A Bull Case Theory: The Case of NVIDIA Corporation ( NVDA )

We discovered a a <a href="https://sergeycyw.substack.com/p/nvidia-dominating-ai-gpus-and-^the” rel=”nofollow noopener” target=”_blank” data-ylk=”slk:bullish ^thesis ;elm:context_link;itc:0;sec:content-canvas” class=”link”>bullish ^thesis  on NVIDIA Corporation ( NVDA ) on Substack by Compounding Your Weal^th. We will briefly describe ^the bull ‘ essay on NVDA in ^this article. As of April 11^th, ^the share of NVIDIA Corporation ( NVDA ) was trading at$ 10.13. According to Yahoo Finance, NVDA’s trailing and forwards P/E ratios were 37.73 and 24.75, bo^th.

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NVIDIA Corporation has established itself as the undisputed leader in the field of increased technology and AI, emerging as one of the most innovative forces in contemporary technology. With a staggering market cap of over$ 2.3 trillion and an annual revenue of$ 130.5 billion as of April 2025, NVIDIA’s dominance is primarily driven by its Data Center business, which now accounts for 88 % of its total revenue. NVIDIA’s premier AI chips, like the H100 and A100, as well as broader AI platforms like CUDA, DGX Cloud, and AI Enterprise, which collectively power almost every significant hyperscaler on the planet. The Data Center business continues to be the heart of the investment thesis, capturing 95 % of the market for AI accelerators and 80 % + of the market for GPUs, despite its rapid revenue growth, which ranged from the meteoric 427 % YoY in Q1 2024 to 93 % in Q4. High client lock-in is supported by its amazing CUDA ecosystem, which is supported by a strong dynamic moat supported by intellectual property, scale, and trusted brand equity. The total addressable market for GPUs by Intel is expanding rapidly, with the potential for the data center market to reach$ 1 trillion by 2028 and$ 1.7 trillion by 2035. Additionally, Intel’s entry into CPUs adds$ 35 billion in TAM, and the market for gaming GPUs is projected to grow at a 21 % CAGR through 2028.

Despite this supremacy, indicators of braking are beginning to show. The lowest in two years for revenue beat in Q4 2024 was the 4.9 % revenue beat, and the free cash flow margin fell from 50.7 % to 39.5 %, which raises questions about how NVIDIA will maintain momentum as the AI cycle matures and competition grows. Analysts still anticipate robust top-line growth of 59.1 % in 2025 and 24.6 % in 2026, which indicates that the company is able to expand into new markets like automotive and robotics while maintaining its Data Center business stability. Despite recent compression, NVIDIA still has a non-GAAP gross margin of 75.7 % and a net margin of 56 %, despite gaming, which still generates$ 11.3 billion.

Operatically, NVIDIA continues to be disciplined and trim. R&amp, D accounts for 9 % of revenue, surpassing SG&amp, A, which is only 2 %, demonstrating a tenacious innovation strategy. The business has enough room for proper reinvestment and shareholder returns thanks to its fortress-like balance sheet, which contains$ 43. 2 billion in cash and$ 33. 3 billion in debt. While the share count decreased by 0.7 % and stock-based compensation decreased by 3 % of revenue, the company’s capital allocation is still favorable for shareholders, with$ 8.1 billion of that amount being returned through buybacks and dividends in the last quarter.