Is Nvidia Stock Really Trading for Just 8 Times 2030 Earnings?
Key PointsNvidia shares are up a modest 18% over the past year, but its growth prospects have improved substantially.
Nvidia (NVDA) is the market's most valuable company by market cap, with a market cap north of $5 trillion this week. While it might seem pricey, the actual price is not outrageous for a company with strong growth potential. Currently, Nvidia trades at a modest 8 times what analysts expect it to earn in fiscal 2030, but this multiple could be considerably higher or lower.
Analysts project Nvidia's normalized earnings to grow in the next few years, but revenue growth is expected to decelerate slightly in the current quarter. Nvidia's stock has been a spectacular investment, growing even faster than its revenue. However, analysts' profit targets have been rising with every blowout quarter. Despite being four years away, fiscal 2030 is already here, with Nvidia trading for just 13 times its next year's earnings.
The company has authorized a record $150 billion in share repurchases, indicating that some investors believe it is still a good value.
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