diff --git a/api/nvidia/v1/clusterpolicy_types.go b/api/nvidia/v1/clusterpolicy_types.go
index f79497e64..d42d1b048 100644
--- a/api/nvidia/v1/clusterpolicy_types.go
+++ b/api/nvidia/v1/clusterpolicy_types.go
@@ -1017,7 +1017,8 @@ type DCGMExporterServiceConfig struct {
 // DCGMExporterServiceMonitorConfig defines configuration options for the ServiceMonitor
 // deployed for DCGM Exporter
 type DCGMExporterServiceMonitorConfig struct {
-	// Enabled indicates if ServiceMonitor is deployed for NVIDIA DCGM Exporter
+	// Enabled indicates if ServiceMonitor is deployed for NVIDIA DCGM Exporter.
+	// Defaults to true. Set to false to explicitly disable ServiceMonitor creation.
 	// +operator-sdk:gen-csv:customresourcedefinitions.specDescriptors=true
 	// +operator-sdk:gen-csv:customresourcedefinitions.specDescriptors.displayName="Enable deployment of NVIDIA DCGM Exporter ServiceMonitor"
 	// +operator-sdk:gen-csv:customresourcedefinitions.specDescriptors.x-descriptors="urn:alm:descriptor:com.tectonic.ui:booleanSwitch"
@@ -2256,11 +2257,11 @@ func (dcgm *DCGMSpec) IsEnabled() bool {
 	return *dcgm.Enabled
 }
 
-// IsEnabled returns true if ServiceMonitor for DCGM Exporter is enabled through gpu-operator
+// IsEnabled returns true if ServiceMonitor for DCGM Exporter should be created (default).
 func (sm *DCGMExporterServiceMonitorConfig) IsEnabled() bool {
 	if sm.Enabled == nil {
-		// ServiceMonitor for DCGM Exporter is disabled by default
-		return false
+		// default is true if not specified by user
+		return true
 	}
 	return *sm.Enabled
 }
diff --git a/controllers/object_controls.go b/controllers/object_controls.go
index b436bcab1..bf913049e 100644
--- a/controllers/object_controls.go
+++ b/controllers/object_controls.go
@@ -4833,8 +4833,9 @@ func ServiceMonitor(n ClusterPolicyController) (gpuv1.State, error) {
 
 	if n.stateNames[state] == "state-dcgm-exporter" {
 		serviceMonitor := n.singleton.Spec.DCGMExporter.ServiceMonitor
-		// Check if ServiceMonitor is disabled and cleanup resource if exists
-		if serviceMonitor == nil || !serviceMonitor.IsEnabled() {
+
+		// Check if ServiceMonitor is explicitly disabled and cleanup resource if it exists
+		if serviceMonitor != nil && !serviceMonitor.IsEnabled() {
 			if !serviceMonitorCRDExists {
 				return gpuv1.Ready, nil
 			}
@@ -4846,33 +4847,36 @@ func ServiceMonitor(n ClusterPolicyController) (gpuv1.State, error) {
 			return gpuv1.Disabled, nil
 		}
 
+		// If Prometheus CRD is missing, skip gracefully
 		if !serviceMonitorCRDExists {
-			logger.Error(fmt.Errorf("couldn't find ServiceMonitor CRD"), "Install Prometheus and necessary CRDs for gathering GPU metrics!")
-			return gpuv1.NotReady, nil
+			logger.V(1).Info("ServiceMonitor CRD not found, skipping DCGM Exporter ServiceMonitor creation")
+			return gpuv1.Ready, nil
 		}
 
-		// Apply custom edits for DCGM Exporter
-		if serviceMonitor.Interval != "" {
-			obj.Spec.Endpoints[0].Interval = serviceMonitor.Interval
-		}
+		// Apply custom edits for DCGM Exporter when a serviceMonitor config is provided
+		if serviceMonitor != nil {
+			if serviceMonitor.Interval != "" {
+				obj.Spec.Endpoints[0].Interval = serviceMonitor.Interval
+			}
 
-		if serviceMonitor.HonorLabels != nil {
-			obj.Spec.Endpoints[0].HonorLabels = *serviceMonitor.HonorLabels
-		}
+			if serviceMonitor.HonorLabels != nil {
+				obj.Spec.Endpoints[0].HonorLabels = *serviceMonitor.HonorLabels
+			}
 
-		if serviceMonitor.AdditionalLabels != nil {
-			for key, value := range serviceMonitor.AdditionalLabels {
-				obj.Labels[key] = value
+			if serviceMonitor.AdditionalLabels != nil {
+				for key, value := range serviceMonitor.AdditionalLabels {
+					obj.Labels[key] = value
+				}
 			}
-		}
-		if serviceMonitor.Relabelings != nil {
-			relabelConfigs := make([]promv1.RelabelConfig, len(serviceMonitor.Relabelings))
-			for i, relabel := range serviceMonitor.Relabelings {
-				if relabel != nil {
-					relabelConfigs[i] = *relabel
+			if serviceMonitor.Relabelings != nil {
+				relabelConfigs := make([]promv1.RelabelConfig, len(serviceMonitor.Relabelings))
+				for i, relabel := range serviceMonitor.Relabelings {
+					if relabel != nil {
+						relabelConfigs[i] = *relabel
+					}
 				}
+				obj.Spec.Endpoints[0].RelabelConfigs = relabelConfigs
 			}
-			obj.Spec.Endpoints[0].RelabelConfigs = relabelConfigs
 		}
 	}
 	if n.stateNames[state] == "state-operator-metrics" || n.stateNames[state] == "state-node-status-exporter" {
diff --git a/controllers/object_controls_test.go b/controllers/object_controls_test.go
index f6df7340d..0a98170b7 100644
--- a/controllers/object_controls_test.go
+++ b/controllers/object_controls_test.go
@@ -1320,7 +1320,7 @@ func TestServiceMonitor(t *testing.T) {
 			expectedServiceMonitor: nil,
 		},
 		{
-			description: "dcgm-exporter SM enabled, CRD missing -> NotReady",
+			description: "dcgm-exporter SM enabled, CRD missing -> Ready (skip gracefully)",
 			stateName:   "state-dcgm-exporter",
 			k8sObjects:  nil,
 			clusterPolicySpec: gpuv1.ClusterPolicySpec{
@@ -1329,9 +1329,43 @@ func TestServiceMonitor(t *testing.T) {
 					ServiceMonitor: &gpuv1.DCGMExporterServiceMonitorConfig{Enabled: ptr.To(true)},
 				},
 			},
-			expectedState:          gpuv1.NotReady,
+			expectedState:          gpuv1.Ready,
+			expectedServiceMonitor: nil,
+		},
+		{
+			description: "dcgm-exporter SM enabled (default nil), CRD missing -> Ready (skip gracefully)",
+			stateName:   "state-dcgm-exporter",
+			k8sObjects:  nil,
+			clusterPolicySpec: gpuv1.ClusterPolicySpec{
+				DCGMExporter: gpuv1.DCGMExporterSpec{
+					Enabled: ptr.To(true),
+				},
+			},
+			expectedState:          gpuv1.Ready,
 			expectedServiceMonitor: nil,
 		},
+		{
+			description: "dcgm-exporter SM enabled (default nil), CRD present -> Ready (created)",
+			stateName:   "state-dcgm-exporter",
+			k8sObjects:  []client.Object{serviceMonitorCRD},
+			clusterPolicySpec: gpuv1.ClusterPolicySpec{
+				DCGMExporter: gpuv1.DCGMExporterSpec{
+					Enabled: ptr.To(true),
+				},
+			},
+			expectedState: gpuv1.Ready,
+			expectedServiceMonitor: &promv1.ServiceMonitor{
+				ObjectMeta: metav1.ObjectMeta{
+					Name:      testServiceMonitor,
+					Namespace: testNamespace,
+					Labels:    nil,
+				},
+				Spec: promv1.ServiceMonitorSpec{
+					NamespaceSelector: promv1.NamespaceSelector{MatchNames: []string{testNamespace}},
+					Endpoints:         []promv1.Endpoint{{}},
+				},
+			},
+		},
 		{
 			description: "dcgm-exporter SM disabled, CRD present -> Disabled (delete if exists)",
 			stateName:   "state-dcgm-exporter",
diff --git a/deployments/gpu-operator/values.yaml b/deployments/gpu-operator/values.yaml
index 222b0e389..43ae88f78 100644
--- a/deployments/gpu-operator/values.yaml
+++ b/deployments/gpu-operator/values.yaml
@@ -290,7 +290,7 @@ dcgmExporter:
   service:
     internalTrafficPolicy: Cluster
   serviceMonitor:
-    enabled: false
+    enabled: true
     interval: 15s
     honorLabels: false
     additionalLabels: {}