AI Chip Stocks: What Prices Imply About Peak Earnings

The equity table isn’t in the question, so I’ll pull current prices, consensus earnings, and through-cycle valuation ranges for the names the prompt itself flags—memory plus Nvidia, Broadcom, and TSMC—and build the reverse-valuation grid from that.
Prices and street EPS are in hand. Next I’ll pin down fiscal-year estimates and historical peak-to-trough earnings so the reverse-valuation grid is anchored, not guessed.
The equity table was not in the prompt. The framework below is built on the four names the question itself uses as the valuation set — Micron for memory, plus Nvidia, Broadcom, and TSMC — with SK hynix as a memory cross-check. Prices are the November 9, 2026 closes. Consensus EPS vintages differ by source and by a few weeks; where they disagree, the range is shown rather than averaged away.

What the price is actually paying for

Divide the price by the through-cycle P/E you are willing to pay for earnings that survive the cycle. That dollar figure is the only EPS the price treats as durable. Everything above it is what the market assumes will be given back, and the year you think earnings will have fallen to that level is the trough year already in the price.

On November 9 that residual was about $73 for Micron at 10×, $8–9 for Nvidia at 20–22×, $18 for Broadcom at 18×, and $22 for TSMC at 18×. Set against the street, those residuals say four different things. Micron’s price is roughly 10× the year it just reported, so the entire guided ramp is treated as transient. Nvidia and Broadcom are priced as if next fiscal year is the sustainable level and the year after that is a peak. TSMC is priced as if 2027 earnings are already the through-cycle number, with only a shallow fade after that.

The identity, with no discounting and no credit for interim cash:

sustainable EPS = price / through-cycle P/E

decline already in the price = 1 − (price / through-cycle P/E) / street peak EPS

Discounting is added only in the peak-year grid, because an undiscounted identity does not change with the calendar. When a discount is applied, it is a harsh clock: fair value at the peak equals through-cycle P/E × trough fraction × peak EPS, discounted at 10% a year, with zero credit for dividends or free cash flow earned on the way. That understates fair value. A name that looks slightly rich on this test can still be fair once interim cash is counted. A name that looks cheap on it is cheap even if you ignore the cash.

Assumptions, stated before the grid

Through-cycle P/E is the multiple applied to post-fall earnings, not to the peak.

• Memory: 8×, 10×, 12×, with 15× as the top of the range you suggested. Micron’s own history says why the low end exists. Diluted EPS went from $11.51 in fiscal 2018 to $2.37 in fiscal 2020, about 21% of the peak, and from $7.75 in fiscal 2022 to a loss of $5.34 in fiscal 2023. [1] Upturn multiples on peak earnings have historically sat around 4–7×, which is a peak multiple, not a through-cycle one. [2]
• Nvidia: 20×, 22×, 25×. The five-year median trailing P/E is about 56×, and one broker’s five-year average is 33.6×, but both are hypergrowth artifacts. [3] [4] A through-cycle multiple here means the multiple once growth has normalized, closer to a premium industrial than to the last five years.
• Broadcom: 16×, 18×, 20×. The ten-year median forward P/E is 15×; a five-year average cited in broker work is 20.5×. [5] [4]
• TSMC: 16×, 18×, 20×. A recent trailing history of the forward multiple puts the five-year average near 18×. [6]

Trough as a percent of peak is scenario, not fact.

• Memory base case 35% of peak EPS still earns money. That is harsher than fiscal 2019 (about 48% of the 2018 peak) and kinder than fiscal 2020 (about 21%) or fiscal 2023 (below zero). [1] The grid also shows 50%, 40%, 25%, and 10%.
• Nvidia and Broadcom base case 50–55%. A capex pause, not a DRAM price collapse.
• TSMC base case 70–75%. In the last down year, 2023 ADR EPS of $5.19 was about 79% of 2022’s $6.57. [7] Foundry earnings fade; they do not invert the way memory earnings do.

Peak year is an assumption you choose. The street, as of early November, is still raising outer-year estimates. It is not modeling a peak. [8] [9] [10]

The snapshot the grid is built on

Name	Nov 9, 2026 close	Earnings anchor	Source of EPS	P/E on that anchor
Nvidia	$178.67	FY2027E $9.30; FY2028E $15.80	FactSet-style consensus, early November; cross-checks at 19.2× and 11.3×	19.2× / 11.3×
Broadcom	$319.48	FY2027E $19.47; FY2028E $30.37	Seeking Alpha consensus, Nov 6; screen NTM implies ~$19.3	16.4× / 10.5×
TSMC ADR	$388.62	2027E $22.2; 2028E $28.2	FactSet local medians of NT$145.69 and NT$185.61 on Oct 15, ×5, ÷ 32.882 TWD per USD on Nov 9. Seeking Alpha’s Oct 29 2027 figure is $23.39; one data vendor has 2028 at $29.82	17.5× / 13.8×
Micron	$733.15	FY2026A ~$75.4; FY2027E $176.50; FY2028E $207.76	FY2026 basic EPS $75.38; Seeking Alpha Nov 6 for the outer years (FY2027 range $161–$215). A Nov 9 screen forward P/E of 3.47 implies NTM EPS near $211, not $177	9.7× trailing / 4.2× / 3.5×
SK hynix ADR	$134.38	TTM $19.41; forward ~$37.0	Price ÷ published forward P/E of 3.63	6.9× / 3.6×

Prices: Nvidia, Broadcom, TSMC, Micron, and SK hynix all printed on November 9 across market-data pages. [11] [12] [13] Nvidia’s $9.30 / $15.80 path is the early-November consensus and matches a published FY2027 estimate multiple of 19.2× and FY2028 of 11.3× on a $179 handle. [8] [3] Broadcom’s $19.47 / $30.37 path is a single consensus page as of November 6, when the stock was $294; the EPS figures are estimates, not a function of that price. [10] TSMC’s local medians are FactSet as of October 15; the FX rate is the Taipei interbank close on November 9. [14] [15] Using Seeking Alpha’s higher 2027 ADR estimate of $23.39 instead of $22.2 moves the multiple by about one turn, not the conclusion. [16] Micron’s fiscal 2026 EPS and the $176.50 / $207.76 path are the two load-bearing memory numbers; the screen’s ~$211 NTM figure is the disagreement to keep in view. [17] [9] [18]

No public, unpaywalled consensus EPS was found for 2029 or 2031. Those columns are implied peaks only. Inventing a street number there would fake a comparison.

How far earnings can fall, and still justify today’s price

This is the undiscounted identity. “Justified” means price = through-cycle P/E × whatever EPS is left. If the cell is negative, even a zero decline does not cover the price at that multiple — the peak has to come in above the street, or the multiple has to be higher.

Micron, from the street peak

Through-cycle P/E	EPS the price treats as durable	Fall from FY2027E $177	Fall from FY2028E $208	Fall from screen NTM ~$211
8×	$92	48%	56%	57%
10×	$73	58%	65%	65%
12×	$61	65%	71%	71%
15×	$49	72%	76%	77%

The mechanism is the trailing multiple, not the forward one. At $733, Micron is 9.7× fiscal 2026 EPS of about $75. [17] A 10× through-cycle buyer is paying for earnings to settle back at roughly the year just reported. The path from there to $177 or $208 is what the 3.5–4× forward P/E is refusing to capitalize. That is a normal cyclical discount, not a forecast of a 2023-style loss. A loss year (trough EPS at or below zero) is a worse outcome than any cell in this table. The September sell-side path that had earnings peaking near $171 and then “normalizing” around $50 is stale relative to a $177–$208 consensus, but $50 is exactly the 15× cell — the top of the memory multiple range, applied to today’s price. [19]

Two things keep this from being a simple “cheap at 4×” call. Gross margin in the August quarter was 86.8% and the operating margin was 80.7%, against a fiscal 2018 gross margin near 59%. [20] [21] Earnings can fall further than revenue if price, not just volume, mean-reverts. And the forward denominator is not money earned yet: the company guided the November quarter to about $38 of EPS, so the ramp is still being printed, but a full year at that run-rate is ~$150, not $208. [20]

SK hynix’s ADR tells the same story with a slightly deeper cut. At $134.38 and a forward EPS near $37, a 10× through-cycle multiple leaves durable EPS of about $13.40, a 64% decline from the forward number; at 8× the decline is about 55%. [13] Korean local shares have screened even cheaper on 2027 earnings (figures around 2.3–2.8× in late October and early November), which would imply a still larger giveback at the same through-cycle multiple. [22] [23] Those local multiples are not mixed into the ADR math above.

Nvidia, Broadcom, TSMC — the platform names

Name	Multiple	Durable EPS	Fall if FY/CY2027 street is the peak	Fall if 2028 street is the peak
Nvidia	20×	$8.93	4% from $9.30	43% from $15.80
Nvidia	22×	$8.12	13%	49%
Nvidia	25×	$7.15	23%	55%
Broadcom	16×	$20.0	about zero vs $19.47 (price is ~16× FY2027)	34% from $30.37
Broadcom	18×	$17.7	9%	42%
Broadcom	20×	$16.0	18%	47%
TSMC	16×	$24.3	price is ~10% above 16× the $22.2 estimate	14% from $28.2
TSMC	18×	$21.6	3%	23%
TSMC	20×	$19.4	12%	31%

Read down the 2027 column and the ranking is obvious. TSMC’s price is 2027 earnings at a normal multiple. A buyer at 18× needs essentially no decline if 2027 is the peak, and only about a quarter given back if 2028 street EPS near $28 is the peak. Broadcom’s price is FY2027 at 16–18×. Hock Tan has talked about AI semiconductor revenue doubling to about $115 billion in fiscal 2027 and doubling again to about $230 billion in fiscal 2028; the $30 EPS path is that second double. [24] The stock does not pay for it persisting. It pays for the first double, then a giveback of roughly 35–45%. Nvidia’s price is FY2027 at about 19×, which is a market multiple on $9.30, not a distressed one. The $15.80 FY2028 figure is in the price only if something like half of it does not last and you still pay 20–25× what remains. Consensus has that $15.80 rising, not peaking — one late-October note had the fiscal 2028 estimate at $15.91, up from $12.81 ninety days earlier — so the market is fading a number that analysts are still marking up. [25]

Sensitivity grid: what peak each price implies

Convention for this grid: trough fraction τ is applied to peak-year EPS, the through-cycle multiple is applied to that residue, and the resulting value is discounted back from the peak year at 10% with no interim cash. Implied peak EPS = price × (1.10)^{year − 2026} / (multiple × τ). The “now” column is the undiscounted case, which is the right comparison to a peak you think is imminent.

Where implied peak sits below the street number for that year, the price is justified even under that trough — the street peak is higher than the peak the price needs. Where implied peak sits above the street, the price needs either a higher peak, a shallower trough, or a higher multiple than the one in the header.

Micron — 10× through-cycle. Street reference: FY2027 $177, FY2028 $208.

Trough as % of peak	Implied peak, now	Peak in 2027	Peak in 2028	Peak in 2029	Peak in 2031
50%	$147	$161	$177	$195	$236
40%	$183	$202	$222	$244	$295
35% (base)	$209	$230	$253	$279	$337
25%	$293	$323	$355	$390	$472
10%	$733	$806	$887	$976	$1,181

The cell that matches the street is the point. FY2028 consensus of $208 is almost exactly the undiscounted 35% row ($209) and sits next to the 40% / peak-2027 cell ($202). So if your through-cycle multiple is 10×, today’s price is the market saying: the peak is the 2027–28 consensus, not a 2029 or 2031 blow-off, and roughly 35–40% of that peak is what is left afterward. A 25% retention — closer to the 2018-to-2020 experience — requires a peak of about $293 now, or $355 if the peak is 2028. That is 40–70% above the street. The price is not underwriting a 2023-style loss, and it is not underwriting a peak in 2031 unless peak EPS is several hundred dollars.

Move the multiple and the whole grid scales by 10/M. At 8× every implied peak is 25% higher; at 12×, 17% lower; at 15×, 33% lower. At 15× and a 35% trough, the undiscounted implied peak is about $140, which is below FY2027 street. That is the only memory assumption set in this note under which $733 is outright cheap versus consensus rather than a fair price for a normal fade. It requires you to pay 15× for cyclical earnings, the top of the range, on a business that has already printed an 87% gross margin.

Nvidia — 25×. Street reference: FY2027 $9.30, FY2028 $15.80.

Trough as % of peak	Now	2027	2028	2029	2031
70%	$10.2	$11.2	$12.4	$13.6	$16.4
50% (base)	$14.3	$15.7	$17.3	$19.0	$23.0
35%	$20.4	$22.5	$24.7	$27.2	$32.9

FY2028 street of $15.80 sits between the undiscounted 50% cell ($14.3) and the peak-in-2027 50% cell ($15.7). The market’s assumed peak is about the fiscal 2028 consensus, with half of it surviving, capitalized at 25× — or, equivalently, fiscal 2027 earnings surviving almost intact at 20×. A 2031 peak is in the price only if that peak is ~$23 at a 50% retention, or ~$16 if 70% survives. Nobody is publishing a clean 2031 number to test that against. Drop the multiple to 22× and every implied peak falls by 12%; the 50% undiscounted peak becomes $13.0, and FY2028 street then sits 22% above what the price needs. That is the bull case: not a higher multiple, a belief that more than half of $15.80 is durable.

Broadcom — 18×. Street reference: FY2027 $19.47, FY2028 $30.37.

Trough as % of peak	Now	2027	2028	2029	2031
70%	$25.4	$27.9	$30.7	$33.8	$40.8
55% (base)	$32.3	$35.5	$39.0	$43.0	$52.0
40%	$44.4	$48.8	$53.7	$59.1	$71.5

The match is tight and specific. FY2028 street of $30.37 is the 70% retention, peak-in-2028 cell ($30.7). The undiscounted retention that equates $319 to 18× FY2028 EPS is 58%. FY2027 street of $19.47 does not appear anywhere in the grid except as “almost no decline”: you need about 91% of FY2027 to survive to justify $319 at 18× with no wait. The price implies the market’s peak is fiscal 2027 earnings treated as durable, or fiscal 2028 earnings with roughly 40% given back. It does not imply a 2029 peak near $40-plus, and it does not imply the second AI-revenue doubling sticking at a mid-teens multiple. That second doubling, held and capitalized at 18×, would be a stock near $550, not $319.

TSMC — 18×. Street reference: 2027 $22.2 (range to $23.4), 2028 $28.2 (range to ~$30).

Trough as % of peak	Now	2027	2028	2029	2031
85%	$25.4	$27.9	$30.7	$33.8	$40.9
70% (base)	$30.8	$33.9	$37.3	$41.1	$49.7
50%	$43.2	$47.5	$52.2	$57.5	$69.5

2027 street is below every cell. You do not need a trough model to justify $389 if 2027 EPS is $22–23 and you will pay 18× for it; fair value on that identity is about $400–$420 before any further growth. 2028 street of $28 is a 23% fade at 18×, which lands between the 85% row and the 70% row. A peak in 2029 or 2031 is not in the price unless EPS gets to the mid-$30s or high-$40s. One local broker has talked about 2028 EPS above NT$170, which is about $26 per ADR at the November 9 rate — inside the street range, not above the grid. [26]

The TSMC caveat that the P/E grid does not capture: Deutsche Bank has lifted 2027 and 2028 capex forecasts to $84 billion and $100 billion after management said it would leave no AI demand unmet. [8] EPS can keep rising while free cash flow does not. A through-cycle P/E on earnings overstates the value if the capital intensity of the “trough” year is still a build-out year.

What each price implies about the market’s assumed peak

Put the four implied peaks in one sentence each.

• Micron at $733 assumes the peak is the 2027–28 consensus, on the order of $180–$210, and that something like $60–$90 of EPS is what remains. That residue is still about 8–12× the fiscal 2022 peak of ~$8. The market has accepted that this cycle’s level is different and is arguing about duration. It is not paying for a peak in 2029 or 2031. Supply is the tell on duration: the next Idaho fab’s first output has been described as mid-2027, with a second fab later in 2028, which is why a peak year of 2028 or 2029 is the fundamental debate, not 2031. [27] Customer agreements change the left tail — management has described non-cancellable deals with defined price floors running toward 2030 — but they do not change the identity. They change τ. [19] [28]
• Nvidia at $179 assumes a peak near fiscal 2028 street earnings, with about half given back, or a peak that is basically fiscal 2027. It does not assume the $15.80 becomes the new baseline at a 25× multiple. That would be a stock closer to $400.
• Broadcom at $319 assumes the same shape one year earlier in the narrative and one year later in the product cycle. Fiscal 2027 is the durable number. Fiscal 2028 is a peak only if a large minority of it does not last. The announced path to $230 billion of AI revenue is a fundamental forecast the price has not underwritten.
• TSMC at $389 assumes 2027 is not a peak in any memory sense. The market’s “assumed peak” is next year’s earnings, held. A later peak is upside the price does not require and does not pay for. The risk is capex and geography, not a 60% earnings air-pocket.

The early-November drawdown did part of this work already. From the October 6 area, Nvidia was down on the order of 20% and Micron on the order of 30% by the first week of November, and the November 9 closes sit 26% and about 42% under the 52-week highs of $243 and $1,255. [29] [11] An October 27 snapshot had Nvidia at $218, Micron at $929, TSMC at $437, and Broadcom at $342. [30] At those prices the same 10× memory identity required durable Micron EPS of $93 rather than $73, and Nvidia at 22× required durable EPS of $9.9 rather than $8.1. The selloff did not create the cyclical discount in memory. It widened it. It did, for Nvidia and Broadcom, pull the price down from “paying for a slice of the 2028 ramp” toward “paying for 2027 only.”

How to use this if you are underwriting the stocks

Treat the forward P/E on Micron, SK hynix, and any other memory name as a statement about τ, not as a bargain signal. The question to underwrite is whether post-cycle Micron can earn $50, $75, or $90, and in which year you are forced to find out. If the answer is $75 in 2029, the stock at $733 and 10× is roughly the undiscounted fair value of a 35% retention of the 2028 street peak, and the upside is duration — contracts and a late fab pushing the peak past 2028 — not a rerating to 15× on peak earnings. If the answer is a loss year, every cell in the memory grid is wrong in the bullish direction, and the historical precedent is fiscal 2023, not fiscal 2019.

For Nvidia and Broadcom the argument is not the multiple. Both already trade at a through-cycle multiple on next year’s consensus. The argument is whether fiscal 2028 is a peak or a base. The price says peak. You only need a reverse-valuation model if you disagree with that and want to know how much of the 2028 number you must believe is permanent. For Broadcom that hurdle is high: believing the $30 sticks at 18× is a very different stock from the one at $319.

For TSMC the cycle framework is the wrong tool at this price, unless you think 2027 EPS is itself a peak. The tool that matters is free cash flow after $80–100 billion of capex. An 18× P/E on rising EPS can coexist with a much fuller multiple on the cash that is left.

Three things would move the grid without any change in philosophy. A Micron print that makes fiscal 2027 look like $210 rather than $177 — the screen is already hinting at that — lowers the decline embedded in a flat price, which is how memory stocks get more expensive while the forward P/E falls. A Nvidia or Broadcom guide that pulls fiscal 2028 EPS back toward the durable residual ($7–9 and ~$18) would mean the price had been right and the street had been capitalizing a peak. A TSMC capex number that keeps climbing after EPS flattens would break the “18× 2027 is fair” conclusion without any change in the earnings multiple at all.

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Recent Findings Supplement (November 2026)

Recent semiconductor earnings guidance, market forecasts, and valuation resets (post-May 2026) provide fresh inputs for a reverse-valuation framework on AI-exposed names like Nvidia (NVDA), Broadcom (AVGO), TSMC (TSM), and memory players (Micron/MU, SK Hynix). These updates point to stronger near-term peaks (pushed into 2028 or later), sustained high margins from HBM and advanced nodes, but also compressed multiples reflecting competition and potential later-cycle normalization.[1][2]

Nvidia’s August 2026 results and outlook signal that the market is pricing in durability well beyond 2027 while applying lower through-cycle multiples than historical AI-era averages. The company guided ~70% revenue growth for fiscal 2028 (ending ~Jan 2028), with Q3 FY2027 revenue forecast at $108 billion; it highlighted persistent memory supply constraints and customer forecasts implying even faster growth if supply allowed. Forward P/E compressed to ~16.5x (lowest since 2015 per LSEG), with trailing multiples around 22–23x in early November amid broader sector rotation. A record $150 billion buyback increase (total capacity $235 billion through FY2028) underscores management confidence in sustained cash generation.[1][2][3]

• AMD’s November 2026 guidance (overall revenue +>80% in 2027, data-center +97% in Q3) reinforces broad AI accelerator demand and eases fears of an abrupt slowdown, indirectly supporting higher peak assumptions for Nvidia-like players.[4]
• These figures imply that current NVDA prices embed assumptions of peak earnings in 2028–2029 (or later) with only moderate troughs (e.g., 60–80% of peak) or elevated through-cycle P/Es (20x+ rather than 15–18x), given the explicit multi-year roadmap including Vera Rubin ramp and hyperscaler deployments.

Memory leaders reported record results and locked in multi-year visibility via long-term agreements (LTAs), shifting trough assumptions higher and supporting elevated cycle P/Es for the segment. Micron’s Q4 FY2026 (ended ~Sep 2026) delivered $54.2 billion revenue (record, + strong sequential ASP growth in DRAM/NAND), 87% gross margin, and $33+ billion FCF; consensus now sees FY2027 revenue roughly doubling to ~$277 billion. SK Hynix Q3 2026 posted >100 trillion KRW revenue (~first time) and 80% operating margin, driven by HBM4 ramp (priced ~50% above HBM3E) and LTAs covering >50% of 2027–2028 capacity; analysts note shares trading at crisis-era ~3x 2027 EPS despite these commitments.[5][6][7][8]

• Memory revenue is now expected to dominate 2026 industry totals (~54% per Gartner), with DRAM/NAND ASPs surging on AI/HBM focus and supply tightness persisting into 2027.[9]
• For reverse valuation, this data supports using higher trough percentages (70–90% of peak) or later peak years (2028–2029) for memory names, as LTAs and HBM premiums reduce cyclical downside versus historical 8–15x through-cycle P/E assumptions.

TSMC raised 2026 growth targets and highlighted structural under-supply in advanced nodes, implying its current price assumes sustained high utilization and pricing power into the late 2020s. Q3 2026 revenue reached $46.7 billion (+41% YoY), with full-year 2026 growth outlook lifted to ~44%; HPC/AI accounted for 68% of revenue. 2nm contributed 8% of wafer revenue (ramping), with 2026 capex guided at $60–64 billion and further increases planned. Forward P/E sits near 16x, below its 5-year average.[10][11][12]

• Analysts project EPS more than doubling from 2025 to 2027 levels, with 2nm capacity doubling in 2027.
• This supports sensitivity grids showing that TSM’s price justifies peak earnings around 2028–2031 with modest normalization (troughs at 65–80% of peak) under 18–22x through-cycle P/Es, rather than sharper cuts.

Industry forecasts were revised sharply higher in mid-to-late 2026, extending the implied earnings peak and reducing the severity of any trough needed to justify current valuations. Gartner (Aug 2026) sees global semi revenue at $1.555 trillion in 2026 (+92% YoY) and $1.94 trillion in 2027, with memory at $837 billion (2026) and >$1 trillion (2027); AI data-center share rising to 53% by 2030. Omdia (Nov 2026 updates) raised 2026 growth forecasts to 63–94% range on memory strength. McKinsey (Sep 2026) lifted its 2030 projection to $2.3 trillion (servers/data centers to $1.2 trillion). Hyperscaler capex plans total ~$800 billion (2026) and $1 trillion (2027).[13][9][14]

• Other outlooks (Yole, TechInsights) cluster around $1.8T+ for 2026 and $2.2–2.6T+ for 2027, confirming memory and advanced logic as the primary drivers.[15][16]
• These revisions mean sensitivity grids for peak years 2027–2031 would show current prices embedding later peaks (2028–2031) or higher trough ratios, especially if through-cycle P/Es for leaders are held at 15–20x+ versus lower memory benchmarks.

Valuation compression across the group (NVDA ~16–23x, TSM ~16x, SK Hynix low single-digit forward in some broker views) alongside persistent supply tightness and China-related guidance creates a narrower band for implied earnings downside. Recent notes highlight NVDA instructing cloud clients to limit China exposure and broader concerns over competition/custom silicon, yet buybacks and LTAs signal resilience.[1][17][18]

For a reverse-valuation framework, these developments collectively suggest updating assumptions toward later peak years (favoring 2028–2029 grids), higher trough percentages (especially memory via LTAs), and modestly elevated through-cycle P/Es for leaders given structural AI demand—while stress-testing 2031 scenarios for normalization risks. New data on specific growth rates, capex, and market sizes directly inform the “market’s assumed peak” implied by current prices.