NVIDIA's stock price rebounds 45% in two months, institutions are bullish: the time to increase positions has come
NVIDIA's stock price has rebounded over 45% in the past two months, with a market capitalization returning to $3.4 trillion, close to Microsoft. The financial report shows that the revenue proportion from the Chinese market has dropped to 13%, and new procurement agreements have been signed in the Middle East. Management confirmed that Blackwell chip production capacity is progressing smoothly, and downstream customer capital expenditures are accelerating. Analysts believe that this is a good opportunity to increase positions, with NVIDIA's dynamic price-to-earnings ratio at 29 times and a PEG ratio of less than 0.9, expecting the price-to-earnings ratio to recover to over 40 times
According to Zhitong Finance APP, in the past two months, NVIDIA (NVDA.US) has staged a thrilling market value comeback. The AI chip giant's stock price has rebounded over 45%, with its market value returning to a high of $3.4 trillion, just a step away from the global market value champion Microsoft (MSFT.US). The dramatic turnaround in market sentiment began with an earnings report that exceeded expectations, alleviating three core concerns.
The earnings report released last week acted as a shot in the arm: addressing concerns over U.S. semiconductor export restrictions to China, the report showed that the company's revenue contribution from the Chinese market fell to 13% in the first quarter, and new procurement agreements signed in the Middle East have built a buffer; regarding doubts about the mass production of Blackwell chips, management confirmed that capacity ramp-up is proceeding smoothly; and concerning the sustainability of AI investments, the report verified that downstream customers' capital expenditures are still accelerating—Microsoft, Meta (META.US), Google (GOOGL.US), and Amazon (AMZN.US) are expected to spend $330 billion on capital expenditures over the next two years, an increase of 6% from current levels.
"NVIDIA has answered all key questions with its performance," said Thomas Martin, Senior Portfolio Manager at Globalt Investments. "Now is a good opportunity to increase positions."
Although the stock price is still 8% away from its historical high in January, NVIDIA's current dynamic price-to-earnings ratio is only 29 times, which is not only below its ten-year average of 34 times but also appears moderate compared to the Nasdaq 100 index's valuation premium of 26 times. More notably, its PEG ratio (price-to-earnings growth ratio) is less than 0.9, the lowest among the seven tech giants, reflecting the market's conservative expectations for high-growth targets.
Samuel Leines, a macro strategist at WisdomTree, pointed out: "As long as AI capital expenditures continue to rise, NVIDIA's valuation is unlikely to see a significant pullback." He expects the price-to-earnings ratio to recover above 40 times. This view has been echoed by most analysts: among the 78 analysts covering NVIDIA, 8 have given a "hold" rating, and only 1 has suggested "sell," with an average target price of $170 implying a 24% upside potential.
It is worth mentioning that compared to the 91% institutional holding ratio of Amazon, Apple (AAPL.US), and Microsoft, NVIDIA's fund ownership rate of 74% is significantly lower. Angelo Zino, Senior Analyst at CFRA Research, believes: "A large amount of capital is forced to cover positions, combined with the exponential expansion of AI computing power demand, it is highly likely that the stock price will reach new highs before 2026."
The stock price trend of the biggest beneficiary of this AI revolution is becoming a touchstone for testing market confidence. As Microsoft firmly holds the market value throne with its cloud business, NVIDIA's rewriting of tech history with two GPU chips may just be the beginning of the show
