Why NVIDIA’s Pause Could Be Setting Up the Next Move Higher

This article first appeared on GuruFocus.

Nvidia (NASDAQ:NVDA) still looks attractively priced, despite a strong run this year, top Bernstein analyst Stacy Rasgon said, keeping an Outperform rating and a $275 price target. He added that, given current levels, we would be buyers here.

Rasgon noted Nvidia stock is up roughly 30% year to date but has stalled since July. That pause pushed forward valuation down to just under 25 times earnings, after a roughly 27% multiple contraction this year. By one measure, the stock sits in the bottom 11% of its historical valuation range.

The analyst pointed out Nvidia now trades at about a 13% discount to the broader semiconductor index, a rare relative cheapness that has appeared only a handful of days over the past decade.

Rasgon acknowledged investor worries about a slowdown in AI spending, longer-term capex plans and competition from custom chips. He said those concerns may be overstated and that demand for GPUs remains healthy.

Upcoming product catalysts such as Rubin and the longer-term Blackwell opportunity could refocus attention, Rasgon added. Events like CES and GTC may also help reset expectations for Nvidia’s roadmap and address questions around China sales.