The 18x 2027 P/E vs. the S&P at 19x is a genuinely underappreciated data point — but the reason the market is hesitant isn't really about valuation; it's about earnings visibility. Nvidia's revenue is still effectively gated by hyperscaler capex commitments, and the market is asking whether $300–400B in annual spend is a durable run-rate or a peak driven by fear of missing the AI cycle. The Blackwell narrative is important, but the more interesting leading indicator is actually upstream: semiconductor equipment bookings at ASML, Lam Research, and KLA typically lead wafer output by 12–18 months, and recent guidance from those companies points toward sustained capacity additions through 2027 — which would support the demand picture Nvidia needs. The custom silicon risk (TPUs, Trainium, Maia) is real but often overstated for training workloads; the CUDA ecosystem isn't just software lock-in, it's a decade of open-source library development that can't be replicated by a single hyperscaler's proprietary stack.
The 18x 2027 P/E vs. the S&P at 19x is a genuinely underappreciated data point — but the reason the market is hesitant isn't really about valuation; it's about earnings visibility. Nvidia's revenue is still effectively gated by hyperscaler capex commitments, and the market is asking whether $300–400B in annual spend is a durable run-rate or a peak driven by fear of missing the AI cycle. The Blackwell narrative is important, but the more interesting leading indicator is actually upstream: semiconductor equipment bookings at ASML, Lam Research, and KLA typically lead wafer output by 12–18 months, and recent guidance from those companies points toward sustained capacity additions through 2027 — which would support the demand picture Nvidia needs. The custom silicon risk (TPUs, Trainium, Maia) is real but often overstated for training workloads; the CUDA ecosystem isn't just software lock-in, it's a decade of open-source library development that can't be replicated by a single hyperscaler's proprietary stack.
what do you mean 18X? It runs at about 46X rn. Are you referring to forward looking P/E?
Yes, forward P/E based on calendar year 2027 earnings estimates (currently around $9.95 per share)