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Nvidia shares trade below 17 times forward earnings as concerns grow
The stock’s de-rating is happening even as fiscal Q2 revenue more than doubled to $96.2 billion and data center revenue jumped 117% to $89 billion, according to Yahoo Finance.
Nvidia (NVDA) is trading at less than 17 times expected forward 12-month earnings, the cheapest valuation level the shares have seen in more than a decade, Yahoo Finance reports. The outlet says the multiple has fallen to around half of what investors were willing to pay as recently as early 2025, even as the company’s fundamentals have continued to accelerate.
According to Yahoo Finance, the market’s skepticism centers on whether the current AI spending cycle can sustain Nvidia’s growth. The disconnect is highlighted by management guidance that suggests continued strength, including a forecast of approximately $108 billion in fiscal third-quarter revenue, implying 89% growth.
Yahoo Finance also points to business momentum in Nvidia’s latest results: fiscal second-quarter revenue rose more than 100% year over year to $96.2 billion, and data center revenue surged 117% to $89 billion. Looking ahead, CEO Jensen Huang projected chip sales could double in calendar year 2027.
Still, risks cited by Yahoo Finance include the company financing a growing share of its sales to AI startups, with roughly 25% of fiscal 2028 revenue expected to come from customers using company-backed financing. The outlet also flags headwinds such as calls from AI labs to slow frontier development, community backlash tied to data center construction, rising interest rates pressuring hyperscaler capital budgets, and continued uncertainty around the sustainability of Nvidia’s growth trajectory.