Nvidia shares may be “silly cheap” right now, presenting a compelling buying opportunity despite near-term uncertainty surrounding CEO Jensen Huang, according to Mizuho Securities tech analyst Jordan Klein.
In an interview with CNBC, Klein pointed to the chipmaker’s forward price-to-earnings multiple dropping below 10x as evidence of extreme undervaluation.
Such depressed multiples are “usually reserved for companies that have structural impairments, or a business that is in secular decline, and we know that’s not the case here,” Klein explained.
The stock has been derating for some time, with earnings growing significantly faster than the share price, and is now discounting considerable uncertainty related to both post-election concerns and questions surrounding Huang’s leadership.
Klein acknowledged that the potential loss of Huang represents a significant risk for the company.
“He’s not only a visionary and a leader for the company, but for the entire technology industry and the AI industry as a whole,” Klein said, adding that in his view, Huang is “irreplaceable in the minds of investors.”
Yeah the whole AI world is on the brink of debt collapse, and competing tech is in the pipeline a few years from now. Sure just the time to be buying a chip company.
Still time to pump before the dump?
Nihilists: People who haven’t embraced nihilism are crazy!
Probably true, honestly. Nvidia is so much bigger than Jenson. But the election concerns and Jensen’s scandal may end up just being a catalyst for the inevitable “pop” of the AI bubble. In other words, the beginning of the end of the economy.
Buy now boys (and girls) and diamond hands!
