Next Arc Research

Disclaimer: This content is for informational and educational purposes only and should not be construed as financial or investment advice. Always do your own research and consult a licensed financial advisor before making investment decisions.
Disclosure: The author holds a long position in NVDA.
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NVDA

Analysis as of: 2025-10-07
NVIDIA Corporation
Designs accelerated computing platforms—GPUs, systems, networking—and AI software used in data centers, PCs and vehicles.
ai enterprise networking semiconductors software
On Yahoo Finance ...

Summary

System moat endures, valuation limits upside
Leadership in full-stack AI systems should sustain outsized revenue growth through 2030. But starting from multi-trillion scale, returns skew to steady compounding rather than another step-change.

Analysis

Thesis
NVIDIA’s compute-systems monopoly (CUDA+NVLink+Spectrum+NIM) and unmatched supply orchestration keep it the default AI factory vendor; TAM expands sharply by 2030, but sheer size caps multiple—expect compounding, not another 10x.

Growth Outlook

Average Implied Multiple (to 2030)
1.9x (from 2 most recent periods)
Reasoning
Q2 FY26 rev $46.7B with Q3 FY26 guide ~$54B confirms >$180–$195B 2025 run-rate. By 2030, accelerators+AI networking+platform SW TAM plausibly ~$800B (Dell’Oro 2029 capex, accelerators $382B; add networking/software). If NVDA holds ~50% share via system moat, revenue ≈$400B. With mid-70% GM and strong FCF, PS likely compresses from ~24 to high teens, yielding ~1.6x market cap vs. today.

Risk Assessment

Overall Risk Summary
Key risks: hyperscaler ASIC disintermediation, HBM/CoWoS and power constraints limiting shipments, export restrictions, and premium valuation compressing as growth normalizes.