Key facts
- DBS Group argues Nvidia's valuation and growth forecast indicate the AI stock rally is not a bubble.
- Nvidia's 12-month forward price-to-earnings ratio is approximately 17x, according to DBS.
- DBS projects Nvidia's revenue will increase 70% in fiscal 2028.
- Nvidia reported $96.2 billion in revenue for its fiscal second quarter ended July 2026.
- Nvidia's fiscal second-quarter revenue was up 106% from a year earlier.
- The data-center segment accounted for nearly $89 billion of Nvidia's fiscal second-quarter revenue.
DBS Group has asserted that the current rally in AI-related technology stocks is not a bubble, citing Nvidia's financial performance and future projections. Hou Wey Fook, DBS Chief Investment Officer, stated on October 5, 2026, that Nvidia's earnings trajectory supports this view.
Hou highlighted Nvidia's 12-month forward price-to-earnings ratio at approximately 17x, a figure he considers modest. He also pointed to DBS's projection that Nvidia's revenue will increase by 70% in fiscal year 2028, which begins in February 2027. These forecasts are built upon substantial past results, with Nvidia reporting $96.2 billion in revenue for its fiscal second quarter ended July 2026, marking a 106% increase from the previous year. The company's data-center segment was the primary driver, contributing nearly $89 billion to this total.
Nvidia's management has indicated that demand for its products outstrips its current production capacity. DBS contrasts the current situation with the dot-com bubble era, where valuations reached approximately 100x earnings, significantly higher than Nvidia's current 17x forward earnings. Despite the positive outlook on AI stocks, DBS recommends a barbell investment strategy, balancing tech and AI growth stocks with defensive assets.