Key Takeaways
- Nvidia’s stock is trading at an attractive valuation with a forward price-to-earnings multiple of 24
- The company’s recent announcements at CES 2026 highlight its innovative approach to the AI market
- Nvidia’s new Rubin AI platform is designed to reduce costs for data centers running large AI workloads
- The company’s focus on innovation and lowering costs is expected to strengthen its competitive position in the market
- Nvidia’s stock is considered a long-term investment opportunity with potential for market-beating returns
Introduction to Nvidia’s Attractive Valuation
Nvidia’s stock has been performing well, with a 32% increase over the last year. However, the company’s revenue and earnings growth have been even more impressive, making its current valuation appear attractive. As noted, "the stock’s forward price-to-earnings multiple is 24, which is attractive." This valuation is particularly notable given the company’s position as a leader in the AI market. Despite concerns about increasing competition and overheated spending in the tech sector, Nvidia’s innovative approach and strong financials make it an appealing investment opportunity.
Nvidia’s Innovative Approach
Nvidia’s CEO, Jensen Huang, believes that the AI opportunity is only just beginning to heat up, with "approximately $10 trillion worth of legacy infrastructure being upgraded to handle the new era of accelerated computing for AI." To capitalize on this opportunity, Nvidia has been investing heavily in research and development, with a focus on staying ahead of the competition in the chip market. The company’s new Rubin AI platform is a key example of this innovation, featuring six different chips that take computing performance to the next level. As Huang notes, the AI opportunity is vast, and Nvidia is well-positioned to take advantage of it.
The Rubin AI Platform
The Rubin AI platform is a significant development for Nvidia, as it addresses one of the company’s weaknesses: the high cost of its chips. By reducing costs for data centers running large AI workloads, Nvidia is making its products more attractive to customers. This is a key aspect of the company’s strategy, as it seeks to strengthen its competitive position in the market. As the article notes, "Rubin shows Nvidia is increasingly focused on lowering the total cost of ownership of its chips, which is strengthening its competitive position." This focus on innovation and cost reduction is expected to drive long-term growth and profitability for the company.
Nvidia’s Competitive Position
Nvidia’s commitment to innovation and customer value is a key factor in its success. The company’s ability to convert 53% of its revenue into profit is a testament to its strong financial management and operational efficiency. However, the company is not resting on its laurels, and the introduction of the Rubin AI platform demonstrates its ongoing focus on improving its products and services. As the article notes, "it’s this kind of innovation that will keep Nvidia at the forefront of the AI market, and this is why the stock is a steal right now." With its strong financials, innovative products, and commitment to customer value, Nvidia is well-positioned for long-term success.
Conclusion and Investment Opportunity
In conclusion, Nvidia’s stock is trading at an attractive valuation, with a forward price-to-earnings multiple of 24. The company’s innovative approach, exemplified by the Rubin AI platform, is expected to drive long-term growth and profitability. As the article notes, "paying 24 times this year’s earnings should set the stage for long-term market-beating returns." With its strong financials, commitment to innovation, and focus on customer value, Nvidia is an attractive investment opportunity for those looking to capitalize on the growing AI market. As Jensen Huang notes, the AI opportunity is vast, and Nvidia is well-positioned to take advantage of it.
https://www.fool.com/investing/2026/01/12/best-ai-stocks-hold-for-next-10-years/