NVIDIA's strong growth momentum in the AI sector and its relatively low valuation after a significant drop may present investors with an unmissable entry opportunity.

On Thursday, nvidia experienced a sharp decline of 8.48%, marking the largest daily drop since the DeepSeek impact, with both the Nasdaq and NVIDIA falling significantly. This caused NVIDIA's market capitalization to fall below the $3 trillion mark, dragging the chip index down by over 6%.

From a valuation perspective, NVIDIA's current forward price-to-earnings (P/E) ratio is 27 times, which is lower than Apple's 32 times forward P/E ratio, despite both being members of the $3 trillion market cap club. However, NVIDIA's growth rate is 20 times that of Apple—Apple's latest quarterly revenue grew by only 4%.

Therefore, in some analysts' views, this comparison makes NVIDIA's valuation appear relatively cheap. They pointed out that NVIDIA's current price corresponds to a 2026 P/E ratio of 20 times, making it almost the cheapest among the seven major U.S. tech giants. The low valuation reflects the current crowdedness of holdings, debates over the long-term sustainability of the business, and short-term noise disturbances. These factors might align well with the interests of long-term value investors.

In terms of performance, NVIDIA continues to shine. According to NVIDIA's latest quarterly earnings report, the company's revenue increased by 78% year-over-year to $39.3 billion, surpassing Wall Street ′s expectation of $38.1 billion. Its data center business revenue nearly doubled to $35.6 billion, primarily driven by strong sales of AI chips. Additionally, the company's revenue guidance for the current quarter is $43 billion, higher than the analyst consensus of $42.1 billion.

However, investor caution is not without reason. Overnight, Trump announced the imposition of tariffs on Canada, Mexico, and other countries starting March 4, which caused NVIDIA's stock to drop significantly after the market opened. Analysts believe that tariff policies pose the biggest risk for NVIDIA this year, especially potential tariffs on chips that could affect products manufactured by NVIDIA in Asia.

 Nonetheless, analysts suggest that despite policy uncertainties, investors should focus more on NVIDIA's fundamental prospects. With the successful launch of Blackwell and the growing demand for AI-driven AI agents, inference capabilities, and multimodal models, NVIDIA's performance in the coming quarters is expected to remain strong.

 NVIDIA's absolute leading position in the AI chip sector, the supply-demand imbalance in the market, a clear product iteration roadmap, and relatively reasonable valuation multiples provide a solid foundation for its continued growth. For long-term investors, short-term stock price fluctuations may offer a good entry point.