What is NVDA's Intrinsic value?

NVIDIA Corp (NVDA) Intrinsic Value Analysis

Executive Summary

As of April 4, 2026, NVIDIA Corp's estimated intrinsic value ranges from $30.08 to $275.89 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $275.89 +55.5%
Discounted Cash Flow (5Y) $159.91 -9.9%
Dividend Discount Model (Multi-Stage) $142.32 -19.8%
Dividend Discount Model (Stable) $80.82 -54.4%
Earnings Power Value $30.08 -83.0%

Is NVIDIA Corp (NVDA) undervalued or overvalued?

With the current market price at $177.39, the stock appears to be fairly valued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate NVIDIA Corp's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.05 1.17
Cost of equity 8.7% 11.4%
Cost of debt 4.9% 61.7%
Tax rate 9.0% 12.5%
Debt/Equity ratio 0 0
After-tax WACC 8.7% 11.5%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 10.1% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $215,938 (FY01-2026) to $1,252,831 (FY01-2036)
  • Net profit margin expansion from 56% to 64%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $160 $3,883,627M 77.9%
10-Year Growth $276 $6,701,950M 65.9%
5-Year EBITDA $250 $6,075,708M 85.9%
10-Year EBITDA $392 $9,533,458M 76.0%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.8%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.0%
  • Long-term growth rate: 4.0%
  • Fair value: $142.32 (-19.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.4% (Low) to 8.7% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $41 to $120
  • Selected fair value: $80.82 (-54.4% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $72,079M
Discount Rate (WACC) 11.5% - 8.7%
Enterprise Value $627,424M - $830,158M
Net Debt $(2,137)M
Equity Value $629,561M - $832,295M
Outstanding Shares 24,300M
Fair Value $26 - $34
Selected Fair Value $30.08

Key Financial Metrics

Metric Value
Market Capitalization $4310577M
Enterprise Value $4308440M
Trailing P/E 35.90
Forward P/E 32.32
Trailing EV/EBITDA 22.55
Current Dividend Yield 2.26%
Dividend Growth Rate (5Y) 25.00%
Debt-to-Equity Ratio 0.00

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $82.77
Discounted Cash Flow (5Y) 25% $39.98
Dividend Discount Model (Multi-Stage) 20% $28.46
Dividend Discount Model (Stable) 15% $12.12
Earnings Power Value 10% $3.01
Weighted Average 100% $166.34

Investment Conclusion

Based on our comprehensive valuation analysis, NVIDIA Corp's intrinsic value is $166.34, which is approximately 6.2% below the current market price of $177.39.

Key investment considerations:

  • Strong projected earnings growth (56% to 64% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.00)
  • Historical dividend growth of 25.00%

Given these factors, we believe NVIDIA Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.