To The Moon

$NVIDIA(NVDA)$

Nvidia (NASDAQ: NVDA) has been one of the most talked-about stocks in the world over the last several years—and for good reason. It’s not just a leader in semiconductors. Nvidia is arguably the central nervous system of the artificial intelligence revolution. And while the stock has soared to new heights, the question investors keep asking is: "Am I too late to buy Nvidia?"

In this article, I’ll share four in-depth reasons why Nvidia stock still deserves a place in a long-term investor’s portfolio today. These are not generic bullish talking points. Each of these reasons is grounded in fundamental analysis—starting with management insight and extending through profitability, capital allocation, and valuation.

By the end, I think you’ll agree: Nvidia may still be in the early innings of a multi-decade growth story—and the current price could represent a long-term opportunity, not a peak.

1. Management’s Vision: Nvidia’s AI Strategy Is Just Getting Started

One of the most underappreciated indicators of a company’s long-term success is the clarity, boldness, and accuracy of its executive leadership. In Nvidia’s case, CEO Jensen Huang and CFO Colette Kress are not only visionary—they’re pragmatists who understand where the market is heading.

On the most recent conference call with Wall Street analysts, Huang laid out an exciting roadmap for Nvidia’s future. While Nvidia has already seen explosive growth due to demand from cloud providers—like Amazon Web Services, Microsoft Azure, Google Cloud, Meta, and Oracle—Huang made it clear that the next phase of AI expansion is moving toward on-premise enterprise deployment.

Let me explain what that means.

Most enterprises today store sensitive and proprietary data on-premise—not in the cloud. That includes sectors like retail, healthcare, banking, logistics, and industrial manufacturing. Moving all that data into the cloud is not only expensive—it introduces security, privacy, and compliance issues. For large corporations, building internal AI infrastructure makes more sense, both economically and strategically.

This is where Nvidia’s new product category comes in. The recently unveiled RTX Pro Enterprise AI Server is designed for exactly this use case: on-site deployment of advanced AI tools, leveraging a company’s own proprietary data. And this distinction is key. Because as Huang himself put it, “The real value of artificial intelligence comes from proprietary data, not generic internet data.”

Consider companies like:

• Walmart, with millions of daily transactions, logistics data, and supplier relationships.

• Home Depot, managing tens of thousands of SKUs across hundreds of locations.

• Target and Costco, analyzing customer trends, seasonal demand, and inventory flow in real time.

These companies aren’t just candidates for AI—they need it to manage their scale, streamline operations, reduce headcount reliance, and gain a competitive edge. And crucially, they have the size and capital to build their own AI data centers.

So when Huang says we're in the very early stages of this AI infrastructure build-out, he's not exaggerating. In fact, global AI infrastructure investment is projected to grow from a few hundred billion dollars today to $1.5 trillion by 2035. That suggests that less than 20% of the total buildout has happened so far.

In short: Nvidia’s first major AI customers were cloud platforms. The next wave is enterprise giants. And after that comes every other industry. Nvidia is prepared to dominate every stage of this transformation.

2. Profitability: Nvidia Is Structurally Stronger Than Ever

When people say Nvidia stock has gotten too expensive, what they often forget is this: Nvidia today is not the same company it was five years ago.

Yes, the stock price has climbed dramatically—but so has the business quality.

One of the most striking improvements is in operating profitability. Over the last 12 months, Nvidia has reported an operating profit margin of 58%. That’s an almost unheard-of figure for a company that designs hardware and powers intensive workloads.

Let’s put that in context:

• In 2018, Nvidia’s operating margin hovered between 28% and 33%.

• Since then, it has nearly doubled.

• Today, Nvidia’s margin profile rivals that of dominant software businesses—a remarkable feat for a company selling semiconductors.

How did Nvidia get here?

First, the company benefits from a fabless model—meaning it outsources manufacturing to foundries like TSMC. This eliminates billions in capital expenses, allowing Nvidia to focus on design, software, and R&D, which are high-margin areas.

Second, Nvidia has pricing power. Its most advanced chips, like the H100 and GB200 Grace Hopper, sell for tens of thousands of dollars each. These are not commodity products—they’re strategic assets for data centers, AI research labs, and Fortune 500 enterprises.

And finally, the company benefits from massive operating leverage. As Nvidia grows, it doesn’t need to increase its expenses at the same rate. As a result, every additional dollar of revenue increasingly contributes to profits.

Today, only a handful of companies—like Visa—report higher operating margins than Nvidia. And unlike Visa, which operates in a mature industry, Nvidia is still growing revenues by 40%+ year-over-year.

This is not just a tech company. It’s a money machine.

3. Capital Efficiency: Nvidia Is a ROIC Monster

If you’re a long-term investor, one of the most important questions you can ask is: How good is this company at reinvesting the capital it earns?

For Nvidia, the answer is: exceptional.

In the most recent period, Nvidia reported a return on invested capital (ROIC) of 141%. That number is not only high—it’s world-class.

Here’s why this matters.

A high ROIC tells us that Nvidia doesn’t just earn profits—it reinvests those profits intelligently. Instead of hoarding cash or chasing unproductive ventures, the company puts money back into product development, software ecosystems, and strategic initiatives that generate outsized returns.

In fact, even when Nvidia retains profits instead of distributing them as dividends, that money isn’t wasted—it’s put to work to expand Nvidia’s lead over the competition. That includes:

• Developing next-gen GPUs for AI workloads.

• Enhancing CUDA, Nvidia’s proprietary software stack.

• Building out enterprise AI solutions.

• Deepening its relationship with developers through SDKs, APIs, and ecosystem tools.

And this isn't a one-off success. Over the past 10 years, Nvidia’s lowest annual ROIC was still above 24%, comfortably exceeding its weighted average cost of capital (WACC). That tells us this is not luck or cyclical strength—this is a deeply efficient, capital-disciplined business.

Many companies grow. Few grow efficiently. Nvidia does both.

4. Valuation: Fair Price for a Hall-of-Fame Company

Let’s address the elephant in the room: valuation.

Yes, Nvidia trades at a forward P/E of 29.4—far higher than the S&P 500 average. But here’s the thing: Nvidia is not an average company.

When we account for its:

• Revenue growth trajectory,

• Dominance in AI,

• Industry-leading margins,

• Capital efficiency,

• And expanding TAM (total addressable market),

…it becomes clear that Nvidia is actually trading at a fair price for a Hall-of-Fame caliber business.

My proprietary discounted cash flow (DCF) model pegs Nvidia’s intrinsic value at $145 per share, nearly identical to its recent market price of $143. That means you’re not overpaying—you’re buying at fair value.

And fair value is all we need when the business is this good.

Could the stock dip short term? Absolutely. But for long-term investors, you don’t need to buy Nvidia at a discount to win. Buying a dominant compounder at a reasonable price and holding it for 5–10 years has been one of the most reliable ways to build wealth in the stock market.

Nvidia might be the best large-cap compounding story of this decade. And right now, you don’t need to pay a bubble valuation to own it.

Revenue Slowing Down?

NVIDIA, long seen as the poster child of the artificial intelligence boom, recently issued guidance that raised eyebrows across Wall Street. While the company’s fiscal Q1 2026 results were undeniably strong—driven by sky-high demand for AI chips—its forecast for Q2 signaled a potential cooling-off period, especially as U.S. export restrictions begin to weigh on growth.

Q1 Snapshot: A Blockbuster Quarter

For the quarter ending in April 2025, NVIDIA reported revenue of $44.06 billion, representing a 69% year-over-year increase. This surge was largely driven by continued demand for its data center GPUs powering generative AI workloads, especially in the U.S., Middle East, and parts of Asia.

Earnings per share also came in well above expectations, and NVIDIA demonstrated strong margins and operating leverage across its business. But despite the record-setting numbers, management issued cautious guidance for Q2.

The Forecast: Q2 Revenue to Flatten

Looking ahead to fiscal Q2 2026, NVIDIA guided revenue to approximately $45 billion. While this still represents sequential growth, it came in below market expectations and reflects a more tempered pace. The biggest drag on the outlook stems from the U.S. government’s restrictions on exporting advanced AI chips to China and several other countries.

These restrictions have created significant headwinds, particularly for NVIDIA’s H20 chip—one of its China-specific models—which has now been blocked from further export. As a result, the company is expected to experience an estimated $8 billion revenue impact in the current quarter from lost China sales and inventory adjustments.

China’s Share Shrinking

Historically, China has represented around 12–13% of NVIDIA’s total revenue. In Q1 alone, H20 sales to China accounted for nearly $4.6 billion. However, due to recent regulatory changes, the company has now absorbed a $4.5 billion charge for unsold inventory and will be excluding China from future revenue guidance altogether.

This move underscores the uncertainty surrounding geopolitical risks and their growing influence on global tech supply chains. NVIDIA’s decision to de-emphasize China in its forward-looking statements reflects a cautious shift in its growth strategy.

Revenue Breakdown and Strategic Shifts

Despite the near-term China headwinds, demand from other regions remains robust. NVIDIA is seeing strong adoption of its AI chips in North America, Taiwan, India, and Middle Eastern countries. The company is also doubling down on domestic chip production and is seeking export-friendly alternatives in Southeast Asia.

Additionally, enterprise adoption of NVIDIA's software platforms, including CUDA and its AI cloud infrastructure, continues to expand. These efforts are helping to offset some of the softness expected from reduced China demand.

🧠 Investor Perspective

Conclusion: Nvidia Is Still One of the Best Stocks in the Market

If you’re wondering whether it’s too late to buy Nvidia, here’s my take: It’s not too late—it’s still early.

Let’s quickly recap the four compelling reasons why Nvidia stock is still a buy:

1. Bullish management commentary confirms the next major AI boom is just beginning—with enterprise clients leading the charge.

2. Operating profitability has nearly doubled, creating a more powerful, more efficient business than ever before.

3. Capital efficiency is off the charts, with Nvidia generating a ROIC north of 140%.

4. Valuation is fair, with the stock trading at a reasonable multiple for a company with elite fundamentals and a massive growth runway.

Whether you’re a growth investor, a quality compounder, or a capital allocator looking for efficiency and return on equity, Nvidia checks every box.

It’s not just the best AI stock. It might be one of the best stocks—period.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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