By Keith Speights
Publication Date: 2026-10-20 08:44:00
In early 2024, the man known as the “Dean of Valuation” viewed Nvidia (NVDA +1.38%) as ridiculously overpriced. New York University finance professor and author Aswath Damodaran posted on X (the social media platform formerly known as Twitter) that the stock “is a bridge too far for me.” He slashed his Nvidia position by half.
Since then, Nvidia has become the world’s largest company by market cap. Its share price has nearly tripled. You might think that the chipmaker’s valuation would be even more concerning now than it was in 2024. However, an interesting thing has happened with Nvidia along the way. Believe it or not, the stock hasn’t been this cheap in seven years — and only one explanation makes sense.
Image source: Nvidia. Image source: Nvidia.
Historically cheap
Nvidia’s shares currently trade at slightly above 27 times trailing 12-month earnings, according to YCharts. The last time the stock’s price-to-earnings (P/E) ratio was at that level was in June 2019.
NVDA PE Ratio data by YCharts
Over the last 10 years, Nvidia’s average trailing P/E ratio was 61.3. Its earnings multiple today is less than half that amount.
To be sure, Nvidia still doesn’t look cheap by most standards. The S&P 500 (^GSPC +0.41%) sports a trailing P/E ratio of 24.9. Based on the S&P 500 Shiller CAPE (cyclically-adjusted price-to-earnings) ratio, the index is near its second-highest valuation ever.
Nvidia isn’t even the least expensive among its “Magnificent Seven” peers. Google parent…
