Nvidia Looks Cheap—But Investors Aren’t Biting

​Nvidia’s stock is starting to look like a bargain, but Wall Street’s not lining up to buy just yet. Despite being a crown jewel in the AI boom, the chipmaker’s shares have dropped around 15% this year, and some analysts are scratching their heads.

BofA’s Vivek Arya is one of them. He sees Nvidia as a rare gem—high-quality, dominant in a booming industry—and now, possibly undervalued. He calls it a “particularly attractive opportunity” and says once the fog clears on some big geopolitical risks, Nvidia could rebound in a big way.

So what’s the holdup? For starters, investors are sweating the mid-May deadline tied to AI chip export restrictions—a Biden-era rule that could curb sales to countries like China. The big question now is whether Trump will reverse course on these restrictions. Arya thinks once that’s answered, it’ll remove a major weight on Nvidia’s shoulders.

But the mood around AI stocks in general is gloomy. Jordan Klein of Mizuho Securities says sentiment is about as grim as it’s been in a year. Even when Nvidia took a 7% intraday dive, he noted, hardly anyone rushed to buy the dip. That tells you something.

Making matters worse for the stock’s image: last week, Nvidia’s chart flashed a “death cross”—a bearish technical signal where a short-term average drops below a longer-term one. It’s the first time that’s happened in three years, and for many traders, that’s like flashing a red warning light.

To be fair, Nvidia is trading at just 20 times its projected earnings—a sharp drop from its usual 36-times average. But investors are still skittish. China is throwing its own curveballs, introducing energy-efficiency rules that could make it harder for Nvidia to sell chips there.

In short, Nvidia’s valuation may scream “buy,” but the broader mood in the market—and uncertainty around AI regulation and global tensions—are keeping many potential buyers on the sidelines.

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