Nvidia and Meta Now Undervalued Relative to S&P 500 Amid March Market Reassessment

Nvidia (NVDA) and Meta Platforms (META) have recently traded at price-to-earnings (P/E) ratios below that of the S&P 500 (^GSPC), a rare occurrence for high-growth tech leaders. As of early March 2026, NVDA’s forward P/E stood at 28.4, while META’s was 26.1—both below the S&P 500’s 29.7 multiple. This reversal marks a notable divergence, given that both stocks had historically traded at significant premiums due to dominant AI and digital advertising momentum. The shift reflects broader market dynamics, including profit-taking after 2024–2025 gains, heightened scrutiny of AI monetization timelines, and macroeconomic concerns over rate persistence. Despite robust revenue growth—NVDA reported 148% YoY revenue increase in Q4 2025, and META posted 32% YoY ad revenue growth—their recent price corrections have compressed valuations to levels more aligned with broader market averages. For investors assessing the Magnificent Seven, NVDA and META now represent relative value. NVDA’s PEG ratio (P/E divided by earnings growth rate) of 0.37 and META’s 0.49 suggest they are undervalued relative to their growth trajectories. In contrast, other Magnificent Seven members like Amazon (AMZN) and Microsoft (MSFT) still trade above the S&P 500’s P/E, reinforcing the relative attractiveness of NVDA and META. The revaluation could influence portfolio positioning in March, with institutional flows potentially favoring these two names for their combination of growth, profitability, and defensive positioning within the tech sector. Analysts note that sustained earnings momentum and ongoing AI infrastructure investments may support a rebound in sentiment, particularly if macro conditions stabilize.