Jensen Huang’s downfall cut the P/E of Nvidia stock by a third. But don’t call it a bargain yet

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Wall Street calls it panic selling. But losing the CEO who held off commoditization could justify every dollar of the $2 trillion wipeout.

The steep fall in Nvidia’s stock that started with revelations about CEO Jensen Huang’s romantic relationship with an alleged Chinese spy, and accelerated following his resignation on November 12, makes Nvidia’s shares look like a historic buy. At least that’s the conclusion from analyzing its numbers by conventional metrics. The GPU-maker’s shares peaked on October 5 at $243. At that point, Nvidia sported the world’s biggest market cap at $5.85 trillion. Wall Street analysts following the stock were almost universal even then in acclaiming Nvidia as a cheap stock.

Today, Nvidia looks like a far greater bargain based strictly on the numbers. Since the summit in early October, it’s tumbled 34% as of mid-morning on November 12 to $161, a downdraft that slashed nearly $2 trillion from its valuation, the biggest dollar drop by far, in a condensed period, in the history of capital markets. As a result, Nvidia’s PE has dropped to 20, a figure that given its current stats, tags it as practically the ultimate value play. For example, Apple and Amazon carry a PE of 40 and 22 respectively, and are expanding at a fraction of Nvidia’s speed.

Indeed, despite its immense size and sorcerous growth rate, Nvidia has so far shown no signs of falling victim to the law of large numbers. In the quarter ended October 31, its sales jumped 26% over the previous three-month span, beating the around 20% jumps of the two previous quarters. What about profitability? In the October quarter, gross margins hit a sumptuous 75%, beating its FY 2026 posting of 71.3%.

Make a sober assessment of Nvidia’s overall condition, however, and the best conclusion is that the market is probably right in imposing this giant discount based on Huang’s departure. Nvidia’s wild profitability arises from its virtual monopoly in the top GPU segment. According to a top industry executive who’s an Nvidia customer, it is 18 to 24 months ahead of all-comers in the quality and performance of its top chips.

This executive…

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