Nvidia’s earnings outlook is finally getting trimmed
The American GPU behemoth had been spared the cuts that Wall Street has applied to fellow members of the Magnificent 7 — until recently.
Chip giant Nvidia is the biggest drag on the S&P 500 shortly before noon — followed by other massive market cap stocks like Apple, Microsoft, and Amazon.
Perhaps not unrelated is the fact that expectations for Nvidia’s earnings over the coming year are finally starting to get snipped by Wall Street analysts.
The stock had been resilient to the trend of earnings reduction we’ve mentioned for other Magnificent 7 shares like Amazon, Meta, and Alphabet, which has emerged since the White House announced the start of President Trump’s trade war with the world.
But that seems to have changed over the last couple weeks, as it became clear that Nvidia, despite its best efforts, remains at the heart of the trade tug-of-war between the world’s two biggest economies.
To be sure, these reductions to Wall Street EPS estimates are trims rather than chops. Numbers published by FactSet show that analysts now expect Nvidia to bring in $4.71 a share over the next 12 months, down a nickel from a week ago. But the change in trend is still notable, as earnings expectations have seemed to steadily grow for much of the last year.
Now, it could be that Wall Street analysts are just rushing to ensure that their numbers make sense in the context of the sell-off the stock has already endured. (It’s down nearly 30% so far in 2025.) That sell-off has made the shares look more reasonably valued. As my colleague Luke Kawa just mentioned, the stock hasn’t been this cheap compared to the index in about a decade.
On the other hand, valuation experts like Aswath Damodaran might argue that with the trade war still in full flower, there could be more bad news to come. And that might mean the shares of this bellwether stock — still valued at roughly 37x NTM earnings — are falling knives traders catch at their peril.
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