Is Nvidia Stock Cheaper Now That Its Multiple Has Fallen?
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Many investors evaluate NVIDIA (NVDA) the way they evaluate any stock: the lower the price-to-earnings multiple, the cheaper the stock. That multiple, what investors pay for each dollar of profit, stood at 101.3 for Nvidia in mid-2023. Today it is 26.5. Does a multiple that has fallen this far mean you are getting a cheaper stock?
Nvidia Stock Rose While Its Multiple Fell
Nvidia’s share price rose 398.7% from mid-2023 to October 23, 2026, excluding dividends. A single share now costs far more than it did, while each dollar of profit behind it costs far less. Over the same three years, the price went up and the multiple went down.
How Much Has Nvidia’s Profit Grown?
Nvidia’s profit over the latest twelve months reached $193 billion, compared with $10.3 billion in the twelve months to mid-2023. That is 18.7 times as much profit in three years. The table below shows how profit and the multiple moved year by year.
| Twelve months to | Net income | Change in a year | Price-to-earnings |
|---|---|---|---|
| Aug 1, 2021 | $7.08 billion | +108.9% | 70.4 |
| Jul 31, 2022 | $7.74 billion | +9.4% | 48.9 |
| Jul 30, 2023 | $10.3 billion | +33.4% | 101.3 |
| Jul 28, 2024 | $53 billion | +413.4% | 57.3 |
| Jul 27, 2025 | $86.6 billion | +63.4% | 44.5 |
| Jul 26, 2026 | $193 billion | +122.7% | 25.1 |
| Jul 26, 2026 (at the share price of Oct 23, 2026) | $193 billion | +122.7% | 26.5 |
Net income is the reported total for the twelve months ending on the date shown. Change in a year compares that net income to the twelve months prior. Each price-to-earnings multiple divides the market value at the calendar quarter end paired with those twelve months by the net income for those twelve months; the final row uses the share price of Oct 23, 2026.
Nvidia generates its sales mostly from one business: the Compute & Networking segment made up 89.6% of revenue in fiscal 2026. On the August 26, 2026 call, management said a surge in AI demand is driving a global infrastructure buildout, and that sustained strength in Blackwell drove sales to hyperscale customers.
Does A Lower Multiple Make Nvidia Cheaper?
Not in the way the rule suggests. A better question is what investors were paying for when the multiple was high. Nvidia’s multiple peaked at 143.1 in early 2023, when twelve-month profit had dipped to about $4.8 billion. Profit today is about 40 times that. Investors paid the most for each dollar of profit when there was far less of it because they expected it to grow, and it did.
Today, a buyer pays less for each dollar of profit than a buyer did three years ago. That earlier buyer was paying for growth that has since happened. The lower multiple partly reflects growth that has already arrived, so it is not by itself a discount. This follows the usual curve for a fast grower: the multiple is highest while the profit is still expected, and lower once it is here.
Where Is Nvidia On That Curve Now?
Nvidia’s profit is still growing fast, and it is expanding faster than it did a year earlier. Profit rose 122.7% in the latest twelve months, compared with 63.4% the year before. Profit also grew faster than sales, which rose 83.4%.
Nvidia’s multiple today sits above the S&P 500’s 22.9. When Nvidia reports in November 2026, the figure to watch is whether profit keeps growing near the latest year’s pace.
Does This Mean You Should Act On NVDA?
Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.
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