By Brian Sozzi
Publication Date: 2026-02-23 14:21:00
When you see the stock of the company at the epicenter of the AI boom trading at super-low valuations, it’s cause to sit up in your seat.
That’s where I am at on Nvidia (NVDA) ahead of its much-anticipated earnings report on Wednesday. Call it a state of pre-earnings shock.
At less than 24 times estimated forward earnings, Nvidia is trading not far from its lowest price-to-earnings (PE) multiple in five years. It’s also well below its five-year average of roughly 38 times.
And as they say in showbiz: But wait, there’s more (see charts below).
Nvidia’s PE ratio remains near the low end of its peers in Big Tech:
And going back farther, Nvidia’s stock is trading on a PE ratio at steep discounts to its nine-year median:
So the question here is why does the stock trade at these “low” valuation levels?
It can be boiled down to three factors.
One, Nvidia’s valuation has compressed despite record fundamentals because investors are repricing the duration of AI spending rather than questioning its existence.
Two, Nvidia is navigating a major transition from Hopper HGX systems to Blackwell chips — this brings near-term margin pressure that shows up in earnings growth rates.
An analysis by Yahoo Scout reveals Nvidia’s earnings per share in fiscal year 2026 will grow 57% year over year. If that were to happen, it would be far slower than 2025’s growth…
