By Keithen Drury
Publication Date: 2026-02-07 22:56:00
The last time the chipmaker’s forward P/E was this low was May 2025.
There are very few people willing to associate the word “cheap” with Nvidia‘s (NVDA +8.01%) stock, but that’s exactly the right adjective. The last time the stock’s forward price-to-earnings ratio was this low — less than a year ago — in the six months that followed, it racked up returns that nearly caused it to double.
Nothing has really changed in its growth rates since that last rise, so I think the stock could be positioned to do it again. At the very least, I expect it will dramatically outperform the market, making it a great buy.
Image source: Getty Images.
Nvidia’s stock looks primed to rise
In April 2025, the markets were shaken by President Donald Trump’s tariff plans, as concerns soared that those taxes would crater the economy.
Trump backed down from some of his original proposed tariffs, but he left many in place and added others. Yet so far, the U.S. economy continues to churn ahead. The market moves a lot faster than the economy or sentiment, which is why it rapidly recovered from the lows it sank to during April and May.
During that trough, Nvidia’s stock traded at about 24 times forward earnings. As the market recovered, the stock rocketed higher to more than 40 times forward earnings, delivering an impressive 81% return along the way.
NVDA PE Ratio (Forward) data by YCharts; PE = price to earnings.
However, tech stocks have pulled back from the highs that they established in late…
