After a stunning financial report, the stock price plummeted. Is NVIDIA now "very cheap"?

NVIDIA's strong growth momentum in the AI sector and relatively low valuation after a significant drop may provide investors with an entry opportunity that should not be missed.

On Thursday, NVIDIA plummeted by 8.48%, marking the largest daily drop since the DeepSeek impact, with its market capitalization falling below $3 trillion, dragging the chip index down by over 6%.

From a valuation perspective, NVIDIA's current forward P/E ratio is 27 times, lower than Apple's 32 times forward P/E ratio, which is also in the $3 trillion market cap club. However, NVIDIA's growth rate is 20 times that of Apple—Apple's latest quarterly revenue grew only 4%.

Barron's stated that this comparison makes NVIDIA's valuation appear relatively "cheap."

Information equity analysis also pointed out, NVIDIA's current price corresponds to a 20 times PE for 2026, making it one of the cheapest among the seven major U.S. tech giants. The low valuation reflects the current level of crowded positions, controversies over the long-term sustainability of the business, and various short-term noise disturbances. These factors may align perfectly with the appetite of long-term value investors.

Well-known investor Duan Yongping has already started to go long on NVIDIA. Yesterday, Duan Yongping interacted with netizens on Xueqiu, stating: "Although I don't fully understand, I'm preparing to sell a bit of NVDA puts. AI is worth paying attention to, and NVIDIA is actually a very good company."

From a performance perspective, NVIDIA continues to shine. According to NVIDIA's latest quarterly financial report, the company's revenue grew by 78% year-on-year to $39.3 billion, exceeding Wall Street's expectation of $38.1 billion. Its data center business revenue nearly doubled to $35.6 billion, mainly driven by strong sales of AI chips. Meanwhile, the company's median revenue forecast for the current quarter is $43 billion, higher than the consensus expectation of $42.1 billion from analysts.

However, investors' caution is not without reason. Overnight, Trump announced new tariffs on countries like Canada and Mexico starting March 4, which led to a significant drop in NVIDIA's stock price after the market opened. Analysts believe that tariff policies have become the biggest risk NVIDIA faces this year, especially potential tariffs on chips that could affect NVIDIA's products manufactured in Asia.

But Barron's believes that despite the policy uncertainties, investors should focus more on NVIDIA's fundamental outlook. With the successful launch of Blackwell, and the growing demand for AI driven by AI agents, reasoning capabilities, and multimodal models, NVIDIA's performance in the coming quarters is expected to remain strong.

NVIDIA's absolute leading position in the AI chip sector, the market condition of product shortages, a clear product iteration roadmap, and relatively reasonable valuation multiples provide a solid foundation for sustained growth. For long-term investors, short-term stock price fluctuations may actually present a good entry opportunity