Nvidia Stock Poised to Double Amid AI Computing Boom

Nvidia's stock is trading at a low price due to the market mispricing it, according to analyst Keithen Drury. The company's position as the leader in GPU computing units for AI firms and its access to information about future chip orders make it poised for growth. Nvidia has projected that the capital expenditures of top AI hyperscalers will reach nearly $800 billion in 2026 and rise to $1.3 trillion in 2027.

The company's internal projections also indicate a 70% revenue growth in FY 2028, which Drury believes is conservative. If Nvidia meets this expectation and maintains its current profit margin of 64%, it will generate $355 billion in profits by the end of 2027.

Drury argues that Nvidia's valuation multiple is too low compared to its peers, such as Apple, which trades at 37 times earnings. Assigning a higher price-to-earnings multiple of 30 to Nvidia yields a market cap of $10.65 trillion, exceeding the current market cap of $5.25 trillion.

Drury predicts that Nvidia's stock will double in under a year, making it a 'no-brainer buy' according to him. However, potential investors should be aware that The Motley Fool Stock Advisor analyst team did not include Nvidia on their list of top 10 stocks for investors to buy now.