Nvidia (NVDA -2.01%) is the largest company in the world by market value, but that isn't stopping it from being the best stock to own in the world. It recently reported results for the second quarter of fiscal 2027 (ended July 26), and they couldn't have been any better. However, what Nvidia reported was overshadowed by its chief financial officer releasing estimates for fiscal year 2028, and the bombshell that she dropped was a doozy.
It all has to do with Nvidia's projected growth next year, and if it comes true, there isn't a better stock to buy than Nvidia.
Image source: Nvidia.
Nvidia's dominance cannot be understated
During its Q1 earnings announcement, Nvidia predicted it would record $91 billion in Q2 revenue. Nvidia blew past that and delivered $96 billion in the quarter, a 106% increase year-over-year pace. For a $5 trillion company to double its revenue year over year is remarkable, but that's exactly what Nvidia did.
Next quarter, management expects revenue of about $108 billion. Considering its recent track record of underpromising and overdelivering, this could be well north of $110 billion. For comparison, here's how much the next three largest companies generated in revenue during their latest quarters.
AAPL Revenue (Quarterly) data by YCharts
Nvidia is poised to catch and surpass Apple (AAPL -1.17%) and Alphabet (GOOG +0.02%) (GOOGL -0.03%) momentarily, and it has already left Microsoft (MSFT -1.15%) behind. The reason Nvidia is larger in market value than these three is that its profit margin is wider, which allows it to produce higher net income.
The results out of Nvidia are incredible, but there's a lot more of that to come.
Next year's results are slated to continue this incredible growth trend
During Nvidia's Q2 conference call, CFO Colette Kress announced that the preliminary estimate for Nvidia's fiscal year 2028 (ending January 2028) would be for 70% revenue growth. The amazing thing is that analysts on average only expected about 44% growth next year. This is clearly a longer-term trend than most investor realize, and the market hasn't priced Nvidia's stock appropriately based on its stellar growth.
For this year, Wall Street analysts expect nearly $400 billion in revenue. With Nvidia's track record of consistently beating estimates, the actual figure will end up well north of $400 billion. If Nvidia's revenue grows 70% from that figure, that implies revenue of about $680 billion. Nvidia's net profit margin has averaged in the mid-50% range, and if it can convert its projected $680 billion in revenue into profit, that would result in $374 billion in net income.
NASDAQ: NVDA
Key Data Points
If Nvidia is assigned a market-average premium (the S&P 500 (^GSPC -0.58%) trades at about 26 times trailing earnings), that would value the stock at $9.7 trillion -- nearly double its current level of $5.5 trillion.
That's right, Nvidia just told investors that it believes its net income will grow enough for the stock to almost double between now and the end of 2027. That's more than investors could ever dream of, and I think it makes Nvidia the best buy in the entire stock market, especially because 26 times earnings is a pretty modest price tag for a company growing as fast and as dominant as Nvidia.
Nvidia is a no-brainer buy right now, and investors shouldn't be shy about loading up on shares.
