XII
Detailed Valuation Scenarios
================================================================================ VALUATION SCENARIOS - DISCOUNTED CASH FLOW (DCF) ANALYSIS ================================================================================ Stock: NVDA Current Price: $180.99 Shares Outstanding: 24,490,000,000M Base Year FCF (FY 2024): $64,089,000,000 -------------------------------------------------------------------------------- BEAR CASE (Probability: 30%) Conservative: Below-trend growth, high risk premium, recession scenario ASSUMPTIONS: • FCF Growth Rate (Years 1-10): 2.0% • Discount Rate (WACC): 13.0% • Terminal Growth Rate: 1.5% 10-YEAR FCF PROJECTION: Year FCF ($M) PV Factor PV of FCF ($M) ------------------------------------------------------------ 1 $65,370,780,000 0.8850 $57,850,247,788 2 $66,678,195,600 0.7831 $52,218,807,737 3 $68,011,759,512 0.6931 $47,135,560,967 4 $69,371,994,702 0.6133 $42,547,143,527 5 $70,759,434,596 0.5428 $38,405,386,193 6 $72,174,623,288 0.4803 $34,666,808,776 7 $73,618,115,754 0.4251 $31,292,163,674 8 $75,090,478,069 0.3762 $28,246,023,847 9 $76,592,287,630 0.3329 $25,496,410,906 10 $78,124,133,383 0.2946 $23,014,459,402 ------------------------------------------------------------ Total PV of 10-Year FCF: $380,873,012,817 TERMINAL VALUE: • Year 11 FCF: $79,295,995,384 • Terminal Value: $689,530,394,642 • PV of Terminal Value: $203,127,619,940 VALUATION SUMMARY: • Enterprise Value: $584,000,632,757 • Shares Outstanding: 24,490,000,000M • Intrinsic Value per Share: $23.85 • Current Price: $180.99 • Upside/Downside: -86.8% • Margin of Safety: -659.0% -------------------------------------------------------------------------------- BASE CASE (Probability: 50%) Moderate: Sustainable growth, Buffett's hurdle rate (10-11%), conservative terminal value ASSUMPTIONS: • FCF Growth Rate (Years 1-10): 6.0% • Discount Rate (WACC): 11.0% • Terminal Growth Rate: 2.0% 10-YEAR FCF PROJECTION: Year FCF ($M) PV Factor PV of FCF ($M) ------------------------------------------------------------ 1 $67,934,340,000 0.9009 $61,202,108,108 2 $72,010,400,400 0.8116 $58,445,256,392 3 $76,331,024,424 0.7312 $55,812,587,185 4 $80,910,885,889 0.6587 $53,298,506,681 5 $85,765,539,043 0.5935 $50,897,673,047 6 $90,911,471,385 0.5346 $48,604,985,072 7 $96,366,159,668 0.4817 $46,415,571,330 8 $102,148,129,249 0.4339 $44,324,779,828 9 $108,277,017,004 0.3909 $42,328,168,124 10 $114,773,638,024 0.3522 $40,421,493,884 ------------------------------------------------------------ Total PV of 10-Year FCF: $501,751,129,650 TERMINAL VALUE: • Year 11 FCF: $117,069,110,784 • Terminal Value: $1,300,767,897,602 • PV of Terminal Value: $458,110,264,024 VALUATION SUMMARY: • Enterprise Value: $959,861,393,674 • Shares Outstanding: 24,490,000,000M • Intrinsic Value per Share: $39.19 • Current Price: $180.99 • Upside/Downside: -78.3% • Margin of Safety: -361.8% -------------------------------------------------------------------------------- BULL CASE (Probability: 20%) Optimistic but realistic: Strong execution, quality business, above-average but sustainable growth ASSUMPTIONS: • FCF Growth Rate (Years 1-10): 12.0% • Discount Rate (WACC): 9.0% • Terminal Growth Rate: 2.5% 10-YEAR FCF PROJECTION: Year FCF ($M) PV Factor PV of FCF ($M) ------------------------------------------------------------ 1 $71,779,680,000 0.9174 $65,852,917,431 2 $80,393,241,600 0.8417 $67,665,383,049 3 $90,040,430,592 0.7722 $69,527,733,041 4 $100,845,282,263 0.7084 $71,441,340,372 5 $112,946,716,135 0.6499 $73,407,615,795 6 $126,500,322,071 0.5963 $75,428,008,890 7 $141,680,360,719 0.5470 $77,504,009,135 8 $158,682,004,006 0.5019 $79,637,147,001 9 $177,723,844,486 0.4604 $81,828,995,084 10 $199,050,705,825 0.4224 $84,081,169,261 ------------------------------------------------------------ Total PV of 10-Year FCF: $746,374,319,059 TERMINAL VALUE: • Year 11 FCF: $204,026,973,470 • Terminal Value: $3,138,876,514,926 • PV of Terminal Value: $1,325,895,361,416 VALUATION SUMMARY: • Enterprise Value: $2,072,269,680,475 • Shares Outstanding: 24,490,000,000M • Intrinsic Value per Share: $84.62 • Current Price: $180.99 • Upside/Downside: -53.2% • Margin of Safety: -113.9% -------------------------------------------------------------------------------- ================================================================================ SENSITIVITY ANALYSIS - Intrinsic Value per Share ================================================================================ How intrinsic value changes with different growth and discount rates: Growth → 3% 5% 8% 10% 12% 15% WACC ↓ ------------------------------------------------------------------ 8% $ 51↓ $ 59↓ $ 75↓ $ 88↓ $ 102↓ $ 129↓ 9% $ 43↓ $ 50↓ $ 63↓ $ 73↓ $ 85↓ $ 106↓ 10% $ 37↓ $ 43↓ $ 53↓ $ 62↓ $ 72↓ $ 89↓ 11% $ 33↓ $ 38↓ $ 47↓ $ 54↓ $ 62↓ $ 77↓ 12% $ 29↓ $ 33↓ $ 41↓ $ 47↓ $ 54↓ $ 67↓ Current Price: $180.99 Base FCF: $64,089,000,000M Terminal Growth: 2.5% (constant) Legend: ↑ = 30%+ upside | ↓ = 10%+ downside ================================================================================ ================================================================================ PROBABILITY-WEIGHTED VALUATION ================================================================================ Bear Case (23.85) × 25% = $5.96 Base Case (39.19) × 50% = $19.59 Bull Case (84.62) × 25% = $21.16 ======================================== Weighted Average Intrinsic Value: $46.71 Current Price: $180.99 Upside/Downside: -74.2% Margin of Safety: -287.5% ================================================================================