Key Morningstar metrics for Nvidia

  • Fair Value Estimate: $280.00
  • Morningstar Rating: ★★★★
  • Morningstar Moat Rating: Wide
  • Morningstar Uncertainty Rating: Very High

Nvidia update

The once-in-a-century artificial intelligence buildout has sent Nvidia on a three-year run to emerge as the first $5 trillion-plus company based on market capitalization. Yet we think the firm is worth significantly more than that today. Nvidia remains at the heart of the AI ecosystem; we don’t foresee a slowdown in AI demand, and the company’s leadership position in the AI infrastructure market remains secure. In turn, we believe the market underappreciates its prospects.

Nvidia anticipates strong growth for its AI GPU-based systems in both 2026 and 2027, and we see few signs from large customers suggesting that the global AI infrastructure buildout will slow in any meaningful way. For 2028 and beyond, we think the strength of Nvidia’s software ecosystem (Cuda), its chip design expertise, its networking and interconnectivity capability, and the flexibility and programmability offered by all this gear will keep it at the center of the AI ecosystem.

In the long term, we think it’s inevitable that Google and AWS will push to bring more chips and AI gear in-house, to Nvidia’s detriment. We expect Nvidia to lose market share to Google’s TPUs and Amazon’s Trainium (especially if Anthropic and/or Google Gemini emerge as dominant frontier models), but we think Nvidia’s share should level out at 68% in 2030 (versus 80% today) within a much larger pie of AI spending.

Our $280 per share fair value estimate is underpinned by strong growth over the next two years, an inevitable deceleration to an otherwise “healthy” growth rate in 2028 and beyond as AI and cloud computing workloads grow, all while Nvidia retains pricing power and maintains 70%-plus gross margins. Our bull-case fair value would be $420 per share if Nvidia concedes no market share, resulting in $1 trillion in annual revenue by 2030. We think $180 is a reasonable downside fair value estimate if the AI market shifts even more toward XPUs, or if AI demand fails to live up to expectations.