Nvidiaās earnings growth signals AI stocks are not in a bubble, says DBS
DBS CIO Hou Wey Fook points to Nvidia's roughly 17x forward earnings multiple and projected 70% revenue growth as evidence the AI rally rests on real profits
Every big rally eventually gets asked the same question at dinner parties: is this a bubble? For AI stocks, DBS Group has an answer, and it is a firm no.
On October 5, 2026, DBS Chief Investment Officer Hou Wey Fook argued that Nvidia’s earnings trajectory shows AI-related tech stocks have not drifted into bubble territory. His case rests on two figures: a valuation that looks modest and a growth forecast that looks anything but.
The numbers behind the call
Hou pointed to Nvidia’s 12-month forward price-to-earnings ratio, which he put at approximately 17x. That metric compares a company’s share price with the profits it is expected to earn over the next year.
The second pillar is growth. DBS projects Nvidia’s revenue will climb 70% in fiscal 2028, a period that begins in February 2027.
That forecast builds on results that were already enormous. In its fiscal second quarter, which ended in July 2026, Nvidia reported $96.2 billion in revenue, up 106% from a year earlier.
The data-center segment did most of the heavy lifting, contributing nearly $89 billion of that total. That is the business selling the chips and systems that train and run AI models for the world’s largest tech companies.
Nvidia’s management has also described a supply-constrained environment. Demand, in other words, is outrunning what the company can produce, which shapes how quickly future growth can actually show up on the income statement.
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Why the dot-com comparison keeps coming up
DBS draws a sharp line between that era and today. Hou contrasted the speculative nature of the pre-dot-com bubble with the earnings visibility AI companies currently offer.
The valuation gap is stark. Historical dot-com peak valuations ran at approximately 100x earnings, according to the research underpinning the DBS view.
Nvidia at roughly 17x forward earnings sits at a fraction of that level.
The barbell approach
Despite the bullish tone, DBS is not telling investors to go all in on chips. Hou recommends a barbell strategy for portfolios, with one side holding tech and AI growth stocks and the other holding defensive assets meant to hold steady when markets turn choppy.
What this means for investors
The roughly 17x forward P/E figure assumes Nvidia delivers on expected profits, and the 70% fiscal 2028 revenue projection is a DBS estimate, not a guarantee.
The supply-constrained backdrop signals demand strength, but it also means Nvidia’s growth depends partly on how fast manufacturing capacity can expand.
With the data-center unit generating nearly $89 billion of $96.2 billion in quarterly revenue, Nvidia’s fortunes are tightly tied to the spending plans of AI infrastructure buyers.