How far would Nvidia have to drop to come in line with the p/e of normal companies in its field

To determine how far NVIDIA would have to drop to come in line with the P/E of normal companies in its field, we need to analyze NVIDIA's current P/E ratio and compare it with the P/E ratios of its peers and the industry average.

1. NVIDIA's Current P/E Ratio: As of September 6, 2024, NVIDIA's P/E ratio is 59.22.

2. Comparison with Peers:
   • NVIDIA's P/E ratio is lower than that of Broadcom (AVGO) at 116.2.
   • It is also lower than the P/E ratio of Advanced Micro Devices (AMD) at 160.6.
   • However, NVIDIA's P/E ratio is higher than that of Qualcomm (QCOM) at 20.
   • Texas Instruments (TXN) has a P/E ratio of 34.1, which is lower than NVIDIA's P/E ratio.
3. Comparison with Industry Average:
   • The P/E ratio for NVIDIA is higher than the industry average, which is approximately 25.8.
   • This suggests that NVIDIA's stock is trading at a premium compared to the broader semiconductor industry.
4. Conclusion:
   • To come in line with the P/E of normal companies in its field, NVIDIA's stock would need to drop significantly.
   • Given that NVIDIA's P/E ratio is already lower than some of its peers and is above the industry average, any further drop would likely need to be substantial for NVIDIA's P/E ratio to align with the norms in its industry.

In summary, NVIDIA would need a substantial drop in its stock price for its P/E ratio to come in line with the P/E ratios of normal companies in its field. This analysis is based on the current P/E ratios of NVIDIA and its peers, as well as the industry average.