NVDA is underpriced and expected to continue growing over the next decade due to insatiable AI infrastructure demand and strong guidance.

Nvidia's unbelievable quarterly earnings report Nvidia reported earnings early after the bell and the stock is up 10% as we're recording this episode. So fiscal Q2 revenue came in at 96.2 billion, up nearly 106% year-over-year, which blew past Wall Street's expectations of $92 billion.

Adjusted earnings per share was $2.22, beating Wall Street's estimates by 13 per share. Now, data center revenue, the whole ballgame at this point, hit $89 billion against expectations of $85 billion, increasing 117% year-over-year.

Gross profit margins held at 75%, which was right in line with Wall Street's expectations. The company threw off over $21 billion of free cash flow during that 3-month period of time.

Nvidia also handed $26 billion back to shareholders during the quarter in both buybacks and dividends and they've still have $99 billion left on that repurchase authorization. Yes, the number that broke Wall Street's model was the guidance.

CFO Colette Crest told investors Nvidia expects fiscal 2028 revenue to grow 70% yearover-year.

Analysts were modeling 44%. So off of a roughly 396 billion fiscal 2027 base and that 70% floor puts fiscal 2028 revenue around $673 billion which would put Nvidia ahead of Apple and Alphabet and behind only Amazon in total company revenue.

And the wild part is Colette Crest their chief financial officer said that that 70% number is the floor. And it's the floor because it's the supply constrained floor of their guidance, right?

So unconstrained demand puts them closer to 100% revenue growth, which is bonkers.

I mean, literally like you're you're saying 2027 base is essentially 400 billion. You slap 70% growth on top of that, which gets you to 675 billion. But if they weren't supply constrained, that number could actually be closer to $800 billion in annualized revenue in 2028 for Nvidia,

which is just crazy. We've owned Nvidia now for years. We've seen this massive rise in these companies like Nvidia and Micron and all that.

And to see that and it's it's even funny Austin because we've been saying for a long time to our listeners in the Rich Habits Network and here on the podcast that we believe Nvidia is underpriced and these numbers really show that in the current stock price.

And Jeff analyst Blaine Curtis titled his note the emperor strikes back and wrote that the 70% growth floor is 200 billion above the prior Blackwell plus Rubin framework Wall Street had built its models around.

He sees a clear path to $1 trillion of revenue in fiscal year 2029. And he kept his buy rating around that $300 price point.

But that price target is not where other Wall Street price targets are being shared right now. Evercore has a price target of $465. Their analyst is saying that Nvidia is one of the most compelling riskreward ratios in their entire coverage universe right now, trading at just 13 times 2027 earnings per share.

For context, Robert, the S&P 500 as an index on average right now is trading at 20 times. So Nvidia right now is cheaper than the S&P 500, which is bonkers.

There is one wrinkle. Gross margins are guided down to 72 to 73% for calendar year 2027 from the mid70s previously and Q3 guidance came in at 108 billion ahead of the 104.86 billion Wall Street wanted.

But Nvidia explicitly said it's assuming zero revenue from China in that number. Zero. And that's not a hidden risk. That's a stated one. And they're still guiding above what the street expected.

So, I think it's all good news and smooth sailing for Nvidia right now.

For me, I think this is the moment Nvidia stopped being the beat and guide conservatively story and started openly telling Wall Street its models are just too small. And so, when a company comes out and says, "Our floor is 70% growth, but our actual demand is closer to 100%."

That's just not corporate hedge fund speak. That's a company that has more customers than compute available.

And I pulled up Nvidia on wall street favorites.com this morning before today's pop and it was sitting at around $229 a share against a consensus analyst target of $365 a share.

Over 50% upside is already priced in by the street before this print.

Now bake it in at $465 price target from Evercore and a guidance number $200 billion above that old framework and you start to understand why the stock ripped double digits and we here at the Rich Habits podcast believe it's going to continue to grow in the coming years.

Yeah, for me a big takeaway is that for two years the AI trade has had to defend itself against when does the spending stop. Nvidia just answered that question with a number that no analyst on Wall Street was expecting.

That paired with $ 160 billion dollars of its own money guaranteeing that its customers can keep buying, which was sort of the circular financing stuff that was also talked about during the earnings call.

That's either the most confident guidance that we've heard from a company like ever in the history of the semiconductor industry or the clearest sign yet of how tightly Nvidia's fortunes are now wound around its own customers and the balance sheet and the circular financing.

You can either think of it as a good thing or a bad thing, but my take is that Nvidia is a monster.

And you know, Robert, we were talking about it a couple weeks ago. We saw Nvidia was trading at like 192 195 a share. And I was like, wait, Nvidia's priced right now as if it's like, you know, the cheapest name in like ever. Like what's going on? Why? Let's go put money.

And like I remember before we were filming, we're you know uh outlining the episode and I was like, let's go put 10 grand in Nvidia real quick. And so we both did and now it's at 230 a share or whatever.

It's just like the entire world is being rebuilt right now with AI in mind. Nvidia will be one of the largest beneficiaries of that infrastructure buildout over the next decade. Full stop.

And Nvidia's CFO just told us that that's going to be the case and is going to remain the case because the demand is just insatiable. Yeah, 100%. And I agree and I'm so glad we've been early and right about Nvidia.

And so many people, you know, are sitting there, when's the next Nvidia going to happen? When's this going to happen? And I'm sitting there thinking, you know, you and I are talking about it, how inexpensive it is as a as a target price right now.

Um, when we were talking about it at 196 and now it's at two something. Um, and I think it's just going to continue to grow.

And I love them as a company, you know, being kind of that granddaddy in the center of it all, you know, along with AMD and Micron and like Taiwan Semiconductor. and you mentioned ASML.

So, I think that collective right there is just a great way to be in this AI trade for the long term.

these GPUs are obviously Nvidia's GPUs right like or so like that's good for Nvidia