One of the biggest debates raging on Wall Street in recent months is what to make of Nvidia (NVDA +0.88%). The company was arguably the catalyst for the artificial intelligence (AI) revolution, supplying the graphics processing units (GPUs) that enable the technology. After a run of 1,180% that spanned three years, the stock has fallen 36% from its peak and is back where it was one year ago.

Many investors believe the sell-off is unwarranted and that it’s only a matter of time before Nvidia’s stock price rebounds, particularly in light of the company’s recent forecast. But one classic financial model suggests Nvidia’s stock price should be above $900.

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A different approach

Most Wall Street analysts employ a…