Nvidia’s Valuation Hits a Five-Year Low Even as Revenue Soars to $81.6 Billion
Published on 07/25/2026 at 12:21 | Redaktion boerse-global.de
Nvidia shares closed Friday at €182.00, slipping 0.80% from the prior session, though the stock still managed a weekly gain of 2.70%. The headline numbers tell a story of modest near-term drift, but beneath the surface lies a far more striking development: the chipmaker is trading at its cheapest valuation in half a decade, and that’s happening alongside record-breaking revenue.
For a company that delivered annual stock gains of 38%, 170%, and 240% over the past three calendar years, the current 13.55% year-to-date advance feels almost pedestrian. It still outpaces both the Nasdaq and the S&P 500, yet for investors accustomed to exponential leaps, the deceleration raises questions. The operating picture, however, offers no cause for alarm. In the second quarter of fiscal 2026, Nvidia posted revenue of $81.6 billion — an 85% surge year-over-year and an all-time high. Hyperscalers continue to pour capital into AI data centers, and demand for Nvidia’s chips shows no sign of abating.
The disconnect between operational momentum and stock performance has compressed the valuation dramatically. Nvidia now trades at 31 times trailing earnings and 23 times forward earnings — multiples not seen in five years. The price-to-earnings ratio sits roughly 41% below its 10-year average of 53. On a growth-adjusted basis, the five-year PEG ratio has fallen to a historic low of 0.56, a level that traditional value metrics flag as undervaluation.
Wall Street remains broadly bullish despite the stock’s sideways grind. Of the 61 analysts surveyed by S&P Global, the consensus rating is “Strong Buy,” with an average price target of $302.83 — implying upside of 46.41% from current levels. The range of individual targets, spanning $180 to $500, underscores the deep uncertainty about how the next few quarters will unfold.
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Options markets are already telegraphing a shift in sentiment. Earlier this month, when the VanEck semiconductor ETF dropped 5% following a report alleging at least a year-long delay in Nvidia’s next-generation server rack production, Nvidia shares held firm. That same day, more than 1.5 million call options changed hands versus fewer than 690,000 puts — a ratio exceeding two-to-one that signals traders are betting on a rebound rather than further declines.
A $1.5 Billion Bet on U.S. Manufacturing
While the market debates valuation, Nvidia is quietly deepening its domestic supply chain. The company has expanded its partnership with Amkor Technology in a deal worth $1.5 billion, including an upfront cash payment. Amkor will develop advanced packaging and testing technologies for next-generation AI and high-performance computing chips, with the investment specifically targeting expanded capacity at its Arizona facility.
Nvidia executive Debora Shoquist described AI as driving a “generational shift” that presents an opportunity to revitalize U.S. manufacturing and supply chains. UBS analyst Randy Abrams upgraded Amkor following the announcement, estimating the supplier’s market share in Nvidia’s Vera CPU at roughly 60%. He also sees the collaboration extending to the GB10 and N1X chip lines, as well as potential future products like Rosa.
The deal arrives at a time when investors are scrutinizing every signal about Nvidia’s growth trajectory. The first quarter of fiscal 2027, which ended April 26, 2026, delivered that $81.6 billion in revenue — an 85% year-over-year jump. Yet Wall Street expects revenue growth of just 219% between fiscal 2026 and fiscal 2029, a sharp deceleration from the 700% expansion of the prior three years.
Structural Risks and a China Wild Card
Beyond the growth debate, analysts are focusing on structural vulnerabilities. Major cloud providers — Amazon, Microsoft, Google, and Meta — are all developing their own chips to reduce reliance on Nvidia’s graphics processors. While current demand remains robust, the long-term trend poses a threat to Nvidia’s dominance among its most important customers.
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The China story offers a potential offset, albeit a constrained one. U.S. export rules have limited Nvidia’s ability to sell into the Chinese market, but recent approvals have opened a narrow channel. The company is now shipping limited quantities of its H200 AI chip to Chinese clients, including Alibaba, Tencent, ByteDance, and ZTE. Reuters reported that Chinese customers had previously signaled interest in more than two million H200 units at roughly $27,000 each. Nvidia’s current guidance excludes China data-center revenue entirely, meaning any pickup there would represent pure upside.
What’s Next
Nvidia’s next earnings report isn’t due until late August. In the interim, the Amkor deal provides a tangible signal that the AI infrastructure buildout continues. Investors will also be watching the late-July quarterly reports from Microsoft, Meta, Amazon, and Alphabet — hyperscalers whose capital expenditure plans directly translate into Nvidia chip orders.
The stock currently sits about 10% below its 52-week high of €202.50 from May, while remaining comfortably above both its 50-day and 200-day moving averages. That places Nvidia in a consolidation zone: cheap valuation and bullish options positioning on one side, a lack of fresh catalysts for new highs on the other. The August earnings report will likely determine which force wins out.
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