Nvidia Stock Is Down 17% From Its High. Is the Artificial Intelligence (AI) Leader Finally Cheap?

Nvidia has pulled back 17% from its May peak and now trades at 21.7x forward earnings—matching the S&P 500's multiple. The valuation reset comes as AI infrastructure spending is projected to exceed $1 trillion next year, keeping the chipmaker in focus for growth investors hunting entry points.

July brings a cluster of catalysts. Major AI hyperscalers—Amazon, Microsoft, Alphabet, and Meta—report earnings with guidance on data center buildouts. Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia's foundry partner, also releases results that will signal chip demand visibility. Microsoft will provide fiscal 2027 capital expenditure guidance, a key indicator of sustained AI infrastructure investment over the multi-year horizon.

The valuation case hinges on whether Nvidia can sustain margin and share gains as AI spending scales. At roughly market multiple, the stock prices in earnings growth but offers limited downside cushion if hyperscaler capex disappoints or deployment timelines stretch.