The American chip giant Nvidia has lost about $1 trillion in value in the 16 percent price drop since its peak on May 14. Nvidia’s so-called P/E ratio – that is, the share price divided by the profit forecast one year ahead – is therefore at its lowest level since the beginning of 2019.
Wall Street’s broad S&P 500 index has a P/E ratio of just over 20, while the Nasdaq’s average P/E ratio is 23.
Despite the sharp decline in its share price, Nvidia remains the world’s most valuable publicly traded company, with a total valuation of $4.8 trillion. But Apple and Google owner Alphabet – which have fared better in the recent turmoil in the AI sector – are close behind at $4.6 trillion and $4.4 trillion, respectively.
