A fresh price target for Nvidia rests on the assumption that the chipmaker's valuation will revert to its five-year average, a bet that the current discount to history reflects anxiety about the AI spending cycle rather than fundamentals. The analysis, published September 2, notes that shares have risen 25 percent over the past year while the S&P 500 gained 18 percent, yet the stock has fallen after each of the last five quarterly reports despite blowout results.
The valuation gap
Nvidia trades at 17.8 times trailing sales, well below the five-year average of 25.4 times. The forward price-to-sales ratio sits even lower at 13 times. If the multiple simply returned to its historical mean at today's revenue, the share price would be $315.46, roughly 43 percent above the current $220.70. The author argues that the P/E average is skewed by a 2023 spike, making the sales metric the cleaner benchmark.
The CEO's revenue call
Jensen Huang has signaled that revenue could jump 70 percent in fiscal 2028. Applied to a 25.4 times sales multiple, that growth would push the share price to $536.28 by 2028, more than double the current level. The prediction does not model additional expansion beyond that year, instead using the 2028 figure as a floor for 2030.
The math behind the target
Five shares purchased today for $1,104 would be worth at least $2,681.41 by 2030 under this scenario. The calculation bakes in a full re-rating to the historical average and Huang's 70 percent growth target, while acknowledging potential setbacks and persistent bubble fears. The projection is not a forecast of continued multiple expansion, it is a mean-reversion trade dressed up as a long-term hold.
What to watch
The entire thesis hinges on two unproven premises: that AI capital expenditure does not plateau before fiscal 2028, and that investors will price Nvidia at the same rich multiple they assigned during the 2023 frenzy. If either fails, the $536 target dissolves. For now, the market is pricing the stock as if the boom has an expiration date.