NVIDIA Corporation (NVDA): A Bull Case Theory

We came across a bullish thesis on NVIDIA Corporation on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on NVDA. NVIDIA Corporation's share was trading at $183.04 as of October 10th. NVDA’s trailing and forward P/E were 53.81 and 29.94 respectively according to Yahoo Finance.

NVIDIA (NVDA) remains the undisputed leader in AI and high-performance computing, driven by its Blackwell GPU architecture and CUDA software platform. The company’s explosive growth continues, with total revenue up 55.6% YoY and Data Center revenue—the primary engine—rising 56.4% YoY, serving hyperscalers and enterprises at global scale.

Its Data Center TAM is projected to surpass $1 trillion by 2028 and reach $1.7 trillion by 2035, fueled by generative AI, robotics, and edge computing. NVIDIA’s competitive advantage is reinforced by unmatched economies of scale, a strong developer network, brand equity, extensive IP portfolio, and high switching costs, cementing its dominant position with over 80% share of AI accelerators.

The company’s other segments also contribute meaningfully: Gaming reaccelerated +49% YoY, Automotive jumped +69.6% YoY, and Professional Visualization and Robotics continue expanding, though smaller in revenue contribution. NVIDIA’s record product launches, including GB200 NVLink-72, Blackwell Ultra, and the Rubin platform, combined with software like CUDA, TensorRT-LLM, and Dynamo, maintain leadership in AI training, inference, and cloud workloads. Partnerships with OpenAI, Microsoft, AWS, Siemens, and CoreWeave further validate ecosystem adoption and scale.

Despite these strengths, NVIDIA faces risks from potential margin pressure, new competitors, and U.S. export restrictions on high-end GPUs to China. Gross margins fell 2.7 PPs YoY, while operating expenses rise to capture long-term AI demand. Yet, with a strong balance sheet, $56.8B cash versus $10.3B debt, and active share repurchases, NVIDIA remains well-positioned to capitalize on AI-driven growth.

Analysts project +61.1% revenue growth in 2025 and +33.3% in 2026, highlighting substantial upside. Overall, NVIDIA represents a high-conviction growth investment with exceptional market leadership, robust profitability, and multiple catalysts in AI, Data Center, and emerging segments, even amid evolving macro and regulatory challenges.

Previously we covered a bullish thesis on NVIDIA Corporation (NVDA) by Compounding Your Wealth in April 2025, which highlighted the company’s AI leadership, Data Center dominance, strong margins, and robust balance sheet. The company's stock price has appreciated approximately by 65% since our coverage. The thesis still stands as NVIDIA’s structural advantages endure. Sergey shares a similar perspective but emphasizes Blackwell GPUs, new platform launches, and emerging geopolitical risks.

NVIDIA Corporation is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 235 hedge fund portfolios held NVDA at the end of the second quarter which was 212 in the previous quarter. While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.