$NVDA posted another phenomenal earnings report... it's hard to comprehend 262% revenue growth, 462% earnings growth and 76% net income margins.
BTW, analysts are expecting $NVDA to generate $350B of profits over the next 4 years.
I'm not even sure how to value $NVDA but here's my best shot...
For the next 4 years, analysts are expecting $NVDA to grow revenues at a 35% CAGR and EPS at a 37% CAGR.
Giving $NVDA a 1.3x PEG ratio (which is less than the average megacap tech company), that would imply a fair NTM P/E ratio of 48x
Coming into Q1 earnings the analysts were expecting $23.50 of EPS in FY2025, I think $NVDA does at least $25.50 in FY2025 so the stock is currently trading at 38x FY2025 EPS (not including cash).
So, even though $NVDA is up 100% YTD, one could argue the stock is still undervalued but I certainly understand the concerns about not knowing when demand will start to taper off and when other semi companies or the megacaps will develop their own AI chips. Right now this is a one-horse race, nobody else is even on the track yet so it's hard to figure out who might challenge $NVDA in the future.