Siegel: Nvidia’s 20x P/E Is a Steep Discount for a 30-40% Growth Stock

Jeremy Siegel has a simple question for investors panicking out of Nvidia right now: why are you discounting a 30-40% growth machine like it’s a tired industrial conglomerate?

The Wharton professor and longtime market bull made the case recently that the Mag-7 selloff has gone too far, and Nvidia (NASDAQ:NVDA | NVDA Price Prediction) is his clearest example.

“When you take a look at some of those Mag-7 stocks like Nvidia that are selling in the low 20s, some even say lower in terms of price earnings ratio, that is an awful lot of discounting. For a company that has been growing 30, 40% a year.”

He’s right that the valuation has compressed. Nvidia’s forward P/E currently sits at roughly 23x, and that’s for a company that just posted full-year revenue of $215.94 billion, up 65% year-over-year. The most recent quarter alone showed revenue of $68.13 billion, up 73.2% year-over-year, with net income growing nearly 95%.

That’s not a 30-40% growth story right now. It’s faster. Siegel’s framing, by that measure, appears conservative relative to the reported growth rates.

The Business Behind the Multiple

This isn’t a company riding a single product cycle. Nvidia’s Data Center segment generated $62.31 billion in Q4 alone, up 75% year-over-year, with networking inside that segment growing 263%. That networking number matters because it signals customers aren’t just buying GPUs, they’re building entire Nvidia-native infrastructure stacks.

CEO Jensen Huang framed the moment on the earnings call:

“Computing demand is growing exponentially. The agentic AI inflection point has arrived. Grace Blackwell with NVLink is the king of inference today, delivering an order-of-magnitude lower cost per token, and Vera Rubin will extend that leadership even further.”

The next platform is already in the pipeline. Meta has committed to millions of Blackwell and Rubin GPUs in a multiyear partnership, and total supply commitments stand at $95.2 billion. This is not a company guessing at demand.

The Pullback Context

Nvidia shares are currently trading at $180.05, down 6.64% over the past week and 3.46% year-to-date. The VIX has climbed to 21.44, signaling elevated market anxiety, which Siegel argues is doing most of the work in pushing these valuations lower, not fundamentals.

He’s watching energy prices as a key macro tell. WTI crude is currently at $66.36 per barrel, in the moderate range, which is neither inflationary nor deflationary. If oil stays contained, one of the key headwinds Siegel cites fades.

The analyst community hasn’t lost the thread. The consensus price target sits at $264, with 58 analysts rating the stock a buy or strong buy against just one sell.

Siegel’s core point is this: fear is doing the discounting right now, not math. His argument is that if AI infrastructure spending has years of runway and Nvidia remains the dominant platform for that buildout, then a 23x forward multiple on a company growing this fast represents a valuation gap that Siegel argues is driven by sentiment rather than fundamentals.