NVDA

NVDA

NVIDIA

Semiconductors

★ Quality 90/100
Overvalued

Price today

$230.36

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The global standard for artificial intelligence

NVIDIA created CUDA over 15 years ago. Today every large AI model in the world is trained on its chips. Replacing it would take years and billions of dollars.

What this business is made of

90qualityReturnsMoatBalance sheetPricing powerReinvestment

Where does the value come from?

5-year cycle

Money made year by year

This business has cycles — good years and bad years. That's why we don't use just the last year.

$0.4
2021
$0.2
2022
$1.2
2023
$3.0
2024
$1.2
2025
Cycle average: $1.23/sh

We use the average of those 5 years as the base for the math — not the good year, not the bad year. That way the value reflects what the company makes steadily.

The business

In the AI gold rush, NVIDIA is the only store selling shovels.

NVIDIA designs the chips (GPUs) that train and run artificial intelligence. It sells those accelerators to the big clouds —Microsoft, Amazon, Google, Meta— who buy them tens of thousands at a time. Data center is already 80% of the business: in FY2026 that division grows nearly 94% to about $176B.

The moat isn't just the chips, it's CUDA: the software layer millions of developers have been programming on for fifteen years. Switching providers means rewriting everything from scratch. Add a two-generation design lead and 75% gross margins that fund the next round of R&D.

Revenue history

$26.9B
2022
$27.0B
2023
$60.9B
2024
$130.5B
2025
$215.9B
2026
CAGR 5 años: +68%

From $26.9B to $215.9B in 4 years — nearly 8.0x its size. Selling more and more is the base of everything else.

Where each $100 of sales goes

Revenue $215.9B · FY2026

Cost of sales$62.5B · 29%
Operations$23.1B · 11%
Taxes and other$10.3B · 5%
Net profit$120.1B · 56%

Of every $100 in sales, $44 goes to costs and operations; $56 is left as net profit (56% margin).

Catalysts and risks

Data Center growing ~94% to $176B in FY2026.

Rubin GB300 Ultra arrives in the second quarter of 2026.

H200 reopening in China: $3-5B potential upside.

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It's a cyclical business: once customers finish building, orders cool off fast.

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Its biggest buyers design their own chips (Google's TPU, Amazon's Trainium).

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Export restrictions to China that can slam shut overnight.

Charlie's note

Paying 22x normalized flow for the best semiconductor business in the world, growing 65% with 75% gross margin, is no extravagance. The trap is confusing the top of the cycle with the permanent state and paying for optimism that hasn't yet been booked.

Analysis · July 2026

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