Dan Loeb calls Nvidia reasonably valued at 15x forward earnings

Dan Loeb's Third Point hedge fund has accumulated over 2.9 million shares of Nvidia across four consecutive quarters, betting on what he calls an AI "super-cycle" that remains in its early stages. Loeb argues the chipmaker is reasonably valued at roughly 15 times projected 2027 earnings, dismissing comparisons to the dot-com bubble by citing Nvidia's substantial cash flows. The $25 billion fund's continued accumulation signals institutional confidence that hyperscaler spending on AI hardware will sustain Nvidia's growth.

Dan Loeb calls Nvidia reasonably valued at 15x forward earnings The Third Point founder is betting big on what he calls an AI 'super-cycle' that's barely getting started. When a hedge fund manager running $25 billion tells you a stock isn’t expensive, it’s worth asking what math he’s using. Dan Loeb, founder of Third Point, is making that case for Nvidia, arguing that the chipmaker trades at roughly 15 times its projected 2027 earnings and just 12 times what he expects it to earn in 2028. The dot-com bubble comparison doesn’t hold, according to Loeb Loeb’s argument is straightforward: Nvidia generates substantial cash flows. The dot-com darlings, by and large, did not. Loeb has described the current AI investment environment as a “super-cycle,” one he believes is still in its early innings. He frames the opportunity through what he calls the “AI stack,” a layered ecosystem that spans energy infrastructure, semiconductor technology, software platforms, and end-user applications. Third Point has been steadily loading up Third Point purchased over 1.45 million shares of Nvidia in Q1 2025, followed by another 1.35 million in Q2. The pace slowed in the second half of the year, with 50,000 shares added in Q3 and 100,000 in Q4, but the direction never changed. That’s four consecutive quarters of accumulation. Beyond Nvidia, Third Point holds significant stakes in Microsoft, Amazon, and Google, the three hyperscalers that collectively represent the largest buyers of the very chips Nvidia sells. The Philadelphia Semiconductor Index has climbed 40% year-to-date, reflecting a market that’s pricing in sustained demand for chips powering AI workloads. What the valuation argument actually means for investors When Loeb says Nvidia trades at 15 times 2027 earnings, he’s implicitly saying he believes those earnings will materialize. That’s a bet on continued hyperscaler spending, sustained demand for AI training and inference hardware, and Nvidia maintaining its competitive moat against AMD, Intel, and a growing roster of custom chip efforts from its own customers. Third Point isn’t a tech-focused venture fund prone to narrative-driven investing. It’s an activist hedge fund with a reputation for rigorous, sometimes combative, fundamental analysis, with notable campaigns at companies including Sony and Sotheby’s. Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy https://cryptobriefing.com/editorial-policy/ .