Nvidia Is Now Cheaper Than the Average S&P 500 Stock: Wall Street Still Sees Record Profits

Key takeaways

• Nvidia’s stock is trading at a discount to the S&P 500, reflecting market concerns over customer spending and financing risks, even as analysts see upside potential.
• Nvidia forward
  EPS

  Earnings per share — profit for one share of the company, in dollars.

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  estimate: $12.03 per share
• Nvidia current price: $215
• Nvidia forward
  P/E

  Price-to-earnings — how expensive the share price is versus the company’s recent profit per share.

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  : 18×

What happened

Nvidia’s share price has slipped to a level that is 11% below the average price‑to‑earnings multiple of the S&P 500, the widest gap since 2015. The chipmaker’s forward earnings estimate for the next 12 months is $12.03 per share, up from about $0.40 at the end of 2022, yet its current price of roughly $215 trades at only 18× those earnings, compared with 19× for the broader market.

Why it matters

The discount signals that investors are wary of Nvidia’s future growth trajectory, despite the company’s record earnings and strong AI demand. If the company’s top customers—Microsoft, Amazon, Alphabet, Meta, Oracle and SpaceX—slow their spending, Nvidia’s revenue growth could hit a ceiling. The market’s lower…

Short-term and longer-term

Short-term. Over the next few days, watch for any earnings

Longer-term. For investors looking ahead, Nvidia’s long‑term case hinges on sustained demand from hyperscalers and the ability of neoclouds to finance their GPU needs.