Nvidia Corp. has lost roughly $1 trillion in market value in less than two months, and its stock is now trading at 18 times earnings projected over the next 12 months. That puts the Nvda stock price at its cheapest level since early 2019, a sharp break from the euphoria that carried it to an all-time high on May 14.
The pullback matters because it has made Nvidia cheaper than the S&P 500 Index, which trades above 20 times forward earnings, and the Nasdaq 100 Index, which is priced at almost 23 times. In a year when the S&P 500 has gained 9.6% and the Nasdaq 100 has risen 16%, Nvidia is up just 5.6% in 2026, a sign that one of Wall Street’s most crowded AI trades has stopped leading the market.
That reversal is even starker when measured against the sector. The Philadelphia Stock Exchange Semiconductor Index has jumped 74% in 2026, while Micron Technology Inc. is up 229% after soaring 239% in 2025. Advanced Micro Devices Inc. and Intel Corp. have also seen their share prices double or even triple this year, drawing money toward memory and storage names as investors look for the next leg of the AI trade.
Eric Clark said the stock had run really far, really fast and was a very crowded trade, a description that fits the shift now underway. Nvidia’s shares have fallen 16% since hitting their high in May, even as Wall Street analysts have been raising their profit estimates for the coming quarters. That gap between a lower share price and higher earnings forecasts explains why the selloff has not been a simple verdict on Nvidia’s business.
The company’s graphics processing units still dominate the artificial intelligence data center market, which is why the stock remains central to the broader AI story. But investors are no longer paying the same premium for that dominance, and Nvidia’s correlation to the chip index sank last month to its lowest since 2014, underscoring how far the stock has drifted from the rest of the semiconductor pack.
Michael Bailey said sentiment has moved on, and that is the clearest explanation for why the money has shifted. As he put it, companies with very low expectations, “the Microns of the world,” are stealing the spotlight. The question now is not whether Nvidia still matters to AI spending, but whether the market is finished marking down the stock after a valuation reset this large.
