Key Points
-
Nvidia's results consistently beat expectations, but even if it only meets them, the stock could double over the next year.
-
Demand for AI computing hardware isn't slowing down.
- 10 stocks we like better than Nvidia ›
Nvidia (NASDAQ: NVDA) has been an OK performer in 2026. The stock is up about 17% year to date, modestly outpacing the S&P 500 (SNPINDEX: ^GSPC), which is up 12%. However, investors have come to expect (and demand) more from the chipmaker. Fortunately for those investors, I think a massive change in its fortunes is coming in 2027.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Nvidia's valuation normalized in 2026
Somewhere along the way, Nvidia gained a reputation as an "expensive" stock. It may have come from the extended period of share price growth that made it the largest company in the world by market cap, but strictly in valuation terms, it's really not trading at a much of a premium anymore. From a trailing price-to-earnings ratio perspective, Nvidia traded above 50 for most of 2024, which is not cheap. Then, it spent most of 2025 in the mid-40s. Now, it has tumbled all the way down to about 28 times earnings.
For reference, the S&P 500 (SNPINDEX: ^GSPC) index trades at 25.1 times earnings, so Nvidia stock today isn't much more expensive than the average stock in the broader market. The second-largest company in the world, Apple (NASDAQ: AAPL), trades for 38 times earnings. So, if you're going to call Nvidia expensive, then by that logic, Apple is significantly overvalued.
Regardless, because Nvidia has been growing so much in 2026 (revenue increased by 106% year over year last quarter) while its stock price gains have been comparatively modest, Nvidia's valuation has tumbled. Now that it's priced at around the market's average, any future growth could translate directly into proportional stock price moves. That's exactly what I anticipate happening in 2027.
2027 will be another year of huge revenue growth for Nvidia
Nvidia expects significant growth next year and has already released guidance. For fiscal 2028 (which ends in January 2028), it expects 70% revenue growth. For the remainder of fiscal 2027, Wall Street analysts expect 90% growth in Q3 and 65% growth in Q4. However, Nvidia has consistently beaten analysts' consensus estimates, so don't be surprised if its actual growth figures come in higher.
Given Nvidia's cheap stock price, the stock could easily double over the next year, and the math backs it up.
Wall Street analysts estimate Nvidia will generate $15.57 in earnings per share during fiscal 2028. Given Nvidia's history of exceeding expectations, I think that it's likely to top that estimate.
If Nvidia trades at the market-average premium of 25.1 times earnings and it hits that forecast target, then by the end of next year, it will trade at $390 per share. Nvidia trades for about $210 now, so that positions it to nearly double under a conservative scenario.
I think it's more likely that Nvidia will trade near 30 times earnings a year from now. That's a pretty average valuation for big tech stocks historically.
Nvidia is primed for an incredible year in 2027, and it won't take the market long to start recognizing the company's massive potential. As a result, I think investors should start loading up on Nvidia. If history has anything to say about Nvidia's projection beats and valuation range, the stock could double over the next year, turning it into the world's first $10 trillion company. That would be an incredible move, and by investing now, you can ensure that you get a slice of that success.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $412,074!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,314,319!*
Now, it’s worth noting Stock Advisor’s total average return is 935% — a market-crushing outperformance compared to 210% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 17, 2026.
Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.