NVDA trades at record highs on the assumption that roughly 75% gross margins and hyperscaler spending both keep compounding. Guidance already shows margin and sequential growth slipping, and revenue depends on a few buyers who are building their own chips.
Nvidia is a leading developer of graphics processing units. Traditionally, GPUs were used to enhance the experience on computing platforms, most notably in gaming applications on PCs. GPU use cases have since emerged as important semiconductors used in artificial intelligence to run large language models. Nvidia not only offers AI GPUs, but also a…
www.nvidia.com- 1Q3 FY27 earnings, expected Nov 25, 2026: watch gross margin against the 74.0% guide and the Q4 revenue guide.
- 2Hyperscaler capex guidance on Q3 calls (late Oct) and the next Broadcom AI revenue print: any 2027 budget plateau or custom-silicon share gain.
- 3Export policy: H200 China licensing and Beijing's customs stance, plus any new BIS rule that tightens controls or the 25% fee structure.
- 1Execution has been strong: Q2 beat the roughly $92 billion consensus and the stock rose 8.7% on the print, so estimates may still be too low.
- 2Demand is supply-constrained, and Rubin is ramping into full production, which supports pricing power and the margin guide.
- 3The average sell-side target of about $324 is far above the price, and the $150 billion buyback plus 5 straight up days show strong momentum against a short.
Read the Full Thesis
- Oct 13, 2026 · Price 225.06
Weekly check-in: On Track. Margin leg intact, demand evidence still against the short, price below entry Nothing this week changed the thesis, and nothing new has been reported by Nvidia since the Aug 26 Q2 print. Fresh demand signals cut against the capex-digestion leg: TSMC reported Q3 revenue growth of 50%, and press reports say SpaceX plans to raise up to $40 billion to buy Nvidia chips. The margin leg still holds, because the Q3 guide of 74.0% stands. The stock is now about 7% below its 52-week high of $243.37, so the case's $239 entry level is above the market.
- Oct 20, 2026 · Price 216.5
Weekly check-in: On Track. AI-financing worries lifted the macro leg; China order report offsets it No new results or guidance arrived this week. The Q3 guide of about $108B revenue and 74.0% gross margin is unchanged, so the margin and concentration legs are neither confirmed nor refuted. The AI-financing leg got outside support: chip stocks had their longest losing streak since 2008 on rate-hike, debt and capex-return worries. A Reuters report on Oct 20 of large Chinese orders for a China-compliant workstation chip cuts against the case's claim that export policy is not a source of upside. Evidence is mixed, and the thesis is still on track.
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