Key Takeaways
- NVIDIA hit a record high this week, putting its market value at about $5.8 trillion and close to $6 trillion.
- In a Vanity Fair interview with Sam Altman, Mark Guiducci cast Jensen Huang as the man “selling picks and shovels during the gold rush,” and that role works in shareholders’ favor.
- Analysts expect NVIDIA’s earnings per share to roughly double this fiscal year, while the stock trades near 20 times forward earnings, about half its five-year average.
- The main risk to watch is customers designing their own chips, including OpenAI, which plans to start deploying its first one by the end of this year.
NVIDIA (NVDA) is back at a record high, and it’s on the verge of becoming the first company ever worth $6 trillion.
This week, OpenAI CEO Sam Altman sat down with Vanity Fair global editorial director Mark Guiducci on the Fair Game podcast. Guiducci offered him a cast list for the history of AI. Elon Musk “is like the Mad King Nero character,” he said. “I think Jensen Huang will be the guy who was selling picks and shovels during the gold rush.”
Then he asked Altman who he wants to be.
Altman declined to play along: “First of all, I never think this way.”
For NVIDIA shareholders, though, Huang’s is the role to want.
Paid whichever lab wins
NVIDIA doesn’t need to bet on which AI lab comes out on top. The company sells the chips they all need, so NVIDIA makes money regardless of who wins the race. OpenAI, led by Sam Altman, has also been one of its biggest customers.
The labs’ investors do have to pick. NYU professor Scott Galloway got at this on Monday’s episode of Prof G Markets. He was explaining why investors are piling into Anthropic at prices he says feel overvalued: “Everybody missed out on what is the greatest stock in history, and that is the infrastructure for AI, and that’s NVIDIA.”
The earnings tell the story. NVIDIA earned $2.99 a share on a normalized basis in the year ended January 2025, followed by $4.77 in the year ended January 2026. Analysts expect earnings to nearly double to about $9 this fiscal year, then climb to roughly $16 and $21 over the next two years. At $21 a share, NVIDIA would be earning about seven times what it did four years earlier, which helps explain why investors are willing to pay such a high valuation today.
The company’s own outlook backs that up. NVIDIA has projected 70% sales growth for the year to January 2028, well above the 45% Wall Street had expected.
A consumer staple price for a gold rush
Here’s the thing: the market is paying less for those earnings than at almost any point in the last five years.
Prof G Markets co-host Ed Elson put it bluntly on last Friday’s episode of The Compound and Friends: “Nvidia is at 16 times forward earnings. It’s treated like a consumer staple valuation.”
TIKR has it a little higher after the latest run, at 19.8 times forward earnings on Monday. That’s still near the bottom of its five-year range. It set a five-year low of 17.5 times just three weeks ago, and its five-year average is 36.6 times…
Huang has called NVIDIA “the world’s first and only growth value stock.” The company recently authorized another $150 billion in buybacks, the biggest buyback in history, which Huang said “reflects our confidence in the long-term opportunity ahead.”
Isn’t the shovel seller the footnote?
The obvious objection is that “picks and shovels” can be a backhanded compliment. The miners who strike it rich get the history books, and the supplier gets a line.
On top of that, one of the biggest miners is making its own shovels. In June, OpenAI unveiled Jalapeño, its first custom AI chip, built with Broadcom (AVGO). It plans to start deploying it in its own data centers by the end of this year. Every chip OpenAI designs for itself is one it may not buy from NVIDIA.
How fast those chips ramp up is worth watching. But NVIDIA’s estimates only need the AI build-out to keep going, whoever pays for it. And at under 20 times forward earnings, a lot of what could go wrong already looks priced in.
The upshot
As far as I’m concerned, the guy “selling picks and shovels” has the best seat in this gold rush. NVIDIA gets paid whichever lab comes out on top. Analysts expect its earnings per share to grow about sevenfold over four years, and the stock trades at about half its five-year average multiple.
Of course, every shovel sale depends on the miners still digging. On March 30, NVIDIA was down 11% for the year as investors questioned the hundreds of billions being spent on AI infrastructure. If that spending slows, those estimates will come down with it.
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!
