Why Nvidia shares are currently discounted

Nvidia’s Stock: A Closer Look Ahead of Earnings

As Nvidia (NVDA) approaches its earnings announcement on February 25, its shares are trading at what some experts consider an attractive valuation.

Art Hogan, a strategist at B. Riley, remarked that Nvidia is currently at its lowest valuation in roughly three years. He noted, “With the stock trading at 25 times forward earnings—a figure likely to decrease after the company updates its guidance—Nvidia remains at the forefront of AI investment. I believe this will only renew investor interest in the stock.”

Supporting Hogan’s perspective, recent data shows that Nvidia’s valuation has compressed over the past few quarters.

Shifting Trends in Tech Stocks

In 2026, the performance of major tech companies like Nvidia has been mixed. After years of dominating the S&P 500, the influence of the top 10 stocks in the index has started to wane, according to Lori Calvasina of RBC Capital Markets.

Investor sentiment toward technology has cooled, partly due to concerns about excessive spending on AI infrastructure. Evercore ISI reports that the information technology sector is now trading at its smallest valuation premium to the S&P 500 since the pandemic. While the “Magnificent Seven” stocks are valued near their post-pandemic average, the remaining S&P 500 companies are close to record-high valuations.

This environment has prompted many investors to shift away from tech and into sectors like healthcare, energy, and industrials.

Nvidia’s Recent Performance and Leadership

So far this year, Nvidia’s stock has risen just 1.5%, trailing both the S&P 500 and the Nasdaq Composite.

CEO Jensen Huang has been actively working to boost the company’s momentum. Speaking at the World Economic Forum last week, Huang highlighted a surge in demand for skilled workers and lucrative salaries in the AI infrastructure sector. He predicted that the current AI boom would lead to the largest infrastructure expansion in history, involving investments worth trillions of dollars.

Huang also dismissed concerns about an AI bubble, arguing that such fears stem from the sheer scale of investment, while the underlying opportunities remain exceptional.

Further reading: Are we in an AI bubble? How to protect your portfolio if your AI investments turn against you.

Strategic Moves and Analyst Outlook

On Monday, Nvidia demonstrated its confidence in the AI sector by investing an additional $2 billion in CoreWeave, a leading neocloud company.

Analysts remain optimistic about Nvidia’s prospects. Atif Malik of Citi expects strong demand for computing and networking to drive growth for both Nvidia and Broadcom, calling them essential AI investments. Malik also noted that Nvidia discussed increased data center demand at CES, and Taiwan Semiconductor recently raised its sales and capital expenditure forecasts for 2026.

About the Author

Brian Sozzi is Executive Editor at Yahoo Finance and part of the editorial leadership team.