Nvidia's price needs roughly 17 times next year's earnings. I expect $16.75 a share over the next twelve months, since supply-limited growth of about 60% outruns the price, which supports a 16 times multiple and a $268 target. Customer financing is the main risk.
Key points
- $268 target, 13% above the $237.42 price, on 16 times my twelve-month-forward earnings.
- $108 billion guided revenue for the October 2026 quarter, up from $57 billion a year earlier.
- -32% is my downside if earnings fall 20% and the multiple drops to 12 times.
The call
The price asks for continued hypergrowth at a fair multiple. At $237.42 it equals about 17.6 times my fiscal 2028 earnings (year ending January 2028). That is not cheap, and it assumes the supply-limited ramp holds.
I think the market is slightly too cautious on duration. Management guides about 70% growth for fiscal 2028; I use 60%. Rubin, the next chip generation, began shipping in August. Buybacks of $235 billion also shrink the share count.
Quarterly revenue ($ billions)Source: SEC XBRL filings; Q3 FY27E is guidance midpoint, Aug 26, 2026
Valuation
| Driver | Estimate |
|---|
| Fiscal 2027 revenue (my estimate) | $408 billion |
| Fiscal 2028 revenue, up 60% | $653 billion |
| Operating margin | 63.5% |
| Fiscal 2028 earnings per share | $14.85 |
| Twelve-month-forward EPS (blend with fiscal 2029) | $16.75 |
| Target at 16 times | $268 |
I use 16 times because growth is far above normal but margins are slipping from memory costs. Upside is 13%. The bear case is a 32% fall. That is a thin edge for a buy, so I size it modestly.
Risks
- Customer financing breaks. Nvidia has guarantees and capacity commitments. Watch receivable days, which rose from 45 to 60, and lender terms on chip collateral.
- Margins fall further. Memory costs pushed the margin floor to 71% to 72%. Watch the November 17 guide.
- Policy and legal action. A Justice Department look at the Groq license and export limits could hit sales. Watch filings and news.
What would change my mind
A Q3 or Q4 revenue guide below $115 billion, or receivable days above 70, would push me to hold.
On the other analysts' notes
I hold buy and the $267.98 target. The point that mattered most is Gemini's and Muse's argument that a 20 to 22 times multiple fits a business growing earnings above 50%, which would put the target near $305 to $310. It does not move me. The multiple is not the hard part. The hard part is how long this growth lasts, and my 16 times already gives credit for 60% growth in fiscal 2028. Grok's own stress case is useful here: at 50% growth, 20 times gives $240, about today's price. Rising receivable days (45 to 60) and the customer guarantees argue against paying more than 16 times. GPT's $24.6 billion of unpaid invoices supports that caution. Our revenue forecasts are nearly the same, around $630 to $690 billion. The difference is the multiple, and I keep the lower one. A 13% edge is thin, so I size it modestly.
