NVIDIA stock: recent performance snapshot

NVIDIA (NVDA) has drawn investor attention after a recent period of mixed returns, with the share price near $182.81 and performance varying across the past week, month, past 3 months, and year.

With annual revenue of about $187.1b and net income around $99.2b, NVIDIA operates across data center, gaming, automotive, and AI focused software, giving investors several business segments to assess.

Recent trading has cooled, with the 30 day share price return showing a 2.27% decline and the year to date share price return showing a 3.20% decline. This contrasts with a strong 1 year total shareholder return of 31.70% and a very large 3 year total shareholder return near 7x, suggesting momentum has recently faded even though longer term holders have still seen substantial gains.

If NVIDIA’s recent weakness has you looking across the broader AI theme, this is a good moment to scan 34 AI infrastructure stocks as a fresh set of ideas to research next.

With the stock sliding recently but still showing very strong multi year returns, the real question now is whether NVIDIA is undervalued after this pullback or if the market has already priced in much of its future growth.

Most Popular Narrative: 7.4% Overvalued

At a last close of $182.81, the most followed narrative for NVIDIA, according to KiwiInvest, pegs fair value at $170.26, leaving the shares above that narrative estimate and asking you to judge whether the growth case justifies the gap.

Nvidia will hit $400b annual revenue in 5 years time. ~90% of revenue will come from data centre customers. This equates to $90b / quarter, or equivalent to 30,000 Blackwell racks (at ~$3m per rack). At 150kW per Blackwell rack, data centres will need to expand at 4.5gW/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.

Curious what has to happen in NVIDIA’s income statement for that price tag to make sense, according to KiwiInvest? The narrative leans heavily on aggressive revenue compounding, rising profitability, and a premium future earnings multiple that assumes NVIDIA keeps its edge in data center AI. Want to see how those moving parts add up to that fair value?

Result: Fair Value of $170.26 (OVERVALUED)

However, this depends on Nvidia maintaining its GPU and AI software edge, and on power constraints or tougher regulation not slowing data center build outs.

Another take: what the multiples are saying

KiwiInvest’s fair value of $170.26 suggests NVIDIA looks overvalued, but the market is telling a more mixed story. At a P/E of 44.8x, the shares are cheaper than peers at 87.7x and below a fair ratio of 57x, yet still slightly richer than the US Semiconductor industry at 43.4x. Is that gap a margin of safety or a premium you are paying for quality and growth expectations?

Build Your Own NVIDIA Narrative

If you see the numbers differently or want to stress test your own assumptions, you can build a personalised NVIDIA thesis in just a few minutes, starting with Do it your way.

A great starting point for your NVIDIA research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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.