Scott R. Grossman
Founder of Vindico Capital, Consumer-Sector Investor
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'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 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 equity-investment book makes earnings vulnerable to an AI valuation downturn even if GPU sales hold up. Private and public stakes totaled about $99bn, or 31% of assets, in July; gains were $15.9bn in April and $7.8bn in July. Private holdings are marked on observable transactions or impairments, so losses could arrive in lumps. Nvidia generated about $127bn of free cash flow over four quarters, and the filing does not split private stakes by sector. 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 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 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 looks cheap at perhaps 13–14x FY28 EPS based on its own guidance. On its call it guided to about 70% revenue growth in FY28, ending January 2028, versus consensus of only 44.5%. x.com 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
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
Rapid revenue growth against forward valuations makes Nvidia and Micron additional calculated risks after the selloff, alongside Meta, Broadcom, IREN, Vistra, Nokia and Oracle. Nvidia grew revenue 106% and guides Q3 to $108B, plus or minus 2%, at 17.5x forward earnings; Micron grew revenue 379% to $54.2B, guides $61.5B next quarter and trades at 5x. The other six retain their growth, contracted-demand or customer-order cases. x.com
