Nvidia is still a cheap stock, this fund manager says

Scotia Wealth Management portfolio manager Stan Wong says Nvidia (Nvidia Stock Quote, Chart, News, Analysts, Financials NASDAQ:NVDA) remains a key AI infrastructure holding despite rising competition in chips.

Speaking on BNN Bloomberg’s Market Call on July 9, Wong said Nvidia is not just a chip company, but a full-stack AI infrastructure platform with exposure to systems, networking and software.

“They really have an ecosystem,” Wong said. “We think of Apple having a consumer ecosystem. Nvidia has an enterprise technology ecosystem.”

Wong said Nvidia remains one of the clearest beneficiaries of global AI infrastructure spending, with hyperscalers expected to spend heavily on AI data centres. He said annual AI infrastructure spending could reach US$1-trillion next year and potentially US$4-trillion by 2030.

“Nvidia and some of these names are clear beneficiaries of that spending,” Wong said.

The fund manager said Nvidia is benefiting as free cash flow moves toward semiconductor companies such as Nvidia and Taiwan Semiconductor Manufacturing, driven by cloud providers and hyperscalers building AI infrastructure.

Wong said Nvidia’s fiscal 2027 revenue could reach about US$392-billion, with earnings growth above 50% over the next few years. He said the stock remains inexpensive on a PEG basis.

Asked whether the pullback from about US$235.00 in May to roughly US$202.00 was enough to put new money to work, Wong said he likes the stock at current levels.

He said Nvidia is bouncing off its 200-day moving average and remains cheap relative to its earnings growth.

“You see a 24 PE right now with a 55%-plus growth rate,” Wong said. “That is a very inexpensive name in the tech space.”

The stock was up 26.2% over the previous 12 months and 936.2% over five years. Of the analysts covering the stock, 78 rated it “Buy,” three rated it “Hold” and one rated it “Sell,” with a consensus target of US$302.18.

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