Nvidia’s Forward P/E Falls Below 17 Despite Rapid Growth

Nvidia shares were trading at less than 17 times expected profit for the next 12 months on September 22, near their cheapest level in more than a decade, according to Bloomberg data. That valuation has fallen even as analysts expect revenue and net income to grow roughly 90% or more this fiscal year.

The multiple, known as the forward price-to-earnings ratio, compares a share price with forecast earnings. Nvidia’s was about half its 2025 level, and down from more than 25 times earnings estimates in May.

The company’s latest results show why the contrast stands out. Nvidia reported $96.2 billion in revenue for the quarter ended July 26, up 106% from a year earlier. Net income rose to $59.7 billion from $26.4 billion.

Nvidia also forecast about $108 billion in revenue for the current quarter. In August, Chief Financial Officer Colette Kress said the company expected revenue to grow about 70% in fiscal 2028, which ends in January 2028.

The low multiple suggests investors are weighing how long such growth can last, not just the latest results. Nvidia’s business has expanded to an enormous scale, making each new increase harder to sustain at the same pace.

Costs and competition add to the questions around future profits. Nvidia reported a 75% gross margin in its latest quarter, but told investors it expected margins to fall to 71% to 72% in the fourth quarter, partly because memory prices are rising.

Customers are also seeking alternatives, including chips they design themselves, Bloomberg reported. If that shift puts pressure on Nvidia’s pricing power, earnings growth could slow even while demand for AI computing remains strong.

Investors will watch upcoming results for evidence that sales growth and margins can hold up. Nvidia’s next-quarter revenue forecast and its plans to manage supply costs will help show whether the discounted valuation reflects caution or a lasting change in expectations.