Nvidia's stock has plummeted 16% since May 14, losing roughly $1 trillion（約160兆円） in market value and reaching its lowest valuation since early 2019. Investors are shifting their AI investments away from Nvidia toward competing chipmakers, particularly memory and storage companies like Micron, despite Wall Street raising profit estimates for Nvidia's coming quarters. The selloff has left Nvidia trading cheaper than the broader S&P 500 and Nasdaq 100, even as its GPU dominance in AI data centers remains intact.
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Nvidia's stock has fallen 16% since hitting an all-time high on May 14, wiping out roughly $1 trillion（約160兆円） in market value in less than two months. The chipmaker now trades at 18 times earnings projected over the next 12 months — the lowest valuation since early 2019, cheaper than both the S&P 500 Index and the Nasdaq 100 Index.
Why it matters
Investors are rotating away from Nvidia in favor of competing semiconductor manufacturers, particularly those in the memory market such as Micron Technology. Even though Wall Street analysts have been raising their profit estimates for coming quarters and Nvidia is expected to deliver the fourth-fastest revenue growth in the S&P 500 this year, the market sentiment has shifted to other areas of the AI trade, making Nvidia appear undervalued relative to its steady revenue growth and profitability.
What to watch
Nvidia's graphics processing units still dominate the artificial intelligence data center market, but rivals such as Advanced Micro Devices and Intel have seen their share prices double or even triple this year. The company now trades cheaper than about half of the S&P 500 stocks, including candy maker Hershey and utility Dominion Energy.
Nvidia's stunning reversal reflects a sharp rotation in the artificial intelligence trade rather than any deterioration in the company's underlying business. The chipmaker's dominance in GPU supply for AI data centers remains unchallenged, and Wall Street analysts have actually been raising profit estimates for the coming quarters—yet sentiment has pivoted decisively toward other areas of the AI ecosystem, particularly memory and storage providers that had been trading at much lower expectations. This shift has left Nvidia trading at a valuation cheaper than roughly half of the S&P 500 stocks, including far less profitable companies, according to valuation metrics compiled by Bloomberg.
The market's repricing of Nvidia illustrates how quickly consensus can change in the AI cycle. Investors who had bid the stock to record highs are now rotating capital to semiconductor competitors and memory makers, treating the chipmaker's steady revenue growth and profitability as no longer justifying its previous premium. Michael Bailey, director of research at Fulton Breakefield Broenniman, captured the shift: "Sentiment has moved on," noting that companies like Micron—where expectations had been very low—are now the ones capturing attention. Whether this repricing reflects genuine reallocation based on changing AI infrastructure demand or a temporary sentiment swing remains to be seen, but it underscores how fluid investor positioning in the AI trade has become.
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