Nvidia (NASDAQ:NVDA) may be one of the S&P 500Best performing stocks of the last five years. But at today’s prices, it doesn’t exactly look expensive.
While the share price has fallen in 2026, the underlying business continues to improve. Is this the buying opportunity investors like me have been waiting for?
P/E multiples
In the past five years, Nvidia’s shares have not traded at a price-to-earnings ratio (P/E) below 30. And most of the time, the frequency has been much higher than that.
To say that the underlying business has come up with assets to ensure valuation is an understatement. Revenue is up nearly 1,000% and the company seems unstoppable.
Investors, however, have always had to consider the risk that something might disrupt the firm’s progress. Even if it’s just customers running out of money to keep buying the latest chips.
However, the current share price implies a P/E ratio of about 17 based on your earnings expectations for next year. And at that level, the equation looks very different.
A forward IP/E of 17 times lower than Amazon (23) and Microsoft (21). And I’ve been buying both of those stocks recently on the grounds that I think they look like great value.
I stick with that opinion, but it’s hard to ignore Nvidia at today’s prices. Until recently, I’ve argued that there’s a lot of growth coming at a price, but that argument is hard to make now.
Accidents
Shares of Nvidia have lost momentum despite the underlying business growing strongly as investors have begun to worry about risks. And honestly, they don’t make these.
To keep growing, the company has to keep releasing better chips that the likes of Amazon and Microsoft have to buy for their data centers. So far, so good, but maintaining this is difficult.
This type of business model encourages competition. And Nvidia’s biggest customers are starting to develop their products with better energy efficiency scores.
Another cause for concern centers around some of the deals Nvidia has been making with its customers. The most high profile of these has been OpenAI.
What was announced in September 2025 as a potential partnership of up to $100bn is now a $30bn investment. And it has been confirmed that this was not a binding obligation.
There may be nothing to worry about in this case. But the possibility that deals could drop by 70% is something investors should factor into their thinking.
Screaming purchase?
The stock is up more than 1,000% over the past five years. But there is a real sense in which this might be the best time to consider buying Nvidia shares in the long term.
There are risks, but those have always been there. And expectations are starting to moderate, giving investors a better value for taking those risks.
Is the stock a better choice for my portfolio than Amazon or Microsoft at today’s prices? I’m not sure – but for the first time in a long time, I’m thinking about it.
