The Goldman Sachs trading desk has circulated a note flagging what it describes as a significant disconnect in Nvidia stock.
The core observation is that NVDA is now trading at a forward price-to-earnings ratio below the S&P 500 for the first time in more than a decade, even as the company continues to deliver some of the strongest earnings growth in the index.
According to the Goldman Sachs trading desk note, Nvidia is trading at approximately 19.7 times forward earnings. The S&P 500’s forward multiple sits at roughly 20.3 times.
That gap is small in absolute terms but historically significant. It is the first time in more than 13 years that Nvidia has not traded at a premium to the broader index.
What the Goldman note flagged for Nvidia
Goldman’s trading desk described the current setup as a growth disconnect. Nvidia continues to deliver explosive fundamental results, yet the stock is being priced as if its growth days are behind it.
The most recent quarter reinforced that point. Nvidia reported Q4 revenue of $68.1 billion, up 73% from the prior year. Data-center revenue reached $62.3 billion, up 75%. Full-year revenue came in at $215.9 billion. Those are not the numbers of a company trading at or below market multiples in a normal environment.
Goldman’s note questioned why a company producing results of that magnitude is trading in line with the average S&P 500 constituent.
The implication is that either the broader market is being too generous with valuations, or Nvidia is being unfairly punished for macro concerns that are separate from its business fundamentals.
What is driving the Nvidia valuation compression?
The compression reflects a broader repricing of high-growth technology stocks rather than a specific deterioration in Nvidia’s outlook. The tech sector’s forward P/E has dropped to around 21 times, the lowest in three years, even as earnings growth expectations remain elevated.
Several macro forces have weighed on Nvidia specifically.
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The Iran conflict has pressured the broader technology sector. Rising interest rates reduce the present value of future earnings, hitting high-multiple growth stocks hardest. China export controls remain a structural constraint on revenue.
Together, these forces have pushed the stock down approximately 8% year to date.
Wolfe Research, which reiterated an outperform rating with a $275 price target, called Nvidia’s Rubin Ultra Pods a blueprint for agentic AI data centers. Goldman’s own price target on the stock stands at $250.
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Why Nvidia’s demand picture remains strong
At GTC 2026, CEO Jensen Huang disclosed that Nvidia now sees at least $1 trillion in purchase orders for Blackwell and Vera Rubin chips through the end of 2027. That figure doubled what Huang cited at the same conference a year earlier.
For the next quarter, Nvidia has guided toward a midpoint of $78 billion in revenue. Data center is the number investors are focused on most closely. Nvidia’s next earnings report is scheduled for May 27, 2026.
What the valuation disconnect looks like in numbers
- Nvidia forward P/E: Approximately 19.7 times, below the S&P 500’s roughly 20.3 times, according to Global Banking & Finance Review.
- Last time this happened: More than 13 years ago, before 2013.
- Q4 revenue:$68.1 billion, up 73% year over year.
- Data center Q4:$62.3 billion, up 75% year over year.
- Next quarter guidance: Midpoint of approximately $78 billion.
- Goldman price target: $250, per StockAnalysis.com. Next earnings: May 27, 2026.
What this means for investors
Goldman’s note does not call Nvidia stock cheap in absolute terms.
What it flags is the relative anomaly: A company producing outsized earnings growth is no longer rewarded with an outsized valuation premium. That is unusual, and the trading desk is pointing it out as a signal worth watching.
The key risk to the bull case is not the business fundamentals. It is whether macro pressure, rising rates, and geopolitical uncertainty can keep the multiple compressed, even as the underlying results continue to beat expectations.
If Nvidia delivers on its $78 billion guidance and raises again in May, the current valuation may look difficult to justify at parity with the S&P 500. That is the tension to which Goldman’s note draws attention.
Related: Rosenblatt resets Nvidia stock price target for 2026
