By John Bromels
Publication Date: 2026-03-31 11:24:00
Artificial intelligence (AI) investors haven’t had much to cheer about so far in 2026. Most major AI stocks are down, and some are way down.
Take Nvidia (NVDA 1.40%), for example. Shares of the AI chipmaking champion have fallen 19% from their October high, and in fact are nearing a six-month low:
Today’s Change
(-1.40%) $-2.34
Current Price
$165.18
But even after that drop, Nvidia still has a current market capitalization of $4.07 trillion. Can the biggest company in the world still be “undervalued?” Evidence suggests it may be. Here’s why it might be time to buy.
Expensive or not
Many investors assume that Nvidia is chronically overpriced. On the surface, this view seems to make sense. Its trailing price-to-earnings (P/E) ratio is 35.7, which is high by historical standards, and its trailing price-to-sales (P/S) ratio is 19.9, which is also high. Shares of Google parent Alphabet, for example, trade at a P/E of just 26.4 and a P/S of only 8.6.
Image source: Nvidia.
However, trailing revenue and trailing earnings present a skewed picture of an extremely high-growth company like Nvidia.
Don’t forget, in Nvidia’s most recent quarter, revenue was up a jaw-dropping 73% year over year, while per-share earnings almost doubled, up 98% year over year. For a company growing this fast, of course trailing metrics are going to look high because…
