Ahead of its fiscal second-quarter report, Shay Boloor, Chief Market Strategist at Futurum Equities, highlighted that Nvidia Corp. (NASDAQ:NVDA), trading at a “valuation discount,” is “fundamentally illogical.”

Citing a bullish research note from Raymond James, Boloor emphasized that Nvidia is trading at a notable discount relative to the broader S&P 500 despite robust earnings momentum, even as the chipmaker expands beyond graphics processors, with Raymond James projecting Nvidia could become the “world leader” in CPU revenue within several years.

Dissecting the ‘Fundamentally Illogical’ Multiples

According to the Raymond James analysis, Nvidia trades at less than 15 times calendar year 2027 GAAP estimated earnings, compared to roughly 19 times for the broader S&P 500 index.

Raymond James considers this disconnect unsustainable given Nvidia’s top-tier balance sheet and projected 20% sales and net income growth, prompting the investment firm to raise its stock price target to $352 from $330 while maintaining a Strong Buy rating.

Highlighting the research, Boloor noted on X that “the note calls Nvidia’s valuation discount fundamentally illogical,” pointing to an unprecedented gap between the company’s market valuation and its underlying financial execution heading into Wednesday’s highly anticipated earnings announcement.

Expanding Beyond GPUs to CPU Dominance

The research highlights that while graphics processing units (GPUs) remain Nvidia’s primary growth engine, its central processing unit (CPU) segment represents a major untapped catalyst.

As “agentic AI” applications expand, Raymond James projects Nvidia’s CPU revenue share will grow from approximately 3% of total sales today to roughly 5% by calendar year 2028, making it the fastest-growing element in the firm’s extended model.

This acceleration could allow Nvidia to become the global market leader in CPU revenue within several years. The upbeat forecast lands as Wall Street expects Nvidia to post second-quarter revenue of $92.03 billion and earnings per share of $2.09, signaling relentless momentum across its broader AI hardware portfolio.

How Has Nvidia Performed in 2026?

NVDA shares rose 14.24% year-to-date, advanced by 18.49% over the last year, and rose 8.94% over the last six months. It closed 2.19% higher at $213.05 per share on Tuesday, and it was 0.40% higher in overnight trading.

Benzinga’s Edge Stock Rankings indicate that NVDA maintains a strong price trend in the long, short, and medium terms, with a solid growth score.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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