Nvidia's 7-day losing streak is longest since 2022 as P/E slides

Nvidia fell 2.91% on Monday to close at $210.22, its seventh straight decline and longest losing streak since 2022.

"The stock has beaten estimates four quarters running and fallen the day after every one of them," said Sean Williams, an analyst at Motley Fool.

The slide has erased 6.69% over seven sessions, leaving the chipmaker up just 12.72% year-to-date — the worst performer in the Philadelphia Semiconductor Index, where AI spending is spreading to a broader set of chipmakers. Forward price-to-earnings has fallen to about 18 times, a multi-year low, though stripping out $13.4 billion of unrealized gains in a roughly $58 billion net income leaves a normalized multiple near 60 times. Nvidia's top three customers account for 54 percent of revenue.

The divergence between price and forecasts is what traders are watching. Wall Street has raised Nvidia's profit estimates 13 percent over the past three months, projecting $228 billion in fiscal 2027 earnings, while 82 analysts tracked carry just three hold ratings and one sell. Earnings land Aug. 26, with analysts expecting $2.01 per share, up 103 percent from a year earlier.

Valuation Falls as Profit Quality Draws Scrutiny

The slide began Aug. 10, when Nvidia announced financing platforms with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to raise more than $500 billion from outside investors — money that helps customers buy Nvidia computing power. Critics call it circular financing. A securities filing last week revealed Nvidia had guaranteed up to $105 billion in lease obligations tied to an OpenAI campus in Ohio.

The 2022 comparison flatters the current decline. Nvidia fell seven straight days into Sept. 6, 2022, shedding 24 percent and closing at its lowest level since March 2021. This slide is a slow leak rather than a crash: four of the seven sessions lost less than 1 percent, while a single day, Aug. 18, did half the damage with a 2.34 percent drop.

Nvidia added $80 billion to its share buyback authorization in the quarter ending April, replacing Apple as the largest single repurchaser in U.S. markets. The stock remains down 10.83 percent from its all-time closing high of $235.74 set May 14.

Analysts Raise Forecasts as Price Slips

The divergence between price and fundamentals is the most notable feature of the pullback. All 26 analysts tracked by TipRanks rate the stock a buy, with an average target of $301.82 — about 40 percent above Monday's close. Bank of America's Vivek Arya holds a $350 price target into the print.

Nvidia's data center business generated $193.7 billion in revenue in fiscal 2026, and the company has beaten estimates four quarters running. Yet it has fallen the day after every one of those reports, costing the stock 2.79 percent on average the next day and 5.31 percent across two days, by Williams' count.

The broader context complicates the bull case. Nvidia gained 19.7 percent over the past year while its technology sector rose 37.1 percent — the company at the center of the AI trade has lagged the AI trade. Electricity, not silicon, is now the hard limit on AI growth, and Nvidia is paying for power years before chips arrive, including a minority investment in Cloverleaf Infrastructure, which has sold more than 7 gigawatts of powered projects.

Whether earnings end the streak depends on whether a record quarter is enough to reset the assumptions built on top of the numbers. The circular financing debate is what traders are trading until Wednesday.

This article is for informational purposes only and does not constitute investment advice.