Shares of semiconductor giant Nvidia (NVDA +4.30%) are down just 1% in 2026. With a share price of nearly $185 as of the closing bell on March 10, Nvidia stock now trades about 11% below its all-time highs.
For perspective, Nvidia stock delivered triple-digit annual gains twice over the past three years. So this year's dip has sparked a familiar question among investors: Is now the time to buy the dip in Nvidia, or is the stock swiftly becoming a falling knife?
Savvy investors understand that share prices reveal very little about a company's worth. What matters more is a thorough understanding of underlying fundamentals, as well as market catalysts that could fuel further growth for the company.
And right now, those factors suggest Nvidia may still have plenty of room to run. Let's dig into why the artificial intelligence (AI) darling is a compelling buy-and-hold opportunity for long-term investors.
Image source: Nvidia.
Nvidia is undervalued based on one critical metric
The forward price-to-earnings (P/E) ratio is a useful metric when assessing whether a stock is over- or undervalued. Right now, Nvidia's forward P/E is hovering around 22. This is in line with its lowest levels throughout the entirety of the AI revolution, and also a few turns below the forward earnings multiple of the Nasdaq-100 index, which sits at about 24.
NVDA PE Ratio (Forward) data by YCharts.
Nvidia's current forward P/E is heavily discounted compared to the company's historical premiums, which usually hovered in the range between 40 and 50 during more bullish chapters of the AI narrative.
During fiscal 2026 (which ended Jan. 25), Nvidia generated $4.90 in earnings per share (EPS), up 67% year over year. According to Wall Street's estimates, analysts are forecasting Nvidia's EPS to be $8.25 in fiscal 2027 and $10.74 by fiscal 2028. That represents about 120% growth in earnings power in just two years.
Nvidia's valuation rerating suggests that the stock has become incredibly cheap relative to the company's expected earnings growth.
How Nvidia is becoming much more than a GPU specialist
During the fourth quarter, Nvidia generated $68.1 billion in revenue, an increase of 73% year over year. By continuing to blow Wall Street's expectations out of the water, Nvidia is positioned for another record year, with analysts forecasting 70% top-line growth.
NASDAQ: NVDA
Key Data Points
Indeed, some challenges exist. Trade tensions with China, rising investment in custom silicon, and new chip designs from Advanced Micro Devices all create legitimate headwinds to Nvidia's graphics processing unit (GPU) moat.
Even so, sovereign AI initiatives such as Project Stargate, as well as accelerating AI infrastructure investments from major hyperscalers like Alphabet, Amazon, Microsoft, and Meta Platforms, position Nvidia to capture rising data center demand. Despite some competitive forces, big tech should continue complementing chip stacks with Nvidia's Blackwell and new Rubin architectures.
Moreover, emerging applications in agentic AI, autonomous systems, and physical AI represent multi-trillion-dollar markets that haven't even moved the needle for Nvidia yet.
For investors searching "Nvidia stock forecast," the company's valuation profile looks especially attractive given new catalysts in Rubin and emerging applications -- both supported by a strong secular narrative on the backdrop of rising AI infrastructure. In my eyes, Nvidia has a favorable risk-reward profile and looks attractive at current valuations, making it a compelling buy-and-hold candidate.
