Nvidia Trades Near Decade-Low Valuation Multiple Despite Strong Earnings Outlook

Nvidia Corp. shares are trading at less than 17 times forward earnings, near the cheapest level in over a decade, as investors question whether the chipmaker's profit growth is sustainable. The multiple is half what the stock commanded in 2025 and down from over 25 times estimates as recently as May 2026. The de-rating persists despite Nvidia projecting 70% sales growth in fiscal 2028, above the 45% consensus estimate. The stock is up 22% in 2026, ranking second among the Magnificent Seven but fifth-worst in the Philadelphia Semiconductor Index, which has gained 76% this year. Rising memory chip costs are pressuring gross margins, projected to shrink below 72% in the fourth quarter from 75%. Competition is intensifying as customers including Meta and Alphabet develop chips in-house. CEO Jensen Huang called the company "incredibly misunderstood" at a Goldman Sachs conference in September 2026. TCW portfolio manager Eli Horton called the valuation setup "very compelling," noting that a significant AI capex slowdown would be required to justify current multiples.