Nvidia's $500 Price Target Still Valid Despite Selloff

Nvidia's stock price has been under pressure lately, trading below $190. This has led some to question its valuation and future prospects. However, one Wall Street pro, Tristan Gerra at Robert W. Baird, remains bullish on the company, predicting a 163% gain from current levels.

Gerra's model treats Nvidia as an integrated AI enterprise platform, rather than just a chip vendor. He assumes accelerating ASP expansion as hyperscalers move to more advanced technology and near-monopolistic control over advanced packaging and specialized memory allocations.

Nvidia has been the primary expression of the AI capex cycle on Wall Street. The company designs GPUs, networking silicon, and CUDA software that power nearly every hyperscale AI cluster in production. Its forward P/E of 22 does not look demanding for a business growing revenue 85% year-over-year at a 55.6% net margin with $48.55 billion in quarterly free cash flow.