Nvidia Corp.’s stock has experienced a significant drop in early 2025, but according to Bernstein analyst Stacy Rasgon, this downturn has made the stock more appealing to investors, Market Watch reports.
Nvidia shares fell 8.7% on Monday and have declined 15% since the beginning of the year. Despite this drop, Rasgon believes Nvidia is now trading at its most attractive valuation levels in nearly a decade.
Currently, Nvidia’s stock is trading at a slight premium compared to the S&P 500, the lowest premium since 2016. Additionally, it is now valued below the PHLX Semiconductor Index—an event that has occurred only once or twice in the past ten years. On a relative basis, Nvidia shares are at decade-low levels, according to Rasgon.
The stock’s forward price-to-earnings (P/E) ratio is now around 25, the lowest in a year and among the lowest in the past ten years. Historically, investors who have bought Nvidia stock at this valuation have seen favorable returns.
Despite the recent decline, Nvidia remains a dominant player in the artificial intelligence (AI) and semiconductor industries. The company recently launched its new Blackwell chip, and while there were early technical issues, Rasgon notes that Nvidia has resolved them and is now positioned for strong sales.
Nvidia shipped $11 billion worth of Blackwell chips last quarter, and demand is expected to rise as companies increase their capital expenditures on AI-related technology. Rasgon described this as a period where “the floodgates are now open” for Nvidia’s latest product cycle.
One of the key risks for Nvidia is increased regulatory scrutiny. In January, the Biden administration introduced new restrictions on AI-chip exports to China, set to take effect in May. Investors are also concerned about the possibility of even stricter restrictions if a new administration takes office.
Rasgon expressed skepticism about further restrictions on Nvidia’s H20 chip, which was designed to comply with existing export limits. He argued that banning the H20 would likely benefit Chinese competitor Huawei rather than achieve US policy goals.
