Nvidia’s (NVDA) stock may be cheap headed into its Feb. 25 earnings report.
“This is the cheapest [valuation-wise] Nvidia has been 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 is going to go down after the upcoming earnings report because they’re going to raise their guidance, they’re the tip of the sword for artificial intelligence spend. I just think that, if anything, Nvidia is only going to reinvigorate the trade.”
To Hogan’s point, Nvidia’s valuation has compressed in recent quarters, according to Yahoo Finance data.
It has been touch-and-go for popular tech stocks like Nvidia in 2026. After several years of tech giants dominating the makeup of the S&P 500 (^GSPC) like never before, a different dynamic has emerged. The weight of the top 10 stocks in the S&P 500 has recently seen some “major deterioration” relative to the rest of the stock market, RBC Capital Markets strategist Lori Calvasina pointed out.
Sentiment on tech has soured as fears of overspending on AI infrastructure ratchets up.
Information technology is trading at its lowest valuation premium to the S&P 500 in the post-pandemic environment, according to Evercore ISI data. The price-to-earnings multiple for the “Magnificent Seven” is in line with its post-pandemic average, while the other 493 stocks in the S&P 500 trade near their all-time high valuations.
Investors have rotated out tech and into more value sectors such as healthcare, energy, and industrials.
For its part, Nvidia shares are up only 1.5% on the year, lagging both the S&P 500 and Nasdaq Composite (^IXIC).
Nvidia CEO Jensen Huang has done his part to get the stock moving higher again.
Huang said at the World Economic Forum last week he’s seeing a “boom” in trade jobs and six-figure salaries for those helping to build out AI infrastructure.
“Everyone should be able to make a great living,” Huang said. He added that he expects the current wave of AI will lead to the “largest infrastructure build-out in human history” involving trillions of dollars.
He also pushed back, again, on the notion of there being an AI bubble. He said the only reason AI bubble fears come about is because the investments are so large, but the opportunity is “really quite extraordinary.”
Read more: Are we in an AI bubble? How to protect your portfolio if your AI investments turn against you.
On Monday, he put his money where his mouth as Nvidia invested another $2 billion in neocloud player CoreWeave (CRWV).
Citi analyst Atif Malik is also bullish on Nvidia into the earnings report.
“Fundamentally, compute and networking demand for next generation reasoning models is accelerating and will likely drive upside for both Broadcom and Nvidia which we see as core AI holdings,” Malik wrote. “Nvidia at CES talked about upside to data center demand and Taiwan Semiconductor bumped up its 2026 sales/capex growth last week.”
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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