NVDA Valuation Model Full Analysis: The Pricing Logic Behind the $4.97 Trillion Valuation

In June 2026, the U.S. stock technology sector exhibited significant structural divergence— the Nasdaq Composite closed at 25,888.84 points, the Philadelphia Semiconductor Index rose 1.52% to 13,371.47 points on the same day, with the AI computing power sector still leading, but capital flow logic has shifted from "widespread gains" to "performance realization" in depth. Nvidia, as the most stable player in the AI infrastructure market share, was quoted at about $205 before market open on June 15, with the previous day's closing at $208, and a total market value of approximately $4.97 trillion. What is the rationality behind this market cap? Does the Wall Street analyst consensus of a "strong buy" with a target price concentrated between $270 and $300 still hold? Meanwhile, Gate officially launched real stock trading functions for U.S. and Hong Kong stocks in June 2026, supporting direct participation in global stock asset allocation using USDT. This analysis explores the core framework of Nvidia’s valuation model, breaking down the valuation logic from three dimensions: free cash flow method, P/E ratio method, and scenario analysis, combined with the latest stock trading features on the Gate platform, providing data support and methodological references for crypto investors to participate in traditional financial asset allocation.

Understanding the Three-Level Framework of NVDA Valuation Model

Data Benchmark: Nvidia’s Latest Financial Overview

Before entering the valuation model, it is necessary to use the first-quarter financial data of 2026 as the baseline. Nvidia’s FY2027 Q1 (ended April 2026) achieved revenue of $81.6 billion, up 85% year-over-year, with growth accelerating for the third consecutive quarter (previous quarter 73%, quarter before that 62%). The data center business contributed $75.2 billion, up 92% year-over-year, accounting for over 90% of total revenue; gross margin remained around 75%; the company completed about $20 billion in buybacks and dividends in a single quarter, and announced an additional authorization of $80 billion in share repurchases.

This set of data reflects a strong fundamental condition, more prominent in horizontal comparison with competitors. Broadcom’s AI semiconductor business is expected to reach $56 billion annually, with nearly 180% growth; Marvell Technology’s annual increase exceeds 200%. However, after the earnings release, Nvidia’s stock price only rose slightly by 0.16% on June 12, and there was no trend of chasing higher—indicating that the focus of Nvidia’s valuation model has shifted from “whether earnings exceed expectations” to “whether the current price fully prices in future growth.”

Framework 1: Free Cash Flow Method as the Core of Valuation

The underlying logic of Nvidia’s valuation model should revert to the essence of free cash flow, rather than simply looking at revenue growth. Analyzing with the “normalized free cash flow + net cash + conservative multiplier” framework: Nvidia’s Q4 FY2026 free cash flow reached $34.9 billion, with gross margin around 75%, reflecting its monopoly pricing power in the AI chip market. From a dynamic forecast perspective, analysts and institutions expect Nvidia’s free cash flow in 2026 to be about $96 billion, in 2027 about $212.5 billion, and further grow to over $410 billion by 2031.

Plugging these cash flow figures into a conservative valuation model yields two scenarios. The pessimistic scenario assumes FY2027 free cash flow of about $140 billion and net cash of $40 billion, with a 20x multiplier, supporting a market cap of approximately $2.84 trillion; the optimistic scenario, assuming the market accepts the “perpetual growth of AI infrastructure” hypothesis and assigns a higher multiplier, would require FY2027 free cash flow to reach about $228.5 billion to justify the current market cap of about $4.97 trillion. This gap reflects the implicit “AI arms race persistence” premium embedded in the current stock price.

Framework 2: P/E Ratio Method and Divergence Signals Between Internal and Institutional Traders

From the P/E perspective, as of June 15, Nvidia’s stock price corresponds to an adjusted forward P/E of about 31.42 times. UBS issued a research report on May 13, 2026, based on an expected 2027 EPS of $14.35 and a 19x P/E, with a target price of $275; the current stock price corresponds to a forecasted 2027 P/E of about 15.7x, below the historical average. Goldman Sachs and Barclays, among others, have recently continued to raise revenue forecasts and target prices.

However, there is a notable divergence between institutional holdings and insider trading. Sixty analysts maintain “buy” or “strong buy” ratings, and 2,991 institutions increased their Nvidia holdings, viewing it as a core asset in AI infrastructure; but over the past six months, management has executed 98 sell transactions with zero buy records. This “insider selling versus foreign capital buying” signal contradiction is a key variable that Nvidia’s valuation model needs to incorporate at this point.

Framework 3: Key Variables in Scenario Analysis

Based on the above frameworks, current valuation needs to undergo stress testing on the following three variables:

Pace of technological iteration

Blackwell platform has entered mass shipment, with customer feedback indicating increased procurement difficulty and longer delivery cycles, and demand remains tight. The next-generation Rubin architecture has been sent to top partners for sampling, but large-scale shipments are expected to begin gradually in the second half of FY2027. In terms of market share, under an 80% yield assumption, Nvidia in 2026 needs to occupy about 51% of the entire industry’s CoWoS capacity, increasing to 66% in 2027.

Pressure from customer self-developed chips

Goldman Sachs’ latest report states that the four major cloud service providers—Microsoft, Google, Amazon, and Meta—are expected to have combined capital expenditures of $770 billion in 2026. This not only constitutes Nvidia’s revenue source but also means that data center clients are accelerating self-research and substitution plans, which could weaken Nvidia’s pricing power in the long term.

Variables in the Chinese market

The company’s outlook has assumed zero contribution from China’s data center revenue, which previously accounted for over one-fifth of total data center revenue. If geopolitical dynamics relax marginally, it could bring significant upside catalysts; if not, the current expectations have already priced in this constraint.

Gate Platform Stock Trading Launch: A New Channel for Crypto Investors to Participate in Nvidia

With a clear understanding of Nvidia’s valuation framework, the next question is: how can crypto investors participate in Nvidia’s allocation with minimal friction? The real stock trading feature launched by Gate in June 2026 provides a feasible answer.

Coverage of U.S. and Hong Kong Markets

On June 1, 2026, Gate first launched U.S. stock trading services, supporting users to trade stocks and ETFs on major U.S. exchanges such as NYSE, NASDAQ, NYSE Arca, NYSE American, and BATS using USDT. On June 11, the Hong Kong stock trading service went live, allowing users to directly access over 1,000 Hong Kong-listed stocks via the Gate app, including Tencent, Meituan, Xiaomi, BYD, HSBC, and other major companies. As a result, Gate’s stock trading achieved full coverage on both app and web platforms, supporting both U.S. and Hong Kong markets, creating a unified entry point for crypto and traditional financial asset allocation.

Core Advantages: USDT Settlement and Low Barrier to Entry

Compared to traditional brokerage accounts, Gate’s stock trading features three key differentiators: first, settlement in USDT. Users do not need to open traditional brokerage accounts or convert currency into HKD or USD; all transactions are settled in USDT, with funds operating within the Gate ecosystem. Second, extremely low minimum investment thresholds. The platform supports fractional trading from as little as 0.01 shares, roughly $10 USDT, allowing retail investors to access blue-chip stocks with small capital. Third, VIP fee tiers and pre-market/post-market trading. The VIP tier system fully supports stock trading, with a $2,000 USD position qualifying for VIP status, and stock trading fees as low as 0.023%, plus support for pre-market and after-hours trading, extending U.S. stock trading hours to five days a week, 16 hours daily.

From the industry competition perspective, Gate’s move is more advanced—connecting traditional securities markets via “real stocks” rather than “tokenized exposure,” with underlying assets bought and held through licensed broker-dealers, making investors the actual beneficiaries of the stocks, entitled to dividends and shareholder rights.

Trading Entry and Operation Instructions

The operation steps for Gate stock trading are fourfold:

• Update the Gate app to version 8.23.5 or higher;
• Enter the TradFi zone, select “Stocks,” then choose “U.S. stocks” or “Hong Kong stocks” based on the target market;
• Transfer USDT from spot or unified account into the stock account;
• Search for NVDA (U.S. stock) or the desired Hong Kong stock code, select quantity (supporting 0.01 share multiples), and confirm the trade.

Regarding trading hours, U.S. stocks support pre-market and after-hours trading extended to 16×5 coverage, while Hong Kong stocks follow HKEX hours (Monday to Friday, 9:30–16:00 HKT).

Nvidia Valuation Model and Gate Stock Trading: A Combined Asset Allocation Approach

By integrating the above valuation framework with Gate’s trading capabilities, crypto investors can construct a structured Nvidia allocation path:

Dollar-cost averaging accumulation

Given Nvidia’s fundamentals trending upward but valuation already high, short-term speculation is challenging. A “regular fixed amount buy + partial profit-taking” strategy can be employed. Using Gate, investors can regularly invest USDT (e.g., $50–$100 weekly) to buy NVDA fractional shares, with the minimum of 0.01 shares matching the dollar-cost averaging rhythm.

Hedging and cross-market allocation

In black-swan scenarios—if AI capital expenditure growth slows or self-developed chips accelerate, causing Nvidia’s stock to revert to valuation—Gate supports holding both crypto assets and stocks within the same account for dynamic rebalancing. Investors can adjust positions between crypto and stock markets rather than passively holding a single risk exposure. Additionally, the Hong Kong stock coverage of Tencent, Alibaba, BYD, etc., offers more options for cross-market diversification.

Monitoring valuation indicators dynamically

After buying NVDA on Gate, investors should continuously track three core valuation anchors: whether the P/E ratio moves toward the 15x historical low, whether free cash flow matches quarterly performance growth, and whether insider selling continues to expand. When these three signals align, it indicates a key window for position adjustment.

Conclusion

In summary, the core conclusion of Nvidia’s valuation model is: Nvidia’s fundamental moat in AI infrastructure remains solid, with monopoly pricing power reflected in free cash flow and gross margin data, but the $4.97 trillion market cap already embeds an optimistic “perpetual AI arms race” premium. Upside risks include structural shifts from training to inference in AI, easing geopolitical constraints in China, and the expansion of new TAM driven by Vera CPUs, adding roughly $200 billion. Downside risks involve accelerated self-developed chips by clients, slower Blackwell mass production, and a peak in cloud giants’ capital expenditure, leading to a revenue growth inflection point.

For crypto users, Gate’s stock trading feature reduces the cost and barriers to participate in high-quality tech assets like Nvidia to unprecedented levels. Using USDT, investors can manage and rebalance both crypto and traditional stocks within a single platform, avoiding cross-platform transfers, cross-border wire transfers, or broker account opening delays. With just a smartphone or computer and an existing Gate account, investors can directly deploy USDT into Nvidia shares, sharing long-term beta gains from AI infrastructure growth.