Nvidia is cheap heading into major earnings report, tech investor Dan Niles says

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The investor also said to expect a beat-and-raise as the chip giant reports results.

Nvidia is still considered cheap and can rise after its earnings report, according to Dan Niles. The semiconductor stock turned artificial intelligence darling has run up big, said the Niles Investment Management founder. But he also pointed out that Nvidia is still about 15% below the 5-year price-to-earnings average, leading him to think that shares can see upside after the company reports quarterly results Wednesday afternoon.

While Cisco's shares soared from the end of 1994 through 2000, he acknowledged that it did have multiple significant declines on that path. With this in mind, Niles said traders should look for periods of digestion in Nvidia before the next leg up. Looking ahead, he said there should be another drawdown for the stock early next year. Still, the technology-focused investor said AI is in its early stages and will continue to proliferate with profitable companies driving the technology.

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