Nvidia Stock Set for Cheaper Price Despite Slowing Growth

Nvidia's stock is expected to report second-quarter earnings on Wednesday, and while some may wonder about its recent growth slowdown, one thing is almost certain: the stock will likely be cheaper after the report.

The chip maker has seen its returns slow down significantly in recent years, with a 19% increase over the last year matching the S&P 500's performance. However, despite this, Nvidia's revenue is set to grow for the fourth consecutive quarter, with analysts expecting a 97.2% increase to $92.2 billion in Q2 earnings.

Nvidia's forward valuation metrics are more useful than trailing ones, and based on analyst estimates, the stock is trading at just 23.6x its fiscal 2027 EPS of $9.02, making it roughly even with the S&P 500. Looking further ahead, Nvidia's forecasts only appear to make the stock more attractive.

The company has consistently underestimated growth by Wall Street, and as seen in a chart from YCharts, forward estimates have consistently moved higher following earnings reports. The last four quarters have come with noticeable increases in consensus forward estimates, not just for the current year but also for future years.