After losing roughly US$1 trillion in market value in less than two months, Nvidia Corp.’s stock is trading at 18 times forward earnings, its cheapest since early 2019, according to data compiled by Bloomberg. This marks a dramatic fall from its all-time high on May 14, when shares peaked before tumbling 16%.
Shift in AI Trade
The chipmaker’s graphics processing units (GPUs) still dominate the AI data centre market, but investors are rejiggering the AI trade by ditching Nvidia in favour of competing semiconductor manufacturers, particularly those in the memory market. The selloff has made Nvidia cheaper than the S&P 500 Index, which trades above 20 times forward earnings, and the Nasdaq 100 Index, at almost 23 times.
“Sentiment has moved on,” said Michael Bailey, director of research at Fulton Breakefield Broenniman. “You’re seeing these companies where expectations were very low — the Microns of the world — stealing the spotlight.”
Revenue Growth Remains Strong
Nvidia’s shrinking valuation is not due to a deteriorating outlook. Wall Street analysts have been raising profit estimates for the coming quarters. The company is expected to deliver the fourth-fastest revenue growth in the S&P 500 this year, yet it remains cheaper than about half of the stocks in the index, including Hershey Co. and Dominion Energy Inc.
“Stocks follow earnings,” said Randy Hare, director of equity research at Huntington Bank, who expects Nvidia shares to resume their climb. “It’s a consistent performer.”
Competitors Surge
While Nvidia has stalled, rivals like Advanced Micro Devices Inc. and Intel Corp. have seen their share prices double or even triple this year. The Philadelphia Stock Exchange Semiconductor Index has jumped 74% in 2026, led by Micron Technology Inc., which surged 229% amid soaring prices for high-bandwidth memory chips. Nvidia, once the second-best stock in the index in 2024, is now the third-worst performer among 30 semiconductor-related stocks.
After soaring more than 1,100% from the end of 2022 through 2025, Nvidia shares are up just 5.6% in 2026, trailing the S&P 500’s 9.6% gain and the Nasdaq 100’s 16% rise. The shift highlights how the AI trade is moving to other areas, such as memory and storage, as investors seek new opportunities.
