Wolfe sees Nvidia stock valuation as 'very attractive' again

Investing.com -- Wolfe Research analyst Chris Caso told clients in a note on Wednesday that Nvidia’s valuation has become compelling once more, arguing that the company’s long-term earnings trajectory remains firmly intact despite recent share-price consolidation.

Caso said Wolfe’s positive stance on Nvidia, which the firm added to its “Alpha List” last month, “is based on our view of fundamentals, and not about seasonal trading trends.”

While the firm highlighted a pattern in Nvidia’s performance, noting that “over the past 3 years, the majority of NVDA’s performance occurred in the Jan-Aug timeframe,” Caso said the seasonal trend only “perhaps help[s] to explain the stock’s underperformance over the last 2 quarters.”

The firm reiterated that fundamentals continue to strengthen. Citing its broader AI outlook, Wolfe said it sees “a clear path to upside in estimates for CY26 and CY27, driven partially by continued unit growth, but especially due to pricing tailwinds as Rubin and Rubin Ultra ramp.”

Caso added that these drivers lift Wolfe’s FY28 (CY27) earnings estimate “to ~$11.50, nearly $1.50 above consensus.”

On that basis, Wolfe said Nvidia’s valuation screens attractively. The firm said the EPS outlook “bring[s] NVDA’s multiple to a very attractive 16x FY28 EPS,” positioning the company well as its next-generation products scale.

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