Why does NVIDIA look cheap if sales are still exploding?

Earnings have grown faster than the stock. NVIDIA's forward P/E is about 21 versus a five-year average near 37. That is cheap versus its own history. The stock is still expensive versus the unofficial whisper for the next quarter — traders are paying for the next number, not the last one.

What number does the market actually need on Wednesday?

The official hurdle is roughly $92 billion in sales and a beat on that print. The real hurdle is forward guidance. The whisper circulating among desks is next-quarter revenue above $100 billion, with some looking for a figure closer to $104 billion. Production comments and the long-term path to $1 trillion in cumulative chip revenue matter as much as the quarter just closed.

Why can NVIDIA beat earnings and still fall?

Since 2023 the company has rarely missed on profitability, so a beat is the base case. In recent quarters the stock has often sold off the day after a strong report because holders use the print to take profits. With 22 of 22 analysts already at Buy, there is no crowded bench of new buyers waiting to step in.

What should investors watch besides revenue?

Gross margin (last quarter near 71%), the split between hyperscalers and the rest of data-center demand, production and shipment timing, China commentary (unlikely to be a bounce catalyst), networking growth, and whether management sounds ahead of or behind the $1 trillion cumulative chip-revenue path.

NVIDIA's Stock Is the Cheapest in 5 Years. So What's the Catch?

By Yogurt · 2026-08-25 · Earnings

NVIDIA is set to report about $92 billion in quarterly sales — up 97% year over year — while the stock trades at a forward P/E of 21, the cheapest in five years. The catch is the whisper: next-quarter guidance may need to clear $100 billion, and all 22 analysts already say Buy. Wednesday's print decides whether cheap is a gift or a trap.

Imagine a company at the center of the AI buildout, about to report roughly $92 billion in quarterly sales — not profit, sales — at nearly 97% year-over-year growth. Now imagine that same stock is trading at the lowest valuation it has seen in five years. That is NVIDIA heading into Wednesday's earnings report.

The company has almost never missed on profitability since 2023. The stock has not acted like it. In 2026 NVIDIA is up about 15.5%, versus roughly 11.7% for the S&P 500 and 15% for the Nasdaq. It beat the index. It did not dominate it. After several recent prints, the day-after tape was red even when the numbers were green. The market is no longer paying for the last beat. It is paying for the next one.

The official number is already priced in

NVIDIA guided to about $91 billion. The Street is at $92.04 billion. That print would be nearly 96.9% growth versus a year ago, with quarter-over-quarter growth around 12.8% — still huge, but slower than the prior three quarters. EPS is expected near $2.09, versus $0.99 a year earlier.

Those figures will not be the drama. A clean beat is the base case. The drama is the unofficial bar traders call the whisper: an extra hurdle that never shows up on the consensus line and still decides whether holders add or sell into the number.

How the machine actually makes money

Last quarter tells you the shape of the business. Hyperscalers — the Google and Amazon class of buyers — contributed about $37.9 billion. Cloud, industrial, and enterprise added about $37.4 billion. Data-center sales were about $75.2 billion of $81.6 billion in total revenue. Gross margin sat near 71%.

NVIDIA only recently split hyperscalers from the rest of the book so the market can see whether growth is still a handful of giant buyers or a broader enterprise wave. The backlog is already spoken for years out. A true surprise is less "we found new orders" and more "we can manufacture faster than we said." That is why comments from Jensen Huang or CFO Colette Kress on production speed matter more than another tenth of a beat.

What Wednesday actually has to clear

The whisper on next-quarter sales is $100 billion, with some desks looking for a figure closer to $104 billion. Investors also want a faster-sounding path to $1 trillion in cumulative chip revenue — not in one quarter, in the backlog Jensen and Colette have already sketched. A line that this arrives sooner than 2027 would move the stock. A line that the factory is running hotter than planned would too.

China is not that catalyst. Management has spent a long time keeping China out of the story. Do not expect a bounce from a China comment. Watch mix, margin, shipment timing, and whether hyperscalers are still doing all the work while the rest of the book lags.

Cheap versus its history. Crowded versus the tape.

On a forward P/E, NVIDIA is about 21. The five-year average is about 37.2 — more than a standard deviation cheap versus its own record. Trailing twelve-month P/E is about 33 versus a five-year median near 73. AMD is around 120. Broadcom is around 61. Versus the semiconductor neighborhood, NVIDIA is the value name. Versus the whisper, it is not.

That is the catch. All 22 major analysts already rate it a Buy. There is no incremental buyer sitting in cash waiting to discover NVIDIA. The next bid has to come from people who already own it and decide the forecast is too cheap to fade. That only happens if Wednesday is a jaw-drop, not a tidy beat.

Three doors

Miss the revenue or the guide: a bloodbath. The stock has been the market's load-bearing wall for a long time. A miss would not stay contained in one ticker.
Land near the official number — think the low-to-mid $90 billions and a margin that looks like the last slide — and the stock can go nowhere, or drift lower as holders sell the news.
Clear the whisper — sales above $95 billion with a better margin, or a guide through $100 billion toward $104 billion, plus a faster production or $1 trillion-path comment — and the cheap-versus-history argument finally gets a tape.

The print is due around 4:20 p.m. Eastern on Wednesday. The reaction will be obvious within the hour. Do not confuse a $92 billion quarter with a reason the stock has to go up. NVIDIA is cheap on a spreadsheet and expensive on a whisper. Wednesday decides which one is real.