Nvidia Is Cheapest Route To Invest In AI, Says Bernstein Analyst, After Stock Triples In A Year

The sky-high valuations of NVIDIA Corp NVDA may give investors pause, but according to a senior analyst, the chipmaker’s stock will continue to soar.

What Happened: Despite concerns about Nvidia’s high valuations, Bernstein’s senior analyst Stacy Rasgon told CNBC on Wednesday that the company’s stock is expected to keep rising. The chipmaker’s stock recently hit record highs, becoming the fourth most valuable company in the S&P 500, according to a report by Business Insider.

Rasgon, who has a price target of $700 for Nvidia, believes that the artificial intelligence trend will continue to drive the company’s performance. He pointed out that Nvidia’s last earnings report showed a 279% increase in revenue from the previous year.

Despite the rapid rise in stock price, Rasgon considers Nvidia’s multiples to be highly attractive, making it one of the cheapest ways to invest in the AI theme in the space. He noted that other companies in the same space, such as Advanced Micro Devices, Inc. AMD and Marvell Technology Inc MRVL, are much more expensive.

“It is actually, if you believe it, one of the cheapest ways to play the AI theme in the space,” he said.

“AMD is much more expensive than Nvidia, Marvell is much more expensive than Nvidia, even Intel, they’re not that different from each other at this point.”

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Why It Matters: This isn’t the first time that Rasgon has highlighted Nvidia’s value. In December, he described Nvidia as the “cheapest AI play,” attributing this to the AI revolution that had also tripled Nvidia’s stock.

Earlier in the same month, Rasgon also pointed out that Nvidia had the cheapest valuations since the cryptocurrency bubble burst in 2018, attributing this to the AI revolution that had tripled Nvidia’s stock

Nvidia greatly benefited from the generative AI surge initiated by OpenAI’s launch of ChatGPT, a decision that became a milestone in artificial intelligence.

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