NVDA is significantly undervalued (fair value $338 vs $218, 55% upside) and is the best stock to buy given strong demand and supply constraints.

Coreweave delivered fantastic news for Nvidia stock investors, suggesting that demand versus supply still remains in the favor of the sellers.

Boy, that's great news to hear if you're an Nvidia shareholder or if you're a Coreweave stock investor.

So Nvidia serves as the backbone, the primary supplier and main financial guarantor for Coree's ever expansive Neocloud operation. These data centers that coreweave operates are using components provided by Nvidia and then even beyond supplying 100% of the advanced GPUs powering Coreweave's data centers. So it's exclusive relationship with Coreeave.

When Coree's revenue is increasing, it's increasing because they're renting out GPUs from Nvidia. But besides that, Nvidia acts as a strategic shareholder holding in an 11% 11 and a half% equity stake.

So this is double good news for Nvidia stock investors. Right? On the top side, Nvidia benefits because Cororeweave is selling out of Nvidia's products, which means Nvidia can send them even more product and sell them more product.

And then on top of that, as Cororeweave rents out Nvidia products at a premium price, Nvidia benefits again. So they double dip on their sales to Core Weeave.

Of course, I have to say that the downside can also be true. In the event of, and this is unlikely to happen anytime soon, but in the event of Cororeweave sales falling, Nvidia is going to experience a double negative.

Nvidia will be able to sell fewer products to core because they're already have too much supply and then as Coree sales drop Nvidia's equity ownership stake will be worth less.

So on the upside this is great for Nvidia but on the downside it's also bad. So in other words it increases leverage for Nvidia. It increases the benefits and it increases the downside.

But when you're in a booming industry, that higher leverage pays off. And it looks like from all estimates that I'm seeing that this industry will remain a booming industry at least until the end of 2027.

So Nvidia is already forecasting a very strong year for its fiscal year 2028 which is actually calendar year 2027. Nvidia's fiscal year ends in January of 2028. And so it calls it fiscal year 2028, but it's actually for primarily results achieved in calendar year 2027.

But Nvidia is forecasting 70% revenue growth in its fiscal year 2028. That was far above what analysts were expecting. And if you remember when Nvidia reported those results, I was live covering that earnings event and Nvidia's stock price jumped as a result. I was thrilled about that.

Nvidia is one of the largest positions in my portfolio. I've ranked Nvidia as the best stock to buy in 2026. So that was great to see and great to see the share price reacting positively.

And in fact, Nvidia management team said that the sales would be much larger if Nvidia wasn't supply constrained. Much larger is what Nvidia CEO Jensen Huang said during that conference call. So Nvidia is supply constraint too.

Nvidia is forecasting 70% growth in its fiscal year 2028 with supply constraints. If it was able to sell all of the demand that it has, it could have been 80 85 maybe 100% revenue growth in calendar year 2027 or fiscal year 2028.

And that's great news for Nvidia and Core Weave.

Meanwhile, I calculated a fair value of $338 for Nvidia stock compared to its current market price of 218. I calculated a 55% upside here for Nvidia stock. This one I see as being significantly undervalued and I've ranked it as the best stock to buy as one of the reasons for that.

So to update, Nvidia stock I see as being significantly undervalued. Coreweave as being slightly undervalued. Coreweave stock I have ranked as a buy. Nvidia stock I have ranked as the best stock to buy.

I own Nvidia stock and I'm interested in adding more Nvidia stock to my portfolio.