NVIDIA (NASDAQ: NVDA) is hard to overlook right now. The company’s stock trades at just 26 times its expected earnings, but it’s growing fast—revenue jumped nearly 65.5% last fiscal year. That price-to-growth ratio is rare, especially for a company of its size.
NVIDIA closed last Friday at $215.20, giving it a market cap of about $5.23 trillion. Sure, that sounds daunting, but the growth tells a different story. In FY2026, they generated $96.58 billion in free cash flow, up 58.7% from the previous year. Their net income reached $120.07 billion, with earnings per share at $4.77. Analysts point out a PEG ratio of just 0.68, which could indicate that the stock is undervalued.
When you zoom out, things look even better. If the stock price doubles, you’d still be buying a business that’s growing faster than most public companies can manage even once in a while. This consistency keeps investors like me buying more.
The growth isn’t slowing down either. In the fourth quarter of FY2026, NVIDIA reported $68.13 billion in revenue, a whopping 73.2% increase year-over-year. The Data Center division alone brought in $62.31 billion, with networking growing by an incredible 263%. Looking ahead, management is predicting Q1 FY2027 revenue of around $78 billion, without even factoring in potential sales from China.
What’s interesting is how consistent their earnings beats have been. They’ve exceeded earnings estimates for eight straight quarters. CEO Jensen Huang recently noted that “computing demand is growing exponentially,” signaling a significant shift in the market. Major companies, like Meta, are placing massive orders for NVIDIA’s GPUs, indicating strong and consistent demand.
Of course, there are concerns. Some analysts worry that NVIDIA might struggle to meet long-term projections. Google’s TPUs are becoming more competitive, and there are clouds looming over the Chinese market that could impact demand. For example, NVIDIA has pledged $95.2 billion in supply commitments, which might prove risky if demand falters.
But here’s why I stay positive: NVIDIA has consistently defied naysayers. Even when doubts arose, the company has managed to grow past expectations. They have built a strong ecosystem that goes beyond just hardware. Their programming tools like CUDA and NVLink create a barrier to switching for customers. Rewriting existing software would be a lengthy and costly process that many tech leaders would rather avoid.
NVIDIA also values its shareholders. In FY2026, they returned $41.1 billion to investors while still having $58.5 billion set aside for stock buybacks. Analysts are setting a price target of $269.17, and traders predict a 68.5% chance the stock hits $224 by the end of the month. My focus isn’t just short-term. With their impressive growth metrics and robust free cash flow, I plan to keep investing as long as the numbers remain compelling.
Ultimately, NVIDIA’s combination of strong growth, committed long-term clients, and shareholder returns make it a compelling investment opportunity in today’s tech landscape.
