Nvidia Has Been Called Overvalued for 3 Years. The Bears Keep Losing.
Bears have called Nvidia overvalued for three years. The stock is up 600% in that time. With a 25x forward P/E — cheaper than AMD at 61x and Broadcom at 37x — the numbers keep proving the critics wrong.
- Nvidia has surged 600% despite years of overvaluation calls, trading at just 25x forward earnings vs AMD's 61x and Broadcom's 37x, with 85% revenue growth and $91B Q2 guidance making the bear case increasingly untenable
Three Years of 'Overvalued' Calls — Three Years of Being Wrong
Cathie Wood called Nvidia 'priced ahead of the curve' in May 2023. Morningstar analysts labeled it overvalued in early 2024. In the three years since, Nvidia is up 600%, while the S&P 500 has gained 78%. The bears have been consistently wrong, and based on Nvidia's financial performance, that trend shows no signs of reversing.
14 Consecutive Quarters of Revenue Growth
Nvidia's fiscal Q1 2027 results (ended April 26, 2026) show why the bear case keeps collapsing. Revenue hit a record $81.6 billion, up 85% year over year — marking 14 consecutive quarters of growth. Data center revenue surged 92% YoY to $75.2 billion. Gross margin was 74.9%. This is a rare combination of scale, growth, and profitability compounding simultaneously.
The Valuation Paradox: Nvidia Is Cheaper Than AMD and Broadcom
A $5+ trillion market cap feels expensive intuitively. But measured against earnings, Nvidia trades at just 25x forward earnings — significantly cheaper than AMD at 61x and Broadcom (AVGO) at 37x. The bears have been anchoring to market cap rather than earnings multiples, and the numbers have consistently proven them wrong.
Looking Ahead: $91B Q2 Guidance, $1T Blackwell/Vera Rubin Target
Nvidia guided approximately $91 billion in revenue for fiscal Q2 2027 — another record. At the 2026 GTC conference, CEO Jensen Huang projected that Blackwell and Vera Rubin GPUs would see at least $1 trillion in combined sales through 2027. Of 54 analysts covering the stock, 52 rate it a buy, with an average price target of $299 — implying approximately 35% upside from current levels.
Frequently Asked Questions
Can a 25x forward P/E really be called cheap for Nvidia?
In isolation, 25x isn't bargain territory. But relative to growth, the case holds — AMD trades at 61x forward P/E and AVGO at 37x. With 85% revenue growth and 14 consecutive quarters of expansion, Nvidia's 25x multiple is cheap on a PEG basis.
What happened to NVDA after Cathie Wood's 2023 overvalued warning?
The stock rose 600% in the three years after the warning, versus 78% for the S&P 500 over the same period. Bears repeatedly underestimated the pace of Nvidia's actual earnings growth.
Can Nvidia's data center revenue keep growing at this pace?
The 92% growth rate will normalize as the base grows larger. But since the AI infrastructure investment cycle is expected to last several years, absolute revenue levels should continue to expand.
Is it too late to buy Nvidia now?
A $5T market cap is understandably daunting. The key question is how much longer the AI infrastructure investment cycle runs. Most analysts forecast strong demand through 2027–2028. Rather than trying to time the top, sizing the position appropriately is the more practical approach.
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