NVIDIA (NVDA), Is the $200 collapse a buying opportunity?...Expert: "Even conservatively, a 50% surge"

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NVIDIA (NVDA) stock price has fallen below $200 again. However, a bullish argument emerged that it is possible for the stock to break $300 if Wall Street's 2027 revenue growth forecast and 2028 fiscal year earnings estimates are applied. Contrary to the stock price, which has fallen about 16% from its peak, AI infrastructure spending is projected to exceed $1 trillion by 2027, leading to the argument that the recent sell-off should be seen as a buying opportunity.

According to financial media Yahoo Finance on July 6 (local time), NVIDIA fell below $200 due to intense selling pressure for several days. The stock price dropped about 16% from its peak, and its year-to-date gain was only 6%. Keithen Drury, a contributor to The Motley Fool, predicted that despite the recent decline, NVIDIA's stock could surge by over 50% to reach $300.

The main concern that triggered the recent sell-off in AI-related stocks is the fear of overinvestment by large cloud companies. However, Drury pointed out that large cloud companies have repeatedly emphasized that the risk of underinvestment is much greater than overinvestment. NVIDIA management, in a recent quarterly earnings announcement, projected that large cloud companies' spending would exceed $1 trillion by 2027, up from an estimated $650 billion in 2026.

Wall Street's growth outlook also supports NVIDIA's performance expansion. Analysts expect NVIDIA's growth rate to be 82% for the remainder of this year and 41% in 2027. The average estimated earnings per share (EPS) for fiscal year 2028 is $12.76. Drury assessed the $12.76 estimate as conservative, citing that NVIDIA's growth rate has consistently exceeded Wall Street's past expectations.

The $300 target price was also calculated from this earnings forecast. Applying a price-to-earnings (P/E) ratio of 25x to the estimated EPS of $12.76 for fiscal year 2028 yields an estimated stock price of $319. Drury predicted that NVIDIA could reach $300 by the end of 2027. This analysis suggests a potential upside of over 50% for about 18 months, based on a stock price below $200.

Drury also noted the possibility that NVIDIA management has a significant understanding of customer order information for the next year. Based on the forecast that AI infrastructure spending will exceed $1 trillion by 2027, Wall Street's 41% growth expectation, and the estimated EPS of $12.76 for fiscal year 2028, he evaluated the recent sell-off as a buying opportunity for NVIDIA stock.

[Article Key Summary]

-NVIDIA's stock price fell below $200, dropping about 16% from its peak, and its year-to-date gain was only 6%.

-AI infrastructure spending by large cloud companies is projected to increase from $650 billion in 2026 to over $1 trillion in 2027.

-Applying a price-to-earnings ratio of 25x to the estimated earnings per share of $12.76 for fiscal year 2028 calculates NVIDIA's estimated stock price at $319.

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