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12-month forward PER 18x…Lower than S&P 500 and Nasdaq 100
The market capitalization of U.S. semiconductor company Nvidia evaporated by more than $1 trillion (approximately 1,500 trillion won) in about two months, though it recently recovered some of its losses.
Nevertheless, its valuation (appraised value) remains at levels seen before the artificial intelligence (AI) boom.
Bloomberg reported on the 8th that, based on the closing price of $196.93 on the 7th (local time), Nvidia's 12-month forward price-to-earnings ratio (PER) is 18 times, its lowest level since early 2019.
Nvidia's valuation is lower than the S&P 500 index (approximately 20 times) and the Nasdaq 100 index (approximately 23 times).
Nvidia's stock price hit an intraday all-time high of $235.47 on May 14, driven by increasing global AI computing demand and the U.S. government's approval of chip exports to Chinese companies. Its market cap swelled to $5.7285 trillion.
However, Nvidia's market cap shrank to $4.6630 trillion on June 26, when the semiconductor stock correction fully began, with $1.0655 trillion evaporating in just a month and a half.
Since then, Nvidia's stock price has partially rebounded, with its market cap currently around $4.9400 trillion as of the 7th.
The closing price on the 7th was 16% lower than its intraday all-time high.
Despite this, its current market cap remains the world's largest, surpassing Alphabet ($4.3 trillion) and Apple ($4.3 trillion).
Nvidia's market share for server-grade Graphics Processing Units (GPUs) also increased to 97% at the end of last year, higher than the previous year.
From late 2022 to 2025, Nvidia was considered Wall Street's hottest stock, with its share price surging over 1,100% thanks to a surge in demand for AI-specific GPUs.
However, this year's stock price increase is only 5.6%, falling short of the S&P 500 (9.6%) and Nasdaq 100 (16%) gains.
Analysis suggests that the decline in corporate value is not due to worsening performance forecasts.
Wall Street analysts have actually raised their future quarterly earnings forecasts. Nevertheless, the analysis suggests that Nvidia's stock weakness is due to being sidelined by the concentration of investment in memory semiconductors like Micron.
Micron, an Nvidia supplier, surged 229% this year, driven by soaring prices for High Bandwidth Memory (HBM), while AMD and Intel stock prices also doubled or tripled.
In addition, major Nvidia customers such as Alphabet and Amazon expanding their development of custom AI chips are also cited as factors weighing on the stock price.
However, the strength in memory stocks has also faltered in recent days. Micron, Samsung Electronics, and SK Hynix all plunged on the 2nd due to concerns about slowing AI infrastructure demand, entering a correction phase.
Michael Bailey, Research Director at Foulton Breakfield Broeniman, said, "Market attention has shifted," adding, "Companies like Micron, which had lower expectations, are taking the spotlight."
Conversely, Randy Hair, Research Director at Huntington Bank, predicted that the stock is "undervalued at current prices" and will rebound within a few months, citing solid revenue growth and profitability. He stated, "Stock prices eventually follow earnings."
According to Bloomberg's compilation, Nvidia's consensus (average market forecast) for revenue and net profit for fiscal year 2027 (February 2026 - January 2027) are $393 billion (approximately 590 trillion won) and $228 billion (approximately 343 trillion won), respectively. These figures represent a 90% increase in revenue and an 82% increase in net profit year-over-year. Notably, the net profit forecast has risen by 13% over the past three months.
Among 82 analysts covering the stock, only one has a sell rating, and the average target price is $302, more than 50% higher than the current price.
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