QSQuantSignals Research/Scion Template
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QS Research · Michael Burry's Scion Capital analyst template · 2006

NVIDIA CORP (NVDA)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case +39% · downside -26% · upside +58%

At $206.81, NVDA trades at 25.8x TTM net income of $192.88B, near the low end of profitable peers, while Q2 FY27 revenue rose 106% and management guided to 70% revenue growth next fiscal year. Using the average P/E of AVGO, ANET, CSCO and QCOM (35.9x) on TTM net income gives a base-case equity value of about $287 per share, +38.8%; applying QCOM's 19.0x gives $152, -26.5%; and applying AVGO's 40.7x gives $326, +57.6%. The base and upside cases show real upside, but the downside case is worse than the -25% maximum required for a long, so the rule is not met. I view this as watch: growth and margin strength are real, but valuation relies on peer multiple expansion and no forward guidance, while macro and AI-capex fears remain valid.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    NVIDIA is a fabless accelerated computing and AI infrastructure company reporting two segments: Compute & Networking (Data Center accelerated computing, networking, AI software, and Automotive) and Graphics (GeForce gaming/PC GPUs and Quadro/NVIDIA RTX workstation GPUs). It makes money by selling data-center-scale GPU/CPU/DPU/networking systems plus software, gaming GPUs, professional visualization GPUs, and automotive platforms. In the latest fiscal year (FY2026, ended 2026-01-25) revenue was $215.94B, operating income $130.39B, and net income $120.07B; from FY2021 to FY2026 revenue climbed from $16.68B with no annual revenue decline. The business shifted from PC graphics/GPU leadership toward data-center-scale AI infrastructure, adding Blackwell, Grace, NVLink Fusion, and Blackwell Ultra, while export controls effectively foreclosed it from China's data center market.

  2. ✓ 2. Competitive advantage

    NVIDIA operates in an intensely competitive market with rapid technological change; its main named competitors are AMD, Huawei, Intel, and large cloud companies that design in-house AI silicon. Absolute profitability and cash generation have grown dramatically from FY2021 to FY2026 (revenue $215.94B, operating income $130.39B, operating cash flow $102.72B in FY2026), suggesting a strong current position. However, the sources do not identify a traditional durable moat; protection relies on patents (some expiring starting March 2026), trade secrets, and R&D scale, while customers have in-house alternatives and some competitors have greater resources.

  3. ✓ 3. 10-Q takeaways

    Q2 FY2027 revenue was $96.2B (+106% y/y, +18% q/q), Data Center $89.0B (+117%), and gross margin was 75.0%. Operating expenses rose 55% y/y to $8.4B; operating income was $63.7B, while net income $59.7B included $7.8B separate non-operating equity gains. Supply/capacity commitments jumped to $279B, H1 FY2027 buybacks were $39.8B, and cash plus marketable debt securities were $56.6B with another $42.8B in marketable equity. No quantitative guidance is given; new risk factor disclosures highlight SB Energy/OpenAI guarantee exposure and AI cloud purchase commitments.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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