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Nvidia Grew Revenue 71% and Still Costs 21 Times Forward Earnings. The Market Is Betting the Growth Stops. - The Motley Fool
42 minute în urmă
1 minut min
Maria Popescu
Over the past 12 months, Nvidia (NVDA -0.10%) grew revenue 71% to $253 billion and more than doubled its net income, to about $160 billion. The stock, meanwhile, trades at about 21 times forward earnings (the profits the company is expected to produce over the next year) as of this writing. That's the kind of price tag the market usually puts on a mature business with ordinary prospects -- not on the largest company in the stock market, worth about $5.1 trillion, while its revenue climbs 71% a year. A price like this says the market expects the extraordinary part of Nvidia's growth to end, and to end fairly soon. I think that bet overshoots. Here's a closer look at why.