Key Takeaways
- On The Compound and Friends, Ritholtz Wealth Management’s Josh Brown said NVIDIA could generate $360 billion in free cash flow next year, nearly four times its free cash flow in its last fiscal year.
- NVIDIA’s valuation implies its earnings are about to fade, and its cash flow record points the other way.
- Brown’s $680 billion revenue figure is in line with Wall Street’s consensus, and the main risk is that some of today’s chip sales are being pulled forward from later years.
- At about 19 times forward earnings, NVIDIA trades at roughly half its 10-year average of 37 times.
Josh Brown thinks NVIDIA (NVDA) is about to generate a staggering amount of cash.
On the Sept. 29 episode of The Compound and Friends, the Ritholtz Wealth Management CEO put a number on it:
“Next year, it could be $360 billion in free cash flow on $680 billion in revenue.”
That’s more than double the record $150 billion buyback NVIDIA announced on Sept. 28. (TIKR ran the math on that buyback here.)
His co-host Michael Batnick, Ritholtz’s director of research, added that NVIDIA’s operating earnings over the past 12 months are now above those of Apple (AAPL): “It’s legitimate actual earnings. These are not estimates.”
And yet the stock trades as if those earnings are about to shrink.
How big is $360 billion?
Start with NVIDIA’s cash generation. According to TIKR, free cash flow jumped from $8.1 billion in the fiscal year ended January 2022 to $96.7 billion in the year ended January 2026.
That’s roughly a 12-fold increase in four years, starting from a business that was already generating billions in cash.
Brown’s $360 billion estimate would equal about 3.7 times NVIDIA’s $96.7 billion in free cash flow today. Put another way, roughly 53 cents of every dollar of revenue would become free cash flow, based on $360 billion of free cash flow and $680 billion of revenue. Last year, NVIDIA converted about 45 cents of every revenue dollar into free cash flow, with $96.7 billion in free cash flow on $216 billion of revenue.
That’s the boldest part of Brown’s call: how much of NVIDIA’s revenue he expects the company to turn into cash.
The revenue already lines up
Brown says his figure is “not just based on the company’s own guidance, but based on the CapEx plans and NVIDIA’s share of that CapEx spend that we’re getting from 50 other sources.” (Capex here is what NVIDIA’s customers spend building data centers, and a large share of it goes to NVIDIA’s chips.)
Wall Street is in about the same place. TIKR’s consensus has revenue at $412 billion for the year to January 2027, then $683 billion for the year to January 2028, from 58 analysts…
Brown’s revenue number is essentially Wall Street’s number.
Of course, consensus asks a lot: revenue that nearly doubles this year, from $216 billion to $412 billion, then grows another 66%. The obvious risk is a pull-forward. If customers are buying chips faster than they can put them to work, some future sales are landing today, and the year to January 2028 comes in short.
Brown’s response: “I went back and looked. The actual forward earnings tend to be very close to the actuals.”
Priced like the party’s ending
That’s what makes the valuation so striking. On the Sept. 28 episode of Prof G Markets, Ed Elson cited Bloomberg’s data showing NVIDIA trading at 17 times earnings, its lowest level in more than a decade, down from 32 times in 2025.
TIKR’s data points in the same direction. NVIDIA’s forward P/E fell to 17.5 times on Sept. 14 and now sits at 19.2 times, well below its 10-year average of 37.0 times.
That’s roughly half NVIDIA’s usual multiple, even as the company continues to grow its free cash flow.
Elson believes competition is part of the reason. “NVIDIA has been the largest player in terms of GPUs, and now they have a lot of competition and Google’s building chips,” he said. That’s a real risk. If major customers start designing more of their own chips, they would be spending less on the GPUs that Brown is counting on to drive NVIDIA’s growth.
Still, the cash flow math leaves plenty of room. Ezra Klein put NVIDIA’s market cap at $5.4 trillion on The Ezra Klein Show on Sept. 25. If Brown’s $360 billion free cash flow estimate is right, that puts NVIDIA at about 15 times next year’s free cash flow, based on $5.4 trillion divided by $360 billion.
Even if Brown’s estimate comes in at half that level, $180 billion would still be nearly twice NVIDIA’s free cash flow last year.
So can NVIDIA really hit $360 billion?
It’s a bold call, but the revenue target is not the crazy part. Brown expects NVIDIA to hit $680 billion in revenue in fiscal 2028, roughly in line with the company’s own outlook.
The bigger leap is in cash flow, as Brown expects $360 billion of free cash flow, which means NVIDIA would turn about 53 cents of every revenue dollar into cash. NVIDIA generated $96.6 billion in free cash flow last year, so that’s a huge step up.
And there’s one timing issue worth watching, as fiscal 2028 does not start until February 2027. If customers pull spending forward or shift more of their spending to custom chips, we should see signs of that before then.
So what is NVIDIA stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what NVIDIA could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
