Nvidia’s key valuation metric, the trailing 12-month price-to-earnings ratio, has recently plummeted to levels not witnessed since before the inception of ChatGPT.
As of Tuesday, data from LSEG reveals this ratio stood at 37 times, significantly impacted by a sharp decline in Nvidia’s stock value during 2025. Despite a modest 1.66% increase on Tuesday, the tech giant’s stock remains down 19% year-to-date.
The reduced valuation has rendered Nvidia more affordable presently than during ChatGPT’s debut on November 30, 2022, marking the stock’s most budget-friendly level since August 2019. Nvidia’s forward P/E ratio sits at 23.9 times, based on LSEG which is the lowest level since 2019. This compares to an average of 20.69 times for its industrial peers. This portrays a 40% reduction compared to when ChatGPT was launched.
This financial milestone is noteworthy, particularly considering Nvidia’s stock surge of nearly 600% post the widespread availability of ChatGPT, driven by robust profits in the GPU sector due to heightened demand from AI enterprises.
Nvidia’s financial results for the final quarter of 2024 were $39.33 billion in revenue, higher than $38.05 billion expected by the street. Meanwhile, an adjusted earnings per share was $0.89, outpacing the anticipated $0.84.
Looking forward, Nvidia predicts first-quarter revenues hovering near $43 billion, indicating a remarkable 65% annual growth trajectory, although slightly lower than the prior year’s astounding 262% increase.
With Nvidia being a key player in the AI-driven spending surge by big tech giants over the past couple of years, some investors are questioning whether the premium on its cutting-edge chips is justifiable, given DeepSeek’s assertion of its AI models matching Western capabilities at dramatically lower prices.
DeepSeek’s rapid ascent in January led to Nvidia suffering a historic $593 billion loss in market value, the largest one-day drop for any U.S. company, despite previously being a top stock performer in 2023 and 2024.
