Nvidia (NVDA) has done it again. After a slow start to the year, the chipmaker has returned to outperforming the S&P 500, with a 23% year-to-date return. Wall Street analysts see more upside ahead, and if the average price target proves correct, the company’s market value could approach $8 trillion.
The rally gained momentum after Nvidia reported solid results for the second quarter of fiscal 2027. Revenue reached $96.2 billion, up 106% year over year. Based on guidance, the company will soon generate more than $100 billion in quarterly revenue. Net income more than doubled to $59.7 billion. Diluted earnings per share came in at $2.46, up 128% and $0.12 above the average analyst estimate.
Guidance also pointed to continued strength. Nvidia expects third-quarter revenue of $108 billion and full-year revenue growth of 70%, well above the 44% consensus projection from analysts.
Valuation remains a talking point. Nvidia trades at a forward price-to-earnings ratio of 25.4 and has a PEG ratio below 0.60. Fundamentals are improving faster than the stock price, suggesting the valuation could become even more attractive. The company’s quarterly profit exceeds the quarterly revenue of most chipmakers, underscoring the scale of Nvidia’s market share advantage. As the AI boom accelerates, Nvidia is well positioned to widen that lead.
CEO Jensen Huang said in the Q2 FY27 press release that a year ago, one lab alone was driving the buildout. Today, there is a golden age of new AI labs and start-ups, with multiple frontier labs scaling in parallel. Huang also highlighted the arrival of physical AI. While physical AI is not an exclusive opportunity for Nvidia, the company is better positioned than any other, with GPUs serving as the technological bedrock no matter which companies figure out physical AI fastest.
The Vera Rubin platform is expected to appear in future results, and demand is not coming only from hyperscalers. In the second quarter, data center revenue rose 117% year over year, a sign that the massive AI infrastructure buildout is already generating revenue rather than merely representing a promise for the future.
Wall Street is clearly bullish. The average analyst price target for Nvidia is $327, about 42% above the current price. Targets range from $220 to $515, with most analysts between $300 and $350. Of 60 analysts, 48 recommend buy and nine recommend strong buy. Deutsche Bank recommends hold. After Q2 results, J.P. Morgan analyst Harlan Sur raised the target from $280 to $320. If the average target is reached, Nvidia’s market cap would climb to nearly $8 trillion.
Nvidia currently has a market cap of $5.56 trillion, making it the largest publicly traded company in the world. The stock is up 34% over the past 52 weeks and more than 900% over the past five years. The company believes the AI supercycle is still gaining momentum. Investors have debated an AI bubble for some time, but with Nvidia projecting 70% full-year revenue growth, those concerns have become quiet murmurs.
Nvidia’s industry position, strengthening fundamentals and reasonable valuation support the case for long-term outperformance of the S&P 500. The slow start to the year looks like a fluke, and recent accumulation shows investors recognize that. Analysts remain bullish, and the average price target points to further upside.
