By Adria Cimino
Publication Date: 2026-03-23 00:15:00
Nvidia (NVDA 3.17%) has proven its ability to deliver spectacular returns to investors, soaring more than 1,200% over the past five years. The reason for such gains is simple: In just a few short years, Nvidia has constructed an AI empire, selling a wide range of AI products, including the crown jewel, its graphics processing units (GPUs).
The company, thanks to the speed and overall efficiency of these chips, became the AI chip leader early on, and this continues as Nvidia launches innovation after innovation.
All of this pushed earnings and the stock price to record levels, and valuation reached peak levels too. But, in recent times, general geopolitical and economic uncertainty, as well as certain concerns about the AI market, have weighed on Nvidia stock. And today, it trades at a surprisingly low level, at just 21x forward earnings estimates. Is the world’s biggest AI stock actually a value play? Let’s find out.
Image source: Getty Images.
Nvidia’s focus on AI
First, let’s take a step back and consider Nvidia’s position in the AI market today and what may be on the horizon. As mentioned, Nvidia has become a market giant. The company, originally focused on serving chips to the gaming market, began to focus on AI about a decade ago. Nvidia chief Jensen Huang saw the opportunity and pledged to design GPUs specifically to power AI.
Huang’s bet clearly was a wise one, as it allowed Nvidia to get in on this market before others and establish its leadership. The company…
