Nvidia (NVDA +0.52%) has had a strong 2026, up about 21% so far this year. Even though that beats the market, Nvidia investors are used to much higher returns. Fortunately for its shareholders, I think October could be the month that turns things around.
The market still isn’t pricing Nvidia’s expected massive 2027 growth into stocks, but it could start to price it in as AI hyperscalers reveal their 2027 forecasts for data center capital spending. This could confirm everything Nvidia has said about its expectations.
If that happens, Nvidia stock is poised to skyrocket, as its price is currently at a pretty attractive level.
Image source: The Motley Fool.
Third Quarter Results Could Reveal Incredible Expectations
Nvidia got a head start by issuing guidelines. During the second quarter, he revealed incredible insights that the market frankly ignored. The company announced that it expects to generate 70% revenue growth in fiscal 2028 (which ends in January 2028). Considering the size of Nvidia, a $5 trillion company, this growth rate is nothing short of incredible.
Sales to AI hyperscalers support these forecasts, as this cohort is expected to increase their spending on data centers again in 2027. The big five hyperscalers are expected to spend nearly $800 billion on data center construction this year, and current estimates call for their investments to reach $1.3 trillion next year. That’s exactly what Nvidia’s projections say, which are probably pretty accurate, given what it knows about its major customers’ plans.
These AI hyperscalers have likely already set their expansion plans for 2027 in stone and have provided demand forecasts to Nvidia so that the company can properly prepare its supply chain to meet them wherever possible. So I think investors can trust these projections, but the market hasn’t really given them any weight.
Today’s change
(0.52%) $1.17
Current price
$228.38
Key Data Points
Daily scope
$228.17 -$232.37
52 week range
$164.27 -$236.54
Volume
1.6M
Average flight
123.5 million
Gross margin
74.67%
Dividend yield
0.23%
Given the expected scale of some development projects, don’t be surprised to see some AI hyperscalers start revealing their 2027 capital spending forecasts during the third quarter, as this will give the market more time to digest these massive numbers. Many companies report earnings in the second half of October, which makes the beginning of the month a great time to stock up on Nvidia stock, as the market apparently isn’t entirely convinced that Nvidia will see as much growth as it expects.
If AI hyperscalers confirm this growth, the market will need to revisit Nvidia’s stock, as it is currently undervalued.
Nvidia stock is cheap
Right now, Nvidia is trading at a pretty attractive 28x earnings.
NVDA PE ratio data by YCharts.
However, this current earnings ratio does not reflect the estimated 70% growth for next year, nor the growth that Nvidia achieved in the last two quarters of this fiscal year. These results will make the stock look incredibly cheap, and if we value Nvidia using fiscal 2028 earnings projections, the stock will drop to an incredibly cheap ratio of 14.
NVDA PE Ratio (Forward 1y) data by YCharts.
I think a fair, long-term valuation for this company would be around 30 times earnings. If Nvidia meets all analyst expectations and hits 30x earnings, the stock could more than double by the end of its 2028 fiscal year. This makes Nvidia a stock worth buying today.
Its rally could kick off in October, making it a great time to buy, as the market could start taking Nvidia’s long-term projections a little more seriously once hyperscalers start rolling out their forecasts for next year.
Gn bussni
