The Application of DCF in Company Valuation: Case of NVIDIA
DOI:
https://doi.org/10.54097/a50yxz91Keywords:
Company Valuation, DCF Model, Fundamental Analysis, Stock Price Forecast, Performance Evaluation.Abstract
Company valuation has always been a crucial theme in financial analysis and corporate management. It plays an important role in both corporate strategic adjustment and investment selection. NVIDIA is an American leading technology company dedicated to expanding into various areas including graphics processing units (GPUs), artificial intelligence (AI), autonomous vehicles, data centers, and other products. The stock of NVIDIA has been rising for several years and attract much attention from investors. Therefore, this paper combines DCF model with Fundamental analysis to value NVIDIA. Results of Fundamental Analysis shows that NVIDIA is in an accelerating technical environment. It has the product advantages in graphics processing units (GPUs) and artificial intelligence. From the results of DCF model, NVIDIA is outperforming as the current stock price far exceeds the estimated one, which shows that Nvidia's current share price is overvalued. Through case study, not only can it help the company position itself correctly, but also provide investors with a stock selection reference.
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