I agree with your valuation assessment. Maybe also interesting to look at Fwd looking P/FCF; currently NVDA trades at 70x P/FCF. If you use current FCF estimates and a "bull" exit multiple of 60x P/FCF you arrive at a CAGR of 40% for the next 2 years. When using a "bear" exit multiple of 30x you arrive at CAGR of 0%. Any lower multiple seems unlikely to me considering the high growth rate. I like to think of it that the probable outcome is between those two numbers: 0% and 40% CAGR.

Yeah, but that 70x FCF is also backward-looking, so it's artificially high (because of the high growth as you point out). The 2024 FCF is just 42 times and the 2025 expected FCF multiple 30x at this price. That also means that you would have to assume a 24.5x multiple for 2026 to have a CAGR of 0%.

I agree with your valuation assessment. Maybe also interesting to look at Fwd looking P/FCF; currently NVDA trades at 70x P/FCF. If you use current FCF estimates and a "bull" exit multiple of 60x P/FCF you arrive at a CAGR of 40% for the next 2 years. When using a "bear" exit multiple of 30x you arrive at CAGR of 0%. Any lower multiple seems unlikely to me considering the high growth rate. I like to think of it that the probable outcome is between those two numbers: 0% and 40% CAGR.

Yeah, but that 70x FCF is also backward-looking, so it's artificially high (because of the high growth as you point out). The 2024 FCF is just 42 times and the 2025 expected FCF multiple 30x at this price. That also means that you would have to assume a 24.5x multiple for 2026 to have a CAGR of 0%.