NVIDIA Corporation (NVDA) Stock Valuation — PE Analysis
Semiconductors · NASDAQ
Current Price
$236.97
PE Ratio (TTM)
29.8x
Intrinsic Value
$417.85
+43.3% margin of safety
COMPETITIVE MOAT
↑AI Compute Dominance
NVIDIA's CUDA ecosystem and specialized hardware create significant switching costs for AI developers. This entrenched platform is essential for training and deploying advanced AI models.
↑Data Center Revenue Growth
The rapid increase in AI agent token consumption drives massive demand for NVIDIA's data center GPUs. This scale advantage allows for continued investment in R&D and manufacturing capacity.
↑Deep AI Software Integration
NVIDIA's comprehensive software stack, from drivers to AI frameworks, is deeply integrated with its hardware. This creates a powerful, difficult-to-replicate ecosystem for AI workloads.
INVESTMENT RISKS
↓Geopolitical Supply Chain Risks
Reliance on global manufacturing, particularly in Asia, exposes NVIDIA to potential disruptions from trade disputes or political instability. This could impact production and delivery.
↓Rapid Technological Obsolescence
The pace of AI innovation is extremely fast. A breakthrough by a competitor could render NVIDIA's current hardware or software less competitive, requiring significant R&D investment.
↓Customer Concentration in Cloud
A significant portion of NVIDIA's revenue comes from a few large cloud providers. Any shift in their purchasing strategies or a move towards in-house chip development poses a risk.
Base case
NVDA base case PE valuation
At a current price of $236.97, the base case PE valuation puts NVDA fair value near $417.85 per share. That figure assumes 20.0% yearly earnings growth, a target PE multiple of 30x, and a 10% discount rate.
Intrinsic Value
$417.85
Margin of safety
+43.3%
Expected annual return
+12.0%
Base case assumptions: 20.0% annual earnings growth, 30x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-07.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the NVDA PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for NVIDIA Corporation respond.
Open PE Calculator for NVDACompany Overview
NVIDIA Corporation stands as a prominent provider of advanced graphics, computational, and networking solutions, operating across the United States, Taiwan, China, and numerous international markets. Its Graphics division encompasses GeForce GPUs, central to PC gaming and personal computing experiences, along with the GeForce NOW cloud gaming service and its supporting infrastructure, as well as dedicated solutions for various gaming platforms. For professional visualization, it provides Quadro and NVIDIA RTX GPUs for enterprise workstations, further offering vGPU software designed for cloud-centric visual and virtual computing, automotive platforms for in-vehicle infotainment, and the Omniverse software suite, facilitating 3D design and virtual world creation. The Compute & Networking segment is a cornerstone for AI, high-performance computing (HPC), and accelerated data center platforms. It integrates Mellanox networking and interconnect solutions, delivers automotive AI Cockpit technologies, fosters autonomous driving development through strategic agreements, and offers comprehensive autonomous vehicle solutions. This segment also manufactures cryptocurrency mining processors, supplies Jetson platforms for robotics and other embedded applications, and offers enterprise AI software, including NVIDIA AI Enterprise. These diverse offerings find widespread application across the gaming, professional visualization, data center, and automotive sectors. NVIDIA distributes its portfolio through a broad ecosystem, engaging original equipment and device manufacturers, system integrators, add-in board makers, retail channels, software vendors, internet and cloud service providers, automotive companies (both manufacturers and tier-1 suppliers), mapping firms, nascent technology ventures, and other industry stakeholders. A notable strategic partnership exists with Kroger Co. Founded in 1993, NVIDIA Corporation maintains its corporate headquarters in Santa Clara, California.
Financial Metrics — NVDA PE Stock Valuation Data
PE Ratio (TTM)
29.8x
PEG Ratio
0.24
Earnings Yield
3.33%
ROE (TTM)
110.1%
Revenue/Share (TTM)
$12.52
Dividend Yield
0.22%
Debt/Equity
0.17x
Frequently Asked Questions
What is the PE ratio of NVDA?
The trailing twelve-month PE ratio of NVDA reflects how much investors pay per dollar of NVIDIA Corporation's earnings. This metric is most useful when compared to Semiconductors peers and the company's own historical range.
Is NVDA overvalued based on PE ratio?
NVDA's PE of 29.8x combined with a PEG ratio of 0.24 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Semiconductors, a DCF analysis may be more appropriate.
How do I value NVDA stock using PE ratio?
To value NVIDIA Corporation using PE: (1) Compare the current PE (29.8x) against the Semiconductors median to assess relative pricing, (2) check the PEG ratio (0.24) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of NVDA?
NVDA's PEG ratio is 0.24, calculated by dividing the PE ratio (29.8x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for NVDA stock valuation?
PE ratio gives a quick relative read — how NVDA is priced versus Semiconductors peers. DCF provides an absolute value based on projected free cash flows. For NVDA, with a strong ROE of 110.1%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See NVDA DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value NVDA with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.