An $89 Billion Reason to Buy Nvidia Stock Here

Nvidia (NVDA) reported blockbuster second-quarter fiscal 2027 results on Aug. 26, led by a solid surge in data-center revenue, which climbed by a whopping 117% year-over-year (YOY) to $89 billion. With the data-center business making up more than 90% of its top line, Nvidia has capitalized on the fact that more companies need large GPU clusters. 

While the semiconductor industry leader faces “threats” that its near-monopoly on advanced artificial intelligence (AI) chips may be coming to an end, Nvidia remains the primary beneficiary of the AI boom. The company is also reportedly set to buy open-source AI platform Hugging Face for $12.9 billion, aligning with CEO Jensen Huang’s strategy of building the AI world on the American stack. 

Given this backdrop, Nvidia's data-center prowess may be the $89 billion reason to buy NVDA stock here.

About Nvidia Stock

Nvidia has emerged as the world’s most valuable company, driven by its dominance in AI and high‑performance computing (HPC). The firm’s GPUs and AI platforms power data centers, cloud services, and cutting‑edge applications, making it a central player in the global technology landscape and the engine behind the ongoing AI revolution. The company currently commands a massive market capitalization of $5.3 trillion.

Nvidia remains the primary beneficiary of the global AI infrastructure buildout, delivering repeated earnings beats, accelerating revenue growth, and raising guidance as demand for its AI chips and systems continues to outpace supply. Over the past 52 weeks, NVDA stock has gained 25%, while shares are up 17% year-to-date (YTD). Nvidia stock reached a 52-week high of $236.54 on May 14 but is now down 7% from that level. Still, based on its strong Q2 earnings report, NVDA stock is up more than 2% over the past five days.

On a forward-adjusted basis, Nvidia’s price-to-earnings ratio of 23.9 times is slightly higher than the industry average near 23 times.

Q2 Revenue Doubled on Data Center Boom

Nvidia’s blowout Q2 results for fiscal 2027 led to an almost 9% pop in NVDA stock on Aug. 27. The results highlighted accelerating demand, as Nvidia believes that AI has reached an inflection point. Total revenue rose 106% YOY to $96.2 billion, coming in above the $91.8 billion estimate Wall Street analysts expected. This was driven by a major tailwind from the data-center business. 

The top-line tailwinds were also reflected in bottom-line gains. Non-GAAP operating income increased 124% YOY to $63.96 billion, while non-GAAP EPS climbed 120% YOY to $2.22, surpassing the $2.09 estimate that analysts predicted. 

Moreover, with Nvidia’s Vera Rubin infrastructure now in full production, the company has scored racks running at partners like CoreWeave (CRWV), Alphabet (GOOGL), Microsoft (MSFT), Oracle (ORCL), and Nebius (NBIS). 

For Q3 fiscal 2027, Nvidia expects revenue of $108 billion, plus or minus 2%, with a gross margin of 74%, plus or minus 50 basis points. Wall Street analysts are robustly optimistic about future earnings. For Q3, analysts expect EPS to climb by 99% YOY to $2.47. For fiscal 2027, EPS is projected to surge 99% YOY to $9.10, followed by 66% growth to $15.12 in fiscal 2028.

What Do Analysts Think About Nvidia Stock?

Following the Q2 results, a plethora of Wall Street analysts reiterated their bullish stances on Nvidia. Bernstein SocGen Group recently maintained an “Outperform” rating on NVDA stock and raised its price target from $315 to $400. Analysts noted that the company's huge balance sheet allows it to secure key components and support its product ecosystem. JPMorgan also maintained an “Overweight” rating and increased its price target from $280 to $320, while UBS analyst Timothy Arcuri kept a “Buy” rating and raised his price target from $280 to $300, citing strong results and guidance.

Nvidia has been in the spotlight on Wall Street for some time now, earning a consensus “Strong Buy” rating overall. Of the 49 analysts rating NVDA stock, 44 have a “Strong Buy” rating, three have a “Moderate Buy,” one analyst has a “Hold" rating, and one analyst has a “Strong Sell” rating. The average price target of $324.44 represents potential upside of 47% from current levels, while the Street-high price target of $515 indicates potential upside of 134% from here.