QS Research · Michael Burry's Scion Capital analyst template · 2006
NVIDIA CORP (NVDA)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case none · downside -19% · upside +21%
On TTM to Jul 26, 2026, today's 14.89x EV/Sales on $302.97B revenue and 23.3x P/E on $192.88B net income put the base case at $186.64, essentially today's price (0%). The 12x EV/Sales downside is $150.4 (-19.4%), supported by the cited China foreclosure and $279B supply commitments, while the 18x EV/Sales upside is $225.8 (+21.0%), supported by Q3 FY2027 guidance of $108.0B ±2% and the $99B buyback authorization; a 30x P/E cross-check is $240.1 (+28.6%). What the market may be missing is that the post-election sell-off has left the cheapest profitable P/E in the peer table while revenue grew 106% y/y in Q2 FY2027, but the sales multiple is only the peer median and the base case does not clear the +30% long hurdle. I call it a watch: the 23.3% drawdown and growth create a possible mispricing, but the risk/reward is not yet asymmetric enough for a long and not bad enough for a short.
Key numbers
- Share price: $186.64
- Market cap: $4,498.02B
- Latest financial period: TTM to Jul 26, 2026
- Revenue (TTM): $302.97B
- EV / EBITDA (TTM): 22.4x
- P/E (TTM): 23.3x
- Price / book: 19.64x
The 15 boxes
- ✓ 1. Long-form business notes
NVIDIA now describes itself as a data center scale AI infrastructure company, not a graphics company: revenue went from $16.68B in FY2021 to $215.94B in FY2026, with operating income up from $4.53B to $130.39B, and free cash generation funding $40.09B of buybacks in FY2026. It is a fabless, platform business (chips + NVLink/networking + CUDA software, with paid NVIDIA AI Enterprise licenses) that sells rack-scale systems into four markets — Data Center, Gaming, Professional Visualization, Automotive — through CSPs, OEMs/ODMs, system integrators and distributors. The main structural drag is policy, not demand: U.S. export controls cost a $4.5B H20 charge in Q1 FY2026 and left the company effectively out of China's data center compute market at FY2026 year-end. Earnings are almost entirely operating: FY2026 pre-tax income of $141.45B vs operating income of $130.39B leaves a non-operating slice, so operating income, not net income, is the number to anchor on.
- ✓ 2. Competitive advantage
The record shows a scale-and-performance advantage monetized at very high margins: FY2026 gross profit $153.46B on revenue $215.94B with operating income $130.39B, and operating cash flow $102.72B against only $6.04B of capex. The 10-K itself describes an intensely competitive market decided on performance, software support, API conformity, manufacturing capability and total system cost, naming AMD, Huawei and Intel plus the in-house silicon teams of Alibaba, Alphabet, Amazon, Baidu and Microsoft. It warns that customers can build their own replacements and that foreclosure from China's data center market has helped competitors build larger developer and customer ecosystems. FY2023 shows the margin is not structurally fixed: revenue was flat but operating income halved, so the advantage rests on scale, R&D and ecosystem rather than on licences or cost position.
- ✓ 3. 10-Q takeaways
Q2 FY2027 (quarter ended July 26, 2026) was a volume-and-price ramp quarter: revenue $96.2B (+18% QoQ, +106% YoY), GAAP gross margin 75.0%, operating income $63.7B (+124% YoY). GAAP net income of $59,688M and $2.46 EPS lean on $7,771M of equity-securities gains booked in other income; the release's non-GAAP net income and EPS are $53,954M and $2.22. The earnings release guides Q3 FY2027 revenue to $108.0B ±2% with zero China Data Center compute revenue assumed and a 74.0% gross margin, while the 10-Q shows the offsetting obligations: supply commitments up to $279B from $119B last quarter, $99B of equity investments plus $25B committed, $36B of six-year AI-cloud service commitments, and SB Energy guarantees capped at $105B.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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