Nvidia has gained about 11% in 2026, beating the Nasdaq and the S&P 500 but below its recent annual returns. Motley Fool writer Dave Kovaleski argues the stock now sits at its lowest price-to-earnings ratio in at least five years, and points to a pattern of pre-earnings gains ahead of the Aug. 26 report.
Nvidia is up about 11% year to date as of July 22, beating both the Nasdaq and the S&P 500. For the chipmaker, though, that has fallen short of recent years.
Over the last three years it averaged a 67% annualized return. From 2023 through 2025 it returned 38%, 170%, and 240%, respectively.
Nvidia is the largest company in the world by market cap and the face of the AI revolution. It holds a 90% share of its core market for the graphics processing units that run data centers and AI accelerators.
Its valuation, though, has rarely looked cheaper. The stock now trades at 31 times earnings and 23 times forward earnings, its lowest price-to-earnings ratio in at least five years. That multiple sits roughly 41% below its 10-year average of 53.
Nvidia's five-year PEG ratio has, meanwhile, fallen to a historic low of 0.56, a reading Kovaleski calls value territory. The last comparable moment came in April 2025, after new tariffs were announced. From an April 4 low of $94, the stock climbed to $186 by year-end — a 99% gain.
Kovaleski also notes that Nvidia's shares tend to rise ahead of its earnings report. Over the past five quarters, starting with the Q1 2025 report on May 28, 2025, the stock has risen in the month before each print.
Some moves were modest, such as a 3% gain to $182 before the fiscal Q2 report on Aug. 27, 2025. Others were large, like a 24% jump to $134 in the month before the Q1 report on May 28, 2025. The author draws a parallel between that run-up and today, when the stock trades at a similar multiple, while stopping short of predicting a repeat before the fiscal Q2 report due Aug. 26.
Source: The Motley Fool
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