Mizuho analyst calls Nvidia 'silly cheap' as forward P/E falls below 10

For dip buyers, the valuation argument offers a clear reference point: a forward multiple under 10 times is unusual for a market leader with rapidly expanding earnings. However, the open-ended nature of the board review limits how far that reasoning can work in the short term, since markets tend to penalise uncertainty over timing. Given Nvidia's heavy weight in the S&P 500 and Nasdaq, news about the probe is likely to drive the indices, not just the stock. The fact that technology now trades at a lower valuation than the broader market could encourage a rotation back into the sector once the leadership question becomes clearer.

---

Nvidia's current valuation resembles that of a company in decline rather than one at the heart of AI, and analysts see that gap as the opportunity, assuming the leadership issue gets resolved.

Key points:

• Mizuho's Jordan Klein told CNBC that Nvidia's forward P/E below 10 indicates it is extremely undervalued
• Klein said the stock reflects post-election concerns and uncertainty about CEO Jensen Huang's leadership
• He called losing Huang a major risk and noted that investors see him as irreplaceable, with the open-ended timeline being the biggest worry
• Nvidia's board has launched an independent investigation, and the shares dropped around 4% on Monday
• Another strategist described the weakness as a potential rare opportunity and pointed out that tech is cheaper than the S&P 500 for the first time in over a decade

Nvidia shares may be "silly cheap" after a significant derating, presenting a compelling buying opportunity despite uncertainty about CEO Jensen Huang, according to Mizuho Securities technology analyst Jordan Klein in an interview with CNBC.

Klein highlighted the chipmaker's forward price-to-earnings multiple, which has dropped below 10 times, as evidence of extreme undervaluation. Multiples that low, he said, are typically seen at companies with structural issues or businesses in long-term decline, and Nvidia does not fit that description. In his view, the stock has been derating for a while, with earnings rising much faster than the share price. It now reflects significant uncertainty tied to post-election concerns and questions about Huang's leadership.

Those questions arose after the board decided to open an independent investigation following reports that Huang had been the focus of a foreign intelligence effort. Nvidia has stated that Huang fully supports the review and will cooperate. The shares fell about 4% on Monday as investors assessed the leadership risk.

Klein acknowledged that losing Huang would be a considerable risk. He described the CEO as a visionary for Nvidia and the broader technology and AI industries, and said investors consider him irreplaceable. Nvidia has a deep bench of talent, Klein said, but the open-ended timeline of the situation is what concerns the market most.

Another strategist offered a more optimistic view. His firm recently added Nvidia to its list of AI stocks to buy for next year, and he suggested the current weakness could turn out to be a rare opportunity if leadership remains intact. He also noted that technology stocks as a group are trading at a lower valuation than the S&P 500 for the first time in more than a decade.

He described Nvidia as one of the central companies in the AI revolution, if not the most central. Even so, the strategist said he was confident the broader AI transformation would not be seriously disrupted even if turbulence at the chipmaker continues.

The outcome and timing of the board's review are now the key variables for the stock, along with whether the valuation discount that Klein highlights begins to draw in buyers.