Missed Out on Nvidia's Incredible Surge? This Could Be the Next Big Artificial Intelligence (AI) Stock, With Potential Gains of 100%, and It Is Incredibly Cheap Right Now
The critical role that Nvidia (NASDAQ: NVDA) plays in the proliferation of artificial intelligence (AI) technology thanks to the massive computing power of its graphics processing units (GPUs) explains why the company witnessed an outstanding surge in its revenue and earnings in recent quarters.
In its recently concluded fiscal 2024, revenue was up 126% to $60.9 billion. In the current fiscal year, analysts expect another stellar revenue gain of 96% to $110.6 billion. Meanwhile, analysts expect the company's bottom line to double this year, though it could outperform on that front, as it enjoys immense pricing power in the AI GPU market.
All of this suggests that Nvidia should be able to justify its expensive valuations. It trades at 75 times trailing earnings, but the forward earnings multiple of 35 tells us just how rapidly its bottom line is expected to grow. What's more, Nvidia's price/earnings-to-growth ratio (PEG ratio) stands at just 0.13. A PEG ratio of less than 1 is viewed as indicating that a stock is undervalued with respect to the growth it is expected to deliver.
Source Fool.com
