A price-to-earnings (P/E) ratio of nearly 74 will usually be considered a nosebleed valuation for any stock. To put that multiple into perspective, it's nearly three times the P/E ratio for the S 500.

Nvidia (NASDAQ: NVDA) currently trades at nearly 74 times trailing-12-month earnings. Unsurprisingly, many investors think the chip stock is priced at a steep premium. But could they be wrong? Is Nvidia stock actually undervalued?

Let's first define the term "undervalued." Oxford Languages, the world's top dictionary publisher, defines it as "not valued or appreciated highly enough" or "having an underestimated financial value."

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Source Fool.com