Nvidia (NVDA): Valuation Spotlight as AI Partnerships and Blackwell Demand Build Ahead of Q3 Earnings

Nvidia (NVDA) shares are being propelled by ongoing momentum in AI infrastructure buildouts, fueled by strong demand for Blackwell GPUs and partnerships with both industry leaders and emerging startups. The upcoming Q3 earnings report is creating additional buzz, as investors look for new insights on Nvidia’s AI growth strategy and customer adoption trends.

See our latest analysis for NVIDIA.

Nvidia’s stock has been on a tear lately, pushing back toward all-time highs with a 38% year-to-date share price return and fresh optimism thanks to rapid-fire AI partnerships and major tech collaborations. Total shareholder return is also striking at 36% over the past year. The multiyear performance cements Nvidia as the torchbearer of the AI rally and signals that momentum is still building as the company benefits from infrastructure spending and strong demand for its chips.

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But with so much optimism already fueling Nvidia’s record run, is the current valuation justified, or has the stock already priced in every bit of future AI growth, leaving little room for the next wave of buyers?

Most Popular Narrative: 25.5% Overvalued

The current narrative from Investingwilly sets Nvidia’s fair value at $152.63, which is noticeably below the latest close of $191.49. This opens up debate about whether the current optimism is running too far ahead of fundamentals.

Nvidia's financial performance in recent years has been nothing short of extraordinary. The company's revenue has surged significantly, largely driven by the rapid growth of its data center segment. Nvidia’s dominance in this sector is reflected in its robust revenue generation, highlighting the increasing global demand for cloud computing, AI, and machine learning solutions.

Read the complete narrative.

Curious what makes this growth story so compelling in the eyes of top investors? Hints: unprecedented expansion rates, a powerful vision for high-performance chips, and game-changing sector bets. Want to see which bold numbers justify that price? Unlock the complete financial thesis behind this high-stakes valuation.

Result: Fair Value of $152.63 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, trade tensions or a prolonged supply shortage could quickly challenge Nvidia’s stellar growth outlook and reset market expectations overnight.

Find out about the key risks to this NVIDIA narrative.

Another View: Pricing by Earnings Ratio

Stepping away from fair value models, a look at earnings-based pricing tells a different story. Nvidia trades at 53.7 times earnings, which is cheaper than its peer average of 72.9, yet more expensive than the broader US Semiconductor industry at 39.5. The fair ratio estimate is 58.1. This discrepancy creates both caution and curiosity. Will market sentiment push the share price up to the fair ratio, or down toward industry norms?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own NVIDIA Narrative

If you have a different take or want to dig into the numbers on your terms, it’s easy to build your own Nvidia story and uncover new insights. Your perspective could take less than three minutes to shape. 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.

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