Key Morningstar metrics for Nvidia

• Fair Value Estimate: $130

• Morningstar Rating: ★★★

• Morningstar Economic Moat Rating: Wide

• Morningstar Uncertainty Rating: Very High

What we thought of Nvidia’s GTC event

We attended Nvidia’s NVDA GTC events in San Jose this week and remain impressed with the company’s march toward artificial intelligence supremacy in hardware, software, and networking, all with physical AI via robotics and autonomous driving on the horizon. We maintain our $130 fair value estimate for wide-moat Nvidia and view shares as fairly valued.

Not surprisingly, we heard little pessimism around the AI data center (DC) environment, as management touted the massive AI factories to be built by governments and tech and consumer internet leaders. CEO Jensen Huang stated that the “vast majority” of AI inference runs on Nvidia today, and even with a rising threat of custom ASICs being designed by hyperscalers, we still foresee tremendous demand for Nvidia’s solutions in the years ahead.

Nvidia’s impressive roadmap

We’re impressed with the details into Nvidia’s three-year AI GPU roadmap, with Blackwell Ultra (GB300 series) arriving later this year, Vera Rubin in the second half of 2026, and Rubin Ultra in the second half of 2027. Rubin Ultra is expected to have 576 GPU die within a single NVLink data center rack and should emerge as a workhorse with significant AI inference processing advantages versus prior generations. Nvidia’s medium-term revenue will rely upon an ongoing increase in AI capital expenditures among tech leaders, but Nvidia’s impressive roadmap should give these customers the incentive to keep spending on AI and replace its legacy GPUs.

Robotics and physical AI remains on the horizon for Nvidia, and a key takeaway from the event is that Nvidia foresees it as a DC opportunity. Nvidia “needs to build the AI to build the robots” and thinks robotics demand can support ongoing DC spending. We were modestly surprised that Nvidia announced its Issac GROOT N1 robotics foundational model as open source. However, we think Nvidia is trying to seed the robotics ecosystem and instead profit on the back end via cloud data and workloads.

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Terms used in this article

Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.

Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company’s future cash flows, resulting from our analysts' independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.

Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn more about how to identify companies with an economic moat, read this article by Mark LaMonica.

Uncertainty Rating: Morningstar’s Uncertainty Rating is designed to capture the range of potential outcomes for a company. An investor can think of this as the underlying risk of the business. For higher risk businesses with wider ranges of potential outcomes an investor should consider a larger margin of safety or difference between the estimate of what a share is worth and how much an investor pays. This rating is used to assign the margin of safety required before investing, which in turn explicitly drives our stock star rating system. The Uncertainty Rating is aimed at identifying the confidence we should have in assigning a fair value estimate for a stock. Read more about business risk and margin of safety here.