Nvidia stock trades at $218.29, up 24% year to date, and Wall Street projections suggest a path to $490 by the end of 2027 based on revenue growth and valuation assumptions. The math rests on continued high sales growth and a price-to-sales ratio below today's level. The stock could fall or gain far less if growth slows.
Nvidia has outperformed the market this year, rising 24% year to date against a 14% gain for the S&P 500. That comeback follows a second-quarter fiscal 2027 report in which the company delivered 106% sales growth, beating both estimates and its own guidance.
Nvidia expands its AI footprint
The company is launching more powerful chips and widening its stake in artificial intelligence through investments and acquisitions. It is acquiring AI platform Hugging Face for $12.9 billion, and it has put $2 billion into CoreWeave this year on top of earlier investments. Those moves widen Nvidia's addressable market and have helped accelerate revenue growth.
Revenue guidance points to $699.3 billion by 2027
Wall Street expects Nvidia revenue to rise 80% this year and 63% next year. CFO Colette Kress, though, guided for 70% growth in fiscal 2028 during the second-quarter earnings call. Combining Wall Street's estimate for fiscal 2027 with management's fiscal 2028 guidance would put Nvidia revenue at $699.3 billion by the end of 2027.
The valuation math behind $490
Applying a price-to-sales ratio of 17, below today's ratio of 19, would put Nvidia's market cap at $11.9 trillion, a 113% increase from today, with the stock reaching $490. A lower ratio of 15 would still put the market cap near $10.5 trillion, an 89% increase.
The average Wall Street target price sits 38% above today's level over the next 12 to 18 months, with a high estimate of 208% above the current price. Nvidia stock usually spikes after earnings as revenue jumps, though not always. Despite likely strong growth over the next two years, the stock may not gain quite as much as current growth rates and valuation multiples imply, and it could fall or gain much more modestly if growth slows.
Source: Fool
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