Nvidia is closing in on $175 a share, roughly 25% below its record high and the same price it was at in July 2025. Since July 2025, its sales and EPS have both grown by over 100%. Further, the stock is trading well under both its 50- and 200-day moving averages. At that price, Nvidia trades at about 12 times forward earnings compared to 18x for the S&P 500. Its PEG ratio sits near 0.25. Earnings growth estimates could be cut in half, and the stock would still be very cheap compared to the market.
The math and the potential growth story point to a remarkably cheap stock. It may very well be, but over the last week, two factors have entered the equation that may hinder its growth potential.
As we wrote in Nvidia: Political Capital Becomes A Liability, the company is facing political pressure due to reports that its CEO, Jensen Huang, was having an affair with a Chinese spy. Three House committees overseeing foreign affairs, intelligence, and China policy have asked him to appear on November 18. Those committees write the rules governing what Nvidia may sell abroad.
The second came out of the election. Last Tuesday, both Republican and Democratic voters rejected data center growth. Restrictions passed in all but one of 41 local measures, including at least 17 outright bans. Newly elected governors in Ohio, Georgia, Michigan, New Mexico and Texas campaigned on pausing construction, and roughly 40% of pending US data center capacity sits in those states. Bloomberg estimates the results could reduce 2027 AI infrastructure spending by 5% to 7%.
Even if growth slows for Nvidia, it may likely still be cheap. But the cheap valuation multiples are based on future growth, and last week the future acquired two new variables that most Wall Street models hadn’t considered.
What To Watch Today
Veterans Day: the stock market is open, but the bond market is closed and federal agencies are shut. No major economic data is scheduled, and the Fed’s weekly statistical releases shift to Thursday.
Economy
| Time (ET) | Release (Period) | Prior | Consensus | Forecast |
|---|---|---|---|---|
| 7:00 a.m. | MBA Mortgage Applications (week ending Nov. 6) | −1.2% | n/a | n/a |
| 7:00 a.m. | MBA 30-Year Mortgage Rate (week ending Nov. 6) | 7.30% | n/a | n/a |
Earnings
| Company (Ticker) | Timing | EPS Est. | Rev. Est. |
|---|---|---|---|
| Corteva (CTVA) | After close (call Thu. 10:30 a.m.) | $0.09 | $1.77B |
| Franco-Nevada (FNV) | After close (call Thu. 8:00 a.m.) | $1.77 | n/a |
A light slate. No mega-cap or sector-defining reporters today. Applied Materials reports Thursday and Nvidia reports Tuesday, Nov. 17.
Fed speakers: None scheduled (federal holiday). Cleveland’s Hammack, Governor Barr, Chicago’s Goolsbee, San Francisco’s Daly and New York’s Williams speak Thursday.
All times Eastern. Economic data: Trading Economics, confirmed against the Federal Reserve Board calendar. Earnings: Earnings Whispers, confirmed against company release-date announcements. As of Nov. 10, 2026.
Market Trading Update
Yesterday, we noted that the AI stocks selloff broke prices but not earnings, and that the market held support on Monday. Today, the question every client is asking is whether the worst of the tech selloff is over. Goldman’s Rich Privorotsky thinks it might be. He called last week “one of the most aggressive episodes of net/gross de-risking” in a decade.
However, before we commit capital, let’s run the checklist against the tape. Positioning is the easy box to tick. Hedge fund nets sit at five-year lows, and long/short funds just cut gross exposure by the most since Covid. Thursday was also the biggest put day in CBOE history. That’s what capitulation usually looks like.
Price is the harder box. The Nasdaq 100 (QQQ) closed Monday at $679.35 after a 3.5% surge, which put it right back on its 200-day moving average at $681.17. That’s a retest from below, NOT a successful defense. QQQ closed 5% under the line on Thursday, and the 14-day RSI hit 27 before rebounding to 41. As the chart shows, QQQ still sits 6% under its 50-day average near $720 and 10.6% below its October 6 record.
This past spring offers a useful template. On March 20, QQQ broke its 200-day, bottomed 6% below it on March 30, and bounced 3.4% the next day. Then it stalled under the line for a week. Only the April 8 reclaim marked the turn, and the index gained 19% over the following five weeks. The bounce gets the headlines, but the reclaim is the signal. There is a systemic process to breaks of the 200-dma when they occur that we covered in The 200-DMA Just Broke, What You Need To Know.
The internals explain why last week hurt so much. As Privorotsky noted, momentum and high beta unwound together, which left low volatility as the only place to hide. Relative to minimum-volatility stocks, momentum fell 33% from its June 22 peak to Thursday’s low, and high-beta fell 26%. Both ratios bounced Monday, yet momentum remains 29% below that peak.
Currently, the consensus says de-risking is “done.” Of course, such is the nature of a washout, which tends to feel finished right before the retest. So be careful chasing the bounce for now, as the real tests often come fast.
So what are we doing? We think the worst of the forced selling is probably behind us, but the confirmation isn’t here yet. We aren’t chasing Monday’s pop. Our factor rotation model flipped from value to growth last week. Even so, our growth tranches remain on hold until QQQ holds above its 200-day moving average for several sessions. On a confirmed reclaim, we will add, with a stop just under Thursday’s $647 close. Until then, hold AI exposure at target weight, favor cash flow over borrowed money, and keep some extra cash.
Short covering builds the first rally. Earnings have to build the second one, and nobody covers a short twice.
CPI Comes In Hot Again
The odds of a Fed rate hike at the December 9th FOMC meeting spiked to 99% from 84% after the October CPI report was released. The headline CPI was 0.4% and core was 0.3%, both were a tenth above expectations for the second month in a row. It appears inflation remains largely an energy story, although a few items are of concern.
The energy prices were collected in October, when crude was still near its highs. The break in prices came at the end of the month and accelerated into November, with crude oil sliding about 20% and gasoline nearly 30% from October highs. November’s report, published in December, is where we will see the steep decline.
The good news is that owners’ equivalent rent rose 0.3% and primary residence rent rose 0.2%, both soft. Used cars fell 1.2%, and new vehicles rose 0.2%. The shelter and vehicle complex that drove the last inflation cycle is no longer the problem.
Of concern, hospital services rose 0.8%, motor vehicle insurance 0.7%, and motor vehicle maintenance and repair 0.6%, all well above the headline. Airline fares, the one transportation line genuinely tied to fuel, rose 0.4%. Cheaper crude does not fix medical costs or insurance premiums.
There is no annual comparison this month as the BLS never collected October 2025 data during the lapse in appropriations.
Tweet of the Day
Trading Rules With Desktop Printout
“Want to achieve better long-term success in managing your portfolio? Here are our 15-trading rules for managing market risks.”
Please subscribe to the daily commentary to receive these updates every morning before the opening bell.
If you found this blog useful, please send it to someone else, share it on social media, or contact us to set up a meeting.