Just a year ago, Nvidia $NVDA was the undisputed star of every tech portfolio. The company’s stock surged by more than 1,000% following the launch of ChatGPT in the fall of 2022, and Nvidia rose to become the world’s most valuable company with a market capitalization of around $4.7 trillion (roughly 105 trillion crowns). And then something strange happened: the market lost interest.
In the first half of 2026, Nvidia’s stock gained only a few percent, while the S&P 500 rose 8% and the Nasdaq 9%. The iShares Semiconductor ETF posted many times that growth over the same period—but that growth was driven by entirely different companies. Investors shifted their focus elsewhere and left one of the best businesses the market has ever seen on the sidelines.
The king holds the throne, but money has found new favorites
This year, money in the chip sector has flowed to where the bottlenecks are. Memory chips have become a scarce commodity, causing shares of Micron ($MU ) and SanDisk ( $SNDK ) to skyrocket. The second wave of interest has been directed toward processors for so-called inference—that is, the operation of ready-made AI models—benefiting Intel $INTC, AMD $AMD, and Arm Holdings $ARM.
Nvidia, however, hasn’t disappeared from the picture. On the contrary. It’s just no longer the only name in the game, and some capital is seeking out stories that haven’t yet run their course. This is the kind of rotation the market goes through time and time again.
It’s worth noting that the stock is currently 17% below its May high. A decline that would raise questions for another company has occurred here without anything going wrong with the business.
Numbers that don’t normally go with the word “cheap”
Here’s the contrast that keeps you up at night. In the first fiscal quarter, Nvidia boosted revenue by 85% to $81.6 billion, andadjusted net income jumped 139% to $45.5 billion. For the full year, the company is on track for net income of over $200 billion—roughly the GDP of Ukraine or Qatar. No other company in the world earns that much.
Looking at the past twelve months, the stock is trading at around 30 times earnings, which is just slightly above the level of the entire S&P 500 index. But a historical perspective is misleading for a company that has just doubled its profits. What’s more important is where all of this is headed.
The analyst consensus for the next three years looks like this:
Fiscal Year 2027: earnings per share of $8.69
Fiscal Year 2028: earnings per share of $11.67
Fiscal Year 2029: earnings per share of $15.76
Last year, Nvidia reported adjusted earnings of $4.77 per share. The market therefore expects earnings to nearly double this year and more than triple in three years. And now for the most interesting part: at a price of around $195, the stock is trading at just 12 times earnings based on 2029 estimates. That’s the kind of valuation you’d normally see for a boring bank or a screw manufacturer, not one of the fastest-growing tech giants of the decade.
Wall Street is wrong about Nvidia. The question is, which way?
The key argument is this: these are just estimates, and the further into the future they look, the less reliable they become. That’s true. But what’s interesting is the direction in which analysts are wrong when it comes to Nvidia.
As recently as 2025, Wall Street expected Nvidia to report revenue of around $250 billion this year. The reality? The company is heading toward roughly $400 billion. That’s not a minor inaccuracy—it’s a massive difference. The market simply didn’t anticipate that growth would accelerate again—and it did.
The Catch Called the Cycle
So why are the shares trading at only 12 times future earnings? The most likely explanation is that investors don’t believe in these earnings over the long term. Semiconductors have always been a cyclical business—a boom comes, companies buy up inventory, warehouses fill up, and demand drops. And for the past year, there’s been a debate over whether AI is just an overinflated bubble.
Interestingly, Micron’s latest results revealed a massive memory shortage, confirming that the AI cycle is definitely not over—and that’s good news for Nvidia.
The peak of the AI cycle will come eventually; there’s no question about that. The question is when and from what height. However, the risk of a slowdown appears to have been priced in for quite some time—and so far, Wall Street has tended to underestimate rather than overestimate Nvidia.
Of the 45 recommendations Wall Street has on Nvidia, 39 are “strong buy” and not a single one is a “sell.” The average 12-month price target hovers around $299—roughly half above the current share price.
And therein lies the whole paradox of today’s Nvidia. It’s not a stock that the market has written off because of poor numbers. It’s a stock that the market has written off out of fear of what comes next. If that fear turns out to be overblown, today’s “boring” price will look, in a few years, like one of the few moments when the world’s most profitable company could be bought for the price of a large, established bank.