With a P/E of only 22, is Nvidia actually a top value stock?

So Nvidia (NASDAQ: NVDA) is a growth stock, and we always make a distinction between those and value stocks, right? I mean, it’s soared by by a massive 1,300% and more over the past five years. After such a stunning performance, the stock’s price-to-earnings (P/E) valuation must surely be up with the biggest.

How close is Nvidia to the P/E we see at its fellow AI hope, Tesla? Tesla stock commands a forward P/E of around 270 at the moment. But Nvidia, nope… it has a P/E of only 22 based on forecasts for the current fiscal year. That would drop to about 16 if next year’s forecasts come good. And by 2029 we could see it under 14.

That mooted 2029 valuation would made Nvidia look cheap even by the standards of the FTSE 100. And the Footsie’s traditionally valued significantly below US indexes. The S&P 500 right now has a forward P/E up at 25. So Nvidia even today looks like a cheap value stock compared to that benchmark.

There must surely be some flaws in this reasoning though, right? Maybe not.

Nvidia stock has echoed previous growth stock booms, but there’s a key difference. Many times in the past, shares have soared well in advance of anticipated earnings. That’s happening with Tesla right now, where the valuation isn’t based on car sales. No, it reflects hopes the company will dominate autonomous driving, robotics, and a host of AI-based things.

But Nvidia’s profits are already here….