Now is probably one of the best times to get into NVIDIA stock, as it is trading at its lowest price-to-earnings (P/E) ratio in a year.
The company’s earnings have increased at a solid pace in the past year, and it should be able to sustain that momentum once the video gaming segment normalizes in a couple of quarters. That, along with the impressive growth that NVIDIA is clocking in other businesses such as data centers, makes the stock an attractive bet today.
The graphics specialist expects its fourth-quarter revenue to drop 7% as compared to the prior-year period. Analysts and investors were originally looking for a 17% jump. The market has taken a dim view of this expected slowdown in NVIDIA’s business and investors have been quick to press the panic button. The stock is down about 20% since reporting earnings. However, the bears seem to be missing the point. NVIDIA is not a short-term play and it won’t be long before its heyday is back again.