Tae Kim, founder of Key Context and author of “The Nvidia Way,” said Nvidia Corp. is increasingly undervalued despite emerging competition.

This assessment comes as the AI chip market faces growing pressure from custom silicon developed by major cloud providers. Kim's perspective suggests that the scale of Nvidia's current growth outweighs the potential disruption from rivals.

Kim said Nvidia is trading at its cheapest valuation in years despite accelerating fundamentals [1]. He said that the company has achieved nearly 80% growth [1] on an $80 billion figure [1] in just three months [1].

Market analysts often point to the development of internal chips by tech giants as a long-term risk to Nvidia's dominance. However, Kim said that threats from Google’s TPU and Amazon’s Trainium remain a "rounding error" [1].

According to Kim, the combination of cheap valuation metrics and strong fundamentals indicates that the market is not fully pricing in the company's current trajectory [1]. He said that the sheer volume of demand continues to outpace the capacity of competitors to erode Nvidia's market share.

“"Nvidia is trading at its cheapest valuation in years despite accelerating fundamentals."”

The debate over Nvidia's valuation centers on whether the company's growth is sustainable or a peak. By framing competitor chips as a 'rounding error,' Kim suggests that the ecosystem lock-in and the speed of Nvidia's scaling are far more significant than the incremental gains made by Google and Amazon's proprietary hardware.