Nvidia Valuation Hits 21x Forward Earnings as Supply Risks Rise
Nvidia's forward earnings multiple has fallen to 21x, matching the S&P 500 and down from its ten-year average of 35x. Heightened supply-chain risks for helium in the Middle East and Broadcom's securing of high-bandwidth memory through 2028 could pressure Nvidia's production costs and GPU availability.
1. Repricing of Nvidia Shares
Nvidia now trades at about 21x forward earnings, matching the S&P 500 and down from its ten-year average of 35x, as a rotation away from Big Tech has led to a 6% sector decline since October.
2. Broadcom's HBM Supply Deal
Broadcom has locked in high-bandwidth memory supply and advanced-node capacity at TSMC through 2028, alleviating HBM shortages and intensifying competition for memory modules critical to Nvidia's GPU production.
3. Middle East Supply-Chain Risks
Heightened tensions between the U.S. and Iran threaten key chip materials such as helium used in semiconductor manufacturing, with potential disruptions posing risks to Nvidia's fabrication timelines as partners monitor supply-chain stability.