The market looks too pessimistic about sustained growth. My forecast allows slower sales growth than management expects, lower margins and no investment gains, yet supports a Buy. Customer financing and cash collections remain the decisive risks.
Key points
- $313.87 a share is my October 2027 target; initiate Buy.
- 60% revenue growth in fiscal 2028 can overcome falling hardware margins.
- $24.6 billion of first-half fiscal 2027 cash was tied up in unpaid invoices.
The call
The market looks too pessimistic about growth, but not about risk. At my 21-times earnings multiple, today's price requires roughly 25% fiscal 2028 revenue growth with a 72.5% gross margin, the share of sales left after product costs. That assumes my expense, tax and share-count estimates.
First-half earnings to operating cash ($ billions)Source: NVIDIA August 26, 2026 10-Q; six months ended July 26, 2026. Rounded to one decimal.
I expect growth to survive the financing worries. My fiscal 2028 forecast is below management's 70% growth expectation. Rubin shipments and wider system sales support it; slower collections deserve scrutiny, not automatic rejection. The November report and subsequent cash collections should separate delivered demand from balance-sheet support.
Valuation
| Driver | My estimate |
|---|
| Fiscal 2028 revenue | $657.3 billion |
| Fiscal 2028 gross margin | 72.5% |
| Fiscal 2028 operating expenses, including stock compensation | $48.0 billion |
| Fiscal 2028 earnings per share, excluding investment gains | $14.95 |
| October 2027 multiple of fiscal 2028 earnings | 21 times |
| October 2027 target | $313.87 a share |
I forecast fiscal 2027 revenue of $410.8 billion, including $125 billion in its extra-week fourth quarter; fiscal 2028 assumes a 17% tax rate and 23.8 billion diluted shares, allowing modest net share retirement rather than full execution of authorized buybacks.
The multiple discounts high interest rates, financing exposure and slower later growth; investment gains contribute nothing to forecast earnings.
My stress case gives $207.91 a share versus $386.56 in the upside case, supporting Buy, not Strong buy.
Growth needed to support a higher share priceAnalyst scenarios, October 7, 2026; fiscal 2028 growth, 72.5% gross margin and 21-times earnings.
Risks
- Customer funding could fail; watch overdue invoices and demands to honor capacity commitments.
- Memory costs could outrun price increases; watch fiscal 2028 gross margin fall below 72%.
- Power delays or customer-designed chips could slow deliveries; watch Rubin shipments and order cancellations.
What would change my mind
I would withdraw the Buy if fiscal 2028 growth guidance falls below 40% while collection times remain above 60 days for two consecutive quarters.