With earnings on the horizon, Nvidia’s shares offer further upside despite trading at a very rich valuation and have every chance of breaching $200 before they report in November.
Trading at $182 per share, Nvidia has a forward P/E ratio of about 40×.
Although this is rich compared with the broader market, the group’s explosive revenue and earnings growth projections more than justify current multiples. Investors have to look beyond the next 12 months to validate the group’s valuation.
Many analysts expected 40–45% annual earnings growth through 2027, and investment banks maintain a “Buy” rating with Goldman Sachs, Morgan Stanley, and Bank of America all having price targets in the $210–$230 range.
The company guided revenue to increase 54% year-on-year in Q3, and investors will eagerly await earnings, due for release on 19th November, for signs of continued momentum.
“From a fundamental perspective, NVIDIA’s financial strength remains exceptional. In fiscal year 2025 (February 2024 – January 2025), the company generated over $130 billion in revenue, doubling from the previous year,” said Linh Tran, Market Analyst at XS.com.
“This surge was driven primarily by soaring demand from data centers and the wave of investment in AI infrastructure by tech giants such as Microsoft, Google, Amazon, and Meta. Its gross margin remained around 74–75%, underscoring NVIDIA’s near-monopolistic advantage in GPUs and specialized software.
“With its proprietary CUDA ecosystem and the advanced Blackwell architecture, the company controls over 80% of the global AI-GPU market — leaving rivals like AMD and Intel struggling to catch up.”
Tran continued to explain that while Nvidia has conquered most of the world’s chip markets, the key to the outlook for the chipmaker lay in China/US trade relations and whether they will be able to continue to service China’s burgeoning tech giants.
“Yet, despite its dominance, NVIDIA faces growing risks. One of the biggest factors clouding its medium-term outlook is U.S.–China trade policy,” Tran explained.
“According to a Reuters report last week, the Trump administration is considering new export restrictions on products made using U.S. software, potentially expanding trade limits far beyond the semiconductor sector. Such measures could affect NVIDIA directly, as China accounts for roughly 20–25% of its revenue. If these restrictions are enacted, NVIDIA’s high-end chips like H200 and L20 could face barriers in supplying Chinese cloud giants such as Alibaba, Baidu, and Tencent.”
Nvidia reaching $200 before it reports earnings will depend on how talks between China and the US develop. But whatever the outcome, it is likely to prove a sideshow in Nvidia’s overall growth in the coming years.
“In the long term, NVIDIA’s outlook remains highly positive. Global demand for AI computing, simulation, and data processing continues to grow exponentially. National AI projects, autonomous-vehicle investments, and edge-computing infrastructure all open new growth cycles. Furthermore, NVIDIA benefits from an “exclusive ecosystem” — a unique integration of hardware and software that no competitor can easily replicate,” Tran concluded.