In One Sense, Nvidia's Stock Now Looks Cheap

Nvidia has shed about $1 trillion in less than two months—and some on Wall Street say that drop has turned it into a relative bargain. The AI-chip leader's shares are down 16% from their May peak as investors rotate into other semiconductor plays. Bloomberg reports its shares are up just 5.6% YTD, while the S&P 500 has seen a 9.6% gain.

• Key lines from Bloomberg: Nvidia is "trading at 18 times earnings projected over the next 12 months... The last time the shares were this inexpensive was early 2019. To get a sense of how dramatically it has fallen off, the erstwhile market leader is now cheaper than the S&P 500 Index, which is priced above 20 times forward earnings, and the technology-heavy Nasdaq 100 Index, which is at almost 23 times."
• "Investors [are] looking for AI plays beyond Nvidia," Mike Reynolds of Glenmede tells MarketWatch. "When you become the biggest stock in the world, there's a target on your back from people trying to chip away at your moat, and I think that's part of what we're seeing."
• Quartz takes a similar stance: "None of this reflects a deteriorating business case. Analysts have continued to lift earnings forecasts, and Nvidia's grip on the server GPU market—roughly 97% at the end of 2025, up from 95% the year before—has shown little sign of loosening. The shift instead reflects investors rotating into other parts of the semiconductor sector, particularly memory and storage stocks."

Meanwhile, MarketWatch reports Apple is getting closer to overtaking Nvidia as the largest US company by market cap. The valuation gap between the two hit a peak of $1.37 trillion in August of last year; that has now shrunk to about $200 billion.