NVIDIA suddenly looks cheap in standard valuation-ratio terms. Smart-money investors may now be dumping Nvidia for Micron and friends, as the real constraint in the AI build‑out is no longer just GPU TFLOPs that you can program with CUDA…
It is worth pausing to remember that in 2018 and again in 2022, NVIDIA was seen as in serious trouble:
First, the market for computer gaming and NVIDIA’s edge in serving that market seemed to be in trouble.
And then NVIDIA was rescued from that by crypto.
Then the market for crypto mining and NVIDIA’s edge in serving that market seemed to be in trouble.
And NVIDIA was rescued by AI—and much, much more than rescued: Jason Huang of NVIDIA as the genius-impresario-entrepreneur of our epoch, master of the most valuable company in the universe!
But the worms are at least exploring their options.
All of the companies that had the money to pay and did not have the cybernetic managerial bandwidth to avoid paying the NVIDIA tax in the enormous run-up since 2022 are now under various forms of pressure to find some way to deal with their ongoing investments in Modern Advanced Machine Learning installations other than to simply write ever larger and larger checks to NVIDIA.
Hence NVIDIA is, as my Bloomberg stream flagged a couple of days ago, now cheaper in a price-earnings sense than Hershey:
Jeran Wittenstein & Rainier Harris: NVIDIA’s $1 Trillion Slide Sends Valuation [Ratio Down] to Pre-AI Boom Levels <https://www.bloomberg.com/news/articles/2026-07-08/nvidia-s-1-trillion-slide-sends-valuation-to-pre-ai-boom-levels>: ‘The chip[-designer’s]… graphics processing units… still dominate…. [But] investors [are] rejigger[ing] the AI trade by ditching NVIDIA in favor of competing semiconductor manufacturers, particularly those in the memory market. The selloff has NVIDIA… trading at 18 times earnings projected over the next 12 months…. The last time the shares were this inexpensive [in valuation-ratio terms] was early 2019…. NVIDIA’s shrinking valuation isn’t the result of a deteriorating outlook. On the contrary, Wall Street analysts have been raising their profit estimates for the coming quarters. Instead, the selloff shows how much the AI trade is shifting to… memory and storage stocks like Micron Technology Inc.. [and to] NVIDIA[’s chip-design] rivals such as Advanced Micro Devices Inc. and Intel Corp. have seen their share prices double or even triple this year….
NVIDIA is expected to deliver the fourth-fastest revenue growth in the the S&P 500 this year, but it’s still cheaper than about half of the stocks in the index, including candy maker Hershey Co. and the utility Dominion Energy Inc…
