NVIDIA Stocks rose 3.69% to close at $204.20 on the 8th (local time) on the New York Stock Exchange, marking three consecutive trading days of gains. The AI chip maker's forward 12-month price-to-earnings ratio reached 18.69x, the lowest level in 11 years and half the 10-year average of 36.9x, according to Dow Jones Market Data cited by MarketWatch. The recovery followed a nearly two-month correction during which NVIDIA's stock fell approximately 17% from its May peak of $235.74 to $194.83 on the 2nd, erasing roughly $1 trillion in market capitalization, as investor focus shifted to high-bandwidth memory suppliers like Micron and concerns emerged over AI infrastructure investment sustainability. Analysts attributed the rebound to growing recognition of NVIDIA's undervaluation and speculation that China may approve limited purchases of H200 GPUs for major AI companies including Alibaba, ByteDance, and DeepSeek, with volumes restricted to under 200,000 units for AI training purposes only.
NVIDIA Forward P/E Hits 11-Year Low as Analysts Maintain Buy Ratings
NVIDIA's forward 12-month price-to-earnings ratio of 18.69x represents the lowest valuation in 11 years, down to pre-AI boom levels even as earnings forecasts continue to be revised upward. Vivek Arya, analyst at Bank of America, described the current level as an "enhanced buying opportunity" in a recent report. Arya stated that investors are "overly pessimistic" about NVIDIA and that "the market is excessively worried about cost pressures from rising HBM prices while failing to properly reflect NVIDIA's pricing power, overwhelming scale, and competitive advantages from $119 billion in supply chain investments."
Goldman Sachs maintained its optimistic outlook with a $285 price target and buy rating. Analyst James Schneider projected that NVIDIA could achieve 55% revenue growth next year even if custom AI chips (ASICs) capture some market share. Schneider cited continued AI infrastructure investment expansion despite competition from Google and Amazon's proprietary AI chips and pursuit by AMD and Intel. He identified the next-generation platform Vera Rubin, scheduled for release in the second half of the year, as a key product expected to support NVIDIA's future growth trajectory.
China Reportedly Considers Limited H200 GPU Purchase Approval
Reuters and The Information reported that the Chinese government is reviewing a plan to allow major AI companies including Alibaba, ByteDance, and DeepSeek to purchase NVIDIA H200 GPUs on a limited basis. The approval would restrict volumes to under 200,000 units with usage limited to AI training purposes only. The speculation that previously blocked sales to China could partially resume improved investor sentiment, despite the restrictive conditions. Market observers interpret the potential policy shift as an indication that Chinese authorities may be easing some regulations to address the intensifying shortage of AI computing resources among domestic companies.
South Korean Semiconductor Stocks Positioned for AI Server Demand Growth
Domestic market attention has focused on South Korean semiconductor stocks, as SK Hynix and Samsung Electronics have shown relatively stronger performance than NVIDIA this year based on expectations of increased high-bandwidth memory demand. NVIDIA GPUs remain the core of the AI server market, and expanded shipments of NVIDIA's Blackwell and Vera Rubin platforms would necessarily increase the likelihood of improved earnings for HBM supplier SK Hynix. Samsung Electronics is also pursuing expanded HBM supply and is assessed as highly likely to benefit over the medium to long term if AI server investment expansion continues. Market participants view next quarter's earnings as the determining factor for whether the current rebound represents a temporary technical bounce or the restart of the AI semiconductor rally. Analysts project that NVIDIA's GPU demand will remain solid if major hyperscalers including Microsoft, Meta, Amazon, and Alphabet continue expanding AI data center investments.
FAQ
What was NVIDIA's stock performance on the 8th (local time)?
NVIDIA Stocks closed at $204.20 on the 8th (local time) on the New York Stock Exchange, up 3.69% from the previous trading day, marking three consecutive days of gains.
Why did analysts describe NVIDIA as undervalued?
NVIDIA's forward 12-month price-to-earnings ratio reached 18.69x, the lowest level in 11 years and half the 10-year average of 36.9x according to Dow Jones Market Data, while earnings forecasts continue to be revised upward. Bank of America analyst Vivek Arya called it an "enhanced buying opportunity" and stated the market fails to properly reflect NVIDIA's pricing power, scale, and $119 billion in supply chain investments.
What is China reportedly considering regarding NVIDIA GPU purchases?
Reuters and The Information reported that the Chinese government is reviewing a plan to allow Alibaba, ByteDance, and DeepSeek to purchase NVIDIA H200 GPUs on a limited basis, with volumes restricted to under 200,000 units and usage limited to AI training purposes only.
