Is Nvidia, at Bargain Levels Right Now, a Buy? Here Are the Bull and Bear Cases. | The Motley Fool

Nvidia (NVDA -0.74%) is often seen as the stock to buy for investors interested in betting on the artificial intelligence (AI) revolution. That’s because the company’s graphics processing units (GPUs) play a key role in the development and use of AI and have generated mind-boggling revenue growth.

Nvidia’s annual revenue has climbed 700% over the past five years, reaching $215 billion in the last fiscal year. And the pace continues, with Nvidia itself for the first time offering annual revenue guidance — the company expects 70% growth in the next fiscal year. Considering this, you may expect Nvidia stock to be expensive. But the stock isn’t. In fact, it’s reached bargain levels, trading at only 25x forward earnings estimates.

Is Nvidia, at this dirt cheap price, a buy right now? Here are the bull and bear cases to consider before making a move.

The Nvidia bull case

Nvidia dominates the AI chip market thanks to its early entry into this space and its commitment to innovation. These two elements have kept it a step ahead of rival chip designers in the data center market. On top of this, Nvidia recently turned its attention to a fresh area of high potential: The company is in the process of launching its first stand-alone central processing units (CPUs).

These are the chips found in every computer, but here’s why Nvidia is interested now: They are the key chips needed to power agentic AI, which involves AI considering a problem and taking steps…