Nvidia Is Getting Bigger Without Getting Expensive

Nvidia's stock has surged 817.8% over the past five years, and its market capitalization has ballooned to $5 trillion, making it appear both formidable and expensive. However, the company's impressive growth is backed by strong revenue, profitability, and strategic partnerships. In fiscal Q2 of 2027, Nvidia reported $96.2 billion in revenue, a 106% increase year-over-year, and adjusted earnings grew 120% to $2.22 per share.

The data center segment, powered by Nvidia's Blackwell chips, accounted for the majority of this growth, with major cloud providers like Amazon's AWS investing heavily in Nvidia's hardware. Management predicts that Vera Rubin, a new product line, will be Nvidia's fastest-growing product, with the company expecting a 70% revenue increase in fiscal 2028.

Despite Nvidia's immense size, its valuation remains reasonable at 23x forward earnings, and analysts expect revenue and earnings to grow by 83% and 89.8%, respectively, in fiscal 2027. The market may be overlooking Nvidia's potential for future growth as competition from rivals like Google, Amazon, Microsoft, and OpenAI intensifies, but the company's recent earnings and outlook suggest that its growth trajectory could remain robust.