Nvidia's Growth Accelerates Despite Reasonable Valuation
Nvidia (NVDA) has experienced extraordinary growth over the past five years, with its stock price rising by 817.8% and market capitalization expanding from $557 billion to approximately $5 trillion as of August 2026. This expansion is driven not just by hype but also by strong financial performance, including a recent fiscal second-quarter revenue surge to $96.2 billion—a 106% year-over-year increase—and adjusted earnings per share rising 120%. The data center segment remains the primary growth engine for Nvidia, with Blackwell playing a significant role and contributing $89 billion in quarterly sales. Nvidia's strategic partnerships are also fueling its expansion. A notable example is its deepening collaboration with Amazon’s AWS (AMZN), which plans to deploy an additional 2 million Nvidia GPUs alongside Vera CPUs over the next few years, as well as integrate Nvidia AI models into cloud services and warehouse robotics. Management anticipates that the upcoming product cycle—led by Vera Rubin—will drive even faster growth than previous transitions. Despite its massive size and continued expansion, investors are viewing Nvidia's stock as reasonably valued. The company is also forecasting a 70% revenue increase in fiscal 2028, although this projection remains constrained by supply limitations.
Topics: AI chips Nvidia revenue growth stock valuation