Nvidia stock fell again on Monday and once more underperformed the market as most equities began to stabilize on Monday. Nvidia, though, has remained under pressure since its earnings release. The stock fell 9% on Friday as equities turned lower and high valuation stocks were punished.
NVDA stock trades on a trailing P/E of 36 and a forward P/E of 46. When growth stalls and interest rates rise, these stocks are always the first ones to be targeted. Investors will look for lower multiples. That means either a lower P or a higher E.
Nvidia has more or less guided for a lower E, so ergo we need a lower P. Simplistic perhaps, but right now valuations and macro are what are driving markets. Revenue growth has turned negative last quarter at $8,288 versus now $6,704. Gross profit $5,431 to $3,036. Slowing growth will mean a lower multiple and valuation.
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