At its current price-to-earnings multiple, Nvidia (NVDA -2.42%) is already a very expensive stock for one of the biggest companies in the world. In this Motley Fool Live segment from "The Rank," recorded on March 14, Fool.com contributors Danny Vena, Jason Hall, and Travis Hoium give their takes on the stock and discuss why the price may be worth it. 

 

Danny Vena: When I look at NVIDIA, what I see is a large and growing opportunity. We already know that NVIDIA has the largest market share for graphics processing units. They're 80 percent plus of the discrete desktop GPU market. That's a cash cow. For high-end gamers, they're constantly upgrading to whatever the latest NVIDIA processor is. NVIDIA spends a ton of money on R&D. They're always upgrading their processors, they're always upgrading their GPUs and people keep buying them. As long as that cycle continues, that's reason enough to buy NVIDIA as it is.

But what we're seeing now is NVIDIA Stage 2, they're using NVIDIA processors in datacenters to speed the data around the datacenters. They are using it in Cloud computing operations. Every one of the Cloud computing operations that we have talked about or we'll talk about on this show, uses NVIDIA processors in their Cloud computing operations. Then there's the other things like it helps run AI. It helps that you have a platform for self-driving cars. There are other things like professional visualization. If you work in Hollywood and you're using CGI, you are probably using NVIDIA processors in order to make that happen.

I think that the second layer of these businesses is really the growth engine. I think in the last couple of quarters, we've seen the datacenter business grow so fast that its on the verge of eclipsing the gaming revenue for top revenue-generator. I think that that continues, I think they continue to spend a lot of money. This is really one of the highest conviction stocks in my portfolio for the next several years.

Jason Hall: I think its is going to be a trillion-dollar company, but it's already halfway there and it's already priced based on some pretty high expectations. I just think the bottom line is that that's why rated it fourth, because everything Danny said is right. But investors have already bought it based on a lot of those expectations. I think that's going to be hard for it to be one of the best performers on this list so I put it in the middle. Travis.

Travis Hoium: Yeah. I had 7 so I'm at least bullish on the stock. I think you touched on a lot of the reasons. It's a 55 percent price to earnings multiple so it's already a very expensive stock for one of the biggest companies in the world.

Jason Hall: On a cash flows basis, it's a little better than that. I think in terms of the ups and downs, it's still wildly expensive.