Nvidia Corp. has lost roughly $1 trillion in market value over the past two months, sliding 16% from its May all-time high. The stock now trades at 18 times forward earnings, its lowest multiple since 2019, according to Bloomberg data.
The rout accelerated this week as a flare-up in the U.S.-Iran conflict rattled global markets. President Donald Trump said a ceasefire with Iran may be over, warning the U.S. would probably launch further strikes. Oil prices climbed, bond yields rose, and nearly 400 S&P 500 stocks declined. Nvidia and other semiconductor shares wavered, though chipmakers bounced modestly by Wednesday afternoon.
Broader momentum stocks have followed suit. CNBC reports that names like Micron have fallen into correction territory, yet Wall Street trading desks aren't seeing signs of panic in the chip or AI space. The selloff appears more tied to geopolitical jitters than a structural shift in AI demand, analysts say.
Despite the valuation compression, some market participants caution the drawdown may have further to run if tensions escalate. Sarah Hunt, Chief Market Strategist at Alpine Saxon Woods, noted that market gyrations remain highly sensitive to geopolitical swings, with oil's rally potentially feeding into inflation concerns that could delay rate cuts.