Nvidia just hit record highs, but stock may still be 'cheap', says analyst

Nvidia (NVDA) stock just hit all-time highs, but one analyst argues it’s still “cheap.”

“We cover a diverse basket of AI-related stocks and Nvidia is now trading at only a modest premium to the group on a PE basis,” Melius Research analyst Ben Reitzes wrote in a note to investors. “Dare we say Nvidia is now cheap?”

The analyst highlights the graphics chip giant’s stock is trading at 28 times consensus earnings projections for 2024.

“This multiple is below stalwarts like AMZN (AMZN), ADBE (ADBE) and MSFT (MSFT)—even though Nvidia estimates may be among the most conservative,” he added.

Nvidia is up 240% year-to-date after posting back-to-back blowout quarters in 2023. The company’s second quarter earnings blew away already sky-high expectations as the AI hype train continues to push the stock higher.

Such results have prompted analysts to question, “How high can the stock go?”

Melius Research has a Buy rating on the stock, with a price target of $730 versus an average Street consensus of $643.

The highest price target on the stock is $1100, assigned by Rosenblatt Securities analyst Hans Mosesmann.

A Nvidia logo is seen on one of their products on display at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang

A Nvidia logo on a product on display at its headquarters in Taipei, Taiwan, May 31, 2023. (Ann Wang/REUTERS)

On Wednesday shares of the chipmaker rose to a session high of about $499 each.

Nvidia stock has 56 Buy, four Hold, and zero Sell ratings.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.

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