By Priya Raman

Nvidia has lost nearly $2 trillion in market value since early October — the biggest dollar drawdown, in such a short window, in the history of capital markets. The stock's plunge, triggered by revelations about CEO Jensen Huang's romantic relationship with an alleged Chinese spy and accelerated by his resignation on November 12, has cut the chipmaker's valuation by roughly a third. And yet, by the numbers, it still isn't a clear buy.

What do the headline numbers say?

The optics look tempting. Nvidia's shares peaked at $243 on October 5, when the company held the world's largest market capitalization at $5.85 trillion and traded at 30 times trailing earnings (a P/E of 30, meaning price divided by profits over the previous four quarters). For a company growing its bottom line at 100% a year, that multiple struck Wall Street analysts as cheap — and almost all of them said so.

Since then, the stock has tumbled 34% to $161 as of mid-morning on November 12. The P/E has fallen to 20. Compare that with Apple at 40 and Amazon at 22, both expanding at a fraction of Nvidia's speed. On conventional metrics alone, Nvidia now reads like practically the ultimate value play.

Is the business still performing?

Yes — remarkably. In the quarter ended October 31, sales jumped 26% over the previous three-month period, beating the roughly 20% gains of the two prior quarters. Gross margins hit 75%, up from the 71.3% Nvidia posted for fiscal 2026. Despite its immense size, the company shows no sign of surrendering to the law of large numbers (the pattern where growth slows simply because a business gets too big).

The engine behind that profitability is a virtual monopoly in top-tier GPUs (graphics processing units, the chips powering AI systems). One senior industry executive who buys from Nvidia puts the lead at 18 to 24 months ahead of all rivals in the quality and performance of its best chips.

The catch, this customer says, is Huang himself. "Huang was the tech visionary and he also got Nvidia to operate incredibly well," the executive said. "The question is how much depended on Jensen, and how much of what he did can another person do?"

Why does the market discount look rational?

Because the moat requires constant motion. "That continuing advantage in chips is absolutely essential to Nvidia. It's an industry where you can't miss a step. If you do, others will catch up fast. Intel fell behind, and it never caught up," the executive said.

The competitive pressure is real and well-funded. Rivals who regularly complain about Nvidia's pricing are building their own in-house chips — a list that includes AMD, Google, and Amazon. High prices and fat margins inevitably attract cheaper supply. Commoditization, the force that has eventually eroded every tech hardware giant's profits, is the threat.

Where is Nvidia's cash actually going?

The balance sheet tells its own story. Over the past four quarters Nvidia generated $105 billion in free cash flow (cash left after operating costs and capital spending). Buybacks, historically the main use of that bounty, fell to just $32 billion in the 12 months ended October. The cash hoard stands at a relatively modest $100 billion, growing slowly.

So where's the rest going? Nvidia is pouring money into its own customers: SpaceX, CoreWeave, OpenAI, SoftBank's SB Energy, and Intel, for CPUs. It has also extended multibillion-dollar credit guarantees for projects built for hyperscalers (the giant cloud operators) and neoclouds (smaller specialized cloud providers) that use its GPUs.

Critics call this "circular financing" — funding the very customers who buy your products. The plausible rationale: Huang was locking in future sales before rivals could field cheaper alternatives, forestalling Nvidia's commoditization for as long as possible.

That's precisely the market's verdict. Investors now judge that Nvidia's margins and profit growth will look far lower in the future than in the past, and that losing the executive who could hold commoditization at bay longest was a big, big loss.

Did the board get it wrong?

One former CEO, speaking on background, took a contrarian view: the board should have kept Huang and punished him instead of pushing him out. "I would have liked to see more facts, and maybe the board's got them," this person said. "The board was not thinking about shareholders. They were thinking about their reputations and not getting sued. They should have punished Huang and made it a very visible punishment like no equity or bonus for a couple of years."

The former CEO concedes this is likely a minority position. "People love to get on their high moral horse and that's what we're seeing," the observer said. "You can't just plug and play to replace someone so critical to the creation of a company's one-of-a-kind products and operation. A number of CEOs who couldn't say it publicly would probably say that the Nvidia board forgot what the role of a board should be, to protect shareholders, not themselves."

The bottom line: that breathtaking $2 trillion loss in value may be an enduring repricing, not merely the panic selling most on Wall Street assumes. The numbers scream bargain. The mechanism — one irreplaceable founder, one eroding moat — says the market has already done the math.