Tom Lee Says NVIDIA (NVDA) Valuation Still Attractive Amid 'Powerful Tailwinds'

We recently published 10 Trending Stocks to Watch As AI Bubble Warnings Heat Up. NVIDIA Corp (NASDAQ:NVDA) is one of the trending stocks.

Tom Lee, Head of Research and CIO at Fundstrat, said in a recent program on CNBC that there are strong tailwinds for the market. The analyst reiterated his view that Nvidia’s stock valuation is attractive.

“You know, one is that we know there’s a tremendous capex tailwind from AI. And the second is that the Fed’s been on hold for 9 months and it’s kept the ISM below 50 for now 31 months and the Fed’s dovish. So that’s the rest of the economy getting basically a lifeline. Those are going to be powerful tailwinds that even a government shutdown doesn’t really change the story around. And now that we’re in this seasonally strong fourth quarter and valuations I just don’t think are that demanding because you know NVIDIA Corp (NASDAQ:NVDA) is still at 26 times earnings. I mean, I think stocks still have a lot of upside into year end.”

Photo by Christian Wiediger on Unsplash It's hard to find cracks in the Nvidia story in the short term. Nvidia owns about 90% of the GPU market, which is expected to reach $3 to $4 trillion by 2030, according to Jensen Huang. McKinsey sees data center CapEx hitting $6.7 trillion with no slowdown in sight in the short term. Nvidia’s next-generation GPU series Rubin is coming in 2026, and the company also has a software edge in AI computing with its CUDA platform, which is now the de facto standard for AI programming.

Baird Chautauqua International and Global Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA) reported first quarter results that were extremely solid. The company took a write-down on China-specific datacenter products and flushed out any future China contributions from their guidance, following the new export restrictions introduced in April. Demand commentary ex China was extremely encouraging—Nvidia is outgrowing expectations despite supply constraints and outgrowing competing ASIC products by a large margin. We have been underweight Nvidia relative to the benchmark, which was up 46% in the quarter, given our short-to medium-term concerns that the feverish AI datacenter build may be resulting in overcapacity, which has not come to bear.”

While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.