Nvidia (NVDA) trades at $214.13, down 1.4 percent today. Despite being the world's largest company by market capitalization, the stock's valuation leaves substantial room for upside.
The key metric is Nvidia's forward price-to-earnings ratio for fiscal 2028. The company has guided for 70 percent revenue growth next year—a forecast with high conviction because major AI hyperscalers have already locked in their capital expenditure plans for that period. Cloud computing companies must contract for chips years in advance to secure supply once data centers are built and powered.
With Wall Street's earnings estimates for next fiscal year and assuming the stock price holds, Nvidia would trade below 14 times forward earnings. That valuation is exceptionally cheap for a company growing revenue 70 percent annually. By comparison, Nvidia's current trailing P/E is 28.
If Nvidia achieves its earnings guidance and trades at a 28x forward multiple by the end of fiscal January 2028—matching its trailing P/E today—the stock would double from current levels. That would represent a 100 percent return in 18 months.
The bull case rests on the durability of hyperscaler spending. Some investors worry about the scale of AI infrastructure investment, but competitive pressure to secure AI capacity is forcing cloud providers to spend aggressively. Several have reported hundreds of billions of dollars in demand backlogs. That backlog ensures sustained capital allocation to chip suppliers like Nvidia for years to come.
