Nvidia (NVDA): Is There Still Room to Run? Fahad Saleem Wed, October 7, 2026 at 2:43 PM EDT 3 min read NVDA -1.13% AVGO -0.74% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Nvidia (NASDAQ:NVDA) went nowhere for most of a year, then broke out in August and now trades at a record high. Ken Fisher's Fisher Asset Management is Nvidia's largest hedge fund holder as of the second quarter, with a stake worth about $18.2 billion, or 5.42% of its portfolio, after raising it by 3% in the second quarter. Nvidia ranks second in our list of his 10 best AI stocks. Click here to see the other nine picks.
Bulls say demand is still growing faster than Nvidia can build chips. AI is moving from training models to running them for businesses and consumers, and every new agent and app adds to the computing power needed. Weighing the AI chip giants? Read our comparison of Nvidia and Broadcom to see which is the better buy now. Management expects about 70% revenue growth in fiscal 2028 and says supply holds that number back. Its CEO has said growth would come close to 100% if Nvidia could make every chip customers want.
Nvidia is also tackling the worry that matters most to the market, which is money. It lined up large lenders, including Goldman Sachs, Blackstone and Apollo, to finance customers' data centers, and it offers to cover up to 25% of the loss if the chips lose value. Its CUDA software lets the same chips handle both training and inference, which helps them keep their value, and its revenue per gigawatt of data center capacity has risen with each chip generation, according to its CEO. Even Stanley Druckenmiller has said he regrets selling Nvidia too early. Read what he said in our list of his 10 best AI stocks. Management also recently announced a record increase to its share buyback.
Margins are the first worry. Nvidia cut its gross margin outlook for fiscal 2028 to 72% to 73%, down from about 75%, because memory prices have risen faster than expected. Its newest chip, Rubin, should make up only about 20% of data center revenue this quarter, and industry reports say the ramp could slip into 2027 because of memory shortages. A delay would push sales out. Want more AI ideas? See our list of the 10 best AI stocks to buy before they explode.
The bigger risk sits with its customers. Big cloud companies burned cash in the second quarter, their debt is rising, and Morgan Stanley estimates the cash they generate will cover only part of the data center spending planned through 2028. Nvidia is helping fill that gap with guarantees and financing support, so part of its demand now depends on borrowing staying affordable while rates climb. A default by a large customer such as OpenAI would test those guarantees.
Competition is also growing. AMD is pushing harder, and cloud companies are building their own chips with partners like Broadcom. A startup backed by former Intel CEO Pat Gelsinger is also going after Nvidia's AI networking business. See how it plans to challenge Nvidia's edge. That is the risk for investors in Nvidia (NASDAQ:NVDA).
Nvidia (NASDAQ:NVDA) trades at a forward P/E of 25.7, only slightly above the sector median of 23.8 and about 39% below its own five-year average of 42.2. Analysts expect earnings per share to rise 95% in fiscal 2027 and 70% in fiscal 2028, which puts the P/E at about 15 on fiscal 2028 earnings. The PEG ratio, which compares the P/E to growth, is 0.49 against 1.29 for the sector, so Nvidia costs less than half as much per point of growth as a typical stock in its sector. Analysts raised their fiscal 2028 estimate by about 24% over the past 90 days, and the stock looks undervalued for its growth, as long as Nvidia (NASDAQ:NVDA) delivers on those forecasts.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
Disclosure: None. Follow Insider Monkey on Google News.
