Nvidia Still Trades at a Discount as AI Chip Rally Broadens

Nvidia trades at a forward P/E of about 18.9x (roughly below the S&P 500’s ~20x) as AI-chip enthusiasm widens competition beyond Nvidia to AMD, Intel and custom designers. The stock is up about 13% this year but has lagged the PHLX Semiconductor Index, which has surged roughly 61% year-to-date, a gap analysts attribute more to momentum and scarcity trades than to fundamentals. Nvidia remains financially strong with plans to return about half of free cash flow to shareholders via buybacks and dividends, and the Street’s average price target sits around $314; Barron’s had previously named Nvidia a stock pick in May when shares were around $226.