Nvidia has become an unlikely laggard in the AI trade it once led. According to Yahoo Finance, the relative price of Nvidia's (NVDA) stock has fallen to levels the company hasn't seen since at least 2019 — well before it became a market darling on the back of the AI boom. The measure in question is Nvidia's forward price-to-earnings ratio, a common gauge of how expensive a stock is relative to expected profits.
What makes the slide notable is the backdrop: Yahoo Finance reports the valuation hit a multiyear low even as the company's revenue sets records. GuruFocus reported Nvidia dropped 16% as its valuation reached its cheapest level since 2019.
The broader chip sector has been under pressure too. AOL noted the iShares Semiconductor ETF (SOXX) fell 11% in the past week and roughly 16% from all-time highs set at the end of June. TradingView reported that Nvidia, Micron and AMD led a chip-stock selloff after President Trump said a U.S.-Iran "truce is over."
Not everyone reads the drop as bad news. AOL framed the pullback as a reason Nvidia "might be the new value play in semiconductors," while a separate TradingView piece weighed whether the struggling stock is now a buy, sell, or hold as AI peers climb. On the bearish side, Seeking Alpha published a piece titled "Nvidia: It's About To Get Much Worse."
Why it matters: Nvidia is a bellwether for the entire AI trade, so a stock falling to pre-boom valuations while its sales hit records signals that investors are rethinking how much future AI growth is already priced in.