Nvidia's Cheap Stock Price Ignites Buying Frenzy
Nvidia's stock has been a game-changer for many investors, with a $10,000 investment at the start of 2023 now worth nearly $160,000. But can buying Nvidia today still deliver those life-changing returns?
Nvidia is one of the biggest beneficiaries of the artificial intelligence build-out, with its graphics processing units (GPUs) being the industry's top choice. The company has posted year-over-year revenue growth of 106% in its most recent quarter, and management forecasts 70% growth for the next fiscal year.
Nvidia currently trades at 25 times forward earnings, which is not much more expensive than the S&P 500. However, when next year's projected 70% growth is factored in, Nvidia's valuation falls to below 15 times next year's earnings, making it a steal for investors.
While Nvidia still offers potential for significant returns, the author believes that doubling over the next year would be the best-case scenario, falling short of setting up an investor for life.