How Expensive Is Nvidia Stock Really?
Even after getting blasted by the bear market this year, top semiconductor company Nvidia (NASDAQ: NVDA) currently trades for 38 times trailing-12-month earnings, or 45 times enterprise value (EV) to trailing-12-month free cash flow. That's sky-high compared to other top-tier, fast-growing chip stocks. AMD (NASDAQ: AMD), for instance, trades for 24 times earnings and 27 times EV to free cash flow. Qualcomm (NASDAQ: QCOM) trades for just 10 times earnings and 20 times EV to free cash flow.
For many investors, Nvidia's current valuation means that the stock is still too expensive. What's more, the company is also facing a host of challenges that are contributing to its plunging share price.
But Nvidia is already making strides to address many of those troubles, as evidenced by its decision to offload an excess of gaming chip inventory last quarter on the cheap. So, the question remains: How expensive is Nvidia stock today?
Source Fool.com
