How Is Nvidia Cheaper Than Microsoft?
The term "cheaper" in investing can mean many different things. It could be that the stock price itself is cheaper, but this is a very narrow definition and honestly not incredibly helpful in the days of fractional shares. There are also connotations about future growth or by what metric a stock is valued.
For many people, artificial intelligence (AI) powerhouse Nvidia (NASDAQ: NVDA) looks incredibly expensive. But when compared to the largest company in the world, Microsoft (NASDAQ: MSFT), I'd suggest that it's cheaper. How? Looking at a particular metric is critical in assessing where a company is heading.
First, let's get the obvious out of the way. From a dollar basis, Nvidia looks expensive, at around $870 per share. Microsoft is much cheaper, at around $425. However, the stock price is just an arbitrary figure. The stock price is determined by the number of shares outstanding and the company's total value. Either of these two could enact a stock split to change the number of shares and make the stock more or less expensive from a dollar standpoint. This is why looking at the stock price doesn't help investors.
Source Fool.com
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