Nvidia’s Stock Performance Discrepancy
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Nvidia's Stock Performance Discrepancy
- Nvidia's stock has risen approximately 20% over the last 12 months, despite an 85% increase in revenue and a 140% rise in non-GAAP EPS during the same period.
- In Q1 FY27, reported on May 20, Nvidia delivered $81.6 billion in revenue, an 85% year-over-year increase, with CEO Jensen Huang noting the "agentic AI inflection point has arrived."
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Nvidia’s stock has experienced a notable disconnect between its share price performance and its robust financial growth over the past year. While the stock has seen an approximate 20% increase in the last 12 months, the company’s revenue surged by 85%, and non-GAAP earnings per share (EPS) grew by 140% during the same period. This divergence suggests the stock may be mispriced, according to some analyses.
The company’s strong performance is further highlighted by its Q1 FY27 earnings, reported on May 20. Nvidia achieved $81.6 billion in revenue, marking an 85% year-over-year increase, and a 20% quarter-over-quarter rise. The data center segment was a primary driver, bringing in $75.2 billion in revenue, a 92% increase compared to the previous year. Networking revenue alone saw a 199% increase, reaching $18.8 billion. Non-GAAP EPS for Q1 FY27 was $1.87 per share, surpassing analyst expectations of $1.77 per share. Nvidia also reported a record $48.6 billion in free cash flow and maintained a strong gross margin of 75%.
Nvidia’s revenue diversification is also becoming more apparent. A new reporting split indicates that $37 billion of revenue now comes from AI clouds, industrial, and enterprise customers, suggesting the company is less solely dependent on “Big Tech” budgets. Big Tech capital expenditure is projected to increase by 77% in 2026, reaching $725 billion, with Nvidia anticipated to capture 35% to 40% of that spending. Despite the impressive growth, the stock currently trades below its all-time high of $235 per share, at around $219 per share. As of August 9, 2026, analysts have raised their fair value estimate for Nvidia stock from $184.19 to $194.77, citing higher assumed revenue growth and stronger profit margins.