Nvidia Stock Still Has Room to Run Despite Strong Recent Gains, Dominates High-Growth AI and Gaming Markets
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Nvidia stock has seen strong growth recently, with the author's previous fair value estimates being reached. New fair value estimates based on discounted cash flow models indicate the stock may still be slightly undervalued.
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Nvidia dominates key high-growth markets like data centers, AI, and gaming. These markets are projected to see double-digit growth rates over the next 5+ years.
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Nvidia’s financials and margins have been exceptionally strong recently. Revenue, earnings, and free cash flows have seen massive growth over 60-90% annually.
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Risks do exist - growth estimates beyond 2026 are speculative, sentiment could turn against the high multiples, and new competitors could emerge. But Nvidia seems well positioned.
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With only small potential downside and chances of continued growth, the author reiterates a buy rating due to Nvidia’s dominance in secular growth markets.