3 Reasons Why Nvidia Stock Is Still Undervalued and Worth Buying in March

By Daniel Foelber – Mar 1, 2026 at 1:15PM ESTKey PointsNvidia’s high margins justify an expensive valuation.The company is incredibly well-positioned to capitalize on agentic and physical artificial intelligence (AI).Nvidia’s buybacks accelerate earnings per share growth.Nvidia (NVDA 4.43%) has produced jaw-dropping returns in recent years, with the stock price up 1,110% since the start of 2023. With that kind of gain, calling Nvidia undervalued seems ludicrous. Here are three reasons Nvidia stock is still a bargain for investors considering it now despite trading near its all-time high set in late October 2025. Image source: Nvidia. 1. Nvidia continues to generate high-margin growth On Feb. 25, Nvidia reported $215.9 billion in fiscal 2026 revenue. For context, Nvidia booked $27 billion in fiscal 2023 revenue -- representing an eightfold jump in three years. The massive increase illustrates how artificial intelligence (AI) has fundamentally changed Nvidia. Data center growth deserves virtually all the credit, as Nvidia earned $193.7 billion in data center revenue in fiscal 2026, up from $15 billion in fiscal 2023. Despite being a much larger company, Nvidia's margins are actually higher now than they were a few years ago -- a testament to its pricing power and customer willingness to pay a premium price for performance. In fiscal 2026, Nvidia achieved 71% gross margins, 60.6% operating margins, and 55.6% net profit margins -- allowing it to rake in a staggering $120.1 billion in net income. ExpandNASDAQ: NVDANvidiaToday's Change(-4.43%) $-8.20Current Price$176.69Key Data PointsMarket Cap$4.3TDay's Range$176.56 - $182.5852wk Range$86.62 - $212.19Volume11MAvg Vol174MGross Margin71.07%Dividend Yield0.02% 2. Nvidia is relentless about innovation One of the main arguments against buying Nvidia has been the risk that its margins will decline due to weaker pricing power, lower demand, and competition. But Nvidia continues to prove the doubters wrong, not because it is overcharging for its products and squeezing customers, but because it is delivering massive improvements that justify premium pricing. In its latest earnings release, Nvidia cited research stating that Blackwell Ultra, which is an upgrade to the initial Blackwell architecture, delivers up to 50 times better performance and 35 times lower costs for agentic AI compared to the Nvidia Hopper platform, which predated Blackwell. Nvidia's next platform, called Rubin, uses six different chips that achieve even greater performance improvements and cost reductions through what Nvidia calls "extreme codesign." This is basically integrating software and hardware for rack-scale data center applications -- such as designing Nvidia's graphics processing units alongside NVLink switches rather than as separate offerings. Agentic AI follows generative AI as the next step on Nvidia's AI roadmap. With Nvidia forecasting exponential future growth in physical AI (autonomous vehicles and general robotics), the company should be able to retain its high margins for years to come. 3. Nvidia is raising its stock repurchases Nvidia's high margins allow it to generate substantial excess cash flow beyond what it needs for its long-term investments, which means Nvidia can freely buy back boatloads of its own stock without impacting its balance sheet or taking dry powder away from innovation. In fiscal 2026, Nvidia bought back $40.1 billion in stock compared to $33.7 billion in fiscal 2025 and $9.5 billion in fiscal 2024. Given Nvidia's $4.3 trillion market cap, it's hard for buybacks to make a dent in its share count. But they will add up over time by reducing Nvidia's share count and accelerating earnings-per-share growth. At 39.9 times fiscal 2026 earnings, Nvidia may not look undervalued. But when factoring in its high margin earnings, runway for future earnings growth, and ability to buy back increasing amounts of stock, Nvidia is arguably a much better value than the S&P 500, which trades at 29.9 times earnings.Read NextMar 1, 2026 •By Geoffrey SeilerThe 4 Biggest Tech Companies Will Spend $655 Billion on AI This Year. Here's How I'm Investing.Feb 28, 2026 •By Beth McKenna7 "Rules" to Improve Your Stock Investing in 2026 and Beyond: Using Nvidia, Palantir, Netflix, Peloton, and Super Micro Computer Stocks as ExamplesFeb 28, 2026 •By Jeremy BowmanIs Nvidia a Buy on the Post-Earnings Dip?

This Number Screams "Yes"Feb 28, 2026 •By Keithen DruryWhere Will Nvidia Be in 2030?Feb 28, 2026 •By Matt Frankel, CFPHere's Why Nvidia Stock Fell -- Even After Reporting 73% Revenue GrowthFeb 28, 2026 •By Beth McKennaNvidia Earnings Call: Nvidia's AI Chips in Space and Sovereign AI's 300%-Plus Annual GrowthAbout the AuthorDaniel Foelber is a contributing Motley Fool stock market analyst with extensive experience covering the broader stock market and publicly traded companies across energy, industrials, utilities, materials, technology, communications, consumer discretionary, consumer staples, and financial stocks. Daniel looks for industry leaders offering compelling growth, value, or dividends to generate passive income. He has also written for energy trade publications and helped build oil and gas training modules. He holds a bachelor’s degree in finance and a certificate in personal financial planning from the University of Houston. He believes the best investors are those who focus on fundamentals, remain steady through volatility, and filter out market noise.TMFpalomino2Stocks MentionedNvidiaNASDAQ: NVDA$176.69(-4.43%)-$8.20*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.