By Keithen Drury
Publication Date: 2026-10-27 19:41:00
Nvidia (NVDA +1.01%) has had a rough few weeks. While it notched a new all-time high at the start of October, the stock has sold off and is now down over 10% from that level. That’s a notable sell-off, especially given that it’s the world’s largest company by market cap.
But is it the perfect buying opportunity right now? Let’s take a look at what history says to find out.
Image source: Getty Images.
Sizable drops are nothing new for Nvidia
Nvidia may have been available to invest in for nearly three decades, but its current business state has only been relevant since 2023, when the AI arms race began. If you look at a stock chart that uses the starting price of 2023 as the high point for Nvidia and then look at drops after that, you can see that selling off 10% or more is nothing new.
In fact, it appears that Nvidia spends about as much time 10% or more off its all-time high as it does near its all-time high. So, this is familiar territory for Nvidia investors. The question is, is it a buy now?
I think the best way to assess this is to look at Nvidia’s valuation. The best way to assess Nvidia’s stock is the forward price-to-earnings (P/E) ratio, which uses analyst estimates to determine what its earnings over this fiscal year will be. From this perspective, Nvidia is extremely cheap, but there’s one glaring thing that hasn’t happened yet.
NVDA PE Ratio (Forward) data by YCharts
Normally, Nvidia’s stock rallies to a 40-times forward earnings level…
