Nvidia Stock: Buy, Sell, or Hold?
Over the past few years, perhaps no other stock has captured the attention of investors as much as Nvidia (NASDAQ: NVDA). Once viewed primarily as a designer of chips used to help video game graphics, the company's graphic processing units (GPUs) have become the backbone of artificial intelligence (AI) infrastructure, given their superior processing speed and energy efficiency compared to the central processing units (CPUs) found in computers and smartphones.
Meanwhile, the company was able to create a large moat long ago by developing a software platform called CUDA that allows developers to program its chips directly. CUDA became the standard on which developers learned to program GPUs, and that, in turn, has helped make Nvidia GPUs the most desirable today. While the market for GPUs has become extraordinarily large with the advent of AI with plenty of developers, Nvidia nonetheless has been able to capture an approximately 90% market share.
Despite this market dominance and its huge stock price gains in recent years, Nvidia's stock remains attractively priced, trading at a forward price-to-earnings (P/E) ratio of about 31 based on 2025 analyst estimates and a price/earnings-to-growth (PEG) ratio of approximately 1. A PEG ratio less than 1 is typically viewed as undervalued, while growth stocks will often carry PEG ratios well above 1.
Source Fool.com
