Nvidia is under-appreciated: I’m buying the stock near $215

This might sound crazy but I’ve been buying Nvidia (NASDAQ: NVDA) stock recently. I’ve been adding to my holding – which I initiated back in 2021 near $20 – around the $215 level.

The reason I’ve been buying is that I actually believe that Nvidia is under-appreciated at the moment. Let me explain…

Growth at an amazing price

Nvidia continues to grow at an unbelievable rate despite the fact that it’s now a $5trn company. Last quarter, revenue came in at $81.6bn, up a whopping 85% year on year.

Now, if a small or mid-cap company was growing at that kind of rate, it would probably have a price-to-earnings (P/E) ratio of somewhere between 50 and 100, or maybe even higher. Nvidia’s P/E ratio, however, is only 17 looking at the earnings forecast for next financial year.

That earnings multiple is below the US market average. In other words, Nvidia is cheaper than the average US stock.

That makes no sense to me. To my mind, investors are not fully appreciating the growth story here.

Left for dead in 2026

Another reason I believe the shares are under-appreciated is their year-to-date performance. This year, they’re ‘only’ up about 17%.

Obviously, that’s a decent gain in less than six months. But compared to the gains generated by other chip stocks, it looks lousy.

Marvell, for example, is up about 270%. Arm, meanwhile, is up 260%.

Relatively to other chip stocks, Nvidia has been a laggard this…