The most “valuable” company in the world today, Nvidia (NVDA), is set to announce its Q3 earnings on Wednesday this week. Currently seen as a bellwether for the entire tech industry, as well as novel new inventions like AI, the GPU behemoth enters the earnings call with joyous analyst praise and a substantial 38% year-to-date gain. However, over the past three months, the stock has been rangebound.
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On the one hand, analysts remain broadly optimistic about Nvidia’s thesis—many have even raised their targets following the late-October GTC event in Washington, D.C. On the other hand, there’s a strong expectation that Q3 could serve as fresh “proof” that Nvidia’s AI cycle is nowhere near its peak. Still, despite this powerful narrative, part of the market has remained cautious, preventing the stock from undergoing a more aggressive re-rating in recent months, even after the latest wave of upward revisions in analysts’ forecasts.
But above all, the alignment between management’s commentary on multi-year demand visibility and the sheer magnitude of the AI CapEx supercycle—which shows no signs of slowing down—continues to reinforce the idea of long-lasting structural tailwinds. In my view, if the market is naturally expecting confirmation of the momentum that keeps Nvidia’s growth-adjusted valuation multiples surprisingly reasonable, then a sharp structural selloff appears unlikely in the current setup—unless something completely unexpected emerges on the earnings call, which I consider extremely improbable.
With that in mind, I believe Q3 is likely to be yet another quarter where the market once again trails behind the company’s actual performance, allowing the stock to extend its bull run. Given this backdrop, maintaining a Buy rating seems like the most reasonable stance.
Reframing the Nvidia Thesis
Even though Nvidia’s share price has been stuck in a short consolidation phase after its strong run this year, the GPU giant heads into its Q3 report at an unusually favorable moment.
To start, when we look at the estimates projected for Nvidia, the last month has brought a meaningful upward revision in long-term annual EPS. Consensus now expects Nvidia to deliver between $8.7 and $10 in EPS by 2028–2030, whereas previous projections pointed to $8.1 and $8.72, respectively, for the same horizon.
The main driver behind these upward revisions was Nvidia’s GPU Technology Conference (GTC) in Washington, D.C., the company’s stage for updating the market on its long-term roadmap. What stood out this time was Jensen Huang’s clear emphasis on data centers and AI infrastructure, along with the visibility he provided for 2025–2027.
In simple terms, Nvidia indicated that it has a line of sight to fulfill $500 billion in demand across 2025 and 2026, considering Blackwell plus Rubin (its next-generation architecture). This does not mean that $500 billion will automatically be recognized as revenue in that window; however, it does confirm that the demand is not only real but also well-contracted or highly validated.
This shift in demand visibility is the central catalyst behind Nvidia’s attempted re-rating within semiconductors, even though that re-rating hasn’t been fully consolidated over the past few weeks.
Why Nvidia’s Structural Setup is Still Solid
Another structural point, in my view, that keeps Nvidia’s thesis relatively safe for the foreseeable future is the simple fact that the AI CapEx mega-cycle is still far from its peak. Almost all the money companies worldwide spend on training and running AI models flows directly through Nvidia’s GPUs and full cluster systems—effectively turning every deployment into a massive average ticket.
In this current earnings season, the major hyperscalers (Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOGL), and Meta (META)) didn’t just report massive CapEx—they also signaled renewed momentum and even more aggressive guidance for next year. If we assume the AI CapEx cycle today sits around $250-300 billion per year, is set to surpass $350 billion in 2025, and could reach $3-4 trillion by 2030, according to Goldman Sachs, there is a strong basis to believe Nvidia’s EPS could double over five years.
From this perspective, it’s also reasonable to argue that the stock appears reasonably priced when adjusted for growth. Nvidia currently trades at 41.8x forward earnings, which, when adjusted for a three- to five-year EPS CAGR estimate of 35.5%, the company’s PEG ratio lands at 1.2—by far the lowest among the Magnificent 7 and even below its closest competitor, Advanced Micro Devices (AMD), which trades at a PEG of 1.4. This suggests that, despite all the hype, Nvidia is far from being stretched. If anything, it looks surprisingly reasonable for the kind of growth it continues to deliver.
Why Q3 Seems More About Stability Than Surprise
Zooming in on the Q3 earnings setup, Nvidia will need to deliver EPS above $1.25 (implying 54% year-over-year growth) and revenues above $54.9 billion (56.7% year-over-year growth) to surpass market expectations.
These projections have been revised upward by as much as 7.5% (EPS) and 6.1% (revenue) over the past six months, reflecting the same dynamic we’ve seen in recent years: consensus continues to lag behind the company’s actual performance.
Naturally, the view that Nvidia is “reasonably valued” rests entirely on the massive growth trajectory that is expected going forward. I emphasize “expected” because Nvidia’s bullish thesis is fundamentally driven by expectations, leaving virtually no room for error. As a result, any sign of weakness, however small, tends to trigger a post-earnings selloff, particularly if full-year guidance isn’t raised.
However, in the current environment, I see the odds of a structural selloff as relatively low. Nvidia enters the quarter with a very high level of contracted demand, providing exceptional order visibility, and the AI CapEx mega-cycle remains extremely strong. In my view, avoiding a meaningful drawdown is more important than an upside surprise this quarter—and I believe the former is a much safer bet.
Is NVDA a Buy, Hold, or Sell?
The consensus among market analysts remains overwhelmingly bullish on Nvidia. Of the 39 analysts who have covered the stock over the past three months, 37 rate it as a Buy, with only two dissenting—one issuing a Hold and the other a Sell. The average price target is $242, implying an upside of nearly 30% over the next 12 months.
Unchanged Bullish Outlook on NVDA Ahead of Q3
Even though tech stocks have been going through a period of profit-taking—as price action remains stagnant over the last couple of months—the odds for Nvidia still look about as bullish as they get, in my view. Fears of an AI bubble are drastically overdone. Structurally, there’s virtually nothing contradicting expectations for sustained AI demand or suggesting that the AI CapEx cycle is slowing. In fact, the opposite remains true.
Market expectations have moved higher, but they still appear conservative enough to leave room for additional beats and further upward revisions. And quantitatively, it’s very rare for a stock not to respond positively when EPS and revenue estimates keep rising. Since Nvidia’s thesis is heavily anchored in future growth expectations, simply avoiding any signs of weakness already tends to be a win from a long-term investor’s perspective—even if short-term volatility shows up around earnings.
With the overall setup still constructive, I maintain a Buy rating ahead of Nvidia’s earnings day on Wednesday.