NVIDIA Corporation (NVDA): Our Calculation of Intrinsic Value
Thursday, November 27, 2025 · Johnny Hopkins
Each week we run a DCF (Discounted Cash Flow) model on a company from our watchlist. This week’s pick: NVIDIA Corporation (NVDA).
Profile
NVIDIA is the global leader in accelerated computing and the foundational hardware provider for the AI revolution. The company’s data-center segment, powered by its Hopper and upcoming Blackwell GPU platforms, drives the vast majority of revenue and profits as hyperscalers, enterprises, and AI startups continue scaling GPU clusters at unprecedented levels. NVIDIA’s ecosystem advantage—CUDA, software libraries, networking (Mellanox), and system-level integration—gives it a wide and durable competitive moat.
DCF Analysis
Inputs:
Discount Rate: 10%
Terminal Growth Rate: 3%
WACC: 10%
Forecasted Free Cash Flows (in billions USD)
2025: $80.0 → PV: $72.7
2026: $90.0 → PV: $74.3
2027: $100.0 → PV: $75.6
2028: $110.0 → PV: $75.3
2029: $120.0 → PV: $75.9
Total Present Value of FCFs = $373.8B
Terminal Value Calculation
Using perpetuity growth model with 2029 FCF = $120B:
TV = (120 × 1.03) ÷ (0.10 − 0.03) = $1,766B
Present Value of Terminal Value = $1,095B
Enterprise Value
Enterprise Value = 373.8B + 1,095B = $1,468.8B
Net Debt
Cash & Equivalents: $53.99B
Total Debt: $10.60B
Net Debt = –$43.4B (net cash)
Equity Value & Per-Share Value
Equity Value = 1,468.8B + 43.4B = $1,512.2B
Shares Outstanding: ~24.35B
Intrinsic Value per Share ≈ $62
Conclusion
DCF Value: $62
Current Price: ~$180
Margin of Safety: –66%
NVIDIA remains a world-class technology leader at the center of the AI buildout, powered by explosive revenue growth, unmatched pricing power, and industry-defining margins. Yet under conservative DCF assumptions, NVDA still trades well above intrinsic value—suggesting the market is already pricing in many years of hypergrowth, continued GPU dominance, and sustained multihundred-billion-dollar free cash flow.
For long-term investors, NVIDIA represents unparalleled quality and strategic importance. But at current prices, the stock offers little to no margin of safety, even while the underlying business continues to execute at an elite level.