Why Nvidia’s Forward P/E Is Near a Decade Low Despite Booming AI Sales

Nvidia’s valuation looks unusually low beside its latest results. In September 2026, its shares traded at less than 17 times expected earnings over the next 12 months—near their cheapest level in more than a decade and roughly half their 2025 multiple.9 That does not mean investors doubt the recent sales. It means the price they are willing to pay for future profits has fallen.

Strong results, lower expectations for the multiple

In Nvidia’s fiscal second quarter of 2027, revenue reached about $96.2 billion, up 106% from a year earlier. Data-center sales accounted for roughly $89 billion.6 When earnings estimates rise faster than a stock’s price, its forward price-to-earnings ratio falls. A lower multiple can therefore coexist with rapid growth; the question is how much of that growth investors expect to last.

Published forward P/E figures also differ substantially. Sources from September put Nvidia at below 17 times, roughly 23 times and 28.1 times earnings.945 Those figures should not be treated as interchangeable: they are snapshots from different dates and may use different earnings periods or estimates. The defensible conclusion is that the valuation has compressed, not that every source agrees on one current multiple.

Huang’s forecast makes the optimistic case

Nvidia expects revenue to grow about 70% in fiscal 2028, compared with the roughly 44% growth analysts had expected ahead of its forecast, Reuters reported.17 CEO Jensen Huang has also projected annual global AI-infrastructure spending of $3 trillion to $4 trillion by 2030.4 That spending figure is a forecast for the broader market, not a projection of Nvidia’s own revenue.

For optimists, sustained spending on AI infrastructure could support years of high chip sales. Some analysts have put numbers behind that view: a semiconductor research team cited by CNBC set a $400 Nvidia share-price target, about 75% above the roughly $229 share price used in its September 22 comparison.1 A target expresses an analyst’s expectations, not a guaranteed return; other published targets and averages differ by source and date.311

Why investors may still hesitate

The challenge is preserving profitability as sales grow. Nvidia’s gross margin was around 75% in its fiscal second quarter, but a September report said it was expected to fall below 72% by the fourth quarter amid higher memory costs and pressure from customers developing their own chips.10 Reuters also reported that memory shortages and higher component costs could constrain expansion.17 Those pressures do not erase Nvidia’s recent results, but they matter to the earnings investors are valuing years from now.

Apple offers a useful comparison, though not a precise valuation verdict. The companies approach AI differently: Nvidia sells the infrastructure used to build it, while Apple embeds AI in devices.7 Faster growth alone does not prove one stock deserves a higher multiple. Comparing them fairly would require forward earnings estimates calculated on the same basis and date, which the available sources do not establish.

The split is ultimately about durability. Nvidia’s reported growth and management’s forecasts support the bullish case; margin pressure, supply costs and customer-built chips explain why investors may demand a lower price for those projected earnings.61710