Thinking about what to do with your NVIDIA shares? You’re not alone. Whether you’ve been riding the wave since the early days or just now looking at that ticker symbol, NVIDIA’s recent moves have certainly put it on everyone’s radar. Just this past week, the stock jumped 6.5%, bouncing back after a minor 1.5% stumble over the past month. For the year-to-date, that’s an impressive climb of 28.6%, while the longer view is almost jaw-dropping: up more than 1,200% over three years and over 1,300% across five years. Those numbers are hard to ignore, especially when the headlines keep NVIDIA front and center in the tech world.
Recent news about NVIDIA partnering with global players on massive datacenter investments underscores the company’s persistent growth narrative. At the same time, the company has faced new challenges, like scaling back some cloud services to focus on core strengths and seeing competition rise from major clients developing their own AI chips. The market is taking it all in stride, recalibrating its expectations and risk appetite in real time.
If you’re wondering if all that momentum is baked into today’s price or if there’s more room to grow, here’s a good starting point: by our scorecard, NVIDIA clocks a valuation score of 2 out of 6. That means it’s undervalued in only two key checks, something we’ll break down together, step by step. In the next section, I’ll walk you through these valuation methods to put today’s price in context, and stick around for a smarter way to assess true value at the end.
NVIDIA scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow (DCF) model works by forecasting a company’s future free cash flows and then discounting those back to their present value. This gives investors an estimate of what the business is really worth today, based on its expected ability to generate cash in the future.
For NVIDIA, the current Free Cash Flow is $72.28 Billion. Analysts forecast this number to grow rapidly over the upcoming years, reaching a projected $249.21 Billion by 2030. Estimates are solid for the next five years; after that, Simply Wall St algorithmically extends the projections further, reflecting optimism around NVIDIA’s continuing innovation and market expansion.
Using these projections and discounting them to today’s dollars, the DCF model calculates an intrinsic value of $143.89 per share. This valuation suggests NVIDIA shares are around 23.6% overvalued compared to the current stock price.
