As of May 22, 2025, NVIDIA Corp's estimated intrinsic value ranges from $15.64 to $178.88 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $178.88 | +35.7% |
| Discounted Cash Flow (5Y) | $108.54 | -17.7% |
| Dividend Discount Model (Multi-Stage) | $93.91 | -28.7% |
| Dividend Discount Model (Stable) | $52.68 | -60.0% |
| Earnings Power Value | $15.64 | -88.1% |
Is NVIDIA Corp (NVDA) undervalued or overvalued?
With the current market price at $131.80, the stock appears to be moderately overvalued.
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:
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 | 0.99 | 1.09 |
| Cost of equity | 8.4% | 10.9% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 3.4% | 7.5% |
| Debt/Equity ratio | 0 | 0 |
| After-tax WACC | 8.4% | 10.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $109 | $2,648,182M | 79.2% |
| 10-Year Growth | $179 | $4,364,458M | 67.0% |
| 5-Year EBITDA | $121 | $2,949,408M | 81.3% |
| 10-Year EBITDA | $190 | $4,639,840M | 69.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $36,223M |
| Discount Rate (WACC) | 10.9% - 8.4% |
| Enterprise Value | $331,374M - $431,779M |
| Net Debt | $(126)M |
| Equity Value | $331,500M - $431,905M |
| Outstanding Shares | 24,400M |
| Fair Value | $14 - $18 |
| Selected Fair Value | $15.64 |
| Metric | Value |
|---|---|
| Market Capitalization | $3215920M |
| Enterprise Value | $3215794M |
| Trailing P/E | 44.13 |
| Forward P/E | 37.46 |
| Trailing EV/EBITDA | 17.55 |
| Current Dividend Yield | 2.52% |
| Dividend Growth Rate (5Y) | 20.54% |
| Debt-to-Equity Ratio | 0.00 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $53.66 |
| Discounted Cash Flow (5Y) | 25% | $27.13 |
| Dividend Discount Model (Multi-Stage) | 20% | $18.78 |
| Dividend Discount Model (Stable) | 15% | $7.90 |
| Earnings Power Value | 10% | $1.56 |
| Weighted Average | 100% | $109.04 |
Based on our comprehensive valuation analysis, NVIDIA Corp's weighted average intrinsic value is $109.04, which is approximately 17.3% below the current market price of $131.80.
Key investment considerations:
Given these factors, we believe NVIDIA Corp is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.