Nvidia stock’s up another 59% in a year. Could it still be a bargain?

Over the long term, Nvidia (NASDAQ: NVDA) has been a brilliant share for some investors. Over the past five years, Nvidia stock has soared 1,356%.

The past year alone has seen Nvidia stock go up by 59%. It is now the largest listed company in the world, with a market capitalisation of $4.6trn.

Given that – and a price-to-earnings ratio of 47 – it might not look like much of a bargain. But I think it potentially could be, even at today’s price.

Ongoing value creation opportunities

Think about what it might take for Nvidia to command a higher value. I see a few possible avenues, which are not mutually exclusive.

One would be for revenues to rise because chip demand rises.

I can see that happening quite easily. AI has sent chip demand sharply higher and is still really only in the early stages of its roll out. Meanwhile demand for all sorts of other chips, like those for gaming and mobile phones, could move higher over time.

An additional driver for Nvidia could be taking more market share. It already has a dominant market position, so that might seem like a tough challenge.

But success can breed success. Nvidia’s existing scale gives it advantages such as a large installed user base and deep expertise, that could potentially help it get even bigger.

Another driver for Nvidia stock meriting a higher valuation could be higher profit margins.

The company’s margins are already high, but economies of scale and…