Nvidia valuation falls below S&P 500 average

Nvidia’s valuation has slipped below the broader U.S. equity benchmark on a forward earnings basis for the first time in more than a decade, according to a March 31, 2026 note from a major bank’s trading desk. The desk said Nvidia is trading at about 19.7 times forward earnings, compared with roughly 20.3 times for the S&P 500. The shift marks a notable compression in the semiconductor company’s multiple even as its reported growth remains strong.

The valuation gap is occurring alongside large headline results from Nvidia’s most recent reporting period. In the fourth quarter, the company posted revenue of $68.1 billion, up 73% year-over-year, and said data center revenue rose 75% to $62.3 billion. For the full year, Nvidia reported revenue of $215.9 billion, underscoring the scale of demand tied to its data center business.

Nvidia has also outlined a sizable pipeline for upcoming products. The company projected $1 trillion in purchase orders for its Blackwell and Vera Rubin chips through the end of 2027, which it said doubles previous estimates. That projection was cited as part of the backdrop for why the valuation move is being framed as a market-driven repricing rather than a change in the company’s stated outlook.

Officials and analysts referenced broader macro and sector forces as key drivers of the multiple compression. The trading desk attributed the disconnect to a wider repricing of high-growth technology shares, noting that the tech sector’s forward price-to-earnings ratio has fallen to a three-year low of around 21 times. It also pointed to rising interest rates, the Iran conflict, and China export controls as factors weighing on sentiment.

Against that backdrop, Nvidia’s stock is down about 8% year-to-date, according to the same account. Even with that decline, some analysts have kept positive ratings and published targets. Wolfe Research maintained an outperform rating with a $275 price target, while Goldman Sachs listed a $250 price target.

For investors, the key uncertainty is whether the current valuation relationship persists as macro conditions evolve and as technology-sector multiples adjust. The trading desk’s framing suggests the move reflects cross-market pricing pressures rather than a company-specific deterioration, but the same macro factors cited—rates, geopolitical conflict, and export controls—remain active variables.

Nvidia’s next updates on demand and delivery expectations for Blackwell and Vera Rubin will be closely watched within the context of these market conditions.