Nvidia (NVDA) Stock Trades Below S&P 500 Valuation for First Time in Over a Decade

Key Takeaways

Table of Contents

Shares have declined 8.2% in 2025 and reached their lowest close since mid-December on Thursday’s session
Forward P/E ratio stands at 19.7x compared to the S&P 500’s 20.3x — marking the first valuation discount in over a decade
Wolfe Research maintains Outperform rating with $275 target after GTC unveiling of Rubin Ultra “Pods”
Jensen Huang’s recent comments suggest production of approximately 200 pods weekly — translating to potential monthly revenue of $120 billion, according to Wolfe’s calculations
Despite recent weakness, NVDA leads as the top individual stock purchase among retail traders, according to J.P. Morgan tracking data

Nvidia (NVDA) finished Thursday’s trading session at $109.02, marking its weakest closing price since mid-December, as artificial intelligence stocks face continued headwinds across the sector.

NVIDIA Corporation, NVDA

Shares showed modest recovery in Friday’s premarket trading, gaining 0.3% after Thursday’s downturn.

Year-to-date performance now shows an 8.2% decline entering Friday’s trading session.

The recent pullback has driven the chipmaker’s valuation metrics to an unusual position relative to broader market benchmarks. Based on FactSet data, Nvidia currently commands a forward price-to-earnings multiple of 19.7x, sitting below the S&P 500’s 20.3x average.

This represents a significant reversal. The company had maintained a valuation premium over the S&P 500 on a forward P/E basis continuously since February 2013 — a 13-year run that ended in late February 2025, per Dow Jones Market Data.

The valuation crossover occurred on February 28, coinciding with escalating geopolitical tensions related to Iran that pressured market sentiment. Subsequently, Nvidia’s multiple has fluctuated around the index average.

Strong Retail Demand Persists

The share price decline hasn’t dampened investor appetite for the stock. According to J.P. Morgan’s retail trading analysis, Nvidia topped the list of most-purchased individual stocks among retail investors during the week concluded March 25.

The stock also received universally favorable assessments from Barron’s Roundtable investment experts.

Broadcom (AVGO) slipped 0.9% in Friday’s premarket session, while Advanced Micro Devices (AMD) similarly declined 0.9%.

Analyst Confidence Remains on Rubin Ultra Infrastructure

Wolfe Research reaffirmed its Outperform stance this week with a $275 price objective, pointing to Nvidia’s GTC conference revelation of Rubin Ultra “Pods” — a comprehensive blueprint for agentic AI datacenter infrastructure.

Wolfe’s analysis suggests each pod contains approximately $150 million in Nvidia hardware. About two-thirds of this value comes from VR200 rack systems, with Groq components contributing the largest share of additional revenue.

The research firm highlighted that supplementary components including CPU, storage solutions, and Groq technology could boost revenue by 50% beyond VR compute racks alone. Groq LPX rack configurations add another 25% revenue opportunity above the VR200 foundation, delivering ultra-low latency inference capabilities for premium service offerings.

In a recent conversation on the Lex Fridman podcast, CEO Jensen Huang indicated the company might require production capacity of “about 200 of these per week, just for context.” Wolfe Research’s calculation: weekly output of 200 pods translates to approximately $120 billion monthly in potential revenue — a figure that dwarfs current Wall Street projections of $482 billion for full-year 2027.

Rosenblatt sustained its Buy recommendation with a $325 price objective, emphasizing clear visibility to exceeding $1 trillion in Blackwell and Rubin platform orders extending through 2027. Cantor Fitzgerald maintained its Overweight rating at $300 following the GTC event. InvestingPro reports that 31 analysts have increased their earnings forecasts for the upcoming period, with price targets extending to $380 at the high end.

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