$NVDA is a Value Play: Another Side to Value Investing

TL;DR - Value Investing Includes Buying Stocks Increasing Slower than Intrinsic Value & I Believe that Applies to $NVDA

Hi everyone. Please let me know if I need to edit this post to comply with any rules, since I am venturing over from other investing/stock subreddits. I familiarized myself with the community before posting, and enjoyed the wiki post about “What is Value Investing?” My opinion differs slightly and can be described as buying shares of a company for less than its “true” value.

The immediate problem becomes, what actually is the true value of a stock, and why or how would a public company trade for a disconnected price?

Recent posts highlight one possible scenario: an industry facing disruption experiences broad declines regardless of business quality.

A lot of value investors prioritize buying stocks after large declines in what they believe to be quality businesses, and simply wait for the rebound. I visualize two declining lines: the stock price and the previously mentioned true value. The stock price is falling more sharply than the underlying business, creating a value gap. Regardless of business quality, some material or perceived material change is affecting the value of the business, with the idea being that concern is an overreaction.

Alternatively, consider the same two lines, but both are increasing. The above scenario relies on stock prices falling faster than true value. However, investors can also find value in stocks rising more slowly than their true value. Enter $NVDA.

First, it is important to distinguish that it is more common for stocks to rise faster than their intrinsic value growth, so selectivity is just as important in this scenario as when catching knives. The same stock can also be overvalued or undervalued depending on when it is purchased. $NVDA itself has experienced periods of both, as investors were late seeing the potential of GPUs for more than gaming and were willing to pay a steep premium when worried about missing the trade.

So, how is a $5 trillion company undervalued? The answer is surprisingly boring: it is hard to understand compounding at this rate at this scale because it seems impossible. The value gap comes from caution around such staggering growth rates continuing as yearly revenue eclipses triple digits.

$NVDA is expected to announce Q1 FY27 (wonky fiscal calendar) on May 20th, 2026. Total Revenue is expected to jump 79% YoY to $78.79 billion on ~$43.5 billion of Net Income ($1.78 EPS on ~24.43 billion shares). $AAPL currently holds the record for quarterly Net Income by an American company with $42.1 billion for the quarter ended December 27th 2025.

CEO Jensen Huang and CFO Colette Kress have guided for sequential increases in both Total Revenue and EPS for FY27, suggesting $200B is an achievable yearly profit target (constant run rate of Q1 expectations is ~$175B). This would be an increase of over 70% on a base of $116.997 billion in calendar year 2025. The H20 China disruption caused the business to only grow 58% that year on a base of $74.265 billion.

I acknowledge that projections are not reality, and the sensitivity table is volatile when growth is nearing triple digits. However, I believe the market is too heavily discounting the probability that $NVDA executes on this staggering growth trajectory simply because it feels ludicrous to jump from $117 billion in profit to over $200 billion in the span of 12 months. There is also no guarantee growth remains positive at all, but with the company’s main factor limiting growth being its ability to fulfill its backlog right now ("sold out" claims), this caution also appears to be overstated at this time.

Tell me why or why you aren’t paying 25x for $200 billion in 2026 profit. I would love to hear your thoughts. Thank you for reading. I am human, and this is not financial advice.