NVIDIA (NVDA) has just reshaped its leadership and partnerships, bringing in longtime Microsoft executive Nicholas Parker to run worldwide field operations while tightening ties with Palantir, LG Group, Verkada and other AI focused partners.

NVIDIA’s latest partnerships and leadership changes come as the stock has eased off recent highs, with a 30 day share price return of 5.01% and a 1 day decline of 1.39%. Longer term performance remains strong, highlighted by a 1 year total shareholder return of 22.44% and a very large 5 year total shareholder return near 9x.

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After a long run that has left NVIDIA sitting on a market value near US$4.7t, the stock now trades with a value score of 4 and at a discount to several intrinsic and analyst targets. This raises a key question for investors: is there still upside left here, or is the market already pricing in the next leg of growth?

Most Popular Narrative: 42.7% Undervalued

According to one of the most followed NVIDIA narratives, a fair value of $339.90 sits well above the last close at $194.83, framing the stock as meaningfully undervalued by that lens.

Nvidia will hit $400b annual revenue in 5 years time. ~90% of revenue will come from data centre customers. This equates to $90b per quarter, or equivalent to 30,000 Blackwell racks (at approximately $3m per rack).

At 150kW per Blackwell rack, data centres will need to expand at 4.5gW per quarter to keep up. Global data centres are expected to increase wattage at 15% per year, which in 5 years time will be close to the 18gW annual increase required. AI (GPU) data centres have higher yields than other data centres, so some amount of use conversion is also expected.

Want to see how this NVIDIA narrative gets from today’s revenue base to that target? The entire case leans on data center mix, margins and future profit multiples. Curious which assumptions really carry the fair value jump from $194.83 to $339.90? The full breakdown lays out every step.

Result: Fair Value of $339.90 (UNDERVALUED)

However, this NVIDIA narrative could be derailed if GPU competition intensifies or if AI data center spending slows faster than the fair value model assumes.

Next Steps

With NVIDIA attracting both optimism and caution, it makes sense to look at the full data set and decide where you stand sooner rather than later, starting with the 4 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.