The analysts at Wolfe Research reminded the investors that the artificial intelligence leader, Nvidia, still possesses more power to demonstrate, and has yet to reach its peak. As per the Wolfe analyst, Chris Caso, the stock market valuation of Nvidia has reached “very attractive” levels, because the company has maintained stable share prices.
In a market that prioritizes current trends, Wolfe presents a refreshing traditional approach by emphasizing fundamental analysis over temporary market fluctuations.
Positive Outlook
The historical pattern, which shows that most of Nvidia’s three-year gains between January and August, does not matter to Caso. The seasonal pattern he observed during the previous two quarters explains Nvidia’s sluggish performance, but it does not serve as a basis for the positive outlook of Wolfe.
The company maintains a positive outlook on markets, which began with its decision to include Nvidia in its “Alpha List”, because the company enables future earnings growth.
AI Momentum
Nvidia maintains its long-term earnings growth through its artificial intelligence technology, which operates as its main business driver according to Wolfe. The company expects its earnings estimates for 2026 and 2027 to increase because of both unit sales growth and higher prices for its upcoming Rubin and Rubin Ultra platform products.
Also, the company wants investors to know that they should expect increased revenue from Nvidia, which will sell both its standard chips, along with its new high-value products.
Earnings Estimates Get a Lift
Wolfe raised its fiscal year 2028 earnings prediction to approximately $11.50 per share, which is almost $1.50 above the present consensus, because the company experienced both higher sales volume and increased product prices.
The analysts consider this as an actual value, rather than an error, which exceeds typical rounding thresholds. Despite the increasing competition and rising customer demand for affordable solutions, the company demonstrates confidence in its ability to maintain premium pricing through its leading AI infrastructure market position.
Valuation Starts to Look Friendly
The earnings assumptions lead Wolfe to determine that Nvidia currently trades at 16 times its FY28 earnings, which he considers an attractive valuation multiple, because of the company’s growth rate. The firm said,
“EPS outlook bring[s] NVDA’s multiple to a very attractive 16x FY28 EPS”.
The stock has undergone a major transformation, as investors previously regarded it as too pricey to buy. Wolfe indicates that Nvidia’s stock presents a potential future value, where if Nvidia can achieve its product development roadmap, the valuation today might well seem quite cheap.
Bottom Line
Wolfe Research believes that the company will continue to develop its artificial intelligence technologies despite Nvidia having lost its former position as a rapidly rising stock. Also, the stock market drop will serve as a warning for financial backers who believe that the company will achieve its highest value during upcoming earnings announcements.
Wolfe believes that Nvidia stock will attract back investors who missed the initial price rise, because its current valuation presents an appealing opportunity to invest.
