FIREDesk
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How to value a stock in 10 minutes: Alphabet, Amazon and Nvidia
The method I use, applied to three real companies with every assumption visible. You can change any number and see what happens.
1The method in four steps
- Estimate EPS (earnings per share): expected net income divided by the number of shares.
- Choose a fair P/E: the multiple of earnings you consider reasonable for this company. It is a judgment, and the weakest link in any valuation.
- Fair value = EPS × fair P/E.
- Compare with the price: how far below or above your fair value it is today. Repeat for a later year to see what the same assumptions imply per year.
2The three examples
My estimates for 2026 (in billions of dollars unless stated) and the closing price of Friday 30 October 2026 (public source):
| GOOGL | AMZN | NVDA | |
|---|---|---|---|
| Net income, my estimate | $144.0B | $77.0B | $176.0B |
| Shares, my estimate | 12.24B | 10.70B | 24.60B |
| EPS | $11.76 | $7.20 | $7.15 |
| Fair P/E (my choice) | 30 | 40 | 50 |
| Fair value | $352.94 | $287.85 | $357.72 |
| Price | $279.84 | $240.35 | $204.64 |
| Price vs fair value | 21% below | 17% below | 43% below |
| P/E at today's price | 23.8 | 33.4 | 28.6 |
Read it carefully: it says only that my numbers put the price below my fair value. Nvidia's gap is the largest because I chose the highest fair P/E (50) and a large profit estimate. Change either and the gap changes, which is the point of the method. Prices move every day, so update them in the calculator below.
3Five years out
The same method for 2031, with the same fair P/E for Alphabet and Amazon and 35 for Nvidia (growth slows, so I allow a lower multiple):
| GOOGL | AMZN | NVDA | |
|---|---|---|---|
| EPS 2031, my estimate | $22.22 | $14.95 | $17.20 |
| Fair value 2031 | $666.67 | $598.13 | $601.83 |
| Implied per year from today's price | 19.0% | 20.0% | 24.1% |
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4Which earnings? A lesson from these three
Alphabet's reported net income for the first half of 2026 was about $174.7 billion, more than my estimate for the whole year ($144.0 billion). The reason: its reports include large gains, mostly unrealized, on its stakes in Anthropic and SpaceX. Amazon's reported results also include gains on its Anthropic stake. These gains are accounting marks, not cash from the business, and they can reverse if the valuations fall. My estimates leave them out. If you use reported earnings without checking, a P/E can look much lower than it really is. Always ask what is inside the profit number; the companies' quarterly reports say.
Years follow the companies' reporting. Nvidia's fiscal year ends in January, so its figures are labeled here by the calendar year in which most of the fiscal year falls. Check the filings of any company you study.
5Try it with your own numbers
A result of your own assumptions, not a recommendation to buy or sell. Nothing is stored or sent.
6What this cannot tell you
- Whether the assumptions are right. Profit, shares and the fair P/E are guesses about the future.
- When, or whether, the price will move toward your fair value. A price can stay below it, or fall further.
- How much to put in. One stock with a lot of money is a bet, not a method. Decide the worst case first.
- Anything about your situation: goals, taxes and the rest of your portfolio.
A checklist for every stock
- I know which numbers are my estimates and which are reported.
- I know what is inside the profit number (one-off gains, investments).
- I chose a fair P/E and wrote the reason in one line.
- I wrote the date, the price and my fair value in a log.
- I decided how much this could be of my total assets, and I can live with losing it.
Next step
You have seen the method. With Stock Eval you see where each stock's price stands against the model, what the price implies and what happens if you change the assumptions. It is free.
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Legal. FIREDesk content is for educational purposes only and is not financial advice, an investment recommendation or a price target. FIREDesk does not give personal recommendations and does not know your situation. The author may own shares of the companies discussed and may buy or sell them at any time without notice. The estimates are the author's own assumptions, not forecasts by the companies or by analysts, and they can be wrong. Prices are closing prices from a public data source on the date stated and may be inaccurate; check them before using them. Valuations depend on assumptions that can be wrong, and past performance does not guarantee future results. Investing involves significant risk, including the loss of the money invested. Tax treatment depends on your country. You are responsible for your own decisions. Disclaimer · Privacy