Nvidia’s Stock Valuation Drops to Decade Low
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Nvidia's Stock Valuation Drops to Decade Low
- Nvidia's forward 12-month price-to-earnings (P/E) ratio has fallen below 17x in mid-September 2026, marking its lowest level in over a decade, despite expectations of significant revenue and profit growth.
- CEO Jensen Huang has publicly addressed the market's skepticism, referring to Nvidia as "the world's first and only growth value stock."
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Nvidia’s stock valuation has reached its lowest point in over a decade, with its forward 12-month price-to-earnings (P/E) ratio falling below 17x as of mid-September 2026. This is a significant drop from its 2025 multiple, which was twice as high, and also lower than the over 25x earnings estimates seen in May 2026. This decline in valuation comes despite the company consistently exceeding revenue and profit expectations in recent quarters.
Market analysts attribute this “de-bubbling” of valuation to a considerable skepticism regarding the sustainability of Nvidia’s current profitability. One key factor is the pressure on gross margins, which are projected to decline from 75% in the second quarter to below 72% by the fourth quarter, primarily due to rising costs of critical components like memory chips.
Another concern is the increasing competition, particularly as major customers such as Meta Platforms and Alphabet are developing their own in-house AI chips. This shift could potentially erode Nvidia’s pricing power and market share over time. While Nvidia’s stock has gained 22% so far in 2026, this performance is modest compared to the broader Philadelphia Stock Exchange Semiconductor Index, which has surged nearly 76% in the same period. Despite these market concerns, Nvidia’s CEO Jensen Huang has stated that the company expects fiscal year 2028 revenue to grow by approximately 70%.