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NVIDIA Corporation - Common Stock
Our verdict on NVIDIA Corporation - Common Stock isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management confirmed that production units of the Blackwell Ultra platforms, including GB300, began shipping in the second quarter of fiscal year 2026 as planned. (1 met across 1 tracked commitment)
“We began shipping production units of our new Blackwell Ultra platforms including GB300 in the second quarter of fiscal year 2026 and continue to sell prior generation architecture.”
Management reiterated the expectation that approximately 40% of revenue from contracts greater than one year in length will be recognized over the next twelve months. (1 met across 1 tracked commitment)
“As of October 26, 2025, revenue related to remaining performance obligations from contracts greater than one year in length was $2.5 billion... Approximately 40% of revenue from contracts greater than one year in length will be recognized over the next twelve months.”
Management has maintained its commitment to recognize approximately 40% of revenue from contracts greater than one year in length over the next twelve months, consistent with prior guidance. (1 met, 1 revised across 2 tracked commitments)
“Approximately 40% of revenue from contracts greater than one year in length will be recognized over the next twelve months.”
The company is actively utilizing the authorization, with $62.2 billion remaining as of October 26, 2025, following significant repurchases in the third quarter. (1 in progress across 1 tracked commitment)
“On August 26, 2025, our Board of Directors approved an additional $60.0 billion in share repurchase authorization, without expiration.”
Management reiterated its belief that the valuation allowance for certain state deferred tax assets may be released in the near term, though it has not yet occurred as of the end of Q2 FY2026. (1 in progress across 1 tracked commitment)
“Given our current and possible future earnings, we believe that we may release the valuation allowance associated with certain state deferred tax assets in the near term, which would decrease our income tax expense for the period the release is recorded.”
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How durable is the business?
The moat is expanding through a rapid one-year product cadence, specifically the transition to Blackwell Ultra (GB300) and increased R&D spending. (1 expanding)
“We continue to execute Data Center compute product introductions, bringing new advanced architectures on a one-year product cadence. We began shipping production units of our new Blackwell Ultra platforms including GB300.”
The cash position remains exceptionally strong, though the company is aggressively deploying capital into strategic investments (Intel, OpenAI, Anthropic) and massive share repurchases. (1 stable)
“As of October 26, 2025, we had $60.6 billion in cash, cash equivalents, and marketable securities.”
The U.S. market share of total revenue decreased from approximately 79% to 48.7% as international billing locations (specifically Singapore) grew substantially. (2 shifted, 1 expanding)
“United States $ 23,470 ... Total revenue $ 46,743”
The balance sheet remains exceptionally strong with $50.3 billion in cash and debt securities, plus an additional $30.2 billion in marketable equity securities, totaling over $80 billion in liquid assets. (1 stable)
“Cash, cash equivalents, and marketable debt securities $ 50,335... we had $50.3 billion in cash... as well as $30.2 billion of marketable equity securities.”
The U.S. market share has significantly increased to 69.3% of total revenue, up from 59.4% in the prior year, as domestic demand for AI infrastructure accelerates. (1 expanding, 1 contracting)
“The increase in revenue to the United States for fiscal years 2026 and 2025 was primarily due to higher U.S.-based Compute & Networking segment demand.”
See the full cited Business Model analysis of NVIDIA Corporation - Common Stock
Where does growth come from?
The Edge Computing segment is establishing a steady growth trend, up 29% YoY, supported by Blackwell workstation demand, despite headwinds in the consumer PC market. (1 steady across 1 signal)
“Edge Computing revenue for the first quarter was $6.4 billion, up 29% from a year ago and up 10% sequentially.”
Automotive revenue, a key component of edge computing, is showing steady year-over-year growth as self-driving platforms gain adoption. (1 steady across 1 signal)
“Automotive revenue was up 32% from a year ago and up 1% sequentially, driven by continued adoption of our self-driving platforms.”
Data Center revenue is showing strong sequential and year-over-year acceleration, driven by the transition to Blackwell architectures and high demand for NVLink compute fabrics. (1 accelerating across 1 signal)
“Data Center revenue was $51.2 billion, up 66% from a year ago and up 25% sequentially, driven by three platform shifts –accelerated computing, powerful AI models, and agentic applications.”
Gross margins have experienced a slight year-over-year deceleration as the business transitions from selling individual components (Hopper HGX) to full-scale data center solutions (Blackwell), though they are recovering sequentially. (1 decelerating across 1 signal)
“Gross margin decreased from a year ago as our business model transitioned from offering Hopper HGX systems to Blackwell full-scale datacenter solutions. Gross margin increased sequentially as Blackwell ramped with an improved mix and cost structure.”
The company is initiating a massive new wave of expansion for its own R&D and DGX Cloud infrastructure, with $7.5 billion in new lease obligations expected to commence shortly. (1 new trend across 1 signal)
“Between the fourth quarter of fiscal year 2026 and fiscal year 2030, we expect to commence leases with future obligations of $7.5 billion, primarily for data center leases.”
See the full cited Future Growth analysis of NVIDIA Corporation - Common Stock
What could break the thesis?
NVIDIA's ability to sell chips depends on its customers being able to build massive data centers, which require huge amounts of electricity and land. Shortages in power or construction delays could slow down chip orders. [DEMAND]
“The availability of data centers, energy, and capital to support the buildout of NVIDIA AI infrastructure by our customers and partners is crucial, and any shortage of these or other necessary resources could impact our future revenue”
The rapid launch of new chip architectures (like Blackwell and Rubin) creates a risk that customers will stop buying current products while waiting for the new ones, leading to volatile sales and wasted inventory. [EXECUTION]
“The increased frequency of these architecture introductions and the larger number of products and product configurations may magnify the challenges associated with managing our supply and demand which may further create volatility in our revenue.”
NVIDIA is facing significant legal pressure from global regulators investigating potential antitrust (monopoly) behavior in the graphics card and AI chip markets. [REGULATORY]
“The French Competition Authority collected information from us regarding our business and competition in the graphics card and CSP market as part of an ongoing inquiry into competition in those markets. We have also received, and continue to receive, broad requests for information from competition regulators in the European Union, the United States, the United Kingdom, China, and South Korea”
A significant portion of NVIDIA's workforce and research operations are located in Israel. Escalation of conflict in the Middle East could disrupt their ability to develop new products. [EXECUTION]
“Our global supply chain for our networking products, including our Israel operations of approximately 5,900 employees... If the conflict escalates or extends, it could affect future product development, supply chain, and revenue”
NVIDIA is involved in a long-running class-action lawsuit where investors claim the company misled them about how much of its sales growth was actually driven by the volatile cryptocurrency mining market. [GOVERNANCE]
“The amended complaint asserted that NVIDIA and certain NVIDIA executives violated Section 10(b) of the Securities Exchange Act... by making materially false or misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand”
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NVIDIA Corporation - Common Stock analysis by filing period
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