Although his income is growing very fast, Nvidia (NASDAQ: NVDA) is now trading near its lowest price since the dawn of artificial intelligence (AI) boom.
Of course, for the chipmaker money it grew 65% last year, but the stock, trading at $117.24 at the time of writing on March 27, 2026, enjoys a price-to-earnings (P/E) ratio of about 35x.
In comparison, in September last year, it stood at 53x, while at the end of summer 2023, it was once 163x.
In other words, Nvidia’s stock has been undervalued relative to its earnings, even as its business continues to grow rapidly.
Will Nvidia stock fall out of favor?
Tech stocks as a whole seem to have fallen out of favor with investors. For example, a The value of the S&P500 the information technology sector is down 7.8% on the six-month chart. During the same period, Nvidia has fallen by 5.8%. As the company continues to post strong earnings, performance appears to be inconsistent, even as demand for the world’s largest technology businesses continues to grow.
The failure to gain momentum is at the expense of the semiconductor maker, since trading at a forward P/E of around 35 means the stock is bought for flawless execution. This is because such multiples assume that the company can continue to convert demand for energy into cash and maintain extraordinary profits.
Looking ahead, management tips for the first quarter of 2027 about $78 billion. In addition, at Nvidia’s recent GTC event, CEO Jensen Huang predicted revenue of at least $1 trillion from 2025 to 2027.
In a sustained break, Nvidia may need to show that its high-end products can attract customers and reduce power volatility. Alternatively, a new, stronger-than-expected AI boom could provide a catalyst to push the levels higher.
That is, until the market is confident that the state of the AI sector will not suffer too much, Nvidia stock may remain volatile even as the company continues to grow.
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