Nvidia Slides 2% as Oil Surges 4% and Forward P/E Falls Below S&P
Nvidia shares slid 2% as chip stocks plunged with oil up nearly 4%, stoking Middle East supply-chain concerns. Its forward P/E dropped below the S&P 500, while data-center capex is forecast at $3–4 trillion by 2030, suggesting unpriced 2027 growth could drive a re-rating.
1. Chip Stocks Plunge on Oil Surge
Nvidia declined 2% on Friday alongside a broader semiconductor sell-off, with Advanced Micro Devices down 3% and Intel off 2%. Crude oil jumped nearly 4% after renewed Middle East tensions, heightening concerns over potential supply-chain disruptions in Asia’s key manufacturing hubs.
2. Forward Valuation Drops Below Market
By the close, Nvidia’s forward price-to-earnings ratio fell below the S&P 500 average, marking a rare undervaluation for the AI chip leader. This shift reflects investor caution on near-term demand and profit forecasts amid geopolitical uncertainty.
3. Long-Term Data-Center Upside
Analysts project global data-center capital expenditures rising to $3–4 trillion by 2030, driven by AI deployment and cloud expansion. Many investors argue that Nvidia’s 2027 revenue gains remain unpriced, setting the stage for a potential valuation re-rating if growth materializes.