Nvidia ( NVDA +2.19% ) is set to report second-quarter earnings on Wednesday, and the biggest question may be why the stock's once-blockbuster growth has slowed.
Nvidia soared through the first three years of the AI boom, but more recently, its returns have been just average, as the stock is up 19% over the last year, matching the S&P 500 .
The chip stock's performance doesn't reflect the reacceleration in the business. It's set to report its fourth straight quarter of improving revenue growth, as analysts are expecting revenue to grow 97.2% to $92.2 billion in its second-quarter earnings report.
With that kind of growth, Nvidia stock has gotten significantly cheaper over the last year as earnings have soared while the share price has remained relatively flat. Based on the analyst earnings-per-share consensus of $9.02 for fiscal 2027, which ends in Jan. 2027, the stock is trading at just 23.6x, putting it roughly even with the S&P 500.
Taking Nvidia's forecasts out further, the stock only looks more attractive.
Why Nvidia looks set to get cheaper on Wednesday
For a company growing as fast as Nvidia, forward valuation metrics are more useful than trailing ones. While you might think that Nvidia earnings have been hard to predict, quarterly results have generally been close to Wall Street expectations and in line with Nvidia's own guidance. On a longer-term basis, Wall Street has consistently underestimated the company's growth.
As the chart below shows, through much of 2025, analysts estimated Nvidia's fiscal 2027 EPS to be around $6, though it now appears to be headed for at least $9.
NVDA EPS Estimates for Next Fiscal Year data by YCharts
But there's another thing worth noting in that chart. Nvidia's forward estimates have consistently moved higher over the last year following its earnings reports.
Here is the chart presented again with earnings dates annotated.
As you can see, the last four earnings reports have come with noticeable increases in consensus forward estimates. That's important because it doesn't just reflect higher forecasts for the current year, which includes the quarter that was just reported, but for future years. You'll also notice that Nvidia's forward estimates have trended higher nearly consistently since the start of 2024, except for a brief period in the first half of last year.
Based on that trend and the recent momentum around the Rubin platform, including SpaceX announcing that it would exclusively build on Nvidia, Nvidia's forward estimates look like a good bet to move higher after Wednesday's earnings report.
If that happens, it will make the stock even cheaper on a forward basis, making it more attractive regardless of which direction it moves after the report.