Everything Money 对 $NVDA 的判断变化

If you own Nvidia, you need to know that every single AI company on the entire planet depends on this one company. And right now, it's at a crossroads. The stock ran from 195 to 225, sold off back down to 210, and the earnings that just dropped could tell us which direction it's heading.

Today, three bull cases, three bare cases, and then we're going to run the numbers and find out what Nvidia is really worth based on my own assumptions. So, real quick, if you're new here, let's talk about what Nvidia actually is. It started in 1993 with three engineers met at a Denny's restaurant, a built a company to make better graphics for video games. For years, that's all it was. The chip that made your games look amazing. Then, it turned out those same chips were perfect for powering AI. And overnight, Nvidia went from gamer favorite to the most important company in the entire AI boom.

All right, so the three big reasons that the Bulls believe that Nvidia at these prices still has a massive runway ahead of it. Bullcase number one, Nvidia isn't just selling chips. It's running a product super cycle that could generate $1 trillion in revenue. This is obviously the big one. Their CEO has outlined visibility toward generating 1 trillion in cumulative revenue between 2025 and the end of 2027 from the Blackwell and next generation Vera Rubin GPU architectures.

And here's what makes this so powerful. Nvidia updates its chip architecture every single year. Hopper, then Blackwell, then Blackwell Ultra, then Rubin. That means every big tech company that wants to stay competitive in AI has to keep buying the newest chips. They can't just buy once and sit on it. They have to keep coming back. That's what keeps Nvidia's chips from becoming a commodity. And it's why gross margins have steadily increased and they're now sitting at 75%.

Now, of course, the bulls say that this isn't a one-time boom. It's a product cycle that forces repeat purchases at premium prices for years and years to come. And there's upside that isn't even in the numbers yet. Nvidia's guidance doesn't include potential revenue from compliance chips for the Chinese market or unannounced software revenue streams. If any of those materialize, the estimates that Wall Street is using right now are truly conservative numbers.

Bullcase number two, the biggest companies on the planet are telling you exactly where the money is going and it's going to Nvidia. This is the fuel behind everything. Microsoft, Google, Amazon, and Meta are on track to spend a combined $700 billion or more on capex in 2026. And every single one of them has said the exact same thing. The risk of underinvesting in AI is bigger than the risk of overinvesting. In plain English, they'd rather spend too much than get left behind. And where does that money go? It goes to Nvidia.

The numbers prove it. Nvidia's supply commitments have nearly doubled to $95.2 billion. That is not a forecast. That's backlogged purchase orders, signed commitments.

The bulls say as long as the hyperscalers keep spending. And right now, none of them are showing any signs of slowing down. Nvidia's revenue has a floor underneath it that's hard to find anywhere else in the market.

Bull case number three, the stock is actually cheap for how fast it's growing. And that surprises a lot of people, myself included. This is the one that catches people off guard because Nvidia has been a $5 trillion market cap business. And the stock price looks expensive, but you got to look at the math. Heading into earnings, Nvidia trades at a forward PE. That's nearly half of what Walmart trades at. Walmart, guys. A discount store.

And Nvidia is growing revenue at roughly 95 to 97% year-over-year. Expected to report $92 billion this past quarter against 47 billion just a year ago. That's nearly doubling the business in just 12 months.

The bulls say that when you have a company growing that fast with high gross margins at 75% like they do a $1 trillion revenue mo road map and the stock is cheaper on a forward earnings basis than this discount store, the market has to be mispricing this. The bulls believe that the earnings growth has outpaced the stock and that gap is an opportunity.

Now, before we get into the bare cases, I want you to hear what the man himself that's running the company is saying because Jensen Hawaiian is not being shy. He says, "Computing demand hasn't slowed down over the last 6 months. It has only gone up. AI models are getting smarter. More people are using them. And both trends mean one thing. More chips need to be ordered." But here's where he goes even bigger. He says that we're at the beginning of a brand new industrial revolution. data centers used to store your data. Now they're becoming what he calls AI factories, buildings that produce intelligence as a product.

And to back that up, Nvidia just partnered with Black Rockck and Blackstone to mobilize $500 billion to build all that out. That is not Nvidia's money, guys. That's the biggest asset managers on Earth betting on Jensen's vision.

He also says that this revolution will eventually require a thousand times more energy than the world currently uses for computing. A thousand times more. And every company that wants to be energy efficient has to buy Nvidia's latest chips to get there.

And when people bring up open-source AI is a threat, he flips it. Free AI means thousands of new companies in entire countries start building and every single one of them needs Nvidia hardware to run it. That's the CEO's view.

Now, let's hear from the other side, the bare cases. If you're going to own Nvidia, you need to know what could go wrong. You absolutely have to understand both sides of the coin. Bare case number one, the customers are spending like crazy, but nobody's proven that the money is coming back as a good return. This is the biggest bare argument against Nvidia, and it's simple. These huge tech companies, the biggest in the world, are spending hundreds of billions of dollars buying Nvidia's chips. But here's the question nobody can fully answer yet. What is the profit on the other side? Where is even the revenue on the other side?

Corporate software revenues from AI tools, the products that are supposed to justify all this hardware, are growing at a much slower pace than the infrastructure spending itself. In plain English, the companies that are buying Nvidia's chips are spending way faster than they're bringing money in from those from what those chips produce. The bears call this the AI ROI chasm. A fancy way of saying that there's a gap between what's being spent and what's being earned.

Nvidia doesn't sell subscriptions. It sells hardware. And hardware spending can get turned off a lot faster than people think. That's exactly why our fifth tenant of principal-driven investing is so important here because what it says is a great business, a great story at the wrong price ends up being a bad investment.

Bearcase number two, Nvidia's biggest customers are also building their own chips now and that should worry you. This one is about the long game. Right now, a tiny handful of customers, we're talking Amazon, Google, Meta, and Microsoft, they account for 40% of Nvidia's total revenue, that is a massive concentration in a very small number of buyers.

And all those buyers are very wealthy. And every single one of them is actively developing their own custom AI chips. They have hundreds of billions of dollars a year to spend. You better believe if they know they're paying huge prices for something that doesn't cost nearly as much, they might themselves try to build those exact chips.

And every custom chip one of these companies develops internally is a high margin Nvidia GPU that they're not going to end up buying. So, right now, Nvidia's chips are still the best. That's why the orders keep coming. But the bears say this is a slowmoving threat that gets more dangerous every single year. As these in-house chips get better and more mature, Nvidia's near monopoly pricing power starts to erode. You go from being the only option to being one of several options. And when that happens, the 75% gross margins that the entire bull case depends on start to compress.

Bare case number three, execution risks and geopolitics could hit at the worst possible time. This one is about things Nvidia can't control. On the execution side, there have been persistent rumors about design complications and packaging bottlenecks with Taiwan Semiconductor, the company that actually manufactures Nvidia's chips, and that could delay the roll out of Blackwell Ultra and Vera Rubin.

When your entire bullcase is built on a product super cycle, any delay in getting the next generation of chips out the door is real problem. That super cycle means they go in cycles. This one's a big boom. If they miss out on that big boom, it's gone for a while.

And then there's the bigger picture. Some bearish analysts are flagging that a chunk of the demand driving these massive data set projects might be artificially propped up through the creative financing rather than genuine organic adoption. What this means is Nvidia has been known to make a hundred billion dollar investment in a company and in exchange that company's going to buy hundred billion dollars of chips from Nvidia. That's the idea going there. They're putting money from here to here to then get back right here.

And then there's China. Strict US export controls continue to block Nvidia from shipping its most powerful chips to the Chinese market. Nvidia has designed scaledown compliance chips to work around the restrictions. But the bears say one more round of regulatory tightening could wipe out billions in international sales overnight. Nvidia's caught in the middle of a geopolitical fight that it didn't start and can't control. And that's a risk that doesn't show up anywhere on the balance sheet, the profit and loss statement, or the PE ratio.

All right, now let's go look at the latest earnings and then we'll analyze the stock. Okay, so here it is. Added a record 15 billion in revenue with strong and diverse contribution across both hypers scale and whatever that means. Year-over-year growth accelerated for the fourth consecutive quarter. So, not only did they saying that revenue is bigger, the growth rate was bigger.

And this is why Jensen, he said recently, guys, we're not seeing a slowdown. We're seeing an increase in the speed of people buying our stuff. Wow. Look at that. Year-over-year 96 point. That's over double the revenue. Incredible.

Oh, ACIE is AI clouds industrial enterprise hypers scale 48.7. Oh, man. gross margin staying in 75%. Guys, I want to show you guys the gross margin from years ago. So, let's pull up their gross margin here. What I love about our software is I can click this chart and see, look at the gross margin. It's just steadily increasing. It was as low in 2004 is 29%. It is now 75%. Every extra unit they sell, that 75% of it goes to the bottom line.

Operating expenses year-over-year 5.4 to 8.4, 8.2, whichever way you want to do it. Earnings per share over double. Free cash flow. Incredible. Free cash flow 21.3 versus 13.5.

Why they're doing share repurchases? They must believe that their stock is massively undervalued. Because if they're not doing it that way, they're just idiots. Oh my gosh, look at this stuff. Gross margin up two and a half points. two and a half percent. Operating expenses up 55% operating income 124% net income 126. Guys, what if this is bad? What what what about this is bad?

All right, guys. So, here's Nvidia. We're pulling it up in our entire software. We're going to break this thing down. First things first, I look at the market cap. This is the actual price of the business because the stock price is merely the market cap divided by the number of shares. It is 5.11 trillion. If it had one share, that share price would be 5.11 trillion. If you had 10 shares, it' be 511 billion. You see where I'm going? So, this is the market cap.

Next, enterprise value, 5.09 trillion. This is if you took the market cap, added on all the debt, then subtracted all the cash you would get by buying it. So, it's basically buying the business with no debt and no cash in the bank account. That's it. When it's lower than the market cap, which is rare, that's a great sign. And Nvidia has debt.

Next, very high returns on capital. This is a great quality metric. Great quality metric. This company is very good at handling the money that comes in the business. Guys, look at this profit margin. 10ear average 52% 5year 54 and a half one year 63%. That profit margin keeps on climbing because their gross margin keeps on climbing. Let's look at this. Look at this gross. Look at this profit margin over the last I mean they had negative years here. Incredible. Look at this gross margin just growing and growing and growing. This is by quarter here. This is annual. When I was in college, this companyy's making 38% quarter um gross margin. They're now making 63% bottom line margin. That's insane.

All right, they pay a cute little dividend, but because the market cap's so high, it's still almost a billion dollars. And guys, 43 times free cash flow, 32 times earnings, but they're growing their profit like crazy. So that might be okay.

Let's go look at um the eight pillars here. Okay, we love seeing this. All check marks. Cash flow is up. Group revenue is up. Net income's up. Debt is low. They're buying back shares, which isn't always a good thing unless the company's undervalued. High returns on capital. It's just these PE and price of free cash flows.

But look at this. Let's pull up analyst estimates. analysts have this company going from $4.70 to $20 per share in profit over the next five years. That's insane. Sorry. Yeah. Next five years. That's like 30 plus% a year in profit growth. And revenue growth of 213 billion growing to a trillion dollars over the next five years. 65% 83% 40% 21 14 and 30% revenue growth.

years. 65% 83% 40% 21 14 and 30% revenue growth. Guys, so here's my thing. This is all amazing. The question is, is this permanent? It feels like it is. But how many times in history have you thought something was a no-brainer and it didn't end up being that way?

Guys, so here's my thing. This is all amazing. The question is, is this permanent? It feels like it is. But how many times in history have you thought something was a no-brainer and it didn't end up being that way?

It was a no-brainer that all these electric vehicle companies would change the world, it'd be done. One lasted, basically. One was a decent stock. And even that one, everybody thought they'd be selling six or seven million cars a year by now. Literally, meet Kevin, Kathy Wood, all these people were saying that they're selling a million, seven, a million, eight cars. They just announced that Cybertruck sales have disappointed again. These things don't If you always make your investment decisions based on the most optimistic assumptions, you're going to have a problem. It allows for no margin of error. And that's what we have here. It's like that's what I'm worried about.

So, we have a little bit of story, a little bit of numbers. We put them together, guys. I'm going to do a 10-year analysis. I'm going to even out a little bit. First line, revenue growth for the next 10 years. I did 12, 20, and 30% revenue growth. Sounds low, but I'm going to bank in a little bit of like, well, maybe they just don't hit it because all of a sudden the AI boom stops and people realize they over spent and they don't need to do that anymore.

First line, revenue growth for the next 10 years. I did 12, 20, and 30% revenue growth. Sounds low, but I'm going to bank in a little bit of like, well, maybe they just don't hit it because all of a sudden the AI boom stops and people realize they over spent and they don't need to do that anymore.

Next, profit margin. If that happens, what I just said, then profits are going to fall. So, I'm putting in 35, 45, and 55% profit margin. Next, what PE would I assign to this company 10 years from now? Not today, not 5 years from now, at the end of 10 years, not the average at the end of 10 years. Well, guys, the average in the S&P over long periods of time is 15, 16, 17 times earnings, but Nvidia is clearly a better company than the average S&P company. So, I'm going to give it a premium. I put an 18, 23, and 28 times earnings.

And then finally, my 9% no margin of safety return. This is This is looking for actually I'm gonna do nine and a half percent. Because that's really what I want to do. I always tell people to do nine to 10% because that's the market return. I'm put in nine and a half. What this is saying is what's the company worth if it was a marketbased company, a market return company. It'll tell you the price to pay. Of course though, you need to put a higher amount in there because you need margin of safety. And if you're just going to get the market return, buy a lowcost ETF. It's way easier on your lifestyle and mind.

I hit the analyze button. The stock is currently at 207. This is going to surprise you. I have a low price of 120, high price of a,000, middle price of 337. My middle assumptions assume a 15.5% return.

Now, you might be looking at this going, Paul, 120 to a,000. Well, yes. You know why? Because my revenue growth assumptions are so different and my profit assumptions are so different. We aren't in a company like Microsoft or Google where it's a lot more compact on their profit margin and growth. It's like they're not growing like crazy like this. So, this is very, very difficult for me to sit there and go, it's a narrow number. But guess what? That middle assumption is showing 15 and a half% returns. That's pretty interesting to me.