Nasdaq on fire: two AI stocks that still look cheap
The Nasdaq is having a moment that has everyone following the tech market paying attention. Over the past few months, stocks tied to artificial intelligence have posted impressive gains, driven by a simple but powerful shift: investors are seeing more clearly the real value these companies deliver.
Revenue growing at a breakneck pace, earnings that surprise quarter after quarter, and demand for AI infrastructure that shows no signs of slowing down. And here comes the part that might actually surprise you: even with all this growth across the sector, there are still stocks trading at pretty attractive valuations.
Two names stand out in this landscape, Nvidia and CoreWeave, companies at different stages but with one thing in common: both appear to be trading below what their potential suggests. 🚀
Why the Nasdaq became the main stage for AI
The Nasdaq has always been known as the home of big tech companies, but what is happening right now goes beyond anything previous cycles have shown. The race for artificial intelligence has created an entirely new layer of value within the market, and the companies that build, train, and operate AI models are becoming foundational pieces of the global digital economy. It is no exaggeration to say that what the internet did in the 90s and 2000s, AI is doing now, but at a much faster pace and with far deeper impacts across virtually every sector of the economy.
What sets this moment apart from previous bubbles is the strength of the numbers. The companies leading this movement on the Nasdaq are not just promising future growth, they are delivering concrete results right now. Operating margins are expanding, long-term contracts are being signed with corporate and government giants, and their customer bases are growing quarter over quarter. That completely changes the conversation around risk, because investors are no longer betting on an idea, they are betting on a business that already works and has a long runway of growth ahead.
Another factor that helps explain what is happening on the Nasdaq is that artificial intelligence infrastructure is still being built. We are at a stage similar to when the internet needed data centers, fiber optic cables, and servers to function at scale. Today, AI needs GPUs, specialized compute clusters, and low-latency networks to operate efficiently. And whoever supplies that is in an extremely privileged position, because the demand exists, it is real, and it is growing faster than supply can keep up. 📈
Nvidia: the cheap stock nobody expected
It might sound strange to call Nvidia a cheap stock. After all, shares have already climbed more than 1,600% from their 2022 low, and the company has become the darling of any portfolio involving artificial intelligence. As the dominant player in the AI accelerator market, Nvidia is one of the most sought-after stocks on the Nasdaq. But when you look at the valuation more carefully, the picture changes.
Currently, Nvidia trades at a price-to-earnings (P/E) ratio of just 41. Yes, that is above the S&P 500 average, which sits around 31. However, when you compare that earnings multiple to the company’s growth rate, the number becomes quite reasonable and, frankly, attractive. The key lies in the relationship between what you pay and what the company delivers in terms of revenue and earnings expansion.
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Results that speak for themselves
In fiscal year 2026, which ended January 25, Nvidia posted $216 billion in revenue, representing a 65% increase over the prior year. And even with rising costs to meet seemingly insatiable demand, the company still generated $120 billion in net income, also a 65% jump year over year. These are not the numbers of a company in the promise phase. These are the results of a money-making machine operating at full capacity.
So if the growth is that strong, why is the valuation not higher? The answer probably comes down to Nvidia’s sheer size. The company has reached a market cap of $4.9 trillion, making it the largest publicly traded company in the world. And that introduces an interesting psychological barrier: if the stock doubles, the market cap goes to $9.8 trillion. No company has even come close to the $6 trillion mark yet. That creates a kind of mental ceiling among investors, who start questioning whether there is room for more growth.
It is also unlikely we will see another 1,600% jump in the stock price anytime soon. That is just math. However, if Nvidia can maintain earnings growth in the 65% range, it has everything it needs to keep outperforming the market by a considerable margin. And that could make the stock increasingly appealing to more conservative investors, while more aggressive growth investors look for bigger returns in smaller companies.
At the end of the day, for anyone looking for above-market returns with a relatively low valuation for the sector, Nvidia remains one of the best bargains in artificial intelligence available on the Nasdaq. 💡
CoreWeave: the new force in AI infrastructure
If Nvidia is the established name, CoreWeave is the emerging star that has been turning the most heads in the world of stocks tied to artificial intelligence on the Nasdaq. With a market cap of $61 billion, it is just a fraction of Nvidia’s size, but that does not diminish the significance of what it is building.
The company operates as a cloud infrastructure provider specializing in AI compute, essentially offering access to massive GPU clusters for businesses that need computational power to train and run large language models and other resource-intensive AI applications.
What sets CoreWeave apart from the cloud giants
Here is the crucial point that makes CoreWeave stand out: unlike cloud providers such as Amazon’s AWS or Microsoft’s Azure, CoreWeave designed its entire cloud infrastructure specifically to handle artificial intelligence workloads. That gives it and its neocloud peers a competitive edge over the larger, more established players, which need to cater to a much broader range of computing needs.
This specialization allows for infrastructure and cost optimization that general-purpose platforms still cannot match. For a company that needs to train a large-scale AI model, the difference in performance and cost between using a generic cloud and using CoreWeave’s dedicated infrastructure can be significant. And when we are talking about operations that cost millions of dollars in compute, every efficiency gain matters.
Impressive recovery after the IPO
CoreWeave went public recently and, as happens with many tech companies during their market debuts, it faced a considerable pullback right after the IPO. But the recovery was swift and impressive: the company’s shares have already risen more than 60% for the year, showing that the market is recognizing the value of the specialized AI infrastructure thesis.
The company already has long-term contracts in place with heavyweight clients, including major tech players that depend on continuous computational capacity for their AI products. These contracts create revenue predictability that the market values highly, especially in a segment still taking shape like specialized AI infrastructure. This sets CoreWeave apart from many other companies that are just riding the AI wave without a solid business model underneath.
CoreWeave’s growth also reflects something bigger happening in the market: demand for AI-specialized computing infrastructure is growing faster than supply can organize itself. That puts the company in a position of relative scarcity, where the capacity it offers becomes increasingly valuable to clients. With the ongoing expansion of artificial intelligence models, especially large language models that require ever more processing power for training and inference, the need for reliable and specialized infrastructure partners is only going to grow. 🔍
What connects Nvidia and CoreWeave right now
Despite being at completely different stages of maturity as companies, Nvidia and CoreWeave share something fundamental that ties them directly to the current Nasdaq movement: both sit at the center of the artificial intelligence value chain. Nvidia manufactures the hardware that makes AI possible at scale, while CoreWeave makes that hardware available in an organized, efficient, and accessible way for companies that do not have the ability or desire to build their own infrastructure. It is an almost symbiotic relationship, and the growth of one tends to fuel the growth of the other, creating a virtuous cycle within the AI ecosystem.
Another thing they have in common is that both are benefiting from a trend that is still in its early stages. Enterprise adoption of artificial intelligence in business processes, customer service, data analysis, product development, and dozens of other applications is still in its infancy. As more companies of all sizes begin integrating AI into their operations more deeply, demand for chips like Nvidia’s and infrastructure like what CoreWeave offers will continue to grow. This is the kind of tailwind that analysts call a secular tailwind, a long-term trend that drives growth regardless of short-term economic cycles.
The CUDA ecosystem and Nvidia’s competitive moat
One aspect that deserves attention when we talk about Nvidia’s valuation is the ecosystem the company has built over the years. CUDA, the company’s parallel computing platform, is so deeply embedded in AI development workflows that switching to an alternative is not a simple decision, even if another company launches a technically competitive chip.
That creates an enormous competitive moat, because the switching cost for customers is extremely high, both in time and in human and financial resources. Developers who learned to work with CUDA, entire software libraries optimized for Nvidia’s architecture, and training pipelines that took months to calibrate are not things you abandon overnight. It is the kind of advantage that tends to persist for a long time and that supports elevated profit margins even in a scenario of increasing competition.
Why these stocks still look cheap
The burning question is: how is it possible that companies this obvious in the market still present favorable entry points? The answer lies in a combination of factors the market is still processing.
In Nvidia’s case, the enormous market cap scares off a lot of investors. There is a widespread perception that a company worth nearly $5 trillion simply does not have room to grow meaningfully anymore. But that perception ignores the fact that the company’s earnings growth has been so strong that the P/E multiple stays contained. In other words, earnings are growing just as fast as the stock price, which keeps the valuation at reasonable levels.
In CoreWeave’s case, post-IPO volatility created an entry window that may not last long. The more than 60% recovery for the year shows the market is beginning to price in the company’s potential, but the neocloud segment is still poorly understood by many institutional investors. As more revenue and contract data get released, the trend is for that perception gap to close, potentially driving shares to higher levels.
What to watch in the coming quarters
For anyone following stocks on the Nasdaq and trying to understand where the tech market is headed, keeping a close eye on Nvidia and CoreWeave is practically a must. Not because they are the only relevant companies in this space, but because they function as thermometers for the market’s appetite for artificial intelligence.
When these stocks move, it is because something significant is happening in the sector, whether it is a new round of contracts, a meaningful technological breakthrough, or a signal that demand for AI compute continues to exceed all expectations.
Key things to watch over the coming months include:
- The trajectory of Nvidia’s data center segment revenue, which is the heart of the company’s AI business
- The pace at which CoreWeave closes new long-term contracts with enterprise clients
- Nvidia’s ability to maintain elevated profit margins as competition in the AI chip market heats up
- CoreWeave’s progress in expanding its infrastructure to meet growing demand
- Regulatory signals that could impact the semiconductor and cloud computing sectors
And for now, the signs keep pointing up. The artificial intelligence market shows no signs of slowing down, the infrastructure still needs to be massively expanded, and the two companies that benefit the most from this environment continue to show solid fundamentals at valuations that, given the growth context, can still be considered attractive. 🚀
