Nvidia at 14.6x next year's earnings: top pick for October

The call rests on Nvidia's own guidance rather than on a new product surprise. During its Q2 conference call, management said it expects a 70% growth rate for fiscal year 2028, a period ending in January 2028 that covers nearly all of 2027. That figure is the pivot for the whole argument: at 24.6 times forward earnings, the analyst says the market is pricing in almost no growth for 2027, and once that 70% is folded into the forward earnings calculation, the multiple drops to 14.6 times.

Two things underpin the analyst's confidence. First, Nvidia has outperformed its own internal expectations in essentially every quarter over the past three years, which is why the 70% figure is treated as a floor rather than a ceiling. Second, the new Rubin generation of chips is starting to become available, offers more advanced capabilities than prior generations, and carries a higher price tag, which the analyst describes as a built-in revenue escalator. The comparison to the S&P 500, at about 20 times forward earnings and roughly 10% annual growth, frames Nvidia's premium as earned rather than excessive.

The stake, as the analyst frames it, hinges on execution rather than on valuation alone. If Nvidia merely meets expectations, the setup still looks favorable; if it repeats its habit of beating them, the upside widens. The risk is that the 70% target is a management projection, not a result, so the gap the analyst sees between price and growth could narrow in either direction depending on what Nvidia reports next.