Nvidia Is Extremely Compelling Right Now And Here’s Why
NVIDIA shares dropped 13% in a month while revenue roughly doubled, and that gap between price and business performance is exactly what keeps one investor buying every single dip.
My NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) position grew again this month, and every pullback gets me to the buy button faster. Shares sit at $202.06. They fell 13.63% over the past month and gained only 0.03% over the past year, while revenue roughly doubled. I keep buying because the stock and the business have diverged.
Why I Keep Coming Back to NVIDIA
NVIDIA sells the whole AI toolkit: chips, networking, CUDA software and full systems. The biggest AI buyers keep signing on for multiple product generations. OpenAI committed to 10+ gigawatts of NVIDIA systems, Anthropic is taking up 1GW, and Meta Platforms (NASDAQ:META) signed a multi-year, multi-generation agreement. To me, that makes NVIDIA a toll road I want to own for decades.
Three Receipts Behind My Conviction
First, the earnings keep beating estimates. Q2 fiscal 2027 revenue reached $96.22 billion, up 105.8% YoY. Non-GAAP EPS came in at $2.22 vs. the $2.09 consensus, the 5th consecutive beat. Management guided Q3 revenue to $108.0 billion, plus or minus 2%.
Second, the valuation got cheaper while profits rose. Based on the current price, I pay about 22 times the fiscal 2027 EPS consensus of $9.3124 and about 13 times the fiscal 2028 consensus of $15.9146. Ninety days ago, that fiscal 2028 estimate stood at $12.8148. Over the past 30 days, analysts made 7 upward revisions and zero downward ones. The revenue consensus implies about 68% growth from fiscal 2027 to fiscal 2028.
Third, the business funds itself. Return on invested capital runs at 92.2%, debt-to-equity stands at 0.073, and interest coverage reaches 503.4x. NVIDIA returned about $26.0 billion to shareholders in Q2 alone and has roughly $99.0 billion left on its buyback authorization. It also raised its quarterly dividend to $0.25 from $0.01. The yield is small. Still, for retirement money, I want a company that grows equity this efficiently.
Why My Money Skips AMD and Intel
Advanced Micro Devices (NASDAQ:AMD) is the obvious alternative, and its Data Center revenue grew 107% last quarter. But AMD trades at about 29 times its 2027 EPS consensus of $15.8472, compared with NVIDIA’s 13 on the matching fiscal year. AMD’s gross margin is 49.5% versus NVIDIA’s 71.07%. Its operating margin is 10.7% versus 60.38%. NVIDIA gives me the stronger business at the lower multiple.
Intel (NASDAQ:INTC) grew Data Center and AI revenue 78%. Even so, its trailing earnings and free cash flow are negative, and net debt-to-EBITDA stands at 3.40. Management also expects the PC slowdown to last at least through the first half of 2027. Intel is a turnaround story. I would rather own the compounder, which also partners with Intel on custom products through NVLink.
Risks That Keep Me Disciplined
The risk I respect most is how much NVIDIA has committed to buy. Supply obligations rose to $279 billion, mostly memory for Vera Rubin production. Days sales outstanding increased to 60 days from 45. If hyperscaler spending stalls, those commitments get heavy fast. China adds pressure too, since Q3 guidance assumes no Data Center compute revenue from the country.
That hyperscaler capex question matters beyond NVIDIA itself, since the companies supplying power, cooling, and networking gear to the data centers ride the same wave. We featured seven such companies in a free AI infrastructure report.
The thesis still holds. The guidance already leaves China out, estimates keep rising, and NVIDIA generated $96.58 billion of free cash flow in fiscal 2026. A cash engine that size can handle a weak quarter.
What Keeps My Buy Button Active
NVIDIA’s chief executive, Jensen Huang, put it plainly: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.” While estimates rise faster than the share price, each dip lowers what I pay for the business I trust most to grow my retirement savings, so I’ll keep buying until the numbers tell me to stop.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
