NVIDIA (NVDA) Falls to $195 - Barron's Says Cheapest Since 2015, BofA Says Buy

Barron’s wrote Tuesday that NVIDIA stock is not this cheap since 2015 on a forward P/E basis. At $195 with a trailing P/E of 30.21 and a forward P/E of 23.58 on $91 billion in Q2 guidance, the PEG ratio is roughly 0.57, well below the typical 1.0 threshold for fair value of a growth stock. To put the Barron’s comparison in context, in 2015, NVIDIA’s business was a tiny fraction of where it is today. 

Revenue was around $4.7 billion versus a trailing twelve-month revenue of $253 billion today. So the Barron’s point is not about the absolute price level but about the multiple at which today’s earnings power are being priced. At 23.58 times forward earnings on a company guiding to $91 billion of revenue for Q2, up from Q1’s $81.6 billion, Barron’s is arguing that the circular financing narrative is creating a valuation disconnect.

That was the framing Bank of America’s analyst used Tuesday morning, reaffirming a Buy rating and calling NVIDIA a “unique, durable growth franchise.” BofA said it believes NVIDIA is well positioned to capture both sides of the AI computing market (training and inference) as AI workloads move from being purely training-focused toward mixed training and inference deployments. 

The Q2 guidance of $91 billion already factors in no Data Center compute revenue from China, meaning the $91 billion is already a conservative floor without Chinese revenues. The current average analyst price target is $302.83, implying 55% upside from $195. KeyBanc raised its target to $330 on July 14.

Bloomberg reported and Forbes confirmed that Taiwanese prosecutors arrested a Nvidia employee as part of an ongoing chip smuggling probe. There are no further details as to what the suspect may have been accused of smuggling or attempting to smuggle. In the context of US export restrictions on advanced AI chips, it is likely that the suspect was allegedly involved in exporting Nvidia chips to China or some other restricted party. Taiwan has been a major enforcement center for AI chip exports because TSMC manufactures Nvidia chips there and is subject to export control laws itself.

The importance of the news for Nvidia hinges on whether the arrest was the act of a rogue employee or evidence of systemic issues within the company’s export control processes. If it was a rogue employee, it is a relatively contained issue. If it points to larger systemic issues at the company, then the company’s own export control infrastructure will come under increased scrutiny. 

The arrest also coincides with a period when Nvidia has already factored out China revenues from its own Q2 guidance to account for export restrictions. A finding of lax export compliance could subject Nvidia to regulatory penalties in an environment where it is already fighting an uphill battle against Washington’s aggressive trade policies. This story increases the negative news flow around the stock but does not alter the company’s own Q2 guidance.

Q1 FY2027: Revenue $81.6B, +85% YoY, Data Center $75.2B, +92% YoY. Gross Margin 74.9% GAAP / 75.0% Non-GAAP. Q2 Guide: $91B (ex China). FY2026 Full Year: $215.9B Revenue, +65% YoY. Net Income $120B. Q1 Results: $80B additional buyback authorized. Dividend raised to $0.25/quarter from $0.01. This is the most aggressive capital return program in NVDA's history. The OpenAI guarantee question that drove Monday's 5% drop has not been confirmed or denied. Analysts called Monday's circular financing fear "overblown" on Tuesday. The $250B figure is a discussion point, not a signed agreement.

On the 4-hour chart, NVDA broke below ascending trendline and 50 EMA ($202.70) and 200 EMA ($204.30). Today's low $192.74 is current chart support. RSI at 37, below mid-range, getting close to oversold. $198.50 is first resistance if it bounces from here.

GOLD Price Chart - Source: Tradingview

Then the EMA band at $202.70 to $204.30 is major resistance. The first sign of a stabilized correction would be a daily close above $202.70. If it falls below $192.74, the next floor is $185.68.

Key Levels

• Today:  $195.47 (-5.50%). Range $192.74 to $208.75. 52-week: $164.07 to $236.54
• Three-day decline:  From $206.80 (Sunday) to $195.47 today. Down ~17% from $236.54 all-time high
• Barron's:  NVDA cheapest since 2015 on forward P/E. Forward P/E 23.58x on $91B Q2 guide
• BofA:  Buy rating. 'Unique, durable growth franchise.' Can win both sides of AI race
• Taiwan:  Nvidia employee detained by prosecutors in chip smuggling investigation
• Analyst target:  Average $302.83. KeyBanc $330. 55%+ upside from $195
• Support:  $192.74 (today's low), $185.68
• Resistance:  $198.50, $202.70 (50 EMA), $204.30 (200 EMA), $211.70

There are three drivers behind this 17% pullback from the ATH that are not about the business fundamentals. The $250B guarantee from Nvidia to OpenAI raised circular financing questions that triggered broad selling in AI infrastructure plays. The semiconductor stocks in Asia got killed on Monday, with SK Hynix dropping 13% and Samsung dropping 15%. That pulled all global chip stocks down regardless of individual company fundamentals.

There's also a broader repricing of the AI infrastructure theme that started when Alphabet reported and sold off post-earnings. It's working its way through every AI stock. Barron's saying it's the cheapest since 2015 and BofA's Buy are comments on the valuation gap between the stock price and the actual business, not an indication that the business has changed. The Taiwan chip smuggling news on Tuesday added another negative headline but didn't affect the $91B Q2 guidance.

There are three potential triggers for the bottom or reversal. First, if Microsoft or Meta report that they're increasing their AI capex guidance later tonight or tomorrow, that's direct evidence that hyperscaler demand is not slowing. That demand is what powers NVDA's GPUs. Second, if Nvidia issues a formal statement clarifying the nature of the OpenAI guarantee, especially if it turns out to be a contingent guarantee on a lease obligation rather than a $250B unconditional liability, the market could reassess the circular financing risk premium. Third, if the stock holds $192.74 today and RSI bounces from near oversold levels, we'd see the short covering rally that analysts calling it the cheapest since 2015 are expecting. All three scenarios are plausible within the next two days.

Nvidia trades at $195.47, down 17% from $236.54. It has a forward P/E of 23.58x with a $91B Q2 revenue guide. Analyst consensus target is $302.83. Barron's calls it the cheapest since 2015. BofA rates it Buy. A Taiwan chip smuggling investigation involving a Nvidia employee generated negative press. $192.74 is support and $185.68 is below that. A daily close above $202.70 would be the first sign the correction is stabilizing. Microsoft and Meta earnings later tonight and tomorrow are critical for determining the hyperscaler spending trajectory that determines NVDA's direction.