Nvidia PE falls to 14-year low, but CEO exit and AI worries cloud the bargain

Nvidia shares are looking like a bargain according to a popular Wall Street metric, trading at the lowest valuation since 2012. The chipmaker's stock has dropped from its October 6 record high, now trading at 12 times expected earnings. This fall to 14-year low comes after CEO Jensen Huang's resignation and a scandal over extramarital affairs, including one with a woman alleged to be a Chinese spy.

CFO Colette Kress is serving as interim CEO while Nvidia searches for a permanent successor. While the abrupt CEO exit is not a demand event, it has caused concern among investors. Nvidia's GPUs have driven the AI boom, but worries about potential slowdown in AI data centre buildout have led to a 30% drop in the company's stock since its record high.

Despite the stock's recent decline, analysts still expect strong profit growth, with Nvidia expected to report a 92% increase in October-quarter revenue and an 89% increase in net profit year-over-year. However, investors will closely watch Kress's outlook on Nvidia's future after the quarterly results are released.