Nvidia Shares Now Look Cheap (Rating Upgrade)


  • We use the discounted cash flow method to evaluate Nvidia Corporation’s intrinsic value, considering all firm-specific variables.
  • The DCF method helps determine if a company is undervalued or overvalued on an absolute basis, unlike relative valuation metrics, which can be flawed.
  • Nvidia’s latest earnings report reveals strong growth in its Data Center business, leading in large part to a new, higher fair value estimate of $606 per share.
  • We were wrong about Nvidia stock in November 2022, but we’re now constructive on shares given the AI boom, which drives the big delta in our fair value estimate change.

Chipmaker NVIDIA"s Valuation Passes 1 Trillion In Market Cap

Justin Sullivan

By Brian Nelson, CFA.

The discounted cash flow (DCF) method is unique in that it uses an absolute approach to valuation. What does that mean? Well, instead of using relative valuation metrics, the DCF models the exact firm one is looking to value, taking into

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson's household owns shares in HON, DIS, HAS, NKE, DIA, RSP, QQQ, VOO, and SCHG. Some of the securities written about in this article may be included in Valuentum's simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies. This article and any links within are for informational and educational purposes only and should not be considered a solicitation to buy or sell any security. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this article and accepts no liability for how readers may choose to utilize the content. Assumptions, opinions, and estimates are based on our judgment as of the date of the article and are subject to change without notice.

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