What is NVDA's Intrinsic value?

NVIDIA Corp (NVDA) Intrinsic Value Analysis

Executive Summary

As of June 8, 2026, NVIDIA Corp's estimated intrinsic value ranges from $29.83 to $351.27 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $351.27 +71.3%
Discounted Cash Flow (5Y) $210.09 +2.4%
Dividend Discount Model (Multi-Stage) $187.61 -8.5%
Dividend Discount Model (Stable) $107.43 -47.6%
Earnings Power Value $29.83 -85.5%

Is NVIDIA Corp (NVDA) undervalued or overvalued?

With the current market price at $205.10, 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 1.2
Cost of equity 8.7% 11.6%
Cost of debt 4.8% 61.7%
Tax rate 9.0% 12.5%
Debt/Equity ratio 0 0
After-tax WACC 8.7% 11.7%

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: 10.2% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $215,938 (FY01-2026) to $1,571,825 (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 $210 $5,083,816M 78.5%
10-Year Growth $351 $8,503,140M 65.4%
5-Year EBITDA $380 $9,204,806M 88.1%
10-Year EBITDA $567 $13,730,148M 78.6%

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: 0.6%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.1%
  • Long-term growth rate: 4.0%
  • Fair value: $187.61 (-8.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.6% (Low) to 8.7% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $54 to $161
  • Selected fair value: $107.43 (-47.6% 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 $71,390M
Discount Rate (WACC) 11.7% - 8.7%
Enterprise Value $612,462M - $823,078M
Net Debt $(4,767)M
Equity Value $617,229M - $827,845M
Outstanding Shares 24,220M
Fair Value $25 - $34
Selected Fair Value $29.83

Key Financial Metrics

Metric Value
Market Capitalization $4967630M
Enterprise Value $4962864M
Trailing P/E 31.12
Forward P/E 28.67
Trailing EV/EBITDA 26.35
Current Dividend Yield 1.96%
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% $105.38
Discounted Cash Flow (5Y) 25% $52.52
Dividend Discount Model (Multi-Stage) 20% $37.52
Dividend Discount Model (Stable) 15% $16.11
Earnings Power Value 10% $2.98
Weighted Average 100% $214.52

Investment Conclusion

Based on our comprehensive valuation analysis, NVIDIA Corp's intrinsic value is $214.52, which is approximately 4.6% above the current market price of $205.10.

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.