By Geoffrey Seiler
Publication Date: 2025-12-14 05:00:00
Here’s why Nvidia may be one of the most undervalued artificial intelligence (AI) stocks.
With a market cap of about $4.5 trillion, Nvidia (NVDA 3.30%) is the largest company on the planet. However, it might also just be the most undervalued artificial intelligence (AI) stock right now, too.
But don’t a lot of pundits say Nvidia is overvalued? That’s true; however, most claims that Nvidia is overvalued stem from its trailing price-to-earnings (P/E) of around 45.5 times, which on the surface is high. Yet, based on 2026 analyst estimates, its forward P/E is below 25 times, and its price/earnings-to-growth (PEG) ratio is below 0.7 times (with below 1 times considered undervalued).
But that’s not all. The company also carries around $52 billion in net cash and securities on its balance sheet, and it’s on pace to generate around $85 billion in free cash flow this year. For a company growing as quickly as Nvidia, those valuation metrics are cheap.
Today’s Change
(-3.30%) $-5.97
Current Price
$174.96
The AI infrastructure leader
Why Nvidia is perhaps the cheapest AI stock in the market is also directly intertwined with its growth. The company has been a growth machine. Last quarter, it grew its revenue by 62% year over year, and its revenue was up nearly tenfold from just two years ago. Its adjusted earnings per share, meanwhile, climbed 60%…
/NVIDIA%20Corp%20logo%20on%20phone%20and%20AI%20chip-by%20Below%20the%20Sky%20via%20Shutterstock.jpg?resize=1000,667&ssl=1 "Is Nvidia Stock a Buy or Sell Below 0 as a Global Trade War Escalates?")
