Why Nvidia at 13 Times Expected Earnings Still Isn’t Cheap Rich Duprey Sun, November 8, 2026 at 11:08 AM EST 5 min read NVDA +3.91% Trade NVIDIA 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 (NVDA) looks cheap at 13 times forward earnings, but a 30% cut to estimates would push the multiple to about 18.
Supply commitments climbed to $279 billion and days sales outstanding stretched from 45 to 60, adding balance sheet risk to the AI boom.
Wall Street still sees about 75% upside, with 59 of 62 analysts rating Nvidia Buy or Strong Buy despite the selloff.
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Nvidia (NASDAQ:NVDA) trades at $186.64. A forward multiple near 13 only looks cheap if Wall Street's earnings forecasts hold up through the next phase of the AI expansion.
Nvidia makes the accelerators, networking gear and CUDA software at the center of AI data centers. Fiscal second-quarter revenue reached $96.22 billion, up 105.8%, and Data Center sales rose 117% to $89.02 billion. Still, the stock fell 21.4% over the past month during a broad chip selloff that Barron's described as leaving chip stocks at fire-sale prices.
Bulls point to estimates that keep rising. The consensus for fiscal 2028 EPS is $15.9146 from 52 analysts, up from $12.8148 90 days ago, with zero downward revisions in the past month. Management expects revenue to grow about 70% in fiscal 2028 and calls that outlook supply-constrained, because customer demand is growing roughly 100%.
Vera Rubin raises revenue per gigawatt to $40 billion from $25 billion for Blackwell. Nvidia has also beaten EPS and revenue estimates in six straight quarters and has $99 billion left on its buyback authorization.
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A forward P/E rests on forecasts, and Nvidia's forecasts depend on AI infrastructure spending continuing at a historic pace across Microsoft, Alphabet, Amazon, Meta and Oracle. If expected earnings fell 30% with the share price unchanged, the multiple would rise to about 18. A 40% cut would push it to about 21. The low-end fiscal 2028 estimate of $12.8484 already implies roughly 15 times earnings.
The balance sheet is also taking on more risk. Supply commitments rose to $279 billion, guarantee obligations reach $108.5 billion, and days sales outstanding stretched to 60 days from 45. Nvidia has invested nearly $50 billion in frontier AI labs, an arrangement CEO Jensen Huang acknowledged some call "circular financing." Gross margin is expected to bottom at 71% to 72% in the fiscal fourth quarter, and the outlook includes no China data center compute revenue. Microsoft's reported decision against extending an Oracle cloud arrangement built on older Nvidia chips shows how fast computing needs turn over.
Execution remains strong, while the growing role of financing raises valuation risk. The fiscal third-quarter earnings report later this month tests revenue against guidance of $108.0 billion, gross margin against 74.0%, and whether management confirms its fiscal 2028 growth target.
The average analyst target of $327.14 implies about 75% upside from $186.64. Targets are one data point and guarantee nothing. Of 62 analysts covering the stock:
Nvidia is up 0.31% so far this year, and the S&P 500 has gained 7.83%. Over one year, the stock is down 0.53% against the index's 9.69% gain. Its beta of 2.247 means the stock tends to move more than twice as much as the broader market.
At $186.64, Nvidia's valuation depends on whether estimates hold.
The multiple only looks low if the estimates behind it hold. Readers should look for three signals in the upcoming earnings report: revenue above guidance, gross margin tracking toward management's floor, and days sales outstanding no longer rising. If all three appear and fiscal 2028 estimates keep rose, the case for owning the stock improves. If guidance falls, or more of the business depends on Nvidia's own balance sheet, the bear case improves.
Upside surprises can move the stock fast. A strong report could quickly lift a stock that has dropped 8.8% in a week. Evaluating the stock before the report means relying on forecasts that can be cut far faster than the business can rebuild them.
At 13 times forecasts that depend on borrowed AI capital, one more quarter of results will show whether the stock is truly cheap.
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