凭借具吸引力的估值和高增长潜力，NVDA 是相较 AMD 更受青睐的买入标的。

Today I want to take a closer look at two of my favorite companies, Nvidia and AMT. He came in here and said, "You know what? Let's talk about AMD and Nvidia, but you have to choose one at the end of the episode. Who would you buy at these prices?

we'll talk about Nvidia versus AMD. might even talk about Nvidia versus Broadcom in the near future. I do know that Nvidia is your your favorite although you do own AMD as well and I am now as of right now fully in AMD. Couple of shares of Nvidia.

with Nvidia right now, Neil, I'm going to start off with what I believe is one of the biggest bullish case for Nvidia and to me is the valuation including the growth opportunity.

This is a company that most recent quarter grew 105%. The quarter before that it grew 85% year-over-year. And if we look at market expectations right 91% on next quarter and 82% next quart uh the quarter after that I personally believe that these numbers analysts still underestimate Nvidia

and with the Vera Rubin platform kind of Nvidia having this massive introduction where Vera Rubin is having even more components from Nvidia they're having more standalone racks like this Vera CPU standalone rack they have the LPX solution I I I think analysts are underestimating the potential strength of Vera Rubin.

But regardless, even if they're not, you're giving me a company that's growing high double digits at a valuation. Let's kind of look at Ford PE ratio of 18.76. To me, that is insane.

but yeah, Nvidia is expected to grow. I mean, even close to triple digits if we're if we're being honest, right? It it's quite close to doubling its business. And the dollar amount just gets bigger and bigger and bigger.

Fun fact, over the last 12 months, operating profit is close to $200 billion. And for fiscal 29, it's expected to be over $600 billion. So, a 3x increase in operating profits is about to happen or that's the expectation um as of right now.

But yeah, valuation is a is an interesting one here because of course PE is very low. Free cash flow super high. So price to free cash flow is also low right here. The the question then becomes why why is it so low?

Is it purely because this is a 5.5 or 5.4 trillion company? Is that the reason why it's not moving that much on the upside? Although I think it's still up around 19% or so the year to date.

But yeah, it it might be the the first truly growth value company out there because you're getting tremendous growth. 90% growth is the expected number for fiscal 27, but it's expected to generate $411 billion for the the fiscal year afterwards.

Right now, expectations are at 65% year-over-year growth, but if if supply chain allows, it might be much more much more than that.

Despite all of that, the pricing metrics are super low compared to what you would usually get if this were, I guess, a $200 billion company, maybe $500 billion company growing this quickly and this profitable, you would probably see mid20s forward PE or even sometimes over 30s.

Yet with this one, it is still under 20 times. So valuation wise, I would say check extremely extremely attractive.

growth rates super attractive margins even with even with the expected decline in the short run because of high memory prices it's still quite high it's actually at historic high levels for an Nvidia so I wouldn't be too worried about that yeah

just talking about Nvidia gets me more excited and excited about some of the bullish we talked about kind of all the financial numbers and and it's crazy you talked about free cash flow for the next four quarters this company is expected to do north of $240 billion in free cash flow.

That is freaking wild to me, right? That is freaking wild to me.

But like I said, enough of financials to me. The things that excites me about Nvidia is just the innovation, right? They they were the first to come up with this full rack scale system and now they're expanding across that, right?

They like I mentioned now they have kind of the aggregated inference where you have the LPX and and the and then their AI accelerator their GPUs doing a lot of the work or or depending on the workloads you need.

Nvidia is the first through an acquire per se, but it's still the one internally doing and and before this they were actually already planning on doing it something else with a CPX that they had produced or or discussed about a year ago.

It seems like they were planning on it but they changed direction regardless.

They're also innovating in storage solutions in storage systems with their DPUs. Something that again other partners or or players are working with partners. Nvidia is bringing everything in there which allows them to take more money off the pie and no matter who it is right now kind of selling AI compute the one that collects the most revenue per compute or per mega per megawatt is Nvidia.

I think Nvidia has talked about 40 billion of of potential sales per gigawatt where the other two competitors that have shared which I think have been AMD and Brocom they just tell us teens or double digits right they don't give us a full number is the only one giving it and I wonder if they're just scared to tell us why the the actual number because Nvidia is just baking so much and I think that has to go a lot with innovation.

The final thing, Neil, is just the Nvidia team kind of revamping this Nvidia GPUs as an asset, I think is very crucial, especially as you're building this multi-gawatt data centers where you are spending hundreds of billions to build the data centers.

If I was a bank and you told me, "Hey, look, I'm going to use this money that you're going to give me to have this GPU and here's the data that this type of GPU can be for the past 8 years has been running on A100s and all this and has still maintained price or here's a new player Broadcom with an ASIC or AMD with the full Rexdale system now with the MI450.

There's not enough data set. I would say if you want the better rate, you're going to buy Nvidia GPUs.

I'll still give you money for these other players, but the better rate is definitely going to go with there. And I think when you're spending hundreds of billion, it does create a a discussion point.

It doesn't mean you're guaranteed to go with Nvidia, but if you're going to get better rates, it opens up the room for table of discussion, and that creates a little bit more opportunity for Nvidia to grab some more market share.

by the way, that's a very good angle that you just laid out there with the fact that yes, if you are using full Nvidia solutions, you'll get better rates if you need to raise money, right?

A percent here, a percent there for a lot of these players that want to grow super quickly is saving them quite a lot of money over over the long term.

I think we we've seen uh with regards to the GPU, the old GPU story, I think we've seen Corwe, right, say something about their A100s that they're still leasing out at good prices and aren't those supposed to be technically now printing money as they say because they're past their their depreciation period?

Yeah. I mean, I think just today they they announced another partnership with I for I think it was like a bioscience company that that company is going to be using A100 and H100s.

The A100 is almost an 8-year-old product and still collecting great revenue for them.

We know that the majority, if not all of Nvidia's largest customers will again come out with their own custom chips, which of course partnering up with with a Broadcom with a Marvel.

Could it potentially hurt Nvidia's expected growth rates that that's I guess the the point of discussion now.

You mix this plus again the fears of maybe all of these GPUs etc. those are commodities. Maybe circular financing is a red flag. I think all of these things, it's not a bearish per se.

It's just what the bears bring up time and time again.

But on the hyperscalers like the big tech companies coming out with their own personal chips, I still think that the large majority of those things are going to be used for internal compute, I think the hyperscalers, the the cloud players, they're all going to still offer Nvidia.

Why is that? because well probably the companies that are using AWS, Azure, Google Cloud have built their company on Nvidia stack and so would be quite stupid for those hyperscalers to start offering something else that isn't Nvidia.

As for the internal use, Google's TPUs we know is very good. We know we know that's why margins for them are going to go up and up and up. I think for Meta their custom chips also for internal use that's going to make the business more efficient.

But I don't see a world where Meta, Google, Microsoft, Amazon, Oracle, I mean, OpenAI, Antropic, the list goes on and on. They don't order GPUs from Nvidia anymore. Maybe in the future they're order, they will order less potentially, but I don't think we're there just yet.

I think when Jalapeno came out here for OpenAI and Broadcom, we kind of saw this negative push towards Nvidia stock.

But I would I want to bring one more risk in my opinion for Nvidia. I I don't think AI being a AI fake is is a true risk. It's always something to consider. What if AI demand slows down?

That's a risk and I think everyone should consider. So I don't believe that risk is true.

If there was another risk is Nvidia is growing at mo at crazy levels. For them to continue to grow at these levels, you need to keep building multi-gawatt data centers, right? A small 10 megawatt data center, a small 100 megawatt data center, which is not small, but compared to the overall things for Nvidia, is it going to move too much the needle?

One thing that we're seeing is power is still expected to be a limitation. What happens if for some reason Nvidia is not able to get the right amount of power to be turned on? that can completely slow down opposed to like some of the other players where a 100 megawatt data center for them could still be a massive jump on the topline number.

So if there was a risk, it could be kind of like power and energy could create a bit of a hurdle for Nvidia. It could create a hurdle for other players, but because of the big numbers Nvidia's producing, their top line can definitely be impacted more than the others.

It was always a laughing stock because of why buy AMD when you can buy Nvidia. It's not an apples to apples comparison but it was like buying Nvidia super early on in this super cycle.

Although Nvidia being Nvidia, the growth rates there are are still mind-blowing but we have seen AMD consistently grow faster and faster take the large chunk of the overall revenue.

yes there is huge demand for let's say non maybe non-Nvidia solutions so AMD came out with MI300 series which was still way behind what Nvidia was offering especially also on the software side of things

Of course, Nvidia is has also entered the CPU space and surprisingly enough, Intel has also positioned itself quite well to to capture the upside there.

They're becoming that middle person between Broadcom and Nvidia.

I think Nvidia has done a tremendous job over the years to make sure that their supply chain is fully fully optimized. compared to an Nvidia which is closer to what did you say 18 19 times.

While at the current expectations Nvidia is expected to grow faster at a larger dollar amount. like we see with Nvidia 2 three years ago when they literally beat Wall Street by by 10 15 20% or so every single time where they go exclusive Nvidia.

And Neo, I'm going to say at these price points, I would feel safer buying Nvidia than AMD. So, Nvidia is going to be my pick here.

I would pick Nvidia purely because of yes, the growth potential. Still, the valuation, the valuation that you're getting right now is in my opinion ridiculous and that's why I would pick it.

if we had zero is zero shares, I tend to lean towards an Nvidia right now.

And it seems we both do with Nvidia. And Nvidia bulls, let us know how much you love us.