NVIDIA Stock: Oversold, Undervalued — How Low Can It Go?

Core Viewpoint - NVIDIA's share price has experienced significant volatility, with a 40% decline noted in early April, amidst broader market challenges and tariff-induced resets, although its market-leading position in AI and strong cash flow suggest a lower likelihood of total value loss [1][3]. Financial Performance - The company's cash flow has surged alongside the AI boom, with a projected $17 billion annual increase in cash position, representing a 67$170, indicating a potential 75% gain from current support levels [3]. Valuation Metrics - NVIDIA's stock has undergone a 35% price correction, leading to a valuation at a 30% to 50% discount compared to recent norms and below the S&P 500 average, trading at 21 times the 2026 consensus [4]. - Even with conservative growth assumptions, the stock remains attractively valued at 14 times earnings, suggesting potential for a 50% to 100% rise over the next decade [5]. Tariff Impact - While NVIDIA is not entirely immune to tariff threats, the impact is expected to be low and short-lived, as semiconductors are largely exempt from tariffs [6][7]. - The company is actively working to onshore production, including a $100 million investment partnership with Taiwan Semiconductor, aimed at enhancing domestic microchip production capabilities [7][8]. Stock Performance and Resistance Levels - NVIDIA's stock sell-off reached a critical point in early Q2, dropping below the$97 resistance level, which may pose significant challenges if not quickly rebounded [9]. - A move above $97 could confirm support at the bottom of the trading range, while potential catalysts for recovery include reduced global economic uncertainty and upcoming earnings releases, with expected revenue growth of 67% [10].