Many children who are highly intelligent may not speak fluently; however, people have different definitions of "fluent."  By age 7, you (as well as others) should definitely understand the words your son says when he speaks.

If he is babbling or slurring words, it is highly recommended that you seek out a speech-language pathologist (SLP) to have his speech, language, and hearing screened.  A screening can let you know if a more comprehensive evaluation is necessary.  

Check with your school to have him seen by an SLP.  It is vitally important to have him seen ASAP, not just because doing so early in the school year can help him get off to a good start, but also to give you peace of mind.