It has been a rough run for Nvidia (NASDAQ:NVDA) stock this year. In fact, NVDA stock is currently down 38% year-to-date and has fallen 46% from last year’s high. Despite all of the long-term positives that Nvidia has going on, the market seems to be ignoring it. Recently, the discussion has fallen away from its industry leading margins and robust cash flow. Investors also seem to have forgotten all of the long-term growth in Nvidia’s various end markets.
For reference, some of those markets include: Datacenters, artificial intelligence and machine learning, drones, robotics, supercomputing, cloud computing, graphics, gaming, autonomous driving, the metaverse and more.
Instead, all investors are seemingly focused on is the price-to-earnings ratio and the supply chain issues in semiconductors. Some have even questioned whether Nvidia is the next Cisco Systems (NASDAQ:CSCO) circa 2000.
Fear-mongering aside, the recent market-wide info says anything but a long-term sell on NVDA stock.
Texas Instruments (NASDAQ:TXN), Taiwan Semiconductor (NYSE:TSM), ON Semiconductor (NASDAQ:ON) and Qualcomm (NASDAQ:QCOM) all beat on earnings and revenue expectations in the past few weeks. Taiwan Semiconductor issued above-consensus revenue for the full year, while Qualcomm and ON Semiconductor issued above-consensus revenue outlooks for the upcoming quarter.
While Intel (NASDAQ:INTC) beat earnings and revenue estimates, management was more cautious with its outlook, particularly toward PCs. Don’t forget, Advanced Micro Devices (NASDAQ:AMD) will report on Tuesday after the close, on May 3.
There’s also signs that the semiconductor shortage is improving. Or at least it is for automakers. Recently Volkswagen (OTCMKTS:VWAGY) CEO Herbert Diess said he expects “significant easing” in regards to the semiconductor situation. Those comments echo those from General Motors (NYSE:GM) when it reported earnings last week.
The bottom line?
The situation with the semiconductor is not perfect. However, there’s light at the end of the tunnel and there are improvements. Not to mention, the earnings reports from the sector have been pretty solid thus far.
Therefore, with NVDA stock trading at a near-50% discount, it may be time to have this name on your radar. After all, analysts expect almost 30% revenue and earnings growth his year for the company. In this environment, that’s pretty solid. And for those that were worried about Nvidia’s valuation, well, it has come down quite a bit in the last few months.
I’ve had my eye on the low-$190s for NVDA stock for quite a while now. Although it’s a bit below that mark now, patience has truly paid off.
On the date of publication, Bret Kenwell held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
