Nvidia Trades at 21 Times Forward Earnings. Is the World's Biggest Artificial Intelligence (AI) Stock Actually a Value Play?

By Adria Cimino – Mar 22, 2026 at 8:15PM ESTKey PointsNvidia stock soared over the past few years thanks to its strengths in AI.Following recent declines in its stock price, Nvidia is considerably cheaper than it was just a few months ago.Nvidia (NVDA 3.17%) has proven its ability to deliver spectacular returns to investors, soaring more than 1,200% over the past five years. The reason for such gains is simple: In just a few short years, Nvidia has constructed an AI empire, selling a wide range of AI products, including the crown jewel, its graphics processing units (GPUs). The company, thanks to the speed and overall efficiency of these chips, became the AI chip leader early on, and this continues as Nvidia launches innovation after innovation. All of this pushed earnings and the stock price to record levels, and valuation reached peak levels too. But, in recent times, general geopolitical and economic uncertainty, as well as certain concerns about the AI market, have weighed on Nvidia stock. And today, it trades at a surprisingly low level, at just 21x forward earnings estimates. Is the world's biggest AI stock actually a value play? Let's find out. Image source: Getty Images. Nvidia's focus on AI First, let's take a step back and consider Nvidia's position in the AI market today and what may be on the horizon. As mentioned, Nvidia has become a market giant. The company, originally focused on serving chips to the gaming market, began to focus on AI about a decade ago. Nvidia chief Jensen Huang saw the opportunity and pledged to design GPUs specifically to power AI. Huang's bet clearly was a wise one, as it allowed Nvidia to get in on this market before others and establish its leadership. The company also promised to update its chips on an annual basis to keep this prized position, and it's followed through on this: Over the past year and a half, it's launched Blackwell and Blackwell Ultra, and it's on track to release the Vera Rubin system later this year. Customers, led by tech giants such as Meta Platforms and Amazon, have flocked to Nvidia for chips and systems, helping earnings skyrocket. In the latest full year, revenue reached a record $215 billion and net income hit $120 billion. In previous years, Nvidia's chips were known for their strength in training large language models -- and they still perform that necessary task -- but the growth driver ahead will be putting AI to work. And this involves powering inference, or AI models' processes that lead to problem-solving. ExpandNASDAQ: NVDANvidiaToday's Change(-3.17%) $-5.66Current Price$172.90Key Data PointsMarket Cap$4.2TDay's Range$171.73 - $178.1152wk Range$86.62 - $212.19Volume6.5MAvg Vol174MGross Margin71.07%Dividend Yield0.02% Powering AI agents AI agents, which could be the next big thing in AI, are systems that consider data, plan, and take action -- and they need inference to do this. Nvidia's latest platforms are designed with this in mind, suggesting the company should play a major role in this next phase of AI growth. Now, let's consider the idea of Nvidia -- a clear growth stock -- actually looking like a value stock too. Value stocks are those that trade for less than what they truly are worth, and this may be the case with Nvidia right now. The stock trades for 21x forward earnings estimates, down from more than 40x just a few months ago. This looks incredibly cheap for a company that's delivered double- and triple-digit revenue gains over the past few years -- and that has bright prospects. For example, during the company's GTC conference last week, Huang said orders so far are pointing to $1 trillion in revenue through 2027. And it's important to note that Nvidia's growth has been accompanied by solid profitability on sales, with gross margin surpassing 70%. On top of this, data shows Nvidia's valuation is closer to that of the average value stock these days than the average growth stock. As of the start of this year, growth stocks are trading at about 29x forward earnings estimates, while value stocks are trading for more than 17x these estimates, according to Siblis Research. This is based on the Russell 1000 Growth and the Russell 1000 Value indexes. And at the same time, Nvidia's growth remains at growth stock levels. All this means that today, Nvidia could be a fantastic buy for both growth and value investors.Read NextMar 22, 2026 •By Keithen DruryHistory Says Right Now Is the Turning Point for Nvidia's StockMar 22, 2026 •By Reuben Gregg BrewerOil Is Above $100 a Barrel for the First Time Since 2022. Here's Why Artificial Intelligence (AI) Investors Should Care.Mar 22, 2026 •By Bram BerkowitzNvidia's CEO Jensen Huang Just Guided for $1 Trillion of GPU Orders Through 2027. Why Aren't Investors Buying the Stock?Mar 22, 2026 •By Adria CiminoThe Era of AI Agents Has Arrived. 2 Stocks on Track to Win.Mar 22, 2026 •By Sean WilliamsNvidia and Advanced Micro Devices Have Sounded a $711 Billion Warning to Wall Street That AI Investors Simply Can't IgnoreMar 22, 2026 •By Geoffrey Seiler2 AI Stocks to Buy Before They Soar 80% and 50%, According to Wall Street AnalystsAbout the AuthorAdria Cimino is a contributing Motley Fool stock market analyst covering healthcare, technology, and consumer goods sectors. Prior to The Motley Fool, Adria covered the European stock market and U.S. stocks pre-market trading for Bloomberg News, Bloomberg TV, and Bloomberg Radio for more than a decade. Earlier in her career, she wrote about biotech, medtech, and technology companies in Boston for Mass High Tech, an American City Business Journals publication. She holds a bachelor’s degree in mass communications from the University of South Florida.TMFAdriaCiminoX@adria_in_parisStocks MentionedNvidiaNASDAQ: NVDA$172.90(-3.17%)-$5.66Meta PlatformsNASDAQ: META$593.90(-2.11%)-$12.81AmazonNASDAQ: AMZN$205.29(-1.66%)-$3.47*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.