"The bear case driving today's tape centers on AI infrastructure sustainability. The Wall Street Journal reported earlier this week that OpenAI missed key revenue and user growth targets, reigniting bubble concerns just as Meta Platforms lifted its 2026 CapEx guidance to a range of $125 billion to $145 billion."
"Underneath the price action, NVIDIA's fundamentals look impressive. Gross margin sits at 71% and operating margin has strengthened to 60%, both best-in-class for any semiconductor business at scale."
"Moreover, NVIDIA's valuation has actually become more attractive. The NVIDIA P/E ratio has compressed from 46x in Q3 FY2026 to 38x in Q4 FY2026."
NVIDIA shares are trading around $201, down 4% from the previous close. This decline follows a significant one-month rally of 27%. Investors are reassessing AI infrastructure sustainability amid mixed updates from major companies. Despite the drop, NVIDIA is up 7.5% year-to-date and 84% over the past year. The company's fundamentals remain strong, with a gross margin of 71% and an operating margin of 60%. Additionally, NVIDIA's P/E ratio has decreased, making its valuation more attractive.
Read at 24/7 Wall St.
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