The stock requires only about 16 times fiscal 2028 earnings if management’s 70% growth view holds. I expect $14.30 of EPS and a 20 times multiple, for $287 in twelve months.
Key points
- $406 billion fiscal 2027 revenue: H1 $178B, Q3 guide $108B, Q4 $120B as Rubin supply lifts hyperscale.
- 70% fiscal 2028 growth is management’s own preliminary, supply-constrained view, implying $690 billion of sales.
- 16.6 times is what $237.42 pays for my $14.30 fiscal 2028 EPS; a 20 times exit is $287.
The call
The price requires fiscal 2028 earnings of about $14 a share and a multiple near 17 times. That is a full year of 70% revenue growth plus a 50% net margin after memory costs reset gross margin to the low 70s. The market is too pessimistic on duration of demand.
I believe Rubin ramps, ACIE and hyperscale both grow, and buybacks hold shares near 24.05 billion. Net margin holds 50% as mix offsets memory. A 20 times multiple on $14.30 EPS is $287, a 21% expected return.
Revenue by quarter ($ billions)SEC 10-Q/10-K through Q2 FY27; Q3-Q4 FY27E and later are the author's
Valuation
| Item | Figure |
|---|
| FY27 revenue (author) | $406 billion |
| FY28 revenue at 70% | $690 billion |
| FY28 net margin | 50% |
| FY28 EPS (24.05B shares) | $14.30 |
| Exit multiple | 20 times |
| 12-month target | $287 |
Twenty times is a discount to the 26 times paid on my FY27 EPS and to the 48 times trailing FY26 $4.90. Asymmetry favors the long side: if growth is 50% not 70%, EPS is still about $12 and 20 times is $240, near today’s price. If 70% holds, 25 times is $358.
Fiscal year revenue ($ billions)FY24-FY26 reported; FY27E-FY28E author, using company 70% FY28 growth view
Risks
- Memory costs keep gross margin below 71% into FY28; watch Q3 and Q4 GAAP gross margin versus the 74% Q3 guide.
- Customer financing and unused cloud capacity stall hyperscale orders; watch DSO staying at 60 days and inventory versus Rubin shipments.
- Export or antitrust limits on open models or Groq licensing cut ACIE; watch 8-Ks and China commentary on the November 17 call.
What would change my mind
Fiscal 2028 growth language cut below 50% or Q4 revenue below $110 billion would force a lower target.