Key Takeaways
- On the Nov. 7 episode of All-In, Trump’s former AI czar David Sacks said data center spending should still be meaningful in 2027, but he gets “really worried about 2028” because nobody will commit $50 billion to a gigawatt site under political uncertainty.
- That’s a real problem for NVIDIA, since analysts expect its revenue to grow 30.5% to $903.2 billion in the year ending January 2029, which covers nearly all of calendar 2028.
- Microsoft’s capital spending almost quintupled from fiscal 2022 to fiscal 2026, and Alphabet and Meta Platforms are still setting their 2027 budgets, so the next round of spending isn’t settled yet.
- NVIDIA trades at 15x forward earnings, near the bottom of its five-year range, but that only protects shareholders if the estimates hold, and NVIDIA’s Nov. 17 report is the first test.
NVIDIA (NVDA) just heard the bear case for 2028 from an unlikely place: Trump’s former AI czar.
On Nov. 6, President Trump posted on Truth Social that he’d work with any state that wants AI data centers, since “only foolish leadership will say ‘NO’ to the riches they bring!”
A day later, David Sacks sounded a lot less sure. On the All-In podcast, he said he doesn’t see any ambitious politician wanting to approve a data center after the midterms. His base case is that fully permitted projects get finished and new ones stall. That’s why he thinks “we get by in 2027,” but “I get really worried about 2028.”
That’s a problem for NVIDIA, since Wall Street’s numbers count on big spenders like Microsoft (MSFT), Alphabet (GOOG) and Meta Platforms (META) to keep building right through 2028. The top five cloud providers and hyperscalers make up a little over half of NVIDIA’s data center revenue, management said in February.
TIKR tracks 62 analysts on Nvidia. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Nvidia, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nvidia’s Analyst Ratings
A $50 billion bet nobody wants to make
Sacks boiled his worry down to the size of the checks:
“these gigawatt-powered data centers, they cost around $50 billion. Nobody can make that investment in conditions of uncertainty.”
He also warned that some sites under construction still need permits to open, so a long permit freeze could leave projects stranded halfway. Management said in August that NVIDIA’s revenue opportunity is about $40 billion per gigawatt with its Vera Rubin systems, up from about $25 billion with Grace Blackwell. So most of a gigawatt site’s budget can end up as NVIDIA revenue, and every site that never breaks ground is up to $40 billion NVIDIA doesn’t sell.
Wall Street is counting on 2028
Analysts expect NVIDIA’s revenue to keep climbing steeply for years:
NVIDIA’s fiscal year ends in late January, so the year ending January 2029 covers nearly all of calendar 2028, the year Sacks is worried about. Consensus has revenue growing 30.5% that year, to $903.2 billion, and topping $1.1 trillion the year after (though only 8 analysts go out that far). The year before looks spoken for: management guides revenue up about 70% for the year ending January 2028 and calls that figure supply-limited, which fits Sacks’s view of 2027.
That growth depends on spending like Microsoft’s, which has almost quintupled in four years:
And nobody is talking about slowing down yet. Alphabet held its 2026 capex guidance at $195 billion to $205 billion on its third-quarter call and said it expects a significant increase in 2027. Meta guided to $135 billion to $145 billion for 2026, and its CFO, Susan Li, said its 2027 budget is still being worked out. My read: next year’s budgets mostly go to sites that are already permitted, and a permit freeze would hit the 2028 budgets.
Not every chip needs a new US permit
Of course, NVIDIA doesn’t need every new data center to be in the US. Customers headquartered in the US accounted for 69.3% of its revenue in the year ended January 2026, but those buyers can build in Canada or Mexico. Plus: with power scarce, Ben Thompson argued that customers with sites already running will want to upgrade them to newer NVIDIA chips. But one big overflow market is already off the table, since NVIDIA’s guidance assumes no data center compute revenue from China. I doubt foreign sites and upgrades can fill a hole the size of the US gigawatt pipeline by 2028.
The market already has its doubts
NVIDIA’s valuation shows investors aren’t paying for a smooth 2028:
At 15x forward earnings, NVIDIA trades near the bottom of its five-year range, against a 36x average and a 71x peak in November 2021. But a low multiple only protects shareholders if the estimates under it hold, and a permit freeze would hit the later years first.
The way I see it, Sacks picked the right year to worry about. If new US permits dry up, I’d expect analysts to cut their numbers for the year ending January 2029 well before NVIDIA reports it, and 15x won’t look so cheap on lower earnings. NVIDIA’s Nov. 17 report, and what management says about customers’ plans past next year, is the first test. Of course, Sacks himself said this “could go a lot of ways,” and if the new governors cut deals with builders, the 2028 pipeline stays open.
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!
