Reverse DCF shows FCF growth needed to justify chip stock prices
A Reddit r/stocks post presents a reverse DCF analysis of 14 chip stocks, calculating the annual free cash flow growth each would need over 10 years to justify its Nov 5 closing price, using a 9% discount rate and flat growth thereafter. The post reports forward P/E figures alongside required FCF growth, noting NVDA and QCOM both trade at 15.5x forward P/E but need about 20% and 9% annual FCF growth respectively. It also lists ARM at 71.3x forward P/E needing 39% growth, and MU at 4.0x needing 2.6%.