BlueChip Breakdown: NVIDIA
- wsvendsen10
- Aug 7
- 2 min read
By Will Svendsen
08/07/20205
📌Company Snapshot
Sector: Semiconductors / Technology
Market Cap: ~$4.4T (StatMuse, StockAnalysis)
Business: NVIDIA designs industry-leading GPUs, AI accelerators, and full-stack computing platforms used in data centers, gaming, autonomous vehicles, and m
ore.
Core Revenue Driver: AI and data center demand, especially from hyperscalers deploying NVIDIA’s H100 chips for LLM training and inference.
📈Recent Performance
Up over 30% YTD, outperforming major indices as AI adoption accelerates.
Q2 FY25 revenue surged 114% YoY; Data Center now makes up 76% of total revenue.
Key customers (Meta, Amazon, Microsoft) continue ramping AI infrastructure with NVIDIA at the core.
Management guidance remains bullish, pointing to long-term, durable growth.
Source: NVIDIA Q2 FY25 Earnings
📊Key Metrics & Valuation
P/E (FWD): ~47x
EV/EBITDA: ~35x
PEG Ratio: ~1.7
FCF Yield: ~1.0%
Gross Margin: ~75%
5Y Revenue CAGR: ~50%
💰DCF Summary
WACC: 9.0%
FCF CAGR (next 5 yrs): ~23%
Terminal Growth: 2.5%
Equity Value: ~$2.94T
Shares Outstanding (FY25): ~2.47B
Intrinsic Share Price: ~$90
Current Price (Aug 6, 2025): ~$181
Source: Internal DCF Model (Aug 2025)
⚖️Catalysts & Risks
Catalysts
Dominance in AI hardware and software ecosystem
Expansion into new verticals: autonomous driving (Drive), virtual collaboration (Omniverse), and custom AI models
Ongoing AI demand from cloud giants and enterprises
Risks
High expectations priced in
China-related revenue restrictions
Competition from AMD, Intel, and custom chips
✅BlueChip Breakdown Rating: Buy
NVIDIA isn’t just riding the AI wave - it’s building the surfboard. Despite its premium valuation, our DCF supports continued upside as FCF compounds and AI demand remains robust. For long-term investors seeking a high-quality AI pure play, this is one of the most compelling opportunities in the market.
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