After a blockbuster earnings report—one that didn’t just beat expectations but *rammed them into oncoming traffic*—Nvidia’s share price still fell 3.15%.'n'nThis shouldn’t surprise anyone.
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After a blockbuster earnings report—one that didn’t just beat expectations but rammed them into oncoming traffic—Nvidia’s share price still fell 3.15%.
This shouldn’t surprise anyone. Apple investors have seen the company announce life-changing miracles only for the stock to yawn downward anyway. And when sentiment is already in free-fall, you don’t just hit the brakes. The Fear & Greed Index is at 7. That’s not “extreme fear.” That’s “people googling bunker floor plans.”
But I’m not here to read the market’s emotional weather. I care about fundamentals. Numbers don’t panic, people do.
Before earnings, Nvidia’s trailing P/E was ~51. Today it’s 44.1. Yesterday, its forward P/E was 27.7. Today? 24.73.
Based on those figures, Nvidia screens as the second-lowest forward P/E in the Magnificent Seven—cheaper than Apple, Microsoft, Alphabet, Amazon, and Tesla. Only Meta is lower at 19.82. This depends on which estimates you pull, but on this data, the point stands: Nvidia is not the wild outlier people imagine.
And yes, multiples can compress further. Adobe is the current poster child. Revenue keeps climbing, yet the market cap has been chopped in half over the past year. Forward P/E ~13.35. Stock from 557.90 to 312.40. A healthy, profitable, growing company—punished because investor vibes took a sick day.
So let’s stress-test Nvidia’s supposedly ridiculous valuation:
- Current valuation: 4.39T
- Forward P/E of 15: 2.676T – still an empire, not a bubble
- Forward P/E of 10: 1.78T – still one of the largest companies on Earth
- Forward P/E of 5: 892B – somehow still bigger than Walmart, Tencent, Oracle, Visa, Netflix, and Palantir
The math stubbornly refuses to produce the apocalypse people keep insisting is inevitable.
Even in that last scenario—pricing Nvidia like a dusty industrial relic—it would still outweigh Walmart, Tencent, Oracle, Visa, Netflix, and Palantir. Your “AI bubble apocalypse”? Not showing up on the spreadsheet.
And remember: low P/Es don’t mean bankruptcy. Plenty of mature industries trade at single-digit multiples without imminent doom. A P/E of 5 on a growing business would imply something has gone badly wrong, but not literal death. Still, the point remains: you have to nuke Nvidia’s valuation from orbit just to make it “average.”
Meanwhile the actual business keeps cranking out earnings. Not rising—erupting. Nvidia has survived the dot-com crash, the Great Recession, multiple crypto implosions, and the entire era where GPUs were dismissed as toys for gamers. The company is 32 years old and has been consistently profitable for over a decade.
History isn’t destiny, but it does establish a track record.
Could the stock get a haircut? Absolutely. Haircuts are normal. Do the fundamentals spell catastrophe? No.
If anything is collapsing, it’s investor psychology—not Nvidia’s balance sheet.
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After a blockbuster earnings report—one that didn’t just beat expectations but rammed them into oncoming traffic—Nvidia’s share price still fell 3.15%.
This shouldn’t surprise anyone. Apple investors have seen the company announce life-changing miracles only for the stock to yawn downward anyway. And when sentiment is already in free-fall, you don’t just hit the brakes. The Fear & Greed Index is at 7. That’s not “extreme fear.” That’s “people googling bunker floor plans.”
But I’m not here to read the market’s emotional weather. I care about fundamentals. Numbers don’t panic, people do.
Before earnings, Nvidia’s trailing P/E was ~51. Today it’s 44.1. Yesterday, its forward P/E was 27.7. Today? 24.73.
Based on those figures, Nvidia screens as the second-lowest forward P/E in the Magnificent Seven—cheaper than Apple, Microsoft, Alphabet, Amazon, and Tesla. Only Meta is lower at 19.82. This depends on which estimates you pull, but on this data, the point stands: Nvidia is not the wild outlier people imagine.
And yes, multiples can compress further. Adobe is the current poster child. Revenue keeps climbing, yet the market cap has been chopped in half over the past year. Forward P/E ~13.35. Stock from 557.90 to 312.40. A healthy, profitable, growing company—punished because investor vibes took a sick day.
So let’s stress-test Nvidia’s supposedly ridiculous valuation:
- Current valuation: 4.39T
- Forward P/E of 15: 2.676T – still an empire, not a bubble
- Forward P/E of 10: 1.78T – still one of the largest companies on Earth
- Forward P/E of 5: 892B – somehow still bigger than Walmart, Tencent, Oracle, Visa, Netflix, and Palantir
The math stubbornly refuses to produce the apocalypse people keep insisting is inevitable.
Even in that last scenario—pricing Nvidia like a dusty industrial relic—it would still outweigh Walmart, Tencent, Oracle, Visa, Netflix, and Palantir. Your “AI bubble apocalypse”? Not showing up on the spreadsheet.
And remember: low P/Es don’t mean bankruptcy. Plenty of mature industries trade at single-digit multiples without imminent doom. A P/E of 5 on a growing business would imply something has gone badly wrong, but not literal death. Still, the point remains: you have to nuke Nvidia’s valuation from orbit just to make it “average.”
Meanwhile the actual business keeps cranking out earnings. Not rising—erupting. Nvidia has survived the dot-com crash, the Great Recession, multiple crypto implosions, and the entire era where GPUs were dismissed as toys for gamers. The company is 32 years old and has been consistently profitable for over a decade.
History isn’t destiny, but it does establish a track record.
Could the stock get a haircut? Absolutely. Haircuts are normal. Do the fundamentals spell catastrophe? No.
If anything is collapsing, it’s investor psychology—not Nvidia’s balance sheet.
@atomicpoet
I don’t know stonks but this makes sense to me: no one gets sticks for dividends, so earnings are not directly relevant. Future size drives stock prices. So they are saying nvidia (and adobe) are peaking, running out of market to grow to. -
@atomicpoet
I don’t know stonks but this makes sense to me: no one gets sticks for dividends, so earnings are not directly relevant. Future size drives stock prices. So they are saying nvidia (and adobe) are peaking, running out of market to grow to.@ThreeSigma Stock prices are entirely about future earnings. Not dividends, not vibes, not “size.”
Dividends don’t matter because the market pays you for a company’s ability to generate cash, not whether it hands that cash out. Berkshire has never paid a dividend. Amazon didn’t profit for years. They were valued on future earning power.
This is where multiples come in. A multiple is just the market saying, “Here’s how much I’m willing to pay for $1 of this company’s future earnings.”
Slow or shrinking companies trade at 5× because nobody expects growth. Fast, compounding companies trade at 30×–50× because the market believes earnings will explode. It’s not mysticism—it’s expectations.
Which brings us back to Nvidia. If people truly believed Nvidia was “peaking” or “running out of market,” their forward P/E wouldn’t be 24.7×. It’d be 12. Or 8. Or 5.
But a sub-25 multiple on a company guiding $65B next quarter and growing like a freight train? That’s the market saying the opposite: future earnings aren’t shrinking—they’re just getting started. -
@ThreeSigma Stock prices are entirely about future earnings. Not dividends, not vibes, not “size.”
Dividends don’t matter because the market pays you for a company’s ability to generate cash, not whether it hands that cash out. Berkshire has never paid a dividend. Amazon didn’t profit for years. They were valued on future earning power.
This is where multiples come in. A multiple is just the market saying, “Here’s how much I’m willing to pay for $1 of this company’s future earnings.”
Slow or shrinking companies trade at 5× because nobody expects growth. Fast, compounding companies trade at 30×–50× because the market believes earnings will explode. It’s not mysticism—it’s expectations.
Which brings us back to Nvidia. If people truly believed Nvidia was “peaking” or “running out of market,” their forward P/E wouldn’t be 24.7×. It’d be 12. Or 8. Or 5.
But a sub-25 multiple on a company guiding $65B next quarter and growing like a freight train? That’s the market saying the opposite: future earnings aren’t shrinking—they’re just getting started.@atomicpoet
One of the troubles with this is that it's totally insane. How can nvidia GROW it's market when it's building a whole bunch of AI farms that eithera) do as intended and put millions of people out of work and use all our power and clean water, or
b) dont' work as intended and go to rustEither way, how does investing in nvidia help?
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@atomicpoet
One of the troubles with this is that it's totally insane. How can nvidia GROW it's market when it's building a whole bunch of AI farms that eithera) do as intended and put millions of people out of work and use all our power and clean water, or
b) dont' work as intended and go to rustEither way, how does investing in nvidia help?
@ThreeSigma You’re mixing existential fears with financial reality. Nvidia’s value isn’t dependent on a future where we all live in AI-powered mega-farms drinking desalinated GPU brine.
First, AI isn’t Nvidia’s only business. Not even close. They have multiple fast-growing lines:
• Gaming GPUs (still a multibillion segment)
• Automotive (ADAS, autonomous stacks, DRIVE)
• Robotics (Isaac)
• Healthcare and medical imaging (Clara)
• Industrial simulation and digital twins (Omniverse)
• High-performance computing and national labs
• Enterprise servers and virtualization
• Edge computing and telecom acceleration
Second, GPUs aren’t just for AI. They’re the compute backbone for everything Moore’s Law can’t keep up with:
• physics simulations
• genomics
• weather and climate modeling
• rendering and VFX
• autonomous navigation
• robotics control
• encryption and security workloads
• high-frequency trading
• scientific computation that has outgrown CPUs
AI is just today’s killer app. GPU demand existed long before this wave and will exist long after it.
Third, the idea that “Nvidia can’t grow” doesn’t match the math. Nvidia’s forward P/E is 24.7. That’s lower than Apple, Tesla, and Amazon. Only Meta is cheaper. If Nvidia were truly “peaking,” its multiple wouldn’t be in the twenties. It would be in the single digits. The market is pricing in continued earnings expansion, not a terminal ceiling.
Fourth, growth doesn’t require building infinite server farms. Demand is shifting toward:
• inference at the edge
• automotive platforms
• robotics
• enterprise AI rollout
• simulation and industrial workflows
• sovereign AI infrastructure
• on-device and lightweight acceleration
This is a horizontal expansion, not “keep stacking GPUs in Nevada until the sun goes out.”
And even if Nvidia stopped growing today—froze in place—it would still be one of the most profitable companies on Earth. Massive free cash flow. High margins. Durable enterprise customers. Multi-industry demand.
The fundamentals simply don’t match the doom storyline. -
@ThreeSigma You’re mixing existential fears with financial reality. Nvidia’s value isn’t dependent on a future where we all live in AI-powered mega-farms drinking desalinated GPU brine.
First, AI isn’t Nvidia’s only business. Not even close. They have multiple fast-growing lines:
• Gaming GPUs (still a multibillion segment)
• Automotive (ADAS, autonomous stacks, DRIVE)
• Robotics (Isaac)
• Healthcare and medical imaging (Clara)
• Industrial simulation and digital twins (Omniverse)
• High-performance computing and national labs
• Enterprise servers and virtualization
• Edge computing and telecom acceleration
Second, GPUs aren’t just for AI. They’re the compute backbone for everything Moore’s Law can’t keep up with:
• physics simulations
• genomics
• weather and climate modeling
• rendering and VFX
• autonomous navigation
• robotics control
• encryption and security workloads
• high-frequency trading
• scientific computation that has outgrown CPUs
AI is just today’s killer app. GPU demand existed long before this wave and will exist long after it.
Third, the idea that “Nvidia can’t grow” doesn’t match the math. Nvidia’s forward P/E is 24.7. That’s lower than Apple, Tesla, and Amazon. Only Meta is cheaper. If Nvidia were truly “peaking,” its multiple wouldn’t be in the twenties. It would be in the single digits. The market is pricing in continued earnings expansion, not a terminal ceiling.
Fourth, growth doesn’t require building infinite server farms. Demand is shifting toward:
• inference at the edge
• automotive platforms
• robotics
• enterprise AI rollout
• simulation and industrial workflows
• sovereign AI infrastructure
• on-device and lightweight acceleration
This is a horizontal expansion, not “keep stacking GPUs in Nevada until the sun goes out.”
And even if Nvidia stopped growing today—froze in place—it would still be one of the most profitable companies on Earth. Massive free cash flow. High margins. Durable enterprise customers. Multi-industry demand.
The fundamentals simply don’t match the doom storyline.Nvidia was a strong company before the ai boom, but not massive like it is now. (I work in one of those other markets and the dominate by being cheap and their software subsidized.)
The “doom storyline” only says that the largest growth of the company goes away, or customers in some of the other markets go away (or some linear combination).
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Nvidia was a strong company before the ai boom, but not massive like it is now. (I work in one of those other markets and the dominate by being cheap and their software subsidized.)
The “doom storyline” only says that the largest growth of the company goes away, or customers in some of the other markets go away (or some linear combination).
Three plus or minus five I get what you’re saying, but you’re zooming in on one slice of Nvidia’s world and treating it like the whole pie.
Yeah, Nvidia wasn’t “massive” before AI—just like Apple wasn’t massive before the iPhone and Amazon wasn’t massive before AWS. Every tech giant has an inflection moment. AI just happens to be Nvidia’s.
And sure, in your market they dominate by being cheap and leaning on the software stack. Totally believable. Lots of tech companies play that game in specific verticals.
That doesn’t mean the entire business is subsidized. Gaming is profitable. Data center margins are enormous. Their financials don’t look like a company running a charity.
But my bigger point: “growth slowing” is not the same thing as “doom.” Volkswagen barely grows. Barclays barely grows. Lenovo barely grows. Oracle went years with flat numbers. All of them are still cash-printing monsters.
When growth in a sector matures, dominant companies do three things:
- expand into adjacent markets (Nvidia already is),
- buy growth (which they’ve done before),
- or start milking the cash cow with buybacks and dividends (trivial for them if they choose).
So the doom storyline only works if you assume “less growth = collapse,” which just isn’t how any of this works. Nvidia slowing down someday is inevitable. Nvidia becoming worthless is not.
