The current infatuation with artificial intelligence, one observes, has proven remarkably lucrative for a select few. Nvidia, purveyor of graphics processing units, finds itself, rather unexpectedly, at the epicentre of this digital delirium. Since early 2023, the company’s stock has ascended to altitudes usually reserved for speculative bubbles, a rise of 1,130% that would give even the most seasoned gambler pause.
One might assume such a trajectory is unsustainable. Yet, Wall Street, ever optimistic in the face of implausibility, continues to issue pronouncements of further gains. Nvidia, it seems, is exempt from the usual laws of financial gravity.
Recently, the company reported results for its fiscal 2026 fourth quarter – figures that, if one were inclined to hyperbole, could be described as astonishing. Revenue reached $68 billion, a 73% increase year-over-year, and earnings per share swelled to $1.62. Analysts, predictably, were delighted.
The Price of Progress
Wedbush analyst Matt Bryson, a man evidently immune to irony, has raised his price target to $300, suggesting a potential upside of 67% from Tuesday’s closing price. One can only assume Mr. Bryson believes the sky is, indeed, the limit. It is a charmingly naïve position, if one overlooks the inherent precariousness of it all.
Nvidia, despite its increasingly improbable ascent, continues to defy expectations. Its data center segment, the engine of this particular boom, grew revenue by 75% year-over-year, reaching $62.3 billion. First-quarter revenue guidance of $78 billion suggests the momentum will continue, at least for the moment. The company, it is said, consistently underpromises and overdelivers – a tactic that, while admirable, cannot mask the fundamental absurdity of the situation.
Indeed, Nvidia has exceeded revenue and earnings expectations in eight of the past nine quarters, a record that speaks volumes about the company’s carefully cultivated image of cautious competence. One suspects a degree of deliberate understatement is involved. After all, a little mystique never hurt a balance sheet.
Should Nvidia’s stock price reach $300, the company’s market capitalization would approach $7.3 billion. A tidy sum, to be sure. Jensen Huang, Nvidia’s chief executive, estimates that data center infrastructure spending will reach $1 trillion annually by 2028. Bernstein analysts suggest Nvidia captures nearly 30% of that spending as pure profit. If these figures are accurate, the company could potentially generate $300 billion in profit – a sum that dwarfs its recent net income of $120 billion.
Taken together, a $7 trillion market cap appears, if not inevitable, then at least within the realm of possibility. Furthermore, at 22 times forward sales, the stock is, relatively speaking, reasonably priced. One might even venture to suggest it is a bargain, considering the prevailing levels of irrational exuberance.
Therefore, one is compelled to conclude that Nvidia stock is, for the moment, a buy. But let us not mistake a temporary surge for lasting value. The current boom, one suspects, is built on a foundation of sand, and the inevitable reckoning will be most diverting.
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2026-03-06 11:02