Value Investing with Sven Carlin, Ph.D. on $NVDA (Nov 6, 2026)

Nvidia is trading at a price-to-earnings ratio of only 14, and the Nasdaq 100 at only 20. This is cheaper than ever in the past five years.

Returning to Nvidia, yes, it has declined, but if you look at the long-term chart, the story is quite different. Wall Street always expects this trend to continue indefinitely until it changes.

Growth, growth, revenue growth, profit growth, and all the analysts are extremely optimistic. However, we must understand the semiconductor cycle. When you look at the times when things go wrong, they get really ugly because prices are falling, backlogs of orders are being canceled, sales are declining, and then the situation looks terrible.

Of course, in periods of prosperity, everything seems amazing, but never in history has the cycle lasted forever.

So it's just a gamble. So, everyone who buys semiconductors now is gambling. You may make good profits. All those who gambled over the past few years and bought on every dip did very well because Nvidia continued to rise.

Nvidia has tracked revenue and net income, but we also need to look at margins. From acceptable average margins, we are now in an excessive period of insanely high margins. If the AI story comes to a halt, and demand falls, margins will fall, revenues will fall, and everything that has propelled the company upward will eventually come to a decline.

Yes, Nvidia may still be profitable, but let's assume that two years from now it will make 100 billion, which is great compared to the 4.3 billion it made in 2020 or 9 billion in 2022.

How quickly things change. If they achieve 100 billion, the market capitalization at a price-to-earnings ratio of 10, which is what could happen to semiconductors, would be one trillion.

At a ratio of 20, it becomes 2 trillion. This is still a 50% decrease from where we are now.

the goal is to be good, not to bet on Nvidia stock.