NVIDIA Corporation (NVDA) Stock Valuation — PE Analysis
Semiconductors · NASDAQ
Current Price
$194.89
PE Ratio (TTM)
29.7x
Intrinsic Value
$347.5
+43.9% margin of safety
COMPETITIVE MOAT
↑Dominant GPU Market Share
Nvidia's near-monopoly in high-performance GPUs for AI training and inference creates a significant barrier to entry. This dominance is difficult for competitors to overcome quickly.
↑CUDA Ecosystem Lock-in
The extensive CUDA software platform and developer community foster deep integration and switching costs. This proprietary ecosystem makes it challenging for alternatives to gain traction.
↑AI Infrastructure Leadership
Nvidia's early and sustained investment in AI hardware and software positions it as the de facto standard. This leadership attracts significant customer loyalty and R&D investment.
INVESTMENT RISKS
↓Customer Capital Expenditure Dependence
Nvidia's revenue is heavily reliant on massive capital expenditures by a few large tech companies. A slowdown in their spending could significantly impact Nvidia's growth.
↓Emergence of Custom AI Chips
Companies like OpenAI developing their own AI chips, potentially with partners like Broadcom, signal a move towards reducing reliance on Nvidia. This could erode market share over time.
↓Intensifying Competition
While Nvidia's moat is strong, the immense profitability of AI is attracting significant competition. Competitors are investing heavily to challenge Nvidia's dominance.
Base case
NVDA base case PE valuation
A base case PE valuation for NVDA estimates a fair value of about $347.5 per share, against a current price of $194.89. The model assumes 20.0% annual earnings growth, a 30x target PE multiple, and a 10% discount rate.
Intrinsic Value
$347.5
Margin of safety
+43.9%
Expected annual return
+12.3%
Base case assumptions: 20.0% annual earnings growth, 30x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-29.
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)
29.7x
PEG Ratio
0.27
Earnings Yield
3.37%
ROE (TTM)
111.7%
Revenue/Share (TTM)
$10.44
Dividend Yield
0.14%
Debt/Equity
0.07x
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 29.7x combined with a PEG ratio of 0.27 provides a growth-adjusted perspective. A PEG below 1.0 suggests NVDA may be undervalued relative to its 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 (29.7x) against the Semiconductors median to assess relative pricing, (2) check the PEG ratio (0.27) 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 0.27, calculated by dividing the PE ratio (29.7x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. 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 111.7%, 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 2026-06-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.