By Reuben Gregg Brewer
Publication Date: 2026-03-31 02:15:00
Nvidia (NVDA 1.40%) is the poster child of the artificial intelligence (AI) industry. Its high-powered chips are the brains that power AI. The company’s leading position in the chip industry isn’t lost on Wall Street, with the stock up 50% over the past year and over 18,000% over the past decade.
That said, Nvidia’s stock is down nearly 20% from its 52-week high, and it has a new chip platform on the way in late 2026. Is now the time to buy this stock, or should investors just keep it on their wish list?
Nvidia looks cheap or expensive, depending on how you view it
Nvidia’s stock has fallen sharply in recent months. The AI stock’s price drop puts it firmly in correction territory and on the verge of falling into its own personal bear market. The stock looks cheap relative to its own history.
Image source: Getty Images.
For example, Nvidia’s five-year average price-to-earnings ratio is around 64x, but its current P/E is only 34x. Its five-year average price-to-book ratio is 30x, but its current P/B ratio is just under 26x. If you are a long-term believer in AI’s ability to change the world, this may appear like an opportunity to add a leading AI company to your portfolio at a reasonable price.
There’s only one problem: the stock still looks expensive on an absolute level. For example, the average technology stock has a P/E ratio of around 34x and an average P/B ratio of 8.5x. The S&P 500 index (^GSPC 0.39%) has an average P/E of roughly 28x and a P/B ratio of 5x. If you…