Chapter 4 calculated the market’s pricing of growth for NVIDA in June 2023. With the stock price at $438.08, the part of that price that was speculation about growth was $420.51, 96.0% of the stock price. On this webpage, let’s track the growth pricing of NVIDIA as time evolves…we’ll regularly update. With an understanding of the business and the fundamental analysis that follows the book, you might also continually bring a challenge to the evolving pricing of growth.
To get us going, we have the building block diagram in February 2024 on this webpage to add to that in June 2023 in chapter 4. And to that we have added the pricing in mid-December 2024. We maintain the 10% required return and base the no-growth valuation on the trailing EPS at the time. With a 10 for 1 stock split in 2024, the per-share numbers are now post-split. Fiscal-year end is January of each year. (One can also work this with the no-growth value based on the forward EPS).
| Date | Stock | Speculative Growth Price | % of Price | Trailing Price | EPS | ||
|---|---|---|---|---|---|---|---|
| Price | No-growth Value | Forward EPS | Fwd EPS Growth % | ||||
| June 2023 | $43.81 | $1.76 | $42.05 | 96.0% | $0.39 | NA | NA |
| Feb 2024 | $82.89 | $13.80 | $69.09 | 83.3% | $1.21 | 2.19 | 81.0% |
| Dec 2024 | $139.84 | $13.80 | $126.04 | 90.1% | $1.21 | 2.95 | 143.9% |
| Mar 2025 | $132.80 | $26.94 | $105.86 | 79.7% | $2.97 | 2.37 | -20.2% |
A few points to note from a Financial Times Lex piece, December 11, 2024:
- EPS for 2025 is forecasted by analysts to be 20.2% below that for 2024.
- Revenue for 2025 was 114% above that for 2024.
- Operating profit margin (before tax) for 2024 was 62.4%, more than Apple, Microsoft, Alphabet (Google) and Intel have achieved in the last 25 years.
- China announced an antitrust investigation into the firm in early December 2024
- In January 2025, DeepSeek AI arrived with less expensive chips, challenging U.S. AI and NVIDIA
- U.S. is restricting sales of NVDIA’s chip to China
- Bank of America is forecasting that NVIDIA will account for $223 billion of the $300 billion chip market by 2027
- NVIDIA’s customers, including Amazon, Google, and Meta Platforms are developing their own chips for AI.
These are only points to direct you to dig deeper. The moat seems deep and wide at this point, but let’s see how things work out.