Zaid

So the backstory here is that NVIDIA has been locked out of China because of US export restrictions, but the US government recently granted NVIDIA a license to export a small number of their powerful H200 chips to China.

But that's just one side of the equation because now the Chinese government has been hesitant to allow Nvidia's chips into their country due to its own national security concerns.

China also wants to funnel support to their homegrown rivals like Huawei.

But Bloomberg recently reported that the Chinese government began telling tech firms like Alibaba that they can prepare to start ordering Nvidia's chips.

And the market has already adjusted to Nvidia not being in China.

So whatever revenue that Nvidia ends up making is just upside.

Jensen seems to think this could be a $50 billion opportunity.

Now to wrap up the bull case, I have to talk about valuation.

I know it sounds kind of crazy to say, but the most valuable company in the world might be undervalued.

So hear me out here, okay?

Nvidia currently trades at less than 22 times forward earnings.

This is well below its five-year average of around 37 times.

In fact, Bloomberg reported that Nvidia is now cheaper than roughly one third of all the stocks in the S&P 500.

The best way that I can put this into perspective is that Nvidia's revenues grew 65% last year, which makes it the third fastest growing company in all of the S&P 500.

And right now the stock is trading basically at the same forward PE as an average S&P 500 company.

Meanwhile, you have a company like Palantir, which has a similar growth rate to Nvidia, but that stock is trading at nearly 100 times forward earnings.

So that just kind of puts into perspective why Nvidia might be undervalued trading at 22 times forward earnings.

So what's my take here?

Well, look, I'm not going to sit here and tell you that NVIDIA is a risk-free investment.

In fact, I think that there are valid concerns.