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NVIDIA Stock: Oversold, Undervalued — How Low Can It Go?

KYIV, UKRAINE - JANUARY 29, 2025 Nvidia corporation logo displayed on smartphone. Nvidia is a global leader in artificial intelligence hardware and software — Stock Editorial Photography

Key Points

  • NVIDIA's stock is undervalued and trading at a critical level where it may rebound. 
  • The move to onshore production will mitigate the tariff impact and turn into a short-term problem.
  • The growth outlook is robust and suggests a solid double-digit to low-triple-digit upside in the worst-case scenario. 
  • Interested in NVIDIA? Here are five stocks we like better.
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NVIDIA Today

NVIDIA Co. stock logo
NVDANVDA 90-day performance
NVIDIA
$97.64 +3.33 (+3.53%)
As of 04:00 PM Eastern
52-Week Range
$75.61
$195.95
Dividend Yield
0.04%
P/E Ratio
38.43
Price Target
$169.89

NVIDIA NASDAQ: NVDA share price reached a 40% decline in early April and may fall further. The broad market is amid a massive, tariff-induced reset that will take months to play out and have long-lasting repercussions. The honest truth is that NVIDIA’s share price could shed 100% of its value, but that is highly unlikely given its industry, market-leading position in AI, and cash flow.

The company’s cash flow has grown in tandem with the AI boom and provides sufficient funds for reinvestment, balance sheet maintenance, capital returns, and improving value. More importantly, the company is well-positioned to continue investing in AI regardless of tariffs or economic conditions. 

Highlights at the end of F2024 include a $17 billion annual increase in the cash position, up 67% year-over-year, a 70% increase in total assets, and an 80% increase in equity. The company is net cash relative to total liability and is expected to produce robust cash flow in F2025 and F2026.

The headwind for the share price in early Q2 is that analysts' sentiment trends are cooling. While still bullish overall, three reports issued in late March include two downgrades and a price target reduction. The downgrades are to Hold from Buy and to a below-consensus $125, signaling an end to the NVIDIA bull market until the next catalyst emerges, an event likely tied to easing economic uncertainty in the broad market. When that happens, the stock price could surge by 50% to 100%. Analysts' consensus is near $170, a 75% gain from critical support levels and a new high when reached. 

NVIDIA NVDA stock chart

NVIDIA Trades at Rock-Bottom Valuation 

NVIDIA’s 35% price correction has put its market at a rock-bottom valuation relative to its norms, the broad market, and the earnings forecasts. Trading at 21x the 2026 consensus in early Q2, the stock is valued at a 30% to 50% discount to recent norms and below the S&P 500 average. The stock has a deeper value relative to the long-term forecast, about 7x the 2035 consensus figure, and still a value assuming the analysts reduce their estimates.

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Assuming only half the growth compared to what is currently priced in, the stock is still only 14x earnings and a value considering the cash flow and balance sheet. This sets the market up to rise by 50% to 100% over the next ten years and more if the market continues to fall. 

NVIDIA’s Tariff Threat: Low-Impact and Short-Lived

NVIDIA MarketRank™ Stock Analysis

Overall MarketRank™
95th Percentile
Analyst Rating
Moderate Buy
Upside/Downside
78.8% Upside
Short Interest Level
Healthy
Dividend Strength
Weak
Environmental Score
-1.26
News Sentiment
0.74mentions of NVIDIA in the last 14 days
Insider Trading
Selling Shares
Proj. Earnings Growth
43.68%
See Full Analysis

NVIDIA is not entirely immune to the tariff threat but has so far dodged the bullet.

Not only has the company been working to onshore more of its production, but semiconductors are largely exempt from the tariffs. There is a risk that they could be targeted, but the impact will be short-lived for NVIDIA. 

Efforts to increase domestic production include a partnership with Taiwan Semiconductor NYSE: TSM, which has pledged $100 million worth of investment.

That is in addition to the hundreds of billions alluded to by NVIDIA CEO Jensen Huang, specifically for U.S. microchip production. 

The money will go toward new and expanded facilities, including the most advanced packaging, ensuring NVIDIA’s AI chips can be 100% domestically produced.

NVIDIA Sell-Off Reaches Turning Point

NVIDIA’s sell-off reached a turning point in early Q2, falling to a new low below critical resistance at the $97 level. That level aligns with prior highs and a support bounce in mid-2024 and may produce significant resistance if there is no quick rebound.

In that scenario, NVIDIA’s stock could fall to $80 or lower. A move above $97 would confirm the presence of support at the bottom of NVIDIA’s trading range and likely result in an upwardly drifting but still range-bound market. 

Among the potential catalysts are a reduction in global economic uncertainty and upcoming earnings releases. The company’s FQ1 release is due in May; analysts expect revenue growth to slow but to a strong 67%, with corresponding and comparable earnings growth

Should You Invest $1,000 in NVIDIA Right Now?

Before you consider NVIDIA, you'll want to hear this.

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Thomas Hughes
About The Author

Thomas Hughes

Contributing Author

Technical and Fundamental Analysis

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Taiwan Semiconductor Manufacturing (TSM)
4.386 of 5 stars
$145.84-0.7%1.48%20.72Moderate Buy$220.00
NVIDIA (NVDA)
4.7602 of 5 stars
$97.71+3.6%0.04%38.45Moderate Buy$169.89
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