Prepared by: Andy Choi
Confidentiality Statement: This document is intended for informational purposes only and is based on publicly available information and the provided source material. However, the analysis and insights contained herein are proprietary and copyrighted. This document should not be distributed, reproduced, or disclosed without prior written consent.
Why Now?
The global economy is at the cross roads looking towards the generative AI now innovation phase to the yet to come multi-year pillar capital outlay phase. This is why there is trillion dollar AI native infrastructure investment by hyper scale cloud companies, enterprises, and nation states aspiring for technological self sufficiency.
NVIDIA occupies a dominant position in the contemporary computing landscape, significantly influencing the fundamental aspects of its development processes. For instance, the announcement of Blackwell, coupled with its increased production efforts, provides the company with a distinctive advantage that attracts substantial investments, currently propelling transformations across various industries. Consequently, NVIDIA is not merely a participant in this sector: rather, it serves as the principal facilitator of the AI industrial revolution.
Three Important Insights
Unassailable Platform Moat
The competitive strength of NVIDIA is further rooted in its ownership of best-of-category hardware but equally through its matured platform moat. The moat is formed through its propriety CUDA software and its constant hardware generational shifts. These kinds of dynamics engender a huge amount of developer lock-in coupled with extremely high switching costs.
Exceptional Financial Model
The financial profile of the business is also borne by its explosive revenue expansion, industry-best profitability, and excellent free cash flow generation. The revenue in Q2 FY26 increased 56% year-on-year to $46.7 billion with data centre sales accounting for close to 88% of total sales, and Non-GAAP gross margins at 72.7% demonstrating NVIDIA's excellent pricing power and operating leverage.
Navigating a Complex Competitive and Geopolitical Landscape
While NVIDIA maintains a position of significant leadership, there exist, nonetheless, inherent risks. For example, longer-term risks include hyperscale customers developing their own proprietary silicon and the ongoing geopolitical confrontation between China and the United States, where a phase 2 has already resulted in diminished revenue from China and may further escalate if tensions persist.
Investment Thesis
From graphics chips to the backbone of AI computing, NVIDIA has transformed into the key provider of full-stack infrastructure. The thesis rests on NVIDIA being the leading supplier of "picks and shovels" for the AI boom, a ultimate force set to drive technology spending for years to come, with a market share in AI accelerators estimated above 80%, NVIDIA has a near-monopoly in the fastest-growing corner of technology.
Many management including NVIDIA themselves projects that the AI infrastructure market may reach $3-4 trillion by the end of the decade, why? The outlook is powered by NVIDIA's Blackwell architecture's initial full quarter's $11 billion in sales. These are the numbers that reflect how large the demand of AI is, and how NVIDIA has maintained its performance lead. With its dominance, its potential for growth, and its defendable moats, NVIDIA is a strong long-term growth motivator.
Valuation
NVIDIA's price tag is justified by its prestigious position as a pioneer in a fast-growing market since the shares are currently trading at a large premium compared to the broader semiconductor industry and forward-looking multiples of the S&P 500 index. This consists of a forward Price-to-Earnings (P/E) ratio of about 47.2 times, accompanied by a trailing twelve-month (LTM) Enterprise Value-to-Sales (EV/Sales) multiple of about 25x, which, while significant, is comparatively normal for fast-growing technology stocks. This premium is further justified by an unparalleled financial profile amongst large-cap technology peers, consisting of an outstanding growth prospects profile featuring industry-leading profitability measures like Return on Invested Capital (ROIC), accompanied by a dominating position in the marketplace.
Refer to table below:
A position in NVIDIA is an important, high-conviction position for growth strategies in a diversified portfolio. The investment provides selective, higher-risk exposure to the secular artificial intelligence trend through its partnerships with hyperscale cloud leaders such as Microsoft, Alphabet, and Amazon, its key customers, and software developers creating AI applications using its technology. This core technology is an important long-term generator of returns in capital markets. A defensive approach to this position is to implement an Overweight position relative to indices in the technology sector, such as the MSCI World Information Technology Index. I also recommend incrementally buying this position by taking advantage of volatility periods to enter at optimal points to build shares.
Risk: The risk to heightened trade barriers for China and the United States can continue to restrict access to a large marketplace while driving the reinforcement of homegrown competitors, as was seen with its application to impose tariffs later in April 2025.
Mitigant: NVIDIA is currently working to develop compliant chips in the China region and is experiencing stunning demand growth in some other regions like the United States, Europe, and the Middle East. This diversification benefits its base revenue geography.
Risk: The business has a strong dependence upon a few hyperscale customers, a few of whom are simultaneously building their own in-house AI silicon, which is a long-term risk to NVIDIA's market position and pricing ability. These are large names company who is moving towards AI, (Alphabet, Microsoft, Amazon).
Mitigant: The firm is actively working to grow its customer base to broader enterprise users and standalone AI projects so as to reduce dependency on a single customer. The performance difference between its general-purpose GPUs and its custom-designed ASICs is still substantial with many workloads.
Competitive Encroachment
Risk: The potential realisation by other large merchant silicon players like AMD and Intel of increased competition can exert pressure on gross margins and market share over a period of time through fluctuating product mixes by these latter two players. The risk is greatly amplified if NVIDIA is incapable of innovating during some future period.
Mitigant: The CUDA software ecosystem creates a powerful moat that is difficult and costly for competitors to replicate, this is also solidified by NVIDIA's rapid innovation cycle, where they consistently maintains a significant operational effectiveness and productivity advantage.
Valuation Volatility
Risk: The steep premium valuation of the stock renders it susceptible to sudden corrections following a change engineered by events in the macroeconomic environment, such as a spike in interest rates, a bubble surrounding stocks of artificial intelligence companies, or any presumed slowing down from its path.
Mitigant: Diversification of portfolio, along with NVIDIA's solid profits and cash flows, can work as a mitigant to potential drawdowns.
Important forward indicators I'm tracking:
Data Centre Revenue Growth (YoY)
Hyperscaler Capex Guidance
Non-GAAP Gross Margin
Blackwell Revenue Contribution
Developments in US-China Export Policy
NVIDIA is a fabless semiconductor producer with fabrication being outsourced to TSMC and architecture and software engineering being its areas of focus. This approach allows NVIDIA to keep its expertise tight and centered around architecture and software engineering for its main lines of products. The key operational strength of the company is its vertically integrated system consisting of hardware elements, such as GPUs, CPUs, DPUs, and network hardware, and a large and proprietary software system by the name CUDA to provide optimised high-performance products. This complete offering covering a wide range creates huge price power and creates a strong competitive position.
Whereas NVIDIA's financial information is segregated by two major business segments, namely Computer and Networking, and Graphics, NVIDIA's business is more aptly described by its four target end-markets with its constituencies and key revenue streams.
Data Centre: This is the biggest and most significant piece of the business firm and is based on the investment thesis foundation. During Q2 FY 2026, it recorded all-time high sales of $41.1 billion and contributed about 88% to the company's total sales with a 56% year-on-year growth rate. The segment is comprised of NVIDIA's enterprise data center GPUs like the Blackwell and Hopper lines, NVLink interconnects, Grace CPUs, as well as its complete portfolio of networking products like Spectrum-X Ethernet platforms and InfiniBand.
Gaming Equipment: is NVIDIA's core business and main source of revenue and brand equity. During quarter two of fiscal 2026, its gaming business brought it $4.3 billion revenue from sales to PC gamers and original equipment makers of its GeForce GPUs.
Pro Visualisation: These are RTX-branded GPUs specifically designed to work with workstations used for architecture, scientific visualisation workstations, and media and entertainment workstations. Even though never its key source of revenues, NVIDIA made revenues to the tune of $454 million during its second quarter 2025 financial period reporting period.
Automotive and Robotics: This is a segment for addressing the NVIDIA DRIVE platform, a complete hardware and software offering for Level 2 and Level 4 autonomous vehicles. The segment is further engaged in addressing the Jetson platform for robotics and other edge. During Q2 FY26, it generated revenue worth $586 million.
The AI Infrastructure Super-Cycle
NVIDIA's case for investment is grounded in its strategic positioning at the center of the vast, multi-trillion dollar global buildup of AI infrastructure. The case has three main pillars: its enduring super-cycle in spend on AI, its resilient defensibility based upon its CUDA software moat, and a quickly moving product innovation cycle that continuously reinforces its advantage in performance.
A foundational and structural change to information technology spend is underway at present. The paradigm is shifting from general-purpose computing based upon CPUs to accelerated computing based upon GPUs to support the compute-intensive workloads of generative AI. This trend shouldn't be thought to reflect a cycle upgrade but instead is a wholesale redesigning of data centers around the world. The capex spend forecast by major cloud services providers, commonly known by their hyperscaler name, supports the magnitude spend we expect during this wave. For calendar year 2025, recent industry estimates expect hyperscaler capital spend to rise by some 50% (2024–25), with players like Alphabet, Meta, and Amazon alone committing tens of billions of dollars to AI infrastructure spend.
This enormous capital outlay supports a strong and sustained demand tailwind for NVIDIA's Data Center products. The firm is not simply an enabler to this nascent trend; instead, it is its biggest beneficiary, taking a huge majority of this new spend. The addressable opportunity is huge, as management and outside experts alike project AI infrastructure spend to jump to between $3 trillion and $4 trillion by this decade's end. This foundational demand stimulus is differentiated by NVIDIA's Data Center revenue, growing an astonishing 56% year over year during its latest quarter. A key performance metric to watch with respect to this stimulus is global cloud service providers' quarterly capital spend guidance during their quarter-end earnings reports.
The CUDA Platform Moat
NVIDIA's strongest competitive advantage is not its hardware but its owned software platform, called CUDA (Compute Unified Device Architecture), launched back in 2006. CUDA offers a programming model accompanied by a comprehensive set of libraries like cuDNN for deep neural networks and cuBLAS for linear algebra allowing developers to harness NVIDIA GPUs' parallel processing ability for any number of applications beyond graphics alone. For close to two decades now, CUDA has solidified its stature as industry-standard artificial intelligence and high-performance computing by virtue of an ecosystem comprised of millions of adept developers and thousands of applications carefully optimised for the platform.
The intricate and sophisticated software ecosystem exemplifies a compelling form of vendor lock-in, thereby imposing excessively high switching costs on customers. A competitor confronts the formidable challenge of not only engineering a GPU with exceptional performance but also replicating a software platform that has been cultivated over two decades, all while convincing millions of developers to rewrite and optimise their code from the ground up. This substantial barrier to entry allows NVIDIA to maintain its dominant market share, which is estimated to exceed 80% in AI accelerators, while also ensuring premium prices for its products.
Relentless Innovation
NVIDIA strengthens its software dominance through a vigorous and dependable product innovation cycle, which spans a duration of one to two years. The company has skillfully adhered to a roadmap characterised by generational architectural progressions, transitioning from the Ampere architecture to Hopper in 2022, and then to Blackwell, which is scheduled for release in 2025, with the next-generation Rubin architecture already announced for 2026. Each successive architecture provides a significant enhancement in both performance and energy efficiency for essential AI tasks, especially in the areas of large language model (LLM) training and inference.
This rapid and fast developments creates a constantly moving target for competitors, making it exceedingly difficult for them to achieve, let alone sustain, performance parity. It also drives a powerful upgrade cycle, as customers are compelled to adopt the latest technology to remain competitive in the AI arms race. The success of this strategy is evident in the adoption of the Blackwell platform, which generated $11 billion in revenue in its first full quarter of availability, marking the fastest product ramp in the company's history. Key performance indicators for this driver include the revenue contribution from the latest platform (Blackwell revenue grew 17% sequentially in Q2 FY26.
The marketplace for AI accelerators is seeing unprecedented scale with unprecedented adoption of generative AI. Though dominated by NVIDIA through and through, it is faced with active and aggressive competition brewing from old-line chipmakers as well as some of its largest customers.
TAM Size and Market Share Dynamics
The addressable artificial intelligence infrastructure market is increasing tremendously. The data center GPU space is worth about $17 billion in 2024 and is predicted to grow at a 27.5% compound annual growth rate and thus will touch over $192 billion by 2034. Scaling out further from there, total spend on AI infrastructure is predicted to touch trillions of dollars over the next decade and thus has huge potential for requisite hardware vendors.
NVIDIA dominates this ecosystem. In its mainstream AI accelerators and datacenter GPUs, several industry studies project its market share to range from 80% to 95%, thus providing it with a de facto near-monopoly position in training and running next-generation AI models. This premier position is carried over to its traditional Gaming business segment, where its discrete GPU unit shipment share attained 94% during second-quarter 2025 based on estimates by Jon Peddie Research, thus only leaving its rival AMD with 6% market share.
Sources of Competitive Moat
NVIDIA's competitive moat is multi-layered, with its software ecosystem serving as the primary defense.
CUDA Software Ecosystem: As detailed previously, the CUDA platform is the cornerstone of NVIDIA's moat. Its deep integration with all major AI frameworks, extensive portfolio of optimised libraries, and large, trained developer base create formidable switching costs and a self-reinforcing network effect.
Hardware Innovation and Performance Leadership: The company's relentless one-to-two-year product cycle ensures a persistent performance and efficiency advantage over competitors, creating a compelling reason for customers to remain within the NVIDIA ecosystem.
Full-Stack Platform Integration: NVIDIA offers a complete, optimised, data-center-scale solution encompassing GPUs, CPUs (Grace), DPUs, high-speed networking (NVLink, Spectrum-X), and a unifying software layer. This end-to-end integration is difficult for competitors, who often focus on individual components, to replicate.
Disruptive Threats and Competitive Landscape
Despite its solid position, NVIDIA has heavy competition awaiting it and will only grow with time. For example, Merchant Silicon Competitors: These are typical semiconductor companies designing general-purpose AI accelerators for open commercial use.
Advanced Micro Devices (AMD): AMD has been NVIDIA's most direct competitor. Its lead AI accelerator is its Instinct MI300 series with its follow-on MI350 series to come out later. AMD matches NVIDIA head-on competitively with certain hardware metrics like offering a larger high-bandwidth memory (HBM) capacity, useful for large language models. Its biggest challenge is its software ecosystem, ROCm, an open-source system developed as CUDA's competitor and alternative. ROCm has stabilised and has gained support among key frameworks but still trails behind CUDA's 20-year head start significantly with respect to depth and developer adoption.
Intel: Gaining shares in its target segment of its AI accelerator market with its Gaudi series processors. Its strategy is to deliver a compelling total cost of ownership (TCO) alongside excellent performance-per-dollar, scalable, industry-standard ethernet-based networking, showing that they have an alternative often cheaper than proprietary interconnects.
Google (Alphabet): Google was a custom silicon leader, having designed and fabricated its Tensor Processing Units (TPUs) internally for its artificial intelligence workloads since 2015. The TPUs are highly optimised toward Google's TensorFlow software stack and are its compute foundation for its Search, Gemini, as well as Google Cloud Platform products.
Amazon: Known for their retail and delivery services, they are also specialising in Web Services which has created its own proprietary set of custom AI chips, "Trainium" for model training and "Inferentia" for inferencing. The chips are created as a cheaper alternative to NVIDIA GPUs in the AWS platform, done in a deliberate act to lower customer expense as well as decrease reliance in a supply chain to a single source.
The rise of legitimate in-house silicon from NVIDIA's largest customers adds a multifaceted dynamic to the equation. While still the largest buyer of NVIDIA GPUs by a wide margin, based on their unmatched performance and broad-based applicability of their workloads, these companies discover that availability of their own bespoke chips really tilts the power dynamic. This gives them a legitimate alternative and enormous negotiating power. In the longer term, this will in turn manifest as pressure upon NVIDIA's pricing and profitability, though still remaining its largest customers. More than causing a wholesale defection from NVIDIA, the ultimate effect of this trend will in fact be a progressive eroding of NVIDIA's pricing power and a ceiling in its longer-term market share.
Financial Metrics & Highlights
NVIDIA's business has undergone a phenomenal transformation from being a high-growth company to a hyper-growth behemoth with a spectacular profitability profile. This is solely a result of its transition towards the high-margin Data Center business area, which now accounts for most of its activities.
Revenue Growth Trends
The company's revenue trajectory has been simply phenomenal. The annual revenue increased from a level of $26.9 billion during FY 2022 to an astonishing $130.5 billion during FY 2025, registering close to a fivefold jump over a period of just three years. The most recent quarter performance during Q2 FY26 stood at revenue at $46.7 billion registering a remarkable 56% surge over prior-year performance.
A closer look at the sequential growth rate reveals a possible moderation in the rate of expansion. While sequential revenue growth was a stellar 12.2% in Q1 FY26 ($44.1 billion versus $39.3 billion), it decelerated to 5.9% in Q2 FY26 ($46.7 billion versus $44.1 billion). While the absolute dollar growth is substantial, this deceleration in the growth rate is a very important data point. It could be a sign of entering early in a transition from a remarkable parabolic phase of growth back to a normalised, although less extreme, course, as the law of large numbers starts to take its toll. For a company whose valuation is based upon stellar growth projections, any sign of deceleration - it matters not how great a base is - will subject to corrections.
Path of Gross & Operating Margin
The transition towards higher value Data Center products has led to substantially higher profitability. The non-GAAP gross margins have moved from 56.9% during FY23 to 72.7% during the quarter concerned, Q2 FY26. The management has continuously signaled guides for gross margins to move to mid-70% range and this points towards their belief in durable pricing power.
The expansion of this margin is thus buttressed by excellent operating leverage. As revenues keep growing, operating cost has been rising at a much slower pace, translating to a significantly wider operating margin. The non-GAAP operating margin for the trailing twelve months is a healthy 58.1%, reflecting the profitability and scalability of its business model.
Free Cash Flow Conversion and Balance Sheet
NVIDIA's business exhibits a substantial capacity for cash generation. In the first quarter of fiscal year 2026, its free cash flow margin exceeded 59%, while in the second quarter of fiscal year 2025, its free cash flow margin was a commendable 45%. This significant generation of cash flow provides ample capital to support its ambitious research and development initiatives, facilitate selective investments, and deliver considerable returns on capital to its shareholders.
The balance sheet is extremely strong. At second-quarter 2026 fiscal year-end, cash and cash equivalents totaled over $56 billion while long-term debt totaled only $8.46 billion. Total assets totaled $140.7 billion substantially larger compared to total liabilities of $40.6 billion and accordingly provides significant financial flexibility and strength.
Shareholder Returns
The firm has become increasingly aggressive in returning capital to its shareholders through share repurchases, mainly. During the first half of fiscal 2026, NVIDIA successfully returned a whopping $24.3 billion to its shareholders. During August 2025, the Board of Directors made a decisive move by approving another $60 billion towards share repurchases and thus highlighting a firm commitment towards returning capital. The quarterly cash dividend is still small at $0.01 per share and is not a significant contributor to the overall capital return policy.
Assessing NVIDIA's valuation means it needs a look beyond conventional measures to value NVIDIA, placing its current multiples in the larger context of its remarkable history of growth and leadership position in the market. The company bears a hefty premium, a position that is seemingly ratified by the market, as it is at the center of today's evolution of AI.
Relative Multiples vs. Peers & History (COMPS)
NVIDIA, on pretty much every normal valuation metric, is selling at a significant premium compared to its semis peers, including such companies as AMD, Intel, Broadcom, Qualcomm, and Texas Instruments.
Price-to-Earnings (P/E): Looking forward to fiscal 2026, NVIDIA shares are currently selling at a P/E of about 47.2 times. This is a very high figure in absolute terms, however, it is put into perspective by forecasted consensus earnings growth of over 40%. This puts its Price/Earning-to-Growth (PEG) ratio at about 1.24, a level which is generally considered justified.
Enterprise Value-to-Sales (EV/Sales): The company's trailing twelve-month EV/Sales multiple is approximately 25x, which is significantly above both its own 5-year historical average and the semiconductor industry median.
Enterprise Value-to-EBITDA (EV/EBITDA): The same applies to the trailing twelve-month EV/EBITDA ratio of approximately 48x, a steep premium over peers as well as.
This enduring premium in multiples implies that the market values NVIDIA not only as a traditional semiconductor firm, but as a platform business with a unique and defendable position in a rapidly growing market. The valuation reflects faith in the durability of its growth and the sustainability of its high-margin business model.
(Reverse DCF) - what does the market believe will happen in the future?
Rather than creating a traditional Discounted Cash Flow (DCF) analysis full of overt assumptions, I believe its more insightful to do a "reverse DCF." The result is a glimpse of the embedded growth assumptions in today's current stock price. To justify its phenomenal market value of approximately $4.4 trillion, the market is implicitly predicting a future in which NVIDIA is able to maintain a revenue compound annual increase in excess of 25-30% over a five to seven year time horizon, during which time it maintains its astounding operating margin in excess of 50-60%.
Validity testing of such assumptions is at the core of the business case for investment. With aprojected multi-trillion-dollar total addressable market opportunity for AI infrastructure and a leadership position in such a market currently held by NVIDIA, such a stellar growth profile is very much in reach. But it does not allow for a lot of room for blips in execution, a dip down in spending, or a substantial erosion of market position. The current valuation, accordingly, is very sensitive to the eventual growth narrative.
Attempting to anchor a huge universe of potential outcomes that accompany a hyper-growth narrative, it is helpful to look at a scenario analysis over a medium-term time horizon, from FY26 to FY28. This framework is applied to value potential upside as well as potential downside, against various assumptions relating to market growth, competition, and execution.
Bull Case (probability: 30%): The case presumes NVIDIA is efficient enough to retain its market share and maintain a percentage above 80% over the forecast period. The case presumes AI TAM grows faster than presently consensus views as fresh, compute-intensive applications in robotics, autonomous, and drug discovery are commercialised. Hyperscaler capex stays at high levels for a long period, and sovereign AI investments gain pace across the world. Presuming these, a revenue CAGR superior to 35% is possible.
Base Case (Probability: 50%): This case represents a balanced scenario and is in agreement with majority consensus estimates. It foresees NVIDIA's market share being gradually eroded and stabilising at mid-65% to mid-70% by 2028 as its opponents' presence at the edge by virtue of processor and silicon offering by AMD and hyperscaler's proprietary silicon starts gaining hold. The Total Addressable Market for Artificial Intelligence grows significantly, consistent with prior projections however, and the hyperscaler capital spend rate for construction expansion starts to plateau after the initial period of intense construction activities are completed. This scenario thus would support a healthy but normal revenue compound annual growth rate of about 25%.
Bear Case (Likelihood: 20%): Here, one imagines a sudden loss of competitiveness for NVIDIA or a sharp fall in the end market. The assumptions most at risk rest upon a fast and seamless ramp up of captive silicon by core customers, causing a drop in market share to less than 50%. This scenario may further be compounded by a cyclical technology spend downturn or a sudden increase in U.S.-China trade sanctions, inflicting permanent harm to the revenue growth potential of the company. This would further bring revenue CAGR to less than 15%.
The following table outlines key upcoming events and potential catalysts over the next 12-18 months that are likely to influence the stock's performance and validate or challenge the core investment thesis.
A comprehensive assessment of risk is critical to a balanced investment view. The following table categorises and assesses the primary risks to the NVIDIA investment thesis, considering their potential impact and probability.
Environmental, Social, and Governance (ESG) and policy factors are increasingly material in financial performance, and for NVIDIA, there are opportunities and then there are risks. NVIDIA upholds a commendable ESG profile, as evidenced by "Sustainalytics" awarding it a "Low Risk" rating. In the semiconductor industry, the company stands proudly at 11th place among 374 firms, securing a position within the top decile. Notably, it garners impressive recognition for its management of human capital, with robust professional development programs and initiatives aimed at fostering a diverse talent pipeline.
Financially Significant Aspects
Energy Efficiency (Environmental Opportunity): At the core of NVIDIA's product strategy is minimising performance-per-watt. The Blackwell architecture, for instance, delivers remarkable gains in energy efficiency over prior generations, specifically in AI inference workloads. With data center power consumption increasingly a material economic and environmental challenge, NVIDIA's emphasis on energy efficiency is more than a core ESG opportunity; it is a vital source of differentiation and a substantial component of its value proposition.
U.S. Industrial Policy (Policy Risk & Opportunity): The U.S. CHIPS and Science Act is designed to restore advanced chip manufacture to American shores. While NVIDIA is a fabless company, this initiative has a direct impact upon its core foundry partner, TSMC, and offers incentives for setting up advanced fabrication facilities in the United States. This could create a longer-term geographically more resilient supply chain for NVIDIA and reduce some geopolitical risk, although a highermanufacturing cost basis compared to Taiwanese production is possible as a result. The U.S. government has, however, demonstrated a willingness to take a proactive interventionist approach in the industry, such as through export controls and, in Intel's case, through setting up direct equity stakes, reflecting a tangled and dynamic policy framework.
NVIDIA's investment insights closely follow J.P. Morgan's Long-Term Capital Market Assumptions (LTCMA), and further support the belief that artificial intelligence is a continuation of general-purpose technology set to bring enormous productivity growth increases to the global economy. For all its history, technological revolutions like the steam engine, electrification, and the internet have followed a pattern with an initial disruption and eventually widespread productivity gains. Studies project at least comparable and potentially substantially greater outcomes for artificial intelligence at a trajectory much faster than its predecessors in history. NVIDIA is the key to the basic computational infrastructure supporting this revolution; hence it is the enabler per excellence of this broader theme. Investment in NVIDIA is a simple statement of this view since it offers focused exposure to the bedrock upon which the next AI-driven economy is to be built. The AI ecosystem expansion to include hyperscalers and software firms is a key investment theme and NVIDIA sits at its very epicenter.
The final answer.
NVIDIA remains the prime enabler and prime benefactor of large-scale infrastructure construction in artificial intelligence with the help of a solid competitive advantage rooted in its superior hardware and software platforms. My Overweight rating has been sustained relative to technology measures, viewing the company as a key growth pick that has focused exposure to a desirable secular trend. As there are serious risks associated with geopolitics, competition, and valuations, there is remaining attractive upside during the next 12 to 24 months for portfolios with a suitable risk tolerance.
Confidentiality Statement: This document is intended for informational purposes only and is based on publicly available information and the provided source material. However, the analysis and insights contained herein are proprietary and copyrighted. This document should not be distributed, reproduced, or disclosed without prior written consent.
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