- Nvidia has returned to record territory as investors regain confidence in the AI spending cycle, but the stock’s valuation now makes future earnings growth increasingly important.
Nvidia Corp. (NASDAQ: NVDA) reached a record share price on Oct. 2 for the first time since May, pushing its market value toward $6 trillion as investors returned to the AI trade. Bloomberg reported that Nvidia shares gained about 2.9% during Friday's session, extending a rally of nearly 25% from the late-July low.
The move puts Nvidia back at the center of the market's AI investment story after a period in which concerns over the durability of AI infrastructure spending pressured the stock. At the latest market data, Nvidia was trading around $236.72, giving the company a market capitalization of roughly $5.75 trillion.
The question for investors is no longer simply whether Nvidia is benefiting from AI spending. It is whether the company's earnings can continue growing quickly enough to support a valuation approaching $6 trillion.
Nvidia's AI Business Continues to Expand
Nvidia's underlying financial growth remains substantial. The company generated $46.7 billion in revenue during fiscal Q2 2027, according to its latest quarterly filing, while its Compute & Networking segment generated $62.7 billion in the quarter under the company's segment reporting structure. Compute & Networking revenue increased 121% year over year.
The latest product cycle is also moving beyond Blackwell. Nvidia began shipping its Vera Rubin systems in August, and management expects the platform to account for about 20% of data-center revenue in fiscal Q3 2027, according to recent analysis.
Nvidia has also said its revenue opportunity per gigawatt of data-center capacity could rise to about $40 billion with Vera Rubin, compared with roughly $25 billion for Blackwell. That is a management estimate rather than reported revenue.
The company's enormous installed software ecosystem is another factor investors are watching. Nvidia's CUDA platform and its broader networking, systems and software offerings allow the company to sell more than individual graphics processors as customers build increasingly complex AI infrastructure.
At the same time, the scale of the company means Nvidia now needs very large increases in revenue and earnings to maintain its previous growth rates. That makes future AI infrastructure spending, customer capital budgets, and the adoption of new Nvidia architectures particularly important.
What Could Make NVDA Stock More Expensive or Cheaper?
Nvidia's valuation has actually become less demanding relative to its earnings growth than it was during earlier stages of the AI rally. Bloomberg reported in September that Nvidia was trading at less than 17 times expected earnings over the following 12 months, roughly half the multiple investors assigned the stock in 2025. Current market data puts Nvidia's forward P/E around 19 times, while its trailing P/E is close to 30 times. StockAnalysis.com
That creates two competing forces. On one side, continued rapid earnings growth could make the existing valuation easier to support. Nvidia's revenue and earnings have expanded at exceptional rates as hyperscalers and AI companies increase spending on accelerated computing.
On the other side, the stock is now worth almost $6 trillion. At that scale, even a strong business can experience valuation pressure if growth slows, customers delay data-center projects, or investors begin assigning a lower earnings multiple to AI semiconductor companies.
Competition is another consideration. Nvidia faces growing challenges from custom AI accelerators developed by major cloud companies and from competing semiconductor manufacturers. The company also remains exposed to export restrictions and changes in the global AI supply chain.
Nvidia's $150 billion increase to its stock-buyback authorization, bringing total potential repurchases to $235 billion through January 2028, could also affect future per-share earnings by reducing the number of outstanding shares. MarketWatch
So, rather than a simple valuation question, the NVDA debate now centers on whether Nvidia can sustain exceptionally high earnings growth while maintaining its position in AI infrastructure.
For investors evaluating the stock, the key variables are future revenue growth, data-center spending, Blackwell and Vera Rubin adoption, margins, competition, and the earnings multiple the market is willing to assign to Nvidia.