Nvidia Earnings: Maintaining our $480 Fair Value Estimate as It Remains the King of AI Processors

Wide-moat Nvidia reported predictably outstanding results for the October quarter that were ahead of guidance, while the company’s fiscal fourth quarter outlook was also ahead of our prior expectations. Nvidia is clearly the dominant provider of graphics processing units deployed in data centers, and we don’t foresee the company losing its supremacy any time soon. We maintain our $480 fair value estimate and view shares as fairly valued. We also maintain our Very High Uncertainty Rating, as the timing and magnitude of future artificial intelligence GPU growth remains unclear to us, especially given recent U.S. restrictions on chip sales into China. That said, Nvidia’s earnings report gives us a small confidence boost that the firm can reach our projection of $100 billion of data center revenue in fiscal 2028, as compared with just $15 billion last fiscal year and our estimate of $46 billion this year.