Wolfe Research analyst Chris Caso notified clients on Wednesday that Nvidia's valuation has regained appeal following a period of share-price consolidation, arguing the company's long-term earnings path remains intact.
Caso emphasized that Wolfe's favorable view of Nvidia is fundamental in nature, writing that it "is based on our view of fundamentals, and not about seasonal trading trends." The firm did note a recurring pattern in Nvidia's price behavior, observing that "over the past 3 years, the majority of NVDA's performance occurred in the Jan-Aug timeframe," and said that this seasonal pattern "perhaps help[s] to explain the stock's underperformance over the last 2 quarters."
Beyond seasonal dynamics, Wolfe maintained that core fundamentals are strengthening. Citing the firm's broader outlook on artificial intelligence demand, the note described "a clear path to upside in estimates for CY26 and CY27, driven partially by continued unit growth, but especially due to pricing tailwinds as Rubin and Rubin Ultra ramp."
Those drivers underpin Wolfe's elevated earnings projection. Caso said the combined impact of unit expansion and pricing will lift Wolfe's FY28 (CY27) earnings estimate "to ~$11.50, nearly $1.50 above consensus." Based on that EPS outlook, Wolfe calculated that the company's valuation "bring[s] NVDA's multiple to a very attractive 16x FY28 EPS," a level the firm views as favorable as Nvidia's next-generation products scale.
The note reiterated Wolfe's recent move to include Nvidia on its internal "Alpha List" last month, positioning the firm to emphasize the name within its highest-conviction ideas. Casey's comments frame the current share-price consolidation as an entry point tied to firming fundamentals rather than a shift in the underlying secular drivers Wolfe sees in AI-related demand and pricing.
For investors assessing exposure to AI hardware and semiconductor leaders, Wolfe's view highlights two levers: continued unit growth and the potential for improved pricing power as new product variants ramp into the market. The firm attributes a particularly meaningful role to pricing tailwinds associated with Rubin and Rubin Ultra in delivering upside to consensus estimates for calendar 2026 and 2027.
Note: This report summarizes Wolfe Research's client note as relayed by the analyst and focuses on the firm's earnings and valuation outlook for Nvidia.