The Motley Fool on $NVDA (Nov 4, 2026)

uh the overall if you're building fewer data centers you would have less demand for Nvidia chips and you know micron from a micron's memory and all that kind of stuff.

Nvidia is another one that's fascinating Uh, I know that that multiple alone beat the market over a very long period of time. Here we go. 16.1% compound annual growth rate on the multiple.

Now, revenue growth is on top of that. So, that's why they performed better better than that.

Yeah, but I mean it it is interesting because price to sales is higher, but price to earnings for an Nvidia is basically where I think I mean it's probably lower than where it was before.

It makes a lot of sense to me that some of the like the Nvidas of the world, the market is saying, you know what, you've got a currently is it a 65% operating margin when historically they have about a 15% operating margin.

Maybe it's not going to go back to 15, but it's probably not going to be 65 in five years, especially when Google and and Amazon are two of your biggest customers and they're they're making a competing chip that they would much rather use themselves.

So, it's like the Pi is getting bigger, but there's more competitors competing for that Pi. And AMD is one of them. And, you know, the other ones are the biggest customers that Nvidia has.

So, it makes sense that from a price to earnings standpoint, I wouldn't be surprised to see those margins come down over time.

and Nvidia is probably a bit different because their revenue is already so so big. But I mean if if we look at what Nvidia is expected to do over the next two years, let's say two three years, it it still is incredible.

I think f their fiscal 29, so two two and two years and a bit more from today, they're expected to generate I think $450 billion in free cash flow in in just one fiscal year.

And and then going back to an Nvidia with the amount of cash they'll just buy back more shares pay a nice dividend and and that's how investors we will see a great return.

So although I do still think that the stock could appreciate over the next couple of years because it it is quite quite cheap of a company despite its size and the growth rates like $5 trillion company growing 70% year-over-year is is is quite something.

I mean 90% this fiscal year, 70 the next fiscal year.

Yeah. Yeah. We'll have to see. I'm keeping an eye on those margins. It's not they're not going to be hurt this quarter or next quarter.

and also some because they're just backed by by Nvidia. So they cannot fail and even if they fail then Nvidia comes in and pushes them forward.