Every investor should own Nvidia – here’s why
Nvidia benefits from a number of structural tailwinds. Three years ago, data centres around the world had less than 5pc of their processing capacity in GPUs. Today, that is around 10pc. We believe this could go to 50pc or even further.
The other biggest companies in the world (Nvidia is now third biggest by market value), are all customers of Nvidia. Of great significance is the fact that the world’s largest companies, such as Microsoft and Alphabet, rely on Nvidia to drive their highest growth potential businesses, which are all AI-based – Microsoft Copilot and Google Gemini in these cases.
Nvidia’s strong competitive position is also a reason to be positive. The business is not easily disrupted. Its CUDA operating platform and application programming interface (or API) is the industry standard for creating high-performance, GPU accelerated applications, giving it an extraordinary “moat” against potential competition in the AI programming space.
Further, with a net cash balance sheet and an exceptional founder-led management team, the accounts and structure of the business make for good reading as well.
Finally, we believe the transition of Nvidia from a high-growth to “quality” business in the eyes of investors will drive share prices even higher, even if earnings growth slows.
Being considered a high-growth business means there have been questions over its long-term share price sustainability.
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