NVIDIA

Investment Thesis

NVIDIA’s data center business continues to outpace all demand forecasts as Blackwell architecture ramps into production. We maintain a Strong Buy rating with a price target of $150, reflecting our conviction in a sustained multi-year compute super-cycle.

What Changed

Blackwell yield rates have improved faster than the supply chain had modeled, enabling a more aggressive production ramp in the current half. Management has effectively pre-sold allocations through the next four quarters, which removes a key bear argument about demand sustainability.

Hyperscaler capex is running above consensus across all major cloud providers. When AWS, Azure, Google, and Meta all raise infrastructure spending guidance simultaneously, the primary beneficiary is NVIDIA — there is no credible alternative at scale.

Competitive Position

The software moat created by CUDA is often underappreciated. Enterprises and researchers have spent years optimizing code for CUDA. Rewriting those workloads for competing accelerators is not just an engineering effort — it is a multi-year undertaking that most organizations will not pursue absent a compelling cost advantage.

AMD’s ROCm ecosystem has improved but remains years behind CUDA’s depth of library support and developer tooling.

Risks

Export controls remain the most significant regulatory risk. Any expansion of restrictions on sales to China or other regions could meaningfully impact revenue. Concentration risk is also high — the top five customers represent a disproportionate share of data center revenue.