Nvidia's valuation has halved since 2025, leaving the chip giant trading at a decade-low forward P/E of 17x as market skepticism regarding sustainable earnings growth outweighs its strong fundamental performance.
Nvidia's forward P/E has fallen below 17x despite ~90% revenue growth, with margin compression and customer in-house chip designs creating skepticism, yet the low multiple is seen as an attractive entry point.
The Philadelphia Semiconductor Index has surged nearly 76% in 2026, indicating broad strength in the semiconductor sector.
Meta is designing its own AI chips, which could reduce its dependence on Nvidia and improve margins.
Alphabet is also developing in-house AI silicon, potentially lowering costs and reducing reliance on external GPUs.
Apple has gained 25% in 2026, leading the Magnificent Seven, but is only mentioned as a performance comparison.
Intel has more than tripled, significantly outperforming Nvidia in the semiconductor index.
AMD has also more than tripled, reflecting strong performance in the chip sector.
Nvidia stock trades at a forward P/E under 17x, marking a decade-low valuation despite projected 90% revenue growth. While the chipmaker faces margin pressure and rising competition from internal silicon projects at Meta and Alphabet, analysts suggest the current discount offers a compelling entry point for investors.
The market is pricing in skepticism regarding the sustainability of Nvidia's earnings, driven by concerns over margin compression and the rise of in-house AI chip development by major tech clients.