Nvidia’s 34% Slide Cuts Its P/E to 20, but the Risk Is Not Gone

By Tom Whitfield

By mid-morning on November 12, Nvidia had lost nearly $2 trillion in market value after its shares fell 34% from an October 5 peak of $243 to $161. The decline ranks as the largest dollar loss in a condensed period in capital-market history.

The selloff began with revelations about Jensen Huang’s romantic relationship with a person alleged to be a Chinese spy and accelerated after his resignation on November 12. That sequence makes the falling P/E hard to separate from the governance shock.

How cheap has Nvidia become?

At the October 5 peak, Nvidia carried the world’s largest market capitalization, $5.85 trillion. Wall Street analysts were nearly unanimous in calling the stock cheap: 30 times earnings over the previous four quarters, a modest multiple for a company growing its bottom line at a 100% annual rate.

By mid-morning on November 12, the P/E had fallen from 30 to 20. Apple trades at 40 and Amazon at 22, and both expand at a fraction of Nvidia’s speed.

Takeaway: Nvidia now carries the lowest stated P/E among the three companies, but the comparison cannot resolve its succession problem.

What do the operating numbers show?

Revenue in the quarter ended October 31 rose 26% from the preceding three-month period, beating roughly 20% increases in each of the previous two quarters. Nvidia showed no sign yet of the slowdown normally expected as a company grows larger.

Gross margin reached 75%, above the 71.3% recorded for fiscal 2026. Those results reflect Nvidia’s commanding, and what the market calls a virtual, monopoly in top GPUs.

An Nvidia customer and top industry executive said the company’s leading chips remain 18 to 24 months ahead of competitors in quality and performance. The executive described Huang as both the unmatched innovator and the operator who made the business work:

“Huang was the tech visionary and he also got Nvidia to operate incredibly well. The question is how much depended on Jensen, and how much of what he did can another person do?”

The executive said Nvidia maintained its margins by staying several steps ahead without slowing. Missing one step would allow rivals to catch up quickly, with Intel cited as a company that fell behind and never caught up.

Takeaway: Current results show little operating damage, but they do not show that Nvidia can sustain the same speed without Huang.

Where is Nvidia putting its cash?

• Free cash flow: $105 billion over the past four quarters.
• Repurchases: $32 billion in the 12 months ended October, below the large sums Nvidia deployed in earlier years.
• Cash: $100 billion, described as relatively modest for the company and growing slowly.

Capital deployment extends to SpaceX, CoreWeave, OpenAI, SoftBank’s SB Energy and Intel, which Nvidia supports for CPUs. Nvidia has also provided multibillion-dollar credit guarantees for projects built for hyperscalers and neoclouds that use its GPUs. Such arrangements often draw criticism as circular financing.

AMD, Google and Amazon, among the competitors that complain about Nvidia’s chip prices, are racing to develop in-house alternatives. The unanswered question is whether Huang felt obliged to finance customers to protect Nvidia’s future. The logic was to lock in future sales as rivals developed lower-priced products and to forestall commoditization, which ultimately erodes hardware profits.

The market expects Nvidia’s future margins and profit growth to fall well below past levels. Huang’s departure makes that risk greater because he set the technological and commercial pace.

Takeaway: The cash supports Nvidia’s lead, but it also embeds financing and commoditization risks that the P/E does not capture.

Did the board protect shareholders?

The governance rupture cost shareholders nearly $2 trillion in market value, according to the market’s reaction. A former CEO interviewed for the report argued that the board made a mistake by failing to try every route to retain Huang.

The former CEO wanted more facts before acting, then said:

“The board was not thinking about shareholders. They were thinking about their reputations and not getting sued.”

He argued that the board should have imposed a visible punishment, such as denying Huang equity or bonuses for two years, while avoiding damage to shareholders. He acknowledged that this constituted a minority view and called the response moral posturing.

He also said executives speaking privately would probably fault the board for protecting its own members rather than shareholders. Huang’s role in creating one-of-a-kind products and running operations made him impossible to replace as a plug-and-play hire.

Takeaway: The board may have avoided a public scandal, but its handling left shareholders with a credibility and succession problem.

Most Wall Street observers describe the selloff as panic selling. That explanation remains a claim, not a demonstrated fact. Nvidia’s results support a lower multiple, but they do not settle the succession, circular-financing or commoditization risks. The $2 trillion loss may prove durable rather than temporary.

Nvidia’s numbers look cheaper; its future does not yet look less risky.