Nvidia CEO Jensen Huang

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Cheap chips?

Nvidia hasn’t been this cheap versus the S&P 500 in nearly a decade — and shares are still getting crushed

A relatively small valuation premium compared to the S&P 500 isn’t bringing out enough dip-buying to propel Nvidia higher.

4/21/25 11:24AM

Nvidia, formerly a $3 trillion chip designer and the world’s most valuable publicly traded company, continues to face intense selling pressure, down more than 5% in early trading on Monday.

It’s a moving target based on changes to stock prices and estimates, but Nvidia is now trading at a forward price-to-earnings ratio of about 20.5x, which is about 6.5% higher than the S&P 500’s multiple (19.25x). That’s the smallest premium since early 2016, back when its sales from gaming were 10 times its data center revenues.

That’s particularly noteworthy as Nvidia had managed to grow into what was once an obscenely rich valuation as its role in powering the AI boom bore fruit. From mid-May 2023 through the stock’s record high early this year, Nvidia’s multiple had nearly halved from 63.2x to 34.7x.

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