Nvidia Is Down 16% From Its Peak and Trading at Its Lowest Valuation in Years, Is This the Entry Point?

When a stock that everyone loved abruptly stops performing, there’s a certain silence on Wall Street. It’s evident in the way fund managers stop discussing their position sizes at dinner and in the way analysts hedge on cable news. For the majority of the previous three years, owning Nvidia stock was a source of pride. It’s been a stock that people kind of… own lately. It is currently trading close to $215, down about 16% from its peak. It has fallen into that uncomfortable middle ground where the bulls sound a little worn out and the bears sound a little smug.

It’s interesting that the company hasn’t truly failed. The data center segment alone now accounts for $193.7 billion of the fiscal 2026 revenue, which was $215.9 billion, up 65% year over year. The margins are stable. According to reports, hyperscalers are negotiating delivery slots like concert tickets because the Blackwell GB300 GPUs are so backlogged. Nevertheless, the stock, which has been strangely mortal these past few months, won’t celebrate. Despite the income statement’s insistence to the contrary, investors appear to think that something has changed.

The DeepSeek incident from the previous year, in which a Chinese AI lab claimed to have trained a competitive model on a fraction of the typical chip budget, is largely responsible for the unease. In a single session, Nvidia’s market capitalization dropped by almost $600 billion, the largest single-day decline in American history. It was the kind of incident that sticks in investors’ memories, much like how the 2018 cryptocurrency crash continues to influence some people’s perceptions of Bitcoin. The price went back up. The anxiety persisted.

Then came the more recent slowdown, the Middle East’s geopolitical noise, the reinstated export restrictions on China, and the well-known question of whether Microsoft, Amazon, and Meta will truly profit from the hundreds of billions they are investing in AI infrastructure. The four hyperscalers indicated approximately $725 billion in capital expenditures for 2026, a 77% increase from the previous year. Even though it’s a remarkable figure, investors continue to silently wonder what would happen if they pulled back.

This is where the valuation becomes intriguing. Depending on which model you believe, Nvidia’s forward P/E is between 24 and 26. The five-year average is more in line with 67. AMD trades at a higher EV/EBITDA multiple and produces a small portion of Nvidia’s free cash flow. ASML does the same. Value-oriented investors, who are typically allergic to AI stocks, feel that the numbers are beginning to shift in a way that makes sense.

Nvidia has “high confidence visibility” of more than $1 trillion in Blackwell and Rubin orders through the end of 2027, according to Jensen Huang, who recently told an interviewer in his typical leather-jacketed manner. The analyst projections begin to appear conservative if even the majority of that lands. Based on Nvidia’s 12- to 18-month chip cadence as opposed to the 3- to 5-year cycle of custom silicon, Beth Kindig of the I/O Fund has proposed a $20 trillion market cap by 2030.

The fact that Nvidia’s earnings are due on May 20 is difficult to ignore. Whatever transpires that afternoon will determine the headlines for the following quarter, if not longer. This specific consolidation is likely to end with a clean beat and strong guidance. The bears get another month at the microphone if they miss, or even if they have a gentle attitude. As anyone who experienced 2022 knows, markets aren’t always interested in feeling right, so the setup feels less like a coin flip than the market suggests.

The current price isn’t a huge deal for an investor who is patient and has a tolerance for volatility. It’s something more subdued—a reasonable price for a powerful company in a time of uncertainty. As always, it depends on what happens next as to whether that counts as the entry point.