Dan Loeb says $5 trillion Nvidia is still undervalued

Nvidia is worth about $5 trillion, but Third Point CEO Dan Loeb told the All-In podcast that the AI chip maker remains undervalued. "I think we'll look back at some point in time and say that was a foolish way to think about Nvidia," he said. Loeb called the stock "absolutely" undervalued when judged against its earnings potential over the next several years.

He suggested investors may be underestimating the company because they struggle to process the scale of its market value. He argued Nvidia's size has become a psychological hurdle, especially for hedge funds and long-short investors who view the stock as a natural short because of its enormous valuation.

Many long-short funds are structurally required to maintain short positions, making Nvidia an obvious target despite its strong fundamentals. Nvidia shares have surged nearly 14-fold since the start of 2023 and are up about 10% this year.

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