Rosanna Prestia
Founder & CEO of Hydra Wealth/Capital, Investment Strategist, Asymmetry & Bitcoin
Nvidia trades at its lowest forward multiple since before the AI era while revenue grows 65% with nearly 90% more guided, the opposite of a bubble. A bubble is hope priced ahead of reality; here earnings are running ahead of the price, with multiples compressing as income statements explode. Per @wliang, Nvidia's forward P/E is about 23x, the lowest since 2019, on revenue up 65% to $216B, below the average chip stock's multiple. 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 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
Rising Chinese competition and doubts about valuations add to Nvidia's downside risk as the AI sector bleeds. Nvidia's break from an uptrending triangular pattern rarely ends well; the AI bubble is cracking, and the trendline break marks the beginning of something much bigger. 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's projected earnings growth could support substantial upside without an enormous multiple. At $221.97 it trades at 10.4x estimated FY2029 earnings; even at $350, nearly 58% higher, it would trade near 16.4x. Estimates imply roughly 130% cumulative EPS growth over the next two fiscal years and may be conservative. SpaceX and Meta earnings look bullish for future chip demand. Slower AI spending, margin pressure or competition could undermine the estimates. x.com x.com
NVIDIA looks close to the top of an AI bubble, with a two-year megaphone pattern signaling exhaustion of growth. Such expanding, volatile patterns historically don't end painlessly. Its roughly 22x valuation on a $4.8 trillion market cap and $216 billion profit is approaching Cisco's roughly 30x in 2000. Nvidia just raised $25 billion in debt, drawing $85 billion of orders. x.com x.com
Nvidia's earnings growth has outpaced its share-price gains, challenging the bubble claim. The attached comparison indexes both to 2020 and shows roughly 70x GAAP earnings versus 36x share price through 2026. x.com
NVIDIA's valuation fell because earnings grew faster than the stock, not because the business slowed. It trades below 17x forward earnings, near its cheapest in over a decade, with net income expected to grow 99% this fiscal year while the stock is up 22%. Quarterly revenue was $96.2B, up 106%, at a 75% gross margin, and next quarter is guided at $108B with no China data-center revenue. About 70% growth is expected in fiscal 2028, limited by supply, and Vera Rubin is ramping fastest ever. 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 rapid revenue and earnings growth makes its near-AI-boom-low P/E look attractive. Quarterly revenue and EPS are both up more than 100% year over year, while the stock trades near its lowest P/E since the AI boom began. x.com
