From Nasdaq: 2025-04-13 23:37:00

Nvidia stock (NVDA) is currently trading at 33 times earnings, which may seem expensive compared to Microsoft stock (MSFT) at 30 times earnings. However, Nvidia has shown faster revenue growth of over 80% annually, with profit margins above 60%. Despite potential risks, Nvidia’s dominance in AI infrastructure makes it a compelling long-term investment.

While Nvidia has experienced significant drops during past market shocks, it has already corrected from a high of $150 to below $110. Investors seeking stability may consider the Trefis High Quality portfolio, which has outperformed the market with over 91% returns. Despite risks, Nvidia’s position in the AI race presents an interesting entry point for long-term investors.

Investing in Nvidia comes with risks such as earnings falling short, reduced demand for chips, and unpredictable events impacting the stock price. Despite potential downsides of up to 40%, long-term investors with a 3-5 year horizon may find Nvidia’s current valuation appealing. Strategies like the Trefis Reinforced Value (RV) Portfolio or consulting a financial advisor can help navigate market volatility.



Read more at Nasdaq: Should You Pick Nvidia Over Microsoft?