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Nvidia stock is trading near its lowest valuation in more than a decade, according to Bloomberg, even as the chipmaker's revenue and net income are each expected to grow by roughly 90% or more in its current fiscal year.

At under 17 times forward earnings, the stock's multiple has been cut in half compared with 2025 — a period when Nvidia's expansion was actually slower — and has fallen sharply from above 25 times expected profits just this past May, according to Bloomberg.

"The stock has de-rated pretty significantly, which suggests a healthy dose of skepticism that the company's current earnings power is sustainable," Eli Horton, a TCW senior portfolio manager overseeing thematic and durable growth equities, told Bloomberg. "The stock's performance is surprising, given the backdrop of incredible fundamentals, but it tells you the market is expecting less than what the consensus is currently estimating."

One drag on the stock's valuation is a squeeze on profitability. Nvidia's gross margin came in at 75% last quarter but analyst estimates compiled by Bloomberg show it sliding under 72% by the fourth quarter, with a recovery expected thereafter. Rising costs for key components such as memory chips are a central factor.

Competition is another concern. David Russell, global head of market strategy at TradeStation, pointed to the growing threat of customers building their own silicon, noting that Meta Platforms and Alphabet are among the major Nvidia buyers that have moved to design AI chips internally — a shift he believes will gradually erode Nvidia's pricing power and market share. "Multiples expand when companies are well positioned with potential to get better, and Nvidia doesn't offer that," Russell said.

Nvidia stock has gained 22% so far in 2026, putting it second among the Magnificent Seven behind Apple's 25% advance — yet that performance looks modest against the broader chip sector. The Philadelphia Stock Exchange Semiconductor Index has surged nearly 76%, with Intel and Advanced Micro Devices both more than tripling; Nvidia sits near the bottom of the index's leaderboard, even as the index itself carries a valuation of 20 times forward earnings.

Nvidia Chief Executive Officer Jensen Huang has pushed back on the market's assessment, calling the company "the world's first and only growth value stock" and describing Nvidia as "incredibly misunderstood" at a Goldman Sachs technology conference earlier this month.

The valuation discount follows a stretch of strong results. Nvidia stock climbed roughly 7% after its second-quarter earnings, when revenue more than doubled and the company projected 70% revenue growth in fiscal 2028 — well above the 45% analysts had expected at the time.

Horton said the current multiple looks favorable given that neither a pullback in AI infrastructure spending nor a major regulatory intervention appears imminent. "This seems like a very favorable multiple to have as an entry point," he said.

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Quick Read

BlackBerry jumped 7%, now up 141% YTD, after Daimler Truck and Volvo Group's joint venture Coretura chose Alloy Kore as its commercial truck SDV foundation. Aptiv gained just 1% and Mobileye barely moved 0.3%, confirming the market treats the Coretura win as BlackBerry-specific, not a sector re-rating. BlackBerry reports Thursday with RBC maintaining a $9 price target, but cautious guidance could sting a stock that has already priced in enormous gains. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Aptiv didn't make the cut. Enter your email to see the names that beat APTV. The report is free. Enter your email and see if any of your stocks made the cut.

BlackBerry Limited (NYSE:BB) is the loudest name in early Tuesday trading, gapping higher after Vector and QNX, a division of BlackBerry, announced that Coretura selected Alloy Kore as the safety-certified foundation inside its software-defined vehicle (SDV) platform for commercial vehicles. That converts a multi-quarter platform pitch into a named customer program days before BlackBerry's next quarterly report.BlackBerry Ltd.

The reaction frames the move as a company-specific event rather than a sector repricing. The iShares Expanded Tech-Software Sector ETF (CBOE:IGV) is at $108.59, up 1%, while the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is at $774.10, up 0.1%. Software is firm and the broad benchmark is barely off unchanged, yet BlackBerry stock is running well ahead of either.

BlackBerry stock is at $9.13, up 7% in Tuesday morning trading, and BlackBerry stock is up 141% year to date, according to RBC Capital. That run has repriced BlackBerry from a small-cap orphan into one of the more discussed automotive-software names of 2026.

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Alloy Kore Lands Its First Design Win

Coretura, the SDV platform company founded by Daimler Truck and Volvo Group and headquartered in Gothenburg, Sweden, chose Alloy Kore through the Vector Distribution, a ready-to-use implementation of the platform. Alloy Kore pairs a safety-certified real-time operating system with pre-integrated common automotive services aimed at high-performance computing in commercial trucks, and this is the first named design win BlackBerry has secured for the product.

Story Continues

BlackBerry's John Wall, President of QNX, described the fit plainly. "Coretura is building the software-defined vehicle platform this industry needs, and they have chosen Alloy Kore as the certified foundational software layer beneath it. That is precisely the role we designed it for," Wall asserted.

The catch for BlackBerry investors is that the announcement disclosed no contract value, no revenue split and no timetable for revenue recognition. What Alloy Kore ultimately adds to QNX revenue therefore stays unproven, and the market has to weigh the strategic validation of a marquee truck-maker joint venture against the absence of any dollar figure attached to it.

Aptiv Edges Higher, Mobileye Barely Moves

The read-across into automotive-software peers is thin. Additionally, Aptiv (NYSE:APTV) is at $44.19, up 1% in Tuesday morning trading, a modest bid alongside the BlackBerry headline rather than any Aptiv-specific catalyst.

Meanwhile, Mobileye (NASDAQ:MBLY) is at $8.01, up 0.3%, essentially unmoved on the QNX news. Intel (NASDAQ:INTC) retains majority ownership of Mobileye, so Mobileye shares often track Intel headlines and semis flows more closely than they do automotive-software prints.

Taken together, the muted moves in Aptiv and Mobileye tell you what the market is doing with the Coretura release. Traders are pricing a BlackBerry-specific win, not a re-rating of every name touching SDV software stacks.

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BlackBerry reports quarterly results before the market opens on September 24, a date the company has confirmed. Ahead of the release, RBC Capital maintained a Sector Perform rating and a $9 price target on BlackBerry, saying commentary about the timing of Alloy Kore design wins would drive sentiment on the quarter.

The bull case for BlackBerry now writes itself. The first Alloy Kore design win landing at a joint venture owned by two of the largest commercial truck makers converts a platform pitch into a named customer program with less than 48 hours to spare, and it puts a concrete data point behind the earlier framing of "multi-year growth opportunities ahead in software-defined vehicles, including significant content expansion with the Alloy Kore platform".

The bear case is what the BlackBerry chart already carries. A stock up 141% year to date has priced in a lot of good news, and this company habitually pairs strong beats with cautious forward guidance. Any conservative FY2027 revision Thursday morning could sting BlackBerry even after a legitimately positive data point like Coretura.

What to Watch Next

Traders can watch for whether BlackBerry holds its early gain into the regular session, since a fade before Thursday's release would signal the market is unwilling to carry a full 7% premium into a print without a contract value attached to Alloy Kore. Shareholders may want to keep an eye on whether management gives any Alloy Kore revenue framing on the call, even qualitatively, because the announcement itself didn't.

For investors weighing new exposure to BlackBerry here, a cautious approach should govern position size given the year-to-date move and the confirmed earnings date less than 48 hours away. Trimming a portion of their positions ahead of the release, or waiting for the reaction rather than adding into it, keeps their risk aligned with a BlackBerry stock that has already done a lot of work in 2026.

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FEATURE Stock futures were sliding on Tuesday as investors opted to lock in some profit following the previous session’s record-breaking tech rally. Artificial-intelligence stocks slipped, having surged on Monday.

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Leading AI stocks ripped higher to kick off this trading week as investors pile back into Big Tech.

The 8:30 Hosts Julie Hyman, Pras Subramanian, and Jake Conley weigh in on the market breadth of the equities participating in this latest rally.

Video Transcript

00:00 Speaker A

some of this momentum coming back into the market. And we're going to talk more about the catalyst in depth in a moment, but it seemed to be meta and its muse um agentic product which it released recently that seems to be getting a lot of excitement. So this's sort of like, oh, here's a big product that everybody could get excited about and the supply chain is revived again and everything is fine.

00:23 Speaker B

Right. Because you have to think about the flow through. If there's demand for Muse, there's going to be demand for the chips and the technology that Meta is buying. So that was good for a bump for AMD, for Intel, for some of those companies.

00:36 Speaker A

And AMD crossing over a trillion.

00:37 Speaker B

That's right, crossing over a trillion market cap. But I want to point out there's a great stat. The breadth yesterday was really narrow.

00:46 Speaker A

Yes.

00:47 Speaker B

Seven stocks hit highs in the S&P 500. 30 hit 52-week lows. You see the disconnect. Yes, this was a great day for tech, and that lifted a lot of the market, but there still really is a split we're seeing.

01:00 Speaker C

Yeah, what what's the term? Bad breath?

01:02 Speaker B

Bad breath.

01:03 Speaker C

Bad breath. But I'm looking at this AMD chart, right? You mentioned, Julie, the return to return to grace. I mean, you see this chart and it was there's a big spike in July, and then it just sort of went low and just sort of did nothing.

01:17 Speaker A

And well, yeah, Semis overall.

01:19 Speaker C

Kind of fizzled out. Yeah, and then starting around mid-September, nuclear launch.

01:31 Speaker A

Yes.

01:31 Speaker B

That's right.

01:32 Speaker C

Um, and that is insane. Uh trillion dollar valuation like you said. I mean, is the the rally's back on? 10% yesterday. I mean, it's kind of nuts to me that, you know, I thought that after this huge run up this year, and we're talking about 100 87% this year so far, that it's going to cool off a little bit. Nope.

01:52 Speaker A

Well, it had cooled off and then it reignited, right? I mean the the SOX, the SOX, the Philadelphia Semiconductor Index, even though it was up for the fifth day and saw those big gains that you're talking about, it's still 15% below its record high, which was set back in June. So, even though we've had, you know, this rockiness, this sort of rebound, it hasn't brought us back to those record levels.

02:22 Speaker A

You know, and it's interesting we were talking about seasonality yesterday and how September tends to be not great. Uh Ryan Dietrick of Carson Group um on Twitter was sort of, it's too early to take a victory lap because we still got a little bit left in September. But he was one of the people saying like, yes, I know September tends to be bad, but this September is not going to be bad, he said. And the second half of the month, he thought would show an increase. And I guess yesterday was at least an early validation of that.

02:51 Speaker B

was a proof point.

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This article first appeared on GuruFocus.

Alphabet (GOOGL, Financials), the parent company of Google, opened pre-orders for its new Googlebook laptops Monday, bringing its Gemini AI tools into a new category of premium computers.

Is GOOGL fairly valued? Test your thesis with our free DCF calculator.GOOGL GF Value chart

The laptops start at $899 and will be offered by Acer, Asus, Dell, HP and Lenovo. They will use Intel or Qualcomm processors and offer up to 14 hours of battery life, according to the company.

Google is positioning Googlebook around Gemini and tighter connections with Android. Users will be able to use AI tools to draft and organize text, ask questions about what is on their screens and resume tasks from an Android phone.

The launch gives Alphabet another way to put Gemini in front of consumers, but it also comes with a pricing challenge. Apple's $699 MacBook Neo gives shoppers a cheaper alternative as Google tries to move beyond the traditional Chromebook market.

For investors, the bigger question is whether Gemini can help Google win more value from hardware and strengthen its broader ecosystem.

The next catalyst will be early demand for Googlebook and whether consumers are willing to pay a premium for its AI features.

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US-Aktien erholten sich zu Wochenbeginn kräftig, da fallende Ölpreise, steigende Bitcoin-Preise und die erneute Begeisterung für künstliche Intelligenz (KI) die Anlegerstimmung verbesserten. Technologieaktien legten vor einem erwarteten Abendessen zwischen führenden Vertretern der KI-Branche und dem chinesischen Präsidenten Xi Jinping später in dieser Woche zu.

Der technologielastige Nasdaq Composite führte die Gewinne an und sprang am 21. September 2026 um 2,3 %, um auf einem neuen Allzeithoch zu schließen. Der S&P 500 stieg um 1,5 %, während der Dow Jones Industrial Average um etwa 0,8 % zulegte.

Die jüngste Rally unterstreicht die Widerstandsfähigkeit von US-Aktien trotz mehrerer jüngerer Herausforderungen. Die Aktien stiegen in einem historisch schwachen Monat weiter, obwohl höhere Anleiherenditen, geopolitische Risiken im Nahen Osten, Erwartungen weiterer Zinserhöhungen der Fed und Sorgen über die Nachhaltigkeit des KI-Booms die Stimmung belasten.

KI-Aktien führen Technologierally vor dem Treffen zwischen Trump und Xi an

KI-bezogene Aktien gehörten am 21. September 2026 zu den größten Gewinnern, als die Begeisterung für den Technologiesektor zurückkehrte. Meta Platforms (META), Advanced Micro Devices (AMD) und Intel (INTC) stiegen zweistellig.

Die Gewinne erfolgten vor dem erwarteten Treffen führender KI-Manager mit dem chinesischen Präsidenten Xi und schürten Hoffnungen auf größere Zusammenarbeit und Entwicklungen in der KI-Branche.

Fallende Ölpreise mildern Inflationssorgen

Die Anlegerstimmung verbesserte sich ebenfalls, als die Ölpreise angesichts der Hoffnung auf eine Wiederaufnahme diplomatischer Gespräche zwischen den USA und Iran unter 100 US-Dollar je Barrel fielen. Niedrigere Energiepreise könnten dazu beitragen, den Inflationsdruck zu verringern, der den geldpolitischen Ausblick der Federal Reserve erschwert hat.

Bitcoin erreicht Achtmonatshoch

Bitcoin stieg auf über 86.000 US-Dollar und erreichte laut Yahoo Finance ein Achtmonatshoch, wodurch sich die Gewinne auf den breiteren Kryptowährungsmarkt ausweiteten. Die Rally hob kryptobezogene Aktien wie Strategy (MSTR) und Coinbase (COIN).

Was kommt auf den S&P 500 zu?

Analysten und Portfoliomanager, die zwischen dem 12. und 25. August befragt wurden, erwarten, dass der S&P 500 das Jahr 2026 bei 7.900 Punkten beendet, wie Reuters zitierte. Große Wall-Street-Banken prognostizieren ein Jahresendziel für 2026 zwischen 7.100 und 8.100 Punkten.

Mindestgewinne von 3 % im vierten Quartal 2026 möglich?

Goldman Sachs Research erwartet ein Jahresendziel von 8.000 Punkten für den S&P 500, 3 % über dem aktuellen Niveau. Jefferies legte ebenfalls ein Jahresendziel von 8.000 Punkten für den S&P 500 im Jahr 2026 fest, basierend auf einem Gewinnwachstum von 35 % und einem EPS von 373 US-Dollar gegenüber einem Konsenswachstum von 29 %.

S&P 500 erreicht 2027 die Marke von 9.000?

Jefferies sieht den Index bis Ende 2027 bei 9.000 Punkten, gestützt durch ein EPS von 450 US-Dollar und ein Gewinnwachstum von 20,8 %. Starke Gewinne und anhaltende KI-Investitionen sind die wesentlichen Treiber dieses optimistischen Ausblicks.

Ausblick auf die Gewinne verbessert sich

Das erwartete Gewinnwachstum für 2026 ist von etwa 13 % zu Jahresbeginn auf 29 % gestiegen. Das Wachstum weitet sich auch über die Magnificent 7 hinaus aus; für den übrigen S&P 500 wird ein Gewinnanstieg von etwa 24 % erwartet.

KI treibt Gewinnwachstum

Jefferies schätzt, dass KI- und Rechenzentrumsunternehmen etwa 46 % des S&P 500 ausmachen, wobei für 2026 ein Gewinnwachstum von 60 % prognostiziert wird. Das Wachstum soll sich 2027 auf 24 % verlangsamen, während sowohl KI-bezogene Unternehmen als auch der Gesamtindex voraussichtlich ein zweistelliges Gewinnwachstum beibehalten.

ETFs im Fokus

Vor diesem gemischten Hintergrund können Anleger S&P-500-ETFs wie den Vanguard S&P 500 ETF VOO, den iShares Core S&P 500 ETF IVV, den SPDR S&P 500 ETF Trust SPY, den State Street SPDR Portfolio S&P 500 ETF SPYM und den Invesco S&P 500 Momentum ETF SPMO beobachten. SPYM verlangt jährlich 2 Basispunkte Gebühren, während VOO und IVV jeweils 3 Basispunkte verlangen. SPY ist mit einer Kostenquote von 0,09 % eine vergleichsweise teure Wahl.

Dieser Artikel wurde ursprünglich auf Zacks Investment Research veröffentlicht.

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Twist Bioscience Corporation (NASDAQ:TWST) is on the cusp of gaining significant exposure to the rapidly evolving artificial intelligence (AI)-driven drug discovery ecosystem. On September 16, the company confirmed a strategic partnership with Lilly TuneLab, a platform created by Eli Lilly and Company (NYSE:LLY).

As part of the strategic partnership, Twist will provide antibody characterization data services for TuneLab. It will also provide data to support AbLab, an antibody developability prediction model, and high-throughput wet-lab data that can help train and improve those models.

Through the agreement, TuneLab users will be able to order Twist's antibody services using preferred Twist protocols, generating wet-lab data that can support AI-enabled antibody discovery. The collaboration therefore gives Twist an opportunity to participate in the growing AI-enabled drug discovery ecosystem as a provider of experimental data and antibody characterization services.Twist Bioscience (TWST) Targets AI-Driven Drug Discovery Growth With Lilly Partnership

The partnership could also create a potential avenue for incremental service revenue. TuneLab users will be able to order services from Twist, allowing the company to benefit if adoption of the platform translates into greater demand for antibody characterization and other experimental services.

Partnership Could Strengthen Twist's Position in AI-Enabled Drug Discovery

Lilly's selection of Twist Bioscience Corporation (NASDAQ:TWST) as an antibody characterization data provider could enhance the credibility of Twist's antibody discovery and characterization capabilities. High-quality experimental data is increasingly important for developing and refining AI models used in drug discovery, potentially creating additional opportunities for companies capable of generating such datasets at scale.

The collaboration could consequently help Twist establish itself as an important data-generation and antibody-characterization layer within the broader AI-enabled drug discovery ecosystem. Importantly, Twist can potentially benefit from increasing AI adoption without assuming the substantial costs and risks associated with developing its own drug candidates.

Underlying Risks In Play

Despite the strategic potential, the TuneLab partnership does not provide significant near-term revenue visibility. The companies have not disclosed a minimum purchase commitment, contract value, or specific revenue guidance associated with the agreement.

Moreover, this is not a conventional drug development or commercialization partnership. The announcement does not disclose rights to Lilly drug candidates, milestone payments, royalties, or other participation in drug commercialization economics.

Story Continues

As a result, the financial opportunity for Twist will depend largely on the extent to which TuneLab users ultimately purchase its services.

There is also no guarantee that the rapid development of AI-driven drug discovery will translate into proportional revenue growth for experimental data providers. Although AI models require high-quality datasets, the ultimate commercial value of those datasets depends on whether the models can consistently generate viable drug candidates and improve the efficiency of drug development.

Hedge Fund Positioning and Short Interest

According to Insider Monkey's database, the number of hedge funds holding Twist Bioscience Corporation (NASDAQ:TWST) increased to 42 in the second quarter from 30 in the first quarter. Among notable portfolio changes, Ark Investment Management reduced its position by 29% to $468.1 million. Farallon Capital increased its stake by 50% to $219.79 million, while DE Shaw significantly increased its position by 2,442% to $121.98 million.

Short interest has also declined. Shares sold short fell to 12.07 million as of August 31 from 14.08 million as of July 31. Nevertheless, short interest remained elevated at approximately 18.20%.

The Verdict

The Lilly TuneLab partnership strengthens Twist Bioscience Corporation (NASDAQ:TWST)'s exposure to the emerging intersection of AI and drug discovery. The company stands to benefit from increased demand for data to enhance drug development.

However, the near-term financial impact is unclear as the partnership does not include disclosed revenue commitments. Investors will therefore need to watch whether TuneLab adoption translates into meaningful demand for Twist's services and whether the company's broader AI-related partnerships ultimately contribute to sustainable revenue growth.

While we acknowledge the potential of TWST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

READ NEXT: ResMed Inc. (RMD)'s Sleep Apnea Leadership Supports Growth Despite Rising Competitive Pressures and Intel Corporation (INTC)'s Terafab Partnership Could Give Its AI Foundry Ambitions a Major Boost.

Disclosure: None. Follow Insider Monkey on Google News.

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FEATURE Stock futures were sliding on Tuesday as investors opted to lock in some profit following the previous session’s record-breaking tech rally. Artificial-intelligence stocks slipped, having surged on Monday.

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Former COO returns to lead Odessa's continued growth from a position of strength.

PHILADELPHIA, September 22, 2026--(BUSINESS WIRE)--Odessa, the world's largest software company dedicated to asset and auto finance, today announced the appointment of Mathew Abraham as Chief Executive Officer, effective 21 September 2026. He succeeds Joe Juliano.

Mathew returns to Odessa, where he served as Chief Operating Officer from 2019 to 2022, leading the company's global delivery organization across implementation and customer success. Most recently, he led and scaled a global business at Veeco. Earlier in his career, he held senior leadership roles at ASML, Applied Materials and Intel. Mathew holds a PhD from Harvard University.

He steps into the role at a time of significant growth for Odessa. Over the past 18 months, the company has successfully delivered more than 20 implementations across North America, Europe and APAC, while continuing to invest in automation, AI-powered digital experiences and platform modernization. These investments have further strengthened Odessa's position as a leader in asset and auto finance technology.

As Odessa expands into new markets, geographies and product areas, Mathew will lead the company's next phase with a continued focus on innovation, operational excellence and delivering long-term value for clients.

"Mathew brings a rare combination of industry expertise, operational leadership and deep knowledge of Odessa, making him exceptionally well suited to lead the company into its next chapter. Odessa has built substantial momentum, and the Board is confident in Mathew's ability to build on that foundation, broaden our opportunities, and advance our long-term vision," said Madhu Natarajan, Executive Chairman, Odessa.

"I'm thrilled to return to Odessa at such an exciting point in the company's journey," said Mathew Abraham, Chief Executive Officer, Odessa. "The asset and auto finance industries are entering a new era, shaped by automation, AI and increasingly sophisticated digital experiences. Odessa is particularly well positioned to help our clients lead this transformation. I look forward to building on the strong foundation already in place and working with the team to carry that momentum forward. I'm convinced our best years are still to come."

About Odessa

Odessa is the world's largest software company dedicated to asset and auto finance, providing an end-to-end platform spanning origination, servicing and remarketing, and automation and AI embedded at its core. For more than 28 years, banks, captives and independent lessors around the world have relied on Odessa to modernize their businesses with confidence. Headquartered in Philadelphia, it serves clients in 55 countries with a team of more than 850 professionals.

For more information, visit www.odessainc.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260922993094/en/

Contacts

Smriti Somani Global VP and GTM Lead, Marketing smriti.somani@odessainc.com

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(Bloomberg) -- Nvidia Corp.'s sinking stock valuation is sending a warning signal about the chipmaker's prospects for maintaining its booming profit growth.

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At less than 17 times profit expected over the next 12 months, Nvidia's shares are trading near the cheapest level in more than a decade, according to data compiled by Bloomberg. The multiple is half what the stock commanded in 2025, when Nvidia's revenue and profit growth was slower, and down from more than 25 times earnings estimates as recently as May.

"The stock has de-rated pretty significantly, which suggests a healthy dose of skepticism that the company's current earnings power is sustainable," said Eli Horton, senior portfolio manager for thematic equities and durable growth equities at TCW. "The stock's performance is surprising, given the backdrop of incredible fundamentals, but it tells you the market is expecting less than what the consensus is currently estimating."

Nvidia's discounted valuation persists even after the shares capped a five-day winning streak on Monday. The advance came amid a broader rebound in semiconductor stocks after AI leaders' calls to slow development of the most advanced AI models spooked investors, sending the Philadelphia Stock Exchange Semiconductor Index, better known as the SOX, down nearly 6% on Sept. 14.

The index jumped 4.3% on Monday, its best day since Aug. 4, after early signs of success for Meta Platforms Inc.'s new AI agent boosted optimism about chip demand.

Even though there are plenty of worries about the broader outlook for spending on AI computing gear amid a backlash against data center construction and soaring interest rates, there are no signs that infrastructure investments are set to slow anytime soon.

Nvidia's revenue and net income are expected to jump 90% and 99%, respectively, in fiscal 2027, which ends in January. That's up from 65% growth for both metrics the year before. In its second-quarter earnings report last month, Nvidia projected that sales would expand 70% in fiscal 2028, well above the 45% growth that had been expected.

Nvidia's shares are up 22% in 2026, a performance that ranks as the second-best among the Magnificent Seven technology giants after Apple Inc.'s 25% gain. The advance pales in comparison to other semiconductor makers, however.

Story Continues

The semiconductor index is up almost 76% this year, led by memory chipmaker Micron Technology Inc. and Nvidia rivals Intel Corp. and Advanced Micro Devices Inc., which have each gained more than 180%. Nvidia is the fifth-worst performer in the index, which is priced at 20 times estimated profit.

The disconnect between Nvidia's strong fundamentals and its stock valuation prompted Chief Executive Officer Jensen Huang to declare that Nvidia is "the world's first and only growth value stock." He called the company "incredibly misunderstood" at a Goldman Sachs technology conference earlier this month.

"Not only are we growing, we're also capturing more at the same time," he said.

Part of the problem is that Nvidia's profitability is under pressure, in large part due to rising costs for key components like memory chips. Nvidia's gross margin was a whopping 75% in the second quarter, but is projected to shrink to less than 72% in the fourth quarter before rebounding in the coming quarters, according to the average of analyst estimates compiled by Bloomberg.

Nvidia's gross margin is a major factor holding its shares back, according to David Russell, global head of market strategy at TradeStation. He expects competition to intensify, especially as some of Nvidia's biggest customers develop AI chips in-house. Meta Platforms Inc. recently touted its home-grown chips, and Alphabet Inc. has made a major business out of its own.

"Companies want to reduce their reliance on Nvidia, so it is very conceivable its market position will weaken over time, and that means gross margins are more likely to go south than improve, which is a big problem for investors," Russell said. "Multiples expand when companies are well positioned with potential to get better, and Nvidia doesn't offer that."

Another issue is that Nvidia has become the highest profile member of the AI trade after a more than 1,600% gain in its share price over the past four years made it the world's most valuable company. Its sales have jumped from about $27 billion in its fiscal year that ended in January 2023 to an estimated $410 billion in the current year, fiscal 2027.

"It is prudent to take a step back and ask whether all this spending is sustainable, because trees don't grow to the sky," said TCW's Horton. "However, Nvidia's multiple really seems predicated on a slowing in AI capex, which would have to come either on hyperscalers pulling back, or a regulatory framework that delays or shuts things down."

But neither of those scenarios seem likely, he said, which is making Nvidia shares look relatively attractive.

"No one knows if the stock will work, but the setup is very compelling and I like the way the probabilities are stacked up," he said. "If the question is whether the multiple will work in your favor by re-rating higher, or work against you, I'd definitely take the former. This seems like a very favorable multiple to have as an entry point."

Tech Chart of the Day

Meta's new artificial intelligence agent, Muse, has quickly risen to the top of mobile app charts, a sign that the social media company is gaining traction in the increasingly crowded market for consumer AI assistants.

Top Tech Stories

Alibaba Group Holding Ltd. is rolling out what it calls China's most powerful AI chip, an accelerator to compete with Nvidia and underpin a massive expansion of data center capacity in coming years. Tencent Holdings Ltd. launched its latest and best image-generation model on the same day as rival Alibaba kicked off its AI conference, signaling intent to catch up to industry leaders like ByteDance Ltd. Paramount Skydance Corp. has settled lawsuits brought by 12 state attorneys general and the Writers Guild trade union, a move that will allow the company to close its historic $110 billion acquisition of Warner Bros. Discovery Inc.

Earnings Due

No major earnings expected

--With assistance from Subrat Patnaik and David Watkins.

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