NVIDIA has mentioned earlier that their total addressable market is 1 trillion dollar. “Nvidia estimates a total addressable market of $100 billion for gaming, $300 billion for chips and systems, $150 billion for artificial-intelligence enterprise software, $150 billion for Ominverse enterprise software, and $300 billion within automotive.” This addressable market will be realized around 2030 and nvidia might be able to capture 10-20 percent of the market as it has competitions from other chip companies as well. Assuming Operating margins of 30% will result in profit of 60 billion.
While the forecast given for next quater is 11 billion, assuming best case profit margin of 35-40%. Earnings is around 4.4 billion. For full year optimistic target might be 20 billion, while the company values at around 1 trillion. Can you share some light on the valuations of nvidia? (200 PE)
I think that company is doing great but valuations is a concern. Even at share price of 130$, company had a market cap of 330 billion, while company can deliver around 10 billion of earnings(pessimistic) PE of 33.
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