With a $5.4trillion price tag, it is the most valuable company in stock market history.

And Nvidia’s share price has soared on the back of seemingly insatiable demand for its state-of-the-art microchips which power the AI revolution.

But a key measure for valuing firms suggests the tech giant’s shares are actually trading at their cheapest level in more than a decade as doubts mount over how fast its booming profits can continue to grow. 

At $224, Nvidia’s shares trade at less than 17 times the earnings that investors expect the company to make in the next year, according to data compiled by Bloomberg.

The multiple is the lowest since 2016 and half what the shares commanded a year ago – when Nvidia’s revenue and profit growth were slower.

This rapid de-rating of Nvidia, led by Jensen Huang, comes amid an investor backlash against the debt-fuelled surge in AI infrastructure spending on costly kit such as data centres as borrowing costs climb.

‘A company’s market value reflects its total earnings power in the long run,’ said Stephen Yiu, of fund manager Blue Whale – an early backer of Nvidia.

He said the company’s profits, which hit $120billion last year, have grown faster than its share price, suggesting the stock should climb even higher.

But he accepts that growing competition from cheaper Chinese rivals will eat into cash-rich Nvidia’s chunky margins and slow earnings growth. It remains a top-ten holding in Yiu’s £2.5billion Blue Whale Growth Fund.

‘We are not writing them off,’ he told The Mail on Sunday. ‘AI is here to stay and Nvidia will remain a market leader within that. But will it continue to grow 50 per cent a year, every year? The short answer is no.’