NVIDIA

NVDA · investment memo

Valuation margin
demonstrated − required CAGR

+43.6%

Required CAGR

23.3%

Demonstrated

66.9%

Terminal margin

58.0%

Exit multiple

13.9x

Company state

Terminal margin basis

own 10-K opex bridge: m_gross,T 70.0 - R&D 9.5 - SG&A 2.5 = 58.0. Constraint m_EBIT,T 58.0 <= m_gross,T 70.0 SATISFIED with 12.0pp headroom. BELOW trailing (TTM 64.02%, FY2026 60.38%) by design under State B, with a named causal bridge (rack-scale BOM pass-through, contractual HBM cost floor to CY2030, ASIC price ceiling, escalating internal-compute R&D, higher-cost ACIE distribution). NOTE: the pre-existing `terminal_margin` key on this record is the FRACTION 0.58; this field is the percent the contract asks for.

Risk & exit

Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.

Risk trigger
12% below the memo price

$167.21

Forward E[R]
vs a 0% floor

+40.0%

A daily close below $167.21 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.

Thesis-invalidation conditions

Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.

Operating margin below 55% in any quarter in which the top-three customers' capex growth is still positive. This is the State B confirmation test in reverse (see Valuation §1) and it would break the 58.0% terminal margin.
Total manufacturing/supply/capacity commitments falling two consecutive quarters from $119bn. This is the only quantified forward series NVIDIA publishes; the KLA precedent (RPO $11.40bn → $7.86bn while revenue rose 15.8%) is what a rolling cycle looks like in a commitment series.
A fresh excess-inventory / purchase-obligation charge above $5bn not attributable to an export restriction. The $4.5bn H20 charge had a policy cause; an equivalent charge with a *demand* cause is the commitment asymmetry breaking.
Required CAGR from the reverse DCF rising above ~40% on a re-run at a higher price — the point at which the +43.58pp margin closes.
Top-three concentration falling below 45% of revenue with total growth intact — the ACIE diversification working.
Gross margin holding ≥73% through two further quarters of rack-scale mix shift — the terminal 70.0% proving conservative.

Impairment case

Named cause: one of the three direct customers defers or re-phases its 2027 accelerator budget in favour of its own ASIC programme. The mechanism is fully specified by NVIDIA's own disclosures. The three customers are 21%, 17% and 16% of revenue. NVIDIA holds no RPO, no backlog, no take-or-pay and $160m of customer advances, so there is no contractual instrument to slow the transmission — the loss lands in the guided quarter. Simultaneously NVIDIA remains obliged on $119bn of supply commitments, $95bn of it inside nine months, which is what converted a demand shock into a $4.5bn inventory-and-

Documents

NVDA Catalyst Calendar NVDA Financial Model Notes NVDA Research NVDA Trade Construction NVDA Valuation

Generated from each name's analysis.json. Figures are research output, not investment advice. Gaps are shown as “—” rather than filled: a missing input is recorded as indeterminate, never estimated.