NVIDIA Corporation

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NVIDIA Corporation stock analysis NVDA overview
Very Bullish +80

Investors Are Worried the AI Rally Has Gone Too Far. Bernstein Analysts Say Nvidia Stock Is Still ‘Cheap’ Here.

📈 The Nasdaq Composite rose 12.25% this year, with some analysts predicting it could reach 30,000 points if earnings remain strong.

⚠️ Concerns about an AI bubble are growing due to geopolitical tensions between the U.S. and Iran and comparisons to the dot-com era.

📉 Despite market worries, Bernstein analysts maintain that Nvidia stock remains "cheap" based on its forward P/E ratio of 26.31x, only slightly above the industry average.

🚀 Nvidia's market dominance continues with a near-monopoly share of 85% in GPUs and a market cap of $5.23 trillion.

💰 The company is investing aggressively over $40 billion, including stakes in data center operator IREN Limited and glass-maker Corning Incorporated.

🔥 Q4 fiscal 2026 revenue surged 73% year-over-year to a record $68.13 billion, driven primarily by the Compute & Networking segment.

🌐 Data center revenue grew 75% to $62.31 billion, with networking technology NVLink surging 263% as it gains traction.

💵 Non-GAAP earnings per share climbed 82% to $1.62, beating analyst expectations of $1.53.

🔮 Management provided guidance for Q1 fiscal 2027 revenue of approximately $78 billion, surpassing the $72.6 billion consensus estimate.

💹 Wall Street analysts are overwhelmingly bullish on Nvidia, with a consensus "Strong Buy" rating and a mean price target of $268.80.

📊 The stock has gained 79.5% over the past 52 weeks and reached an all-time high of $222.30, though it is currently slightly down.

📉 Technical indicators show Nvidia's 14-day RSI at 69.26, suggesting the stock is approaching overbought territory.

🤝 Strategic partnerships are expanding, including one with Meta Platforms for the Rubin platform and collaboration with Marvell Technology.

🔮 Long-term order visibility for Blackwell and Rubin platforms extends from 2025 through 2027, potentially totaling more than $1 trillion.

Bullish Signals
  • Bernstein analysts believe Nvidia's stock is still 'cheap' on a forward basis, with a non-GAAP P/E ratio of 26.31x only 5.9% above the industry average of 24.85x.
  • Nvidia reported record fourth-quarter results with revenue surging 73% year-over-year to $68.13 billion, beating Wall Street estimates of $66.21 billion.
  • The Compute & Networking segment grew a massive 71% YoY to $61.65 billion, driven by explosive demand for H100 and Blackwell chips powering AI training.
  • Data center revenue reached an all-time record of $62.31 billion, climbing 75% from the prior year and significantly surpassing the $60.69 billion expectation.
  • Nvidia's networking subsegment grew by a remarkable 263% to $10.98 billion, validating the strong adoption of its NVLink technology.
  • Profitability expanded impressively with non-GAAP operating income jumping 81% YoY to $46.11 billion and non-GAAP EPS climbing 82% to $1.62, beating analyst expectations.
  • The company provided robust guidance for the upcoming quarter, projecting Q1 fiscal 2027 revenue of $78 billion, which beats analyst consensus of $72.60 billion even without China data center revenue.
  • Wall Street projects continued strong growth with EPS expected to surge 71.6% annually in fiscal 2027 and 34.1% in fiscal 2028, reaching $10.51 by the end of that period.
  • Analysts maintain a consensus 'Strong Buy' rating, with the Street-high price target of $380 indicating potential upside of 72.12% from current levels.
  • Nvidia has secured visibility for over $1 trillion in orders for its Blackwell and Rubin platforms spanning from 2025 through 2027.
  • The company has strengthened its market position by partnering with Meta Platforms on the Nvidia Rubin platform and investing $3.2 billion in Corning Incorporated to expand its manufacturing base.
Risk Factors
  • Analysts like Michael Burry warn that the AI rally may have entered bubble territory, comparing the current sentiment to the last stages of the dot-com bubble.
  • Nvidia's stock has surged 79.5% over the past 52 weeks and reached an all-time high of $222.30, which coincides with a Relative Strength Index (RSI) of 69.26 indicating the stock is entering overbought territory.
  • Rising geopolitical tensions regarding peace negotiations between the U.S. and Iran are creating headwinds for investor sentiment despite strong AI demand.
  • Despite record revenue growth, Nvidia faces potential near-term volatility if the market corrects from its elevated valuation of 26.31 times forward non-GAAP earnings.
Full Analysis
Investors are debating whether the AI rally has extended too far into bubble territory, with concerns fueled by geopolitical tensions between the U.S. and Iran and warnings from figures like Michael Burry who compare the current sentiment to the dot-com era. Despite this headwinds, Bernstein analysts maintain a bullish stance on Nvidia Corporation (NVDA), arguing the stock remains "cheap" relative to its forward price-to-earnings ratio of 26.31 times, which is only marginally higher than the industry average of 24.85 times. The semiconductor giant continues to dominate the AI landscape with a near-monopoly market share of 85% in GPUs, driving a massive valuation with a market capitalization of $5.23 trillion and reaching an all-time high of $222.30 earlier in May. Nvidia recently reported record-breaking results for the fourth quarter of fiscal 2026 (ended Jan. 25), with revenue surging 73% year-over-year to $68.13 billion, exceeding Wall Street expectations of $66.21 billion. This growth was primarily driven by the Compute & Networking segment, which grew 71% to $61.65 billion, and the data center business, which rose 75% to $62.31 billion. Profitability also significantly outperformed estimates, with non-GAAP operating income climbing 81% to $46.11 billion and non-GAAP EPS jumping 82% to $1.62. The company's strong performance was highlighted by guidance for the upcoming fiscal 2027 first quarter of $78 billion in revenue, which surpasses the consensus estimate of $72.60 billion even excluding China data center sales. Analysts remain highly optimistic regarding Nvidia's future growth trajectory and strategic partnerships. The company has pledged over $40 billion in investments and strengthened its position with deals such as a partnership with Meta Platforms, an expanded collaboration with Marvell Technology, and significant commitments to IREN Limited and Corning Incorporated. Wall Street consensus ratings are overwhelmingly positive, with 44 out of 49 analysts rating the stock a "Strong Buy" and only one rated a "Strong Sell." Price targets suggest substantial upside, ranging from a consensus target of $268.80 (representing roughly 21% upside) to a Street-high target of $380 (representing over 70% upside), reflecting continued confidence in the company's visibility for more than $1 trillion in orders for its Blackwell and Rubin platforms through 2027.