Eric Jhonsa
Technology Portfolio Manager at Dutch Asset
Nvidia is much closer to trough multiples than peak multiples. The large tech companies are unlikely to cut capex plans in the near term given GPU pricing and the growth they see in cloud revenue and backlog, with Meta, which has no infrastructure-as-a-service business, the possible exception. x.com
Nvidia's valuation gives too little credit to its expected long-term earnings growth. Its forward P/E-to-growth ratio is 0.28, the lowest since late 2023; the bullish read depends on those growth expectations proving accurate. x.com x.com
Nvidia looks interesting again because rising earnings estimates have not been reflected in its valuation. FY28 EPS estimates rose about 25% in 60 days while shares stayed roughly flat; it trades below 14 times FY28 earnings with a mid-single-digit free-cash-flow yield. Exponential change is hard to grasp, and it is hard to see Nvidia not winning if the US does, though there is little capital to absorb market wobbles. x.com x.com
NVIDIA is a capital-cycle cyclical, so its strong near-term guidance only sets up a bigger slowdown later. Its FY28 guide for 70% growth, versus 45% consensus, means a bigger deceleration in FY29. Arguments that NVIDIA deserves a market multiple or more on $400B-plus of FY2028 net income ignore how such cyclicals behave. x.com x.com
Nvidia's rising revenue alongside a much lower P/E is getting hard to ignore. Its chart shows quarterly revenue above $80 billion in Q2 2026 while the P/E is around 30x, down from much higher multiples in prior years. x.com
Nvidia's earnings look set to beat expectations: fiscal 2028 (roughly calendar 2027) EPS of $15.7 is likely to land a lot closer to $20, against a $223 share price. x.com
Nvidia is priced for perfection, so even strong earnings could send it lower; it fell after each of its last four beats, including one of 5.7%. Demand is real, with $1 trillion of orders for 2026–27 against about $253 billion of trailing sales, so slowing growth isn't the worry; the worry is that no result can satisfy a perfect price. At $5.2 trillion it is the S&P 500's biggest piece, and options imply a roughly 5% swing, about $260 billion, on the ~$92 billion of expected sales. x.com
Nvidia's growth outlook runs well ahead of the market's. Nvidia is guiding to 70% revenue growth in FY2028, while consensus expects only 50%. x.com x.com
Nvidia looks cheap if its projection of about 70% growth in FY2028 holds, especially since that growth comes while supply is constrained. That would mean roughly $730B of revenue and $420B of operating profit, putting the stock at just 12x 2028 EBIT, which makes staying on the sidelines hard to justify. x.com x.com
Nvidia's $14 billion purchase of Hugging Face deepens a conglomerate discount that has been building. The business may be getting more insulated, but it is also getting harder to understand, which could add to the stock's lack of a multiple premium. This is a caution rather than an outright bearish call. x.com
NVIDIA is cheap at 14.7x 2027 earnings with 69% consensus EPS growth, a next-year PEG of 0.21, and it can keep rising from all-time highs. The next wave is robotics and AI in the physical world, where NVIDIA will be the brain of the robots. x.com