Nvidia Fails to Soar Despite Record Results: 10 Undervalued Alternatives

Nvidia’s exceptional earnings failed to spark a stock rally.
Should this be seen as a warning sign for the most expensive tech stocks?
Discover 10 undervalued tech stocks that analysts are particularly bullish on.

NVIDIA () reported for the first quarter of fiscal year 2027 on Wednesday evening, and the numbers were once again very strong.

Revenue jumped 85% from a year earlier to $81.6 billion, beating analysts’ expectations of around $79.2 billion. The company’s Data Center business, which remains its main growth driver, nearly doubled revenue year over year to $75.2 billion. This segment now makes up 92% of Nvidia’s total revenue and also came in above Wall Street estimates.

Adjusted earnings per share reached $1.87, ahead of the expected $1.76.

Nvidia also gave strong guidance for the current quarter, forecasting revenue of $91 billion. This outlook has pushed analysts to raise their estimates again.

CEO Jensen Huang highlighted the growing demand for AI infrastructure, saying that the expansion of AI factories is accelerating rapidly.

Despite these strong results, Nvidia shares fell about 1% in after-hours trading. This continues a recent pattern where the stock has dropped after earnings reports, even when results exceeded expectations. The shares also declined after the company’s previous three quarterly reports, including a 4% drop following fiscal Q4 2026 earnings in February.

This situation raises an important question for investors. NVIDIA shares reached a record high of $236.54 on May 14, only days before the earnings report. The stock is currently trading at nearly 45 times trailing 12-month earnings, with a market value of about $5.3 trillion. At these levels, even very strong results may fail to impress investors if they fall slightly short of extremely high expectations.

Some analysts have compared the recent rally in semiconductor stocks to the dot-com bubble. has surged more than 50% in just six weeks, raising concerns that markets may already be pricing in years of perfect growth.

This warning extends beyond Nvidia and applies to much of the expensive technology sector. In the current market, positive news alone may no longer be enough to push stocks higher.

Because of this, some investors may prefer technology companies that still trade at more reasonable valuations and offer clearer upside potential based on valuation models, instead of buying stocks where future growth expectations are already heavily priced in.

10 Tech Stocks Show Strong Potential

We therefore turned to the Investing.com screener to identify tech stocks that, unlike Nvidia, are significantly undervalued according to valuation models and analysts. Our criteria:

Market: United States
Sector: Technology
Market cap over $3 billion
Upside potential of more than 20% according to InvestingPro Fair Value (which synthesizes several recognized valuation models)
Upside potential of over 50% based on the average analyst target
Stocks covered by more than 10 analysts
Overall Health Score, Growth Health Score, and Cash Flow Health Score above 2.5/5

This research has allowed us to identify 10 opportunities:

Specifically, these tech stocks show potential based on Fair Value ranging from 23.6% to 45.3%, while analysts assign them upside targets of 50% to 104.1%.

Among these stocks are:

1. Pegasystems Inc

Pegasystems Inc () is a major provider of business automation and customer management software for large companies, including banks, insurers, and telecom firms. The company has also been expanding its use of generative AI through its Blueprint platform.

The stock fell nearly 40% from its highs in 2026 after weaker-than-expected Q1 results, but some investors now see this decline as a potential opportunity. One important business metric, Cloud ACV, which measures recurring cloud revenue, grew 29% year over year. Free cash flow also topped $200 million in Q1 alone.

Despite these numbers, the stock is trading at around 11.7 times forward earnings, which is relatively low for a software company with gross margins near 75%.

2. Futu Holdings Ltd

FUTU: Futu Holdings Ltd () operates online brokerage and wealth management platforms across Asia and the US through its Futubull and Moomoo apps. The company continues expanding across Hong Kong, Singapore, Japan, Malaysia, and the United States.

Its business model remains highly profitable, with gross margins above 88%, growing active customer accounts, and continued international expansion. However, some analysts believe the company’s valuation still does not fully reflect this growth.

Bank of America currently has a “Buy” rating on the stock with a target price of $223.50, while Morgan Stanley maintains an “Overweight” rating and a target price of $225, suggesting that analysts see current price levels as attractive in the short term.

However, all other stocks on the list show higher potential according to Fair Value!

 

Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of any assets and does not constitute an offer, solicitation, recommendation, or advice to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky; therefore, any investment decision and the associated risk are the sole responsibility of the investor. Additionally, we do not provide any investment advisory services.