NVDA Stock Is Running. Is There Fuel Left?
This chipmaker’s stock has been on a historic tear, but for investors arriving now, the critical question is whether the business can still outrun its already premium price.
NVIDIA (NVDA) builds the engines of the artificial intelligence revolution, from the chips to the full-stack systems that function as complete “AI factories.” The market has rewarded this position handsomely, bidding the stock up 35% over the last twelve months. It now sits as the most valuable company tracked by Trefis. The run is real, ranking in the top 38% of large US stocks on trend strength. The open question for any would-be buyer is whether the price already charges for all of it. Is this momentum with fuel, or momentum fully priced?
Is A Real Business Powering This Run?
The numbers show an engine running at full throttle. Over the last twelve months, NVIDIA’s revenue grew 83%, a different order of magnitude from the S&P 500 median of 8.4%. The company translates this top-line growth into immense profitability. The company’s operating margin is 65%, crushing the 18.6% median for the index.
This performance is rooted in a surge in AI demand for its integrated platforms. The company is capturing more value with each generation, with management noting its revenue opportunity has grown from roughly $18 billion per gigawatt with its Hopper platform to $40 billion with the new Vera Rubin platform. Growth is also diversifying. While hyperscale cloud providers remain key, management states that its ACIE segment, which includes sovereign AI, regional NeoClouds, and enterprises, will represent roughly half of its data center business.
What Does a Ticket Cost, and What Is the Catch?
An investor today pays a premium for that quality. The stock trades at a price-to-earnings multiple of 28.3, above the S&P 500 median of 23.0. Its price-to-sales multiple of 18.0 is also significantly richer than the median of 3.2. While the stock has been a strong performer, it currently trades about 4% below its 52-week high.
The real catch, however, is a business risk, not a valuation metric. To fuel the ecosystem, management has invested nearly $50 billion in the so-called Frontier AI labs. While this supports major customers, it has also raised questions about what some call “circular financing.” The risk is that NVIDIA is using its own balance sheet to fund customers who, in turn, are developing their own custom chips that could one day compete. It’s a strategic gamble that the ecosystem built on its CUDA platform will prove more valuable than the risk of nurturing future rivals. For investors looking at other ways to participate in this space, a semiconductor ETF like SOXQ offers broader exposure.
Is a 70% Growth Target the Only Number That Matters Now?
Ultimately, the debate comes down to whether future growth can justify the current price and its embedded risks. Management put a hard number on the table, offering an unusually long-range forecast. They expect to grow revenue by approximately 70% in fiscal 2028. Critically, they call this a “supply-constrained outlook,” suggesting underlying demand is even stronger.
This single, ambitious target becomes the clearest test for investors. Hitting or exceeding this growth would argue the engine is still pulling hard enough to create new value. Falling short would give weight to the idea that the best of the run is already reflected in the share price. For now, all eyes are on that 70% figure.
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