A forward price-to-earnings ratio divides a share price by the earnings analysts expect, not the earnings already reported. On Wednesday morning that put Nvidia at 11.0 times next year’s consensus and Broadcom at 20.1 times, by our arithmetic.
The two companies’ consensus earnings grow at almost the same rate into next year, 69% and 68%. This explainer uses their live numbers, and AMD’s, to show what the ratio measures and what it leaves out.
Business Pill · Compound Annual Growth Rate
An evergreen Business Engineer explainer on compound growth rates, the arithmetic behind earnings that keep compounding. It teaches the general idea only and does not discuss Nvidia.
The key insight: As we read the worked example, a forward P/E is two numbers, not one: on the same day Nvidia is 18.6, 11.0 or 7.9 times depending on the fiscal year used, by our arithmetic, so every quoted multiple needs its year attached.
Price divided by earnings per share. A trailing P/E uses the last four reported quarters; a forward P/E uses a forecast, usually the analyst consensus for the current or next fiscal year. A next-12-month (NTM) ratio uses forecasts for the coming twelve months, which can span two fiscal years.
TradingKey put it plainly on Wednesday: “The forward P/E ratio is determined jointly by stock price and future earnings expectations”. The price can fall, or the forecast can rise, and the ratio drops either way.
Each company’s share price at 10:19 a.m. ET on 11 November 2026 divided by Nasdaq’s analyst consensus earnings per share for its current, next and following fiscal year. The multiples are our arithmetic; the fiscal years end in different months.
The Worked Example, 11 November
At 10:19 a.m. ET Nvidia traded at $172.68. Nasdaq’s consensus is $9.30 a share for the fiscal year ending January 2027 and $15.75 for the year ending January 2028. Divide, and Nvidia is 18.6 times this year and 11.0 times next, by our arithmetic.
Broadcom, at $350.41, is 33.8 times its $10.37 for the year ending October 2026 and 20.1 times its $17.46 for 2027. AMD, at $537.74, is 77.6 times its $6.93 for 2026 and 33.5 times its $16.04 for 2027, by our arithmetic.
Why the Year Matters
The further out the forecast, the lower the multiple and the thinner the estimate. Nvidia falls to 7.9 times consensus for the year ending January 2029 and 6.5 times for 2030, by our arithmetic, but those rest on 9 and 3 estimates, against 17 for this year.
This is why one stock can carry several “forward P/E” figures on the same day. TradingKey, citing FactSet, puts Nvidia’s next-12-month ratio at about 11.7 times; our first piece put it at 10.7 times next fiscal year on the 10 November close.
What the Ratio Leaves Out
Growth alone does not separate Nvidia from Broadcom here: consensus earnings rise 69% and 68% into next year, yet Broadcom’s next-year multiple is 1.8 times Nvidia’s, by our arithmetic. The ratio does not show how reliable the forecast is or what risk the market prices on top.
TradingKey sets out both readings for Nvidia: that the price already reflects “slowing AI spending as well as regulatory and corporate governance risks”, or that “current earnings forecasts have not yet fully reflected industry shifts”. Our follow-ups turn the gap into market value and the forecast into a quarterly path.
The Structural Read
As we read the Nvidia-Broadcom gap, it is not a gap in next-year consensus growth, 69% against 68%; it is a gap in what the market pays for each forecast dollar, 11.0 against 20.1 times, by our arithmetic.
As we read TradingKey, the ratio has two moving parts: it says analysts have not yet lowered their next-12-month forecasts in tandem with Nvidia’s share price.
TradingKey, 11 November 2026
“However, a declining valuation does not necessarily mean the stock is cheap”
Three Implications
FOR READERS OF A MULTIPLE Check the year: Nvidia is 18.6 times this fiscal year and 11.0 times next on the same price, by our arithmetic.
FOR THE ESTIMATE COUNT Nvidia’s consensus rests on 17, 15, 9 and 3 estimates across four fiscal years on Nasdaq’s page.
FOR THE COMPARISON Next-year consensus growth: Nvidia 69%, Broadcom 68%, AMD 131%, by our arithmetic.
The framework records: “I developed the idea of the AI Supercycle: the notion that the AI industry resembles the semiconductor wave”.
As we read it, a forward P/E is the market’s price on where a company sits in such a cycle: the multiple shrinks year by year as the consensus assumes earnings keep compounding. The framework predates the current share moves and does not discuss them.
What Is Not Established
Consensus figures change as analysts revise them, and the three companies’ fiscal years end in different months. Nasdaq’s consensus and FactSet’s may use different sets of estimates; we did not read FactSet’s data. None of this is a valuation call or investment advice.
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A forward P/E is price over forecast earnings, so it moves with both. On 11 November Nvidia was at 11.0 times next year’s consensus, Broadcom at 20.1 times and AMD at 33.5 times, by our arithmetic, with Nvidia’s and Broadcom’s consensus earnings growing at almost the same rate.
A note on sourcing. Prices are Nasdaq.com real-time last sales at 10:19 a.m. ET on 11 November 2026 and consensus earnings forecasts are from Nasdaq.com, both read at 15:19 UTC. The 11.7 times next-12-month figure is TradingKey’s, citing FactSet data, published on 11 November and read in full; we did not read FactSet’s data. Every multiple and growth rate is our arithmetic. This explainer covers market valuation only and is not investment advice. Nvidia, Broadcom and AMD were not contacted.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
