Nvidia’s Earnings Multiple Falls Below 17 as Margins Face Pressure

Nvidia shares are valued at less than 17 times expected earnings for the next 12 months, their lowest multiple in more than a decade, according to Bloomberg data. That is down from more than 25 times in May and roughly half the level investors paid in 2025.

The lower multiple suggests investors are less confident that Nvidia can sustain its exceptional profit growth. A forward price-to-earnings ratio compares a company’s share price with analysts’ expected profits over the coming year.

The change comes despite strong recent results. Nvidia reported $96.2 billion in revenue for its fiscal second quarter, up 106% from a year earlier, and earnings of $2.22 per share.

Costs offer one reason for caution. Nvidia said rising component costs, including memory, are weighing on profitability; it expects gross margin, the share of sales left after direct costs, to fall to 71%–72% in fiscal fourth-quarter before improving.

Competition is another concern. Major customers are developing their own chips to rely less on Nvidia, which may weaken the company’s market position and put further pressure on margins, TradeStation’s David Russell told Bloomberg.

Nvidia’s shares have gained 22% in 2026, but that trails the semiconductor index’s nearly 76% rise. Intel and AMD have each climbed more than 180%, leaving Nvidia among the index’s weaker performers, Bloomberg reported.

The gap between Nvidia’s growth and its stock performance shows that strong results alone may no longer satisfy investors. They will be watching whether the company can keep expanding profits while memory costs rise and customers seek alternatives. Its valuation is cheaper than it was, but that reflects doubts about how durable today’s earnings may be.