Elon Musk recently praised Nvidia (NASDAQ: NVDA) GPUs as the best available option for AI processing, while explaining that Space Exploration Technologies (NASDAQ: SPCX) will exclusively use them. Some of those Nvidia processors will head into space next year on its first data center test satellites. That’s even better news for Nvidia, and it seems like the good times will continue to roll.
Image source: Getty Images.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Nvidia isn’t slowing down
Nvidia’s market cap is approaching $6 trillion, yet it’s putting up growth rates that look more appropriate for a start-up than for the world’s largest publicly traded company. The chipmaker more than doubled its revenue year over year in its fiscal 2027 second quarter, and it posted a 62% net profit margin.
Musk’s remarks show that the leading chipmaker hasn’t lost its edge. Furthermore, the decision to send Nvidia chips up into space next year is a major test. It will determine whether Nvidia’s latest processors are ready for the space economy or whether some enhancements will be needed before they can be deployed effectively in orbital conditions.
SpaceX seems more than eager to take that financial responsibility off Nvidia’s plate. The company is in the process of raising $40 billion just to buy more Nvidia chips.
SpaceX is far from Nvidia’s only customer. Every hyperscaler uses its technology in its data centers, and given how important artificial intelligence is becoming to the global economy, sales are unlikely to slow. Nvidia is already forecasting 70% revenue growth for its fiscal 2028, which starts after the last Sunday of January 2027.
Nvidia still trades at a good valuation
Nvidia has a long history of outperforming the S&P 500 (SNPINDEX: ^GSPC), especially when you zoom in on the AI boom. The GPU maker’s stock is up by more than 25% this year, but that return pales in comparison with its fundamental growth. When a company’s revenue and net income growth rates exceed its year-to-date stock gains, that can result in compelling valuations.
For instance, Nvidia only trades at a P/E ratio of 28.5, which is lower than the tech industry’s average. It’s also growing faster than almost every company in the sector. Nvidia also trades at a price/earnings-to-growth (PEG) ratio of 0.48. A stock with a PEG ratio of 1 is considered fairly valued; any positive reading below that suggests that the stock is underpriced.
Of course, Nvidia has to maintain its growth rates to keep its attractive valuation. The fiscal 2028 guidance already points to this, and the fact that companies are eager to borrow billions of dollars just to buy more of its chips shows that demand for them won’t slow anytime soon.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $385,972!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,416,196!*
That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.
*Stock Advisor returns as of October 9, 2026.
Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Elon Musk Just Made a Surprising Statement About AI Chips. Here’s the Stock It Helps. was originally published by The Motley Fool