NVIDIA Corporation
NVDA · Semiconductors
Designs graphics processors (GPUs) and the networking and software used to run AI workloads in data centers, plus chips for gaming, cars and professional visualization.
Model built Sep 3, 2026 · latest annual filing FY2026 · figures in USD
Assumptions
Start from
Years 1-5
Average per year
Starting: 33.0%
Operating profit as % of revenue, average
Starting: 59.0%
Capex as % of revenue, average
Starting: 2.9%
The long run
Growth fades to this by year 10, then continues forever
Starting: 4.0%
Profit earned on each dollar reinvested after year 5. Sets how much capex growth needs
Starting: 100.0%
The yearly return you require for the risk
Starting: 16.0%
Value per share
10 years of cash flows plus a value for everything after, all discounted to today.
Starting model (base)
$163
42% of this value comes from after year 10.
-25%
Arithmetic only, not a recommendation.What the price implies: buying at $218 earns about 13.4% a year if these cash flows play out, compared with the 16.0% discount rate.
Revenue and free cash flow
Last 5 years reported (SEC filings), then 10 years projected: years 1-5 from the assumptions, years 6-10 fading to the long run.
Projected free cash flow = operating profit after tax + depreciation - capex - working capital. Reported free cash flow = operating cash flow - capex, so the two are close but not identical.
Where the starting numbers come from
The years 1-5 assumptions were set by AI using the company's SEC filings, its own guidance and judgment about what is one-off. The reasoning for each line is under the i next to it. They are a starting point to react to, not a view. Compare them with what actually happened:
| Assumption | Starting (yrs 1-5 avg) | Reported (5 years to FY2026) |
|---|---|---|
| Revenue growth | 33.0% | 66.9% a year |
| Operating margin | 59.0% | 46.0% average |
| Capex % revenue | 2.9% | 2.3% average |
- Years 6-10 are calculated, not guessed: growth slides from the year-5 rate (15.0%) down to long-term growth (4.0%); margin and depreciation stay at year-5 levels; capex moves from 3.2% of revenue to 2.7%, which is depreciation plus what it takes to keep growing.
- Return on new invested capital (RONIC) 100%: what the years 1-5 assumptions themselves imply (extra after-tax operating profit by year 5 divided by the extra investment made to get there), kept between the discount rate and 100%.
- Discount rate 16.0%: cost of equity = risk-free rate 4.97% (US 10-year Treasury) + beta 2.22 x equity risk premium 5.0% = 16.1%; blended with cost of debt 5.0% after tax at 1% debt weight.
- Historical figures: SEC EDGAR annual filings (10-K). Share count and net debt from the latest filing used for the model.