NVDA's Value Play Potential Boosts NVDU ETF Prospects

Nvidia (NVDA) is gaining attention as a potential value play after its stock price dropped 17.54% below its 52-week high.

This unexpected turn of events could benefit traders considering the Direxion Daily NVDA Bull 2X Shares (NVDU), which aims to deliver 200% of the daily performance of Nvidia's semiconductor stock.

Morningstar's Brian Colello notes that Nvidia's $280 fair value estimate is above its July 30 closing price of $195.04, with a projected price-to-earnings multiple of 30 times for fiscal 2027 and 20 times for fiscal 2028.

Colello also predicts 80% total revenue growth for Nvidia in fiscal 2027 due to the acceleration in AI capital spending expected for the industry in calendar 2026. Hyperscalers are projected to spend as much as $700 billion this year, with global AI infrastructure spending exceeding that figure in the coming years.

Nvidia foresees $3 trillion-$4 trillion of annual AI infrastructure spending by 2030, and is expanding its presence in AI through GPUs, networking, software, and services. Colello expects Nvidia to achieve mid-70s gross margins in fiscal 2027, with modest deterioration to the high 60s a decade from now.