Overview
- Nvidia, which Reuters said Monday is down about 20% from its October record, now trades near 19.6 times expected earnings, its cheapest level since early 2019.
- Worries that Amazon, Microsoft, Alphabet, and Meta will take years to earn back roughly $700 billion in 2026 data-center spending are pressuring AI valuations.
- The chipmaker’s business remains strong, with gross margins near 75%, data-center sales surging, and management touting up to $1 trillion in AI platform revenue through 2027.
- All of the Magnificent Seven are down this year and trail the S&P 500, signaling a broad pullback from the mega-cap tech trade that led the post-ChatGPT boom.
- Investors are rotating to suppliers seen as monetizing AI now, with Taiwan Semiconductor up about 7.5% year to date through March 27 on heavy demand to fabricate advanced chips.