Nvidia (NVDA) Stock Falls 20% From Record High as Institutions Sell $70B

TLDR

• Nvidia’s price-to-earnings (PE) ratio has fallen to ~19.6x, its lowest since early 2019 — now below the S&P 500’s PE of ~20
• The stock is down nearly 20% from its October 2025 record high of $207, with $800 billion wiped from its market cap
• Institutional investors sold over $70 billion worth of NVDA stock in Q4 2025, with 2,627 funds cutting positions
• Despite the selloff, Nvidia posted 65% revenue growth in fiscal 2026, reaching $215.9 billion, with Data Center revenue up 75%
• CEO Jensen Huang projected at least $1 trillion in cumulative revenue from Blackwell and Vera Rubin platforms through 2027

Nvidia, the world’s most valuable company at around $4 trillion, is now trading at a price-to-earnings multiple not seen since before the AI boom began. Its forward PE has dropped to roughly 19.6x — below the S&P 500’s current PE of about 20.

NVIDIA Corporation, NVDA

That’s a striking reversal for a stock that has surged over 1,000% since the launch of ChatGPT in late 2022. For most of that run, investors rewarded Nvidia with premium valuations precisely because of its explosive earnings growth.

The pullback has been driven by a mix of factors. Broader market fears over the U.S.-Israel conflict with Iran have pushed oil prices higher, stoking inflation concerns and raising the possibility of interest rate hikes. Nvidia has been caught in that wider selling pressure.

There’s also a more specific worry hanging over the stock. Big cloud customers — Microsoft, Alphabet, Amazon — have been spending heavily on AI infrastructure, but investors are questioning how quickly those investments will translate into revenue and profit. That uncertainty has rattled confidence in the AI trade more broadly.

Institutions Pull Back

The numbers on institutional selling are hard to ignore. In Q4 2025, some 2,627 funds trimmed their Nvidia positions, offloading around 440 million shares worth roughly $73.5 billion at the time. Sellers included FMR LLC, JPMorgan Chase, T. Rowe Price, Northern Trust, and UBS Asset Management.

It wasn’t a one-sided story, though. Around 3,090 institutions actually increased their stakes during the same period, picking up over 648 million shares. Institutional ownership still stands at 67.75% of the company.

The stock closed at $167.52 on March 27, sitting well below its October 2025 peak of $207.

Strong Fundamentals Haven’t Moved the Needle

Here’s what makes the situation unusual: Nvidia’s business is doing well. Full-year fiscal 2026 revenue rose 65% to $215.9 billion. Q4 revenue climbed 73% year over year to $68.1 billion. Gross margins are at 75%. Analysts are forecasting average earnings growth of over 70% for Nvidia this fiscal year, compared to 19% for the broader S&P 500.

At GTC 2026, CEO Jensen Huang projected at least $1 trillion in cumulative revenue from the Blackwell and Vera Rubin AI platforms through 2027.

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