Nvidia's Valuation Keeps Getting Cheaper as Growth Holds

Nvidia's stock has become cheaper even as the company has sustained robust levels of growth, according to an analysis published by Fortune under the headline "Nvidia is right: Its stock is a bargain by this measure."

The claim cuts against the common objection that Nvidia trades at elevated levels after its run as one of the market's most closely watched names. The valuation argument rests on a basic relationship: the price investors pay relative to the company's earnings power has declined even while the business itself keeps expanding at a strong pace.

That dynamic matters for how investors should read the stock. A falling valuation multiple combined with sustained growth means the share price has not outrun the underlying business. On this measure, the analysis concludes, Nvidia's shares qualify as a bargain — a judgment the company itself has endorsed, as the headline's phrase "Nvidia is right" indicates.

The tension is straightforward. Companies that grow earnings quickly tend to see their valuations compress over time, because the denominator — earnings, cash flow, or another fundamental measure — rises faster than the stock price. Nvidia's case fits that pattern: growth has held up, and the multiple has come down.

For investors weighing the stock today, the analysis suggests the debate should shift from whether Nvidia is expensive in absolute terms to whether its current valuation adequately reflects the growth the company continues to deliver. If the compression in the multiple persists while growth remains robust, the shares stay cheap by this measure — and the burden of proof moves to the bears.