NVIDIA’s long-term growth trajectory continues to shine, powered by its leadership in AI, data centers, and next-generation computing. Based on a forward earnings model calibrated to the 10-year U.S. Treasury yield, the stock’s fundamental fair value stands at $188 per share. Applying a prudent 20% discount for interest rate risk and market uncertainty yields a conservative intrinsic value of $150.

Yet, as of today, NVIDIA trades near $235—a level where its earnings yield falls below that of the 10-year Treasury. This inversion suggests the market may be entering an early “bubble wave”, where sentiment and momentum temporarily override fundamentals.

Looking ahead one year, if current exuberance persists and liquidity remains abundant, NVIDIA could climb further—potentially reaching $282 to $353 in a full speculative bubble, as implied by real-yield-adjusted historical extremes. While such a move is not impossible in the short term, it would imply stretched valuations with minimal margin of safety and heightened sensitivity to any shift in Fed policy, earnings deceleration, or risk-off sentiment.

Conclusion: NVIDIA’s structural opportunity is undeniable, but the 1-1.5 year horizon carries elevated short-term risk. Prudent investors may consider balancing conviction in AI’s long arc with tactical caution—using volatility as a potential entry or rebalancing signal, rather than chasing momentum at peak optimism.

Disclaimer

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