Nvidia (NASDAQ: NVDA) closed at $197.01 on July 28, so a $1,000 investment would purchase approximately 5.08 fractional shares.
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In this article, "history repeats itself" does not mean Nvidia must reproduce an earlier stock return or return to one of its highest valuation multiples. Instead, it refers to Wall Street once again raising its earnings estimates and a modest valuation expansion as a major product cycle develops.
After Nvidia reported its fiscal fourth-quarter results in February 2024, Wall Street's estimate for the company's earnings over the next 12 months rose from $22.52 per share to $27.19 by May 2024, an increase of nearly 21%.
Nvidia's share price performance during the Blackwell product cycle provides a more relevant guide to its current situation. Introduced in March 2024, Blackwell combines artificial intelligence (AI) chips, CPUs, networking, and complete computing systems. Major cloud providers had already announced plans to adopt the platform, so Blackwell was launched with far higher expectations than Hopper. The setup is similar in 2026, as Wall Street already expects strong growth while Nvidia ramps production of its next-generation Vera Rubin platform ahead of broader deployments later in 2026.
However, analysts could still underestimate how much revenue Rubin generates from each deployment. The platform brings together GPUs, CPUs, networking, switches, storage systems, and software. Nvidia can therefore capture more revenue from a complete AI system, even without a major jump in GPU volumes.
Wall Street currently expects Nvidia to earn $8.99 per share in fiscal 2027 and $12.87 in fiscal 2028. At $197.01, the stock trades at roughly 22 times the fiscal 2027 earnings estimate.
The following calculation estimates Nvidia's share price one year from July 2026. Assume fiscal 2028 earnings-per-share (EPS) to exceed the current consensus estimate by 3.7%, matching the company's average EPS surprise over the previous eight quarterly reports. Hence, Nvidia's fiscal 2028 EPS could rise from $12.87 to about $13.35 per share.
Assuming Nvidia trades at 20 times its fiscal 2028 earnings estimate in July 2027, the projected EPS of $13.35 implies a share price of approximately $267. The 20 times multiple is below Nvidia's current valuation of about 21.9 times fiscal 2027 earnings and well below the levels seen during much of the Blackwell cycle. It reflects slower expected growth and the possibility that current forecasts already include much of Rubin's potential. So at approximately $267 per share, the original $1,000 investment would then be worth about $1,351, representing a return of roughly 35%.
But reaching that share price will depend on a fast Rubin rollout, continued hyperscaler spending, and higher Nvidia revenue per AI system. The main risks are weak customer returns on AI spending, increasing competition, and export controls.
Nvidia still seems to be a good long-term pick, but the uncertainty surrounding Rubin and AI spending favors gradual buying rather than an aggressive purchase at today's price.
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Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
What Nvidia Could Be Worth on a $1,000 Investment if History Repeats Itself was originally published by The Motley Fool