Nvidia’s Valuation Falls to Pre-Boom Territory After a $1 Trillion Drop
Nvidia (NVDA) has erased roughly $1 trillion in market value in under two months, and that slide has pushed its stock down to its cheapest valuation since before the AI boom began. Since peaking at a record high on May 14, the shares have dropped about 16%. Investors, in other words, have started reshuffling the AI trade — and they are moving money away from the former market darling.
Where the Money Is Going
Rather than fleeing chips altogether, investors are simply rotating into rivals. Memory and storage makers such as Micron (MU) have absorbed much of that flow, while competitors like AMD (AMD) and Intel (INTC) have watched their shares double or even triple this year. As one analyst put it, sentiment has “moved on,” and the companies that once carried low expectations are now the ones grabbing attention.
Cheaper Than Hershey
Consequently, Nvidia now trades at roughly 18 times projected forward earnings — a level it last touched in early 2019. That figure sits below both the S&P 500, which trades above 20 times, and the Nasdaq 100, which sits near 23 times. Remarkably, Nvidia has become cheaper than about half the stocks in the S&P 500, including names as unglamorous as candy maker Hershey (HSY) and utility Dominion Energy (D).
Fundamentals Still Point Up
Yet this decline does not reflect a weakening business. On the contrary, Wall Street analysts keep raising their profit estimates for the coming quarters, and Nvidia is still on track to deliver the fourth-fastest revenue growth in the entire S&P 500 this year. Because the company’s growth and profitability have held so steady, several analysts now argue that the stock looks genuinely undervalued at these levels.
The Bottom Line
Nvidia’s tumble, therefore, tells a story about rotation rather than collapse. The GPUs still dominate the AI data center market, but the market’s enthusiasm has spread outward to the rest of the semiconductor space. For investors willing to look past the shifting mood, the current price may represent an opportunity rather than a warning.
