Nvidia PE falls to 14-year low, but CEO exit and AI worries cloud the bargain
Stock down 12% this week at 12 times expected earnings; interim CEO Colette Kress to face investors as analysts still forecast strong AI chip demand
Nvidia's stock price has fallen to a 14-year low, trading at 12 times expected earnings – the lowest since 2012. This follows a sharp drop from its October 6 record high and is attributed to both the departure of CEO Jensen Huang and concerns over AI slowdown. Huang resigned amid a scandal involving extramarital affairs, while Nvidia's GPUs have been driving the AI boom.
The company's stock has also dropped about 12% this week due to leadership uncertainty. CFO Colette Kress is serving as interim CEO as Nvidia searches for a permanent successor. However, investors are primarily worried about the potential slowdown in AI data center buildouts. Analysts expect strong profit growth, with analysts forecasting a 92% surge in October-quarter revenue and an 89% increase in net profit year-over-year.
Despite the pessimistic outlook, Nvidia's shares are still being viewed favorably by investors, who anticipate continued demand for its chips.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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