There aren’t any hotter stocks in the market right now than Nvidia (NASDAQ:NVDA). Today, shares of NVDA stock hit another all-time high, with the company briefly surpassing $2 trillion in market capitalization in early morning trading. At the time of writing, NVDA stock has once again passed the $2 trillion mark and appears to be heading higher.
For investors in this high-performance chip maker, this rally has truly been incredible. Some investors may indeed be keen on holding their position for an extended period. And such a view makes sense if one believes that the artificial intelligence (AI) growth drivers propelling Nvidia’s recent earnings beat will remain strong for years.
Even at this current market capitalization, NVDA stock trades at only 33 times forward earnings. This is largely a function of how profitable its core high-performance chip business is. But it also begs the question — if revenue and earnings growth continue to accelerate, could Nvidia actually be a bargain at this level?
Let’s dive into whether Nvidia could be poised for even higher highs moving forward.
NVDA Stock Surges, Surpassing $2 Trillion Valuation
Currently, there are only four companies in the world trading at market capitalizations above $2 trillion. And with Saudi Aramco’s valuation only slightly higher than Nvidia’s, it’s possible that Nvidia could be challenging Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) for the top spot around $3 trillion, if this momentum continues.
Indeed, such a move toward $3 trillion would imply around 50% upside from current levels. And considering NVDA stock is already up more than 60% year to date, such a move wouldn’t be out of the question.
The company’s forward multiple isn’t stretched for a company growing at this brisk of a pace. In fact, there are a growing number of investors who now believe Nvidia is a relatively cheap hypergrowth name on a PEG (price-to-earnings-to-growth) basis. That thesis is valid and has been proven correct by Nvidia’s recent earnings beats. However, the bar is now set extremely high for Nvidia. We’ll have to see how many more quarters the company can pole-vault over expectations.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
