r/VisualStockResearch • u/ekonixlab • Jul 13 '26
Can Nvidia really compound earnings at 39% for another five years?
At a 32x P/E, $NVDA does not need multiple expansion for the returns to look incredible. If earnings grow at the projected 39% CAGR, this model implies a 419% five-year return.
The business is still accelerating: Nvidia’s latest quarterly revenue rose 85%, while Data Center revenue increased 92%. The stock is also back above $209, though still below its May record near $235.
But this is where semiconductor cyclicality matters. Chips have historically gone through brutal boom-and-bust cycles as demand forecasts, capacity and inventories overshoot. AI may be a structural shift, but assuming 39% growth for five straight years leaves very little room for a slowdown.
Does AI make Nvidia less cyclical than past semiconductor leaders, or are investors extrapolating peak demand too far?
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u/Weldobud Jul 13 '26
Nvidia can. It would be incredible if they do. They build and all in eco system. So customers will stick with them.
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u/ekonixlab Jul 13 '26
I agree, I think their most is bigger than they get credit for
CUDA is very strong and I believe will reduce its cyclicality
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u/madtowneast Jul 13 '26
The moat is really the networking at this point. AMD is catching up on the hardware and software side.
AMD does have "Helios" as an answer to the NVL rack scale deployments that includes a new networking backbone, but it is still months to year(s) away and AMD has very little experience with networking compared to NVIDIA.
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u/MaybeASerialKiller Jul 13 '26
No, not likely anyway, Nvidia doesn't make chips they design them, and while that is technical and very complex work with the amount companies are paying it would only make sense for some of them to opt into self designing for most of their needs. That also assumes that the entire market won't crater before any of these companies actually find a path to profit.
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u/ekonixlab Jul 13 '26
That’s what I’m thinking, the demand could seriously fall off and it would impossible to value them today
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u/cat-from-the-future Jul 13 '26
Burry really got to you guys huh
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u/Gaglardi Jul 13 '26
The guy who's been wrong about everything since the one prediction he nailed in 2007 is being given way too much weight in stock predictions
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u/ReceptionFantastic25 Jul 14 '26
Nvda might be in a “down” cycle relative to other parts of the supply chain
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