Nvidia Stock Just Crashed 22%. Jim Cramer Says It's the Cheapest in a Decade

Jim Cramer keeps telling investors to buy while Nvidia sinks, and the math behind his bold valuation claim might surprise skeptics. But several red flags explain why Wall Street refuses to listen, and one upcoming report could settle the fight.

Nvidia shares plunged 22% on November 1, 2026, closing at $120 after shedding roughly $200 billion in market value. The decline followed a sharp sell‑off in AI‑related stocks and a downgrade from Morgan Stanley that cited waning data‑center demand. On November 5, 2026, Jim Cramer told CNBC’s Squawk on the Street that the stock now trades at a forward price‑to‑earnings multiple of 16.5, the cheapest level in roughly ten years. He argued that the valuation makes Nvidia an attractive buy despite the recent slide, while analysts point to upcoming earnings on December 12, 2026 as the decisive test.

The 22% drop reduces Nvidia’s market cap by about $200 billion, directly lowering the cost basis for the AI chips that power many cloud services you rely on. A lower price‑to‑earnings multiple signals that the company may have more room to invest in research and expand capacity, which could translate into faster rollout of next‑generation GPUs. If the upcoming December 12 earnings beat expectations, the stock could rebound, potentially stabilizing the pricing of AI‑driven products you use daily. Conversely, a miss would reinforce concerns about a slowdown in AI spending and may pressure wages in tech‑heavy regions.

At the height of the 2021 rally, Nvidia’s forward P/E climbed to 70, far above its historical average of roughly 30. The stock’s market capitalization surged to $1 trillion in early 2022, a level not revisited since the 2020 bull market. Past corrections of similar magnitude, such as the 2008‑2009 decline of 55% in the broader semiconductor index, have often been followed by extended periods of sideways trading. Analysts say the present slump reflects a shift from rapid data‑center expansion to a more cautious stance by cloud providers, a trend that could redefine the competitive landscape for GPU manufacturers.

The market will watch Nvidia’s December 12, 2026 earnings release for clues on whether the valuation correction is temporary or indicative of a deeper slowdown. If revenue growth slows below 10% year‑over‑year, the stock may stay depressed, prompting a wave of downgrades from major brokerages. Surprisingly, the company’s chief financial officer announced on November 6 that it plans to accelerate share‑buyback authorizations, a move that could signal confidence despite the price drop. This buyback push, unusual in a down market, suggests that insiders view the current price as an attractive entry point for long‑term investors.