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Nvidia shares jumped 25% this week — and got cheaper. Here's how that happens

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Nvidia CEO Jen-Hsun Huang at the Consumer Elctronics Show (CES) in Las Vegas, USA, 04 January 2017. Huang announced that his company would collaborate with the German car company Audi in future.

Andrej Sokolow | Picture Alliance | Getty Images

The rise in Nvidia (NVDA) shares on Thursday was incredible: Not only was it one of the largest single-day gains in market value ever, but after a 25% surge the chipmaker's stock was actually cheaper than the day before.

Consider: On Wednesday, the price-to-earnings ratio for Club holding Nvidia was 66.1 based on full-year 2024 estimates, and 49.1 based on 2025 projections. On Friday, the forward P/E for this year was 52.9 and just 39.4 for next year.

Sound a bit off? Here's how this happens.

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