Nvidia (NVDA) stock could be cheap ahead of its earnings report on February 25.
“This is the cheapest [valuation-wise] Nvidia has been doing this for about three years,” B. Riley strategist Art Hogan said on Yahoo Finance’s opening bid (video above).
Hogan added, “So when you’re trading at 25 times forward earnings (which will fall after the upcoming earnings report as they’re going to raise guidance), they’re the tip of the sword for AI spending. I just think that, if anything, Nvidia is just going to reinvigorate the industry.”
Hogan believes Nvidia’s valuation has compressed in recent quarters, according to Yahoo Finance data.
For popular tech stocks like Nvidia, 2026 is shaping up to be a volatile year. A few years after tech giants dominated the S&P 500 (^GSPC) like never before, a different dynamic has emerged. RBC Capital Markets strategist Lori Calvasina noted that the weighting of the top 10 stocks in the S&P 500 relative to the rest of the stock market has seen some “significant deterioration” recently.
Confidence in the technology has soured as concerns about overspending on artificial intelligence infrastructure have grown.
Evercore ISI data shows that the information technology sector has some of the lowest valuation premiums relative to the S&P 500 in the post-pandemic environment. The Big Seven’s P/E ratios are in line with their post-pandemic averages, while the other 493 stocks in the S&P 500 are trading at near-all-time high valuations.
Investors have turned their attention to the technology sector and toward more valuable sectors such as health care, energy and industrials.
For its part, Nvidia shares are up just 1.5% this year, lagging the S&P 500 and the Nasdaq Composite (^IXIC).
Nvidia CEO Jensen Huang did his part to get the stock higher again.
Huang told the World Economic Forum last week that he saw a “boom” in trade jobs and six-figure salaries for those helping build AI infrastructure.
“Everyone should be able to live a good life,” Huang said. He added that he expects the current wave of artificial intelligence to lead to “the largest infrastructure buildout in human history,” involving trillions of dollars.
He also once again refuted the idea of ​​an AI bubble. He said the only reason to worry about the artificial intelligence bubble is that the scale of investment is too large, but the opportunity is “really rare.”
Read more: Are we in an AI bubble? How to protect your portfolio if your AI investments go against you.
