Nvidia Is One of the Most Profitable Businesses in the World. Here's Why the Stock Is Worth $311 a Share Right Now -- 39% More Than Its Share Price.

Nvidia (NVDA) currently trades 39% below fair value based on forward earnings multiples, according to a Motley Fool analysis targeting $311 per share. The chipmaker's forward P/E ratio stands at 25.1, well beneath its five-year average of 34.4, despite maintaining a 64% net profit margin—one of the highest in public markets.

The company has successfully pivoted from its gaming chip roots to dominate the AI data center chip market, a transition that underpins the bullish price target. At current levels, the valuation gap suggests meaningful upside for investors willing to bet on multiple expansion back toward historical norms.

The 64% net margin reflects Nvidia's pricing power in the high-performance GPU market, where competition remains limited and demand from hyperscale cloud providers continues to accelerate. The forward multiple discount persists even as the company solidifies its position as the default supplier for large language model training infrastructure.