Nvidia: all good. Consensus will keep revising up, stock is getting cheaper –
but patience is required
Over past month, Consensus has revised up FY27 (2026) and FY28 (2027) by 10%. There’s more coming. 4Q26 (Jan-26) and 1Q27 (Apr-26) growth is accelerating to ~75% YoY on high Blackwell demand. We should expect Rubin (revenue from ~ Sept-26) to support ~50% growth in FY28, Consensus is at 28%.
Consensus is revising up, the stock is stuck at $200 and getting cheaper: 24x FY27 and 19x FY28 EPS.
But this market is not in the mood. Since AI hit investors consciousness (ChatGPT early 2023), we’ve seen an annual cadence of “belief” crisis: LLM are done (late ’23), there’s no ROI (mid ‘24), DeepSeek will win and Google is toast (early ‘25). The current “crisis” is split between 1) the potential winners but no appetite to buy (hardware providers AMD, Micron, NVDA, TSM), and 2) the losers (the hyperscalers thought to be over-spending, and anything software supposed to be destroyed by code automation).
In that context, Nvidia reported pretty strong results / guidance and the stock isn’t moving pre-market. The ongoing “belief” crisis is amplified by rotation (sell Tech, buy Staples, Energy, Health Care, Industrials), further US$ weakness (which is about the US fiscal deficit and policy uncertainty, i.e. don’t buy more US, buy EM or EZ).
Small positive, you can’t worry that Tech is too expensive any longer. Looking at the biggest market caps in each segment (Staples, Energy, Health Care, Industrials), they’re all significantly more expensive than NVDA (24x) or TSM (25x): Walmart is trading at 43x, Chevron 28x, Elli Lily 30x, Caterpillar 34x.
What can you do? 1) make up your mind about future AI revenues for both hardware vendors and application vendors 2) decide if Tech stocks are cheap enough or diversification is more attractive 3) narrow down to best-in-class Techies and be patient. For me that’s AMD, MU, NVDA, TSM (hardware) and GOOG, MSFT (platforms) and xxx (application software). I’ll think about software next week but right now I have to catch a flight.
Finally,
CFO quote:
We look ahead, we expect sequential revenue growth throughout calendar 2026, exceeding what was included in the $500 billion Blackwell and Rubin revenue opportunity we shared last year. We believe we have inventory and supply commitments in place to address future demand, including shipments extending into calendar 2027.
*** PAYWALL ***
