Is the largest company in the world still attractive for investment?

How much of a “monster” it is, it is enough to see only from the fact that the company is expected to register revenues of almost 79 billion dollars in the coming quarter and in the one after that, almost 87 billion dollars. In the coming fiscal year (2027) it is expected to register revenues of 370 billion dollars, and these are expected to jump to 484 billion dollars in the next fiscal year (2028), a jump of 30%.

And another impressive angle on Nvidia, “Approximately 35% of the profit growth of all S&P 500 index companies in the first quarter comes from Nvidia alone. Together with the chip company Micron, they account for 55-60% of the total growth,” says Gilad Kaiser, director of foreign stocks at Migdal Insurance and Finance.

“Everyone thought her cycle would end, and they were wrong”

But is it possible that despite the huge value, it is still superior to the other tech giants? Perhaps surprisingly, the answer to this may be positive and analysts mark it as an opportunity.

“Nvidia is the cheapest stock among the ‘Magnificent 7’ (the technology giants, which also include Google, Apple, Microsoft, Amazon, Meta, Tesla), its earnings multiple for next year is 18, all the others are more expensive,” says Sergey Vaschunok, a senior analyst at the Oppenheimer Israel Investment House.

According to him, the reason the stock has recently risen less than its competitors is because “investors are pricing that Nvidia, with a 95% market share in the AI ​​field, will not be able to maintain this dominance for long. Investors say, and probably rightly so, that at some point its market share will drop to 90%, or even to 80%”, he explains, but notes that even if this is true, “there were so many who said that its cycle is over, and in the meantime it is not over”.

While Nvidia rose about 12% since the beginning of the year, the chip index climbed 52%. According to Kaiser, “At the moment, investors are looking for the ‘upside’ in smaller companies, such as the chip companies AMD and Intel, even though they trade at profit multiples of 40-60, which means they are more expensive. I am optimistic about the entire chip industry, including Nvidia. The fundamental data at Nvidia looks amazing, and some analysts are now telling us that they also consider it a ‘stock picking’.”

And Sachunok adds that “for many years they said that the 7 Magnificent would underperform the S&P 500 index. In the last year this is true, but in the last 5 and even 10 years they have outperformed and continued to beat the index. Now Nvidia is about to launch the next generation of products. If it increases the efficiency of information production, more performance per calculation unit (token) Nvidia will continue to maintain market leadership and will continue to also to grow at high rates”.