Vladyslav Koptiev @AtlasCapital: "$NVDA 𝗧𝗵𝗲 𝗖𝗿𝗼𝘄𝗻 𝗝𝗲𝘄𝗲𝗹..."

Malta

$NVDA (NVIDIA Corporation) 𝗧𝗵𝗲 𝗖𝗿𝗼𝘄𝗻 𝗝𝗲𝘄𝗲𝗹 𝗼𝗳 𝘁𝗵𝗲 𝗔𝗜 𝗥𝗲𝘃𝗼𝗹𝘂𝘁𝗶𝗼𝗻 For years my portfolio leaned toward “value” names. Only in 2025 did I add Adobe, Google, and Nvidia. While I missed their early rallies, I don’t regret it—my portfolio still outperforms the S&P500. With a new NVDA position (outside Etoro), I want to look closer at this company, the undisputed leader of the AI era. 𝗦𝗲𝗺𝗶𝗰𝗼𝗻𝗱𝘂𝗰𝘁𝗼𝗿𝘀: 𝗙𝗿𝗼𝗺 𝗚𝗿𝗼𝘄𝘁𝗵 𝘁𝗼 𝗠𝗮𝘁𝘂𝗿𝗶𝘁𝘆 The sector surged in the 1980s–90s with PCs and the dot-com boom, then slowed as chips commoditized. Since 2020, cloud and AI have reignited demand. Margins remain strong, though cycles persist. Leadership shifted: Japan faded, TSMC and Samsung rose, Intel stumbled, Nvidia thrived by targeting high-value niches. 𝗔𝗜 𝗖𝗵𝗶𝗽𝘀: 𝗪𝗵𝘆 𝗚𝗣𝗨𝘀 𝗠𝗮𝘁𝘁𝗲𝗿 A GPU contains billions of transistors, enabling trillions of parallel calculations per second. This makes them perfect for gaming, visualization, and training AI models—tasks CPUs cannot handle efficiently. Nvidia dominates this segment, holding ~85% of the AI data center market in 2024. 𝗙𝗿𝗼𝗺 𝗦𝘁𝗿𝘂𝗴𝗴𝗹𝗲𝘀 𝘁𝗼 𝗟𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 Founded in 1993, Nvidia nearly failed when its NV1 chip misaligned with Microsoft’s DirectX. With only weeks of cash left, Jensen Huang bet everything on Riva 128 (1997), designed entirely in software—an industry first. It worked, and in 1999 the GeForce 256 launched the modern GPU era. Since then, Nvidia has supplied Microsoft’s Xbox, led in gaming, and capitalized on crypto and now AI. Drawdowns have been brutal (up to –89%), but the company always rebounded stronger. 𝗗𝗿𝗶𝘃𝗲𝗿𝘀 𝗼𝗳 𝗥𝗲𝘁𝘂𝗿𝗻𝘀 Over the past decade, Nvidia’s revenue grew >40% CAGR, EPS ~65%, ROIC consistently high. This mix of growth + capital discipline delivered ~80% annualized returns. Few companies combine scale, margins, and innovation so effectively. 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗦𝗻𝗮𝗽𝘀𝗵𝗼𝘁 My base case: Revenue CAGR: 25% (2025–2030), 20% (2030–2035). Market share declines from 85% to ~55%. Terminal growth: 3.5%. 2035 revenues: ~$ 900–950B. Operating margin: 58%. WACC: 11%. Reinvestment ratio: Sales-to-capital 1.8. Exit multiple: 18x EBITDA (vs. sector 24x). Fair Value: $ 191/share. At current prices, NVDA trades ~12% below FV, implying ~4% annual alpha if closed in 3 years. 𝗞𝗲𝘆 𝗥𝗶𝘀𝗸𝘀 Taiwan exposure: Heavy reliance on TSMC. Nvidia is diversifying (Samsung, U.S. fabs), but full independence is unlikely. AI hype risk: Demand may normalize faster than expected. Customer concentration: Two hyperscalers = 39% of revenue. Competition: AMD, Google TPU, Amazon Trainium, Alibaba’s 2025 chip all aim to reduce dependence on Nvidia. Regulation: Export bans, tariffs, and geopolitics could disrupt supply. Macroeconomy: Recession, FX, rates. Expectations treadmill: Harder to grow at scale—the law of diminishing returns. 𝗖𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻 AI is a transformative trend but not every AI stock is a winner. Nvidia, however, is the backbone of AI infrastructure. Risks remain, but leadership, profitability, and growth justify its premium. In my view, NVDA is a buy for long-term investors willing to accept volatility. Full article available on Patreon: www.patreon.com/posts/nvda-valuation-138609575?utm_medium=clipboard_copy&utm_source=copyLink&utm_campaign=postshare_creator&utm_content=join_link

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