Nvidia (NVDA 0.68%) has been a big winner on the stock market in recent years, primarily driven by the company's dominance in the market for artificial intelligence (AI) chips.
An investment of $1,000 in this semiconductor stock three years ago is now worth just under $8,601. Nvidia stock is now trading around $183 a share, and it is worth noting that its flat share price performance over the past six months is lower than the 39% jump in the PHLX Semiconductor Sector index over the same period.
Does this mean Nvidia stock has run its course and it is now time to book profits, or will it regain its mojo and head toward $300 a share? Let's find out.
Image source: Nvidia.
Nvidia's earnings growth potential suggests that it is built for more gains
Nvidia will release its fourth-quarter fiscal 2026 results (for the year ended Jan. 25, 2026) on Feb. 25. The company's earnings for the first nine months of the fiscal year increased by 50% from the prior-year period. According to consensus estimates, Nvidia will end the fiscal year with earnings of $4.69 per share, an increase of almost 57% from the previous year.
NASDAQ: NVDA
Key Data Points
What's worth noting is that Nvidia's margins were under pressure in the first half of fiscal 2026 due to the ramp-up in production of its Blackwell processors. That's because Nvidia was focused on boosting the output of the Blackwell chips to meet healthy end-market demand, noting that it will have opportunities to improve the cost structure once production hits full swing.
Nvidia management said it believes it will be able to keep gross margin in the mid-70% range in fiscal 2027, an improvement over the 71% to 73% range it saw in the first three months of fiscal 2026. The potential improvement in margins in the new fiscal year, which is now underway, along with a sizable backlog that's reportedly expanding due to the inflow of more orders, should help Nvidia deliver stronger earnings growth in fiscal 2027.
That's probably why analysts expect a 65% increase in earnings in the new fiscal year, followed by a 28% jump in the next one.
Data by YCharts.
Nvidia, however, could exceed analysts' expectations next year as well. That's because its next-generation Vera Rubin processors, which are poised to go on sale later this year, are likely to attract significant customer interest thanks to the exponential performance improvements they are expected to deliver over Blackwell.
A $300 stock price doesn't look like a long shot
The chart above shows that Nvidia's earnings in fiscal 2028 are expected to reach $9.90 per share. If Nvidia trades at even 30 times earnings at that time (a discount to the tech-laden Nasdaq-100 index's earnings multiple of 31.5), its stock price could get close to $300. However, Nvidia could easily exceed that mark, since its earnings are likely to increase faster than the 28% jump analysts are estimating next year.
That's why investors can still consider buying Nvidia stock, since it has room for more upside.
