Analyst Says NVIDIA (NVDA) Valuation Still ‘Reasonable’ – Here’s Why

We recently published 10 Stocks Moving On Key Analyst Calls. NVIDIA Corporation (NASDAQ:NVDA) is one of the stocks analysts were recently talking about.

Tom Lee, Fundstrat’s head of research, said in a program on CNBC on September 25 that Nvidia’s valuation is still “reasonable.” The analyst compared the chipmaker’s valuation to some other major companies:

“I agree there is going to eventually be a shakeout, but I think valuations, strangely enough, are actually pretty reasonable today compared to 1998 because, you know, 1998 was that liftoff point before that final 18-month surge. And I’d say the best benchmark is NVIDIA Corp (NASDAQ:NVDA) trades at 26 times forward earnings. Cisco at that same exact moment was at 60 times and Cisco’s PE peaked at 210 times Ford earnings. So NVIDIA Corp (NASDAQ:NVDA) to me is still a bargain at 26 times. It’s cheaper than Costco and Walmart which are close to 50 times forward earnings.”

Nvidia owns about 90% of the GPU market, which is expected to reach $3 to $4 trillion by 2030, according to Jensen Huang. McKinsey sees data center CapEx hitting $6.7 trillion with no slowdown in sight in the short term. Nvidia’s next-generation GPU series Rubin is coming in 2026, and the company also has a software edge in AI computing with its CUDA platform, which is now the de facto standard for AI programming.

Baird Chautauqua International and Global Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA) reported first quarter results that were extremely solid. The company took a write-down on China-specific datacenter products and flushed out any future China contributions from their guidance, following the new export restrictions introduced in April. Demand commentary ex China was extremely encouraging—Nvidia is outgrowing expectations despite supply constraints and outgrowing competing ASIC products by a large margin. We have been underweight Nvidia relative to the benchmark, which was up 46% in the quarter, given our short-to medium-term concerns that the feverish AI datacenter build may be resulting in overcapacity, which has not come to bear.”

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Disclosure: None. This article is originally published at Insider Monkey.