Hua Er Jie Jian Wen·2025-12-24 08:33Core Viewpoint - Bernstein's report indicates that despite Nvidia's decent stock performance this year, its valuation has undergone significant compression, currently sitting at an attractive historical low [1][4]. Group 1: Stock Performance and Valuation - Since July, Nvidia's stock price has stagnated, with a year-to-date increase of approximately 30%, underperforming the Philadelphia Semiconductor Index (SOX) which rose by 38% [1]. - This stagnation in stock price, coupled with rising earnings expectations, has led to a substantial decline in its expected price-to-earnings ratio (P/FE) to below 25 times [1][4]. Group 2: Relative Valuation - Nvidia is currently trading at about a 13% discount relative to the overall semiconductor industry, placing it in the first percentile of its valuation over the past decade [4]. - Historical data shows that when Nvidia's P/E ratio falls below 25 times, investors typically see substantial returns, with an average one-year return exceeding 150%, and no negative returns during such periods [4]. Group 3: Future Catalysts - Bernstein estimates that a 25 times expected P/E ratio indicates Nvidia's valuation is at the 11th percentile of its range over the past ten years, marking an absolute low [5]. - The report highlights that there are multiple catalysts on the horizon, including healthy capital expenditure intentions and the upcoming CES and GTC conferences, which are expected to provide further momentum [5]. - The anticipated release of the Rubin architecture products and potential market opportunities in China due to the Trump administration's approval of H200 chips are also noted as positive developments [5]. Group 4: Analyst Rating and Price Target - Bernstein reaffirms its "outperform" rating for Nvidia, setting a target price of $275, suggesting that current market expectations may be too low given the company's guidance of over $500 billion from Blackwell/Rubin [5].