Nvidia Drops 16% as Valuation Hits Cheapest Level Since 2019

Nvidia NASDAQ:NVDA, a major chipmaker whose graphics processing units dominate artificial intelligence data centers, has seen its stock valuation fall to its cheapest level since early 2019 after losing roughly $1 trillion in market value in less than two months. Nvidia shares have declined 16% since reaching an all-time high on May 14, even as the company's GPUs continue to hold a leading position in the AI data center market. The stock is now trading at about 18 times projected earnings over the next 12 months, below the S&P 500 Index at more than 20 times and the Nasdaq 100 Index at almost 23 times, suggesting investors may be reassessing one of the market's most crowded AI trades.

The decline appears less connected to weakening fundamentals and more tied to a rotation within the semiconductor sector. Wall Street analysts have continued raising Nvidia's profit estimates, while investors have shifted attention toward Micron Technology NASDAQ:MU, a memory-chip maker benefiting from stronger high-bandwidth memory pricing, as well as Advanced Micro Devices NASDAQ:AMD and Intel NASDAQ:INTC, competing chipmakers whose shares have doubled or even tripled this year. Nvidia is still expected to deliver the fourth-fastest revenue growth in the S&P 500 (SPY) this year, but its shares are up only 5.6% in 2026, trailing the S&P 500's 9.6% gain, the Nasdaq 100's 16% rise, and the Philadelphia Stock Exchange Semiconductor Index's 74% jump.

Nvidia's market position still appears strong, with the company holding 97% of the server GPU market at the end of 2025, up from 95% at the end of 2024, according to Bloomberg Intelligence data cited in the source. The company is projected to generate $228 billion in profit on $393 billion in sales in fiscal 2027, which ends Jan. 31, representing expected growth of 90% and 82%, respectively, while its profit estimate has risen 13% over the past three months. Of the 82 analysts tracked by Bloomberg, only three rate the stock a hold and one recommends selling, while the average price target of $302 implies more than 50% potential upside over the next 12 months, leaving investors to weigh whether Nvidia's valuation reset could mark a temporary pause or a deeper shift in AI market leadership.