Nvidia's AI Surge Still Looks Like a Bargain at 26x Forward Earnings
TL;DR Summary
Nvidia trades around 26x forward earnings with 65% revenue growth, underpinned by a durable CUDA software moat and high switching costs that keep customers tied in. FY2026 free cash flow was $96.6B and net income $120B, with Q4 revenue up 73% and Data Center driving most of the growth. Management guided FY2027 revenue to about $78B, aided by multi-year cloud commitments (OpenAI, Meta, CoreWeave) even without China compute revenue. Bear cases cite a potential AI capex slowdown and China's export controls, but at a PEG of roughly 0.68 the market still prices in strong growth, so the author plans to keep buying as long as the math works.
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- Jim Cramer Says Buy 2 Artificial Intelligence (AI) Stocks Down 24% and 46% Before They Soar The Motley Fool
- Jim Cramer Says Buy Nvidia for Valuation, Not China Bet. Stock Trades Cheaper Than Intel and AMD. Yahoo Finance
- Jim Cramer Said 'Smell' — AI Stocks Heard 'Sell' Benzinga
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