Nvidia's Growth Trajectory: Is It Too Late to Buy In?

Nvidia's stock price has risen significantly over the past few years, and many investors have wondered if it's too late to buy in. The company's latest results show strong growth, with revenue rising 106% year-over-year to $96.2 billion in the fiscal second quarter of 2027.

The data center segment accounts for a significant portion of Nvidia's revenue, growing at an even faster rate of 117% to $89 billion. Net income more than doubled to about $60 billion, with a gross margin of 75%. The outlook is strong, with management guiding for fiscal third-quarter revenue of $108 billion, a 12% increase from the previous quarter.

At its current price of around $224, Nvidia's stock trades at about 28 times earnings. However, the company's growth rate is expected to remain high, with a forecasted 70% revenue growth in fiscal 2028. This would put earnings per share close to double the trailing figure.

The market has already priced in the year of growth Nvidia's supply chain is lined up to deliver, but given little credit for anything after that. A purchase at today's price could work out if Nvidia holds onto its earnings and doesn't experience a downturn in AI spending.