Nvidia Stock Sees 30% Discount as Morningstar Calls it a Bargain

Nvidia's stock has been on a rollercoaster ride this week, but according to Morningstar, it's now a bargain after trading at 30% below its $280 fair value estimate.

The research firm assigned Nvidia a 'Wide' economic moat rating due to its GPU and CUDA software ecosystem, which creates significant competitive advantages despite rising competition. However, they also flagged 'High' uncertainty due to customer concentration and geopolitical risks, including U.S. export restrictions on China.

Nvidia shares rose in early morning trading Friday, still on track for a weekly decline. Despite this, Morningstar believes the stock looks like a bargain, with Nvidia fitting the profile of a 'growth-at-reasonable-price' stock. The firm expects tech companies to find secondary sources for its GPUs or build in-house solutions to diversify, but these efforts may only reduce Nvidia's dominance.