Nvidia Stock Set to Weather September Market Woes

Nvidia stock has seen significant growth since ChatGPT's release in 2022, increasing by 1,600% and catapulting it to the top of the market. Despite a brief falter earlier this year, Nvidia has regained its dominance, with a year-to-date gain of 24%. The company's latest earnings report on August 26 showed a 106% increase in revenue over last year's second quarter.

The strong outlook is due in part to the top hyperscalers' expected spending of $800 billion this year and $1.3 trillion next year, with Nvidia set to receive a substantial portion of that investment. The company has also recently acquired AI development platform Hugging Face for $12.9 billion.

Nvidia stock is currently trading at 19 times trailing-12-month sales and 29 times trailing-12-month earnings, near multiyear lows. This suggests that the market may be undervaluing Nvidia due to its size and increased competition.