# NVIDIA Corp. (NVDA) — InvestMoat Analysis

_Last analyzed: August 26, 2026_
_Asset class: equity · Canonical page: https://investmoat.com/stocks/nvda_

## Scores

| Dimension | Score (0–100) |
| --- | --- |
| Moat durability | 82 |
| Growth trajectory | 91 |
| Valuation | 73 |
| **Composite** | **85** |

Scores are computed deterministically from this asset’s data by the InvestMoat formula (see https://investmoat.com/llms.txt for methodology). Scores are not directly comparable across asset classes.

## Key stats

- **Ticker:** NVDA
- **Market Cap:** ~$5.3T

## Moat

CUDA software ecosystem and 10-year hardware lead in AI compute.

### The Ecosystem Moat (CUDA)

Nvidia's moat isn't just "fast chips", it's the **Full-Stack Software Advantage**:

- **CUDA Software Ecosystem:** With over 4 million developers, CUDA is the industry standard. Moving to another hardware provider requires rewriting massive amounts of code.
- **Innovation Velocity:** Hopper → Blackwell → Rubin on a one-year cycle. The Aug 26 PR names Vera Rubin ramping into full production, with racks at CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius — the product cycle the moat is supposed to keep winning, not a reason to mark the moat up.
- **Infiniband Networking:** Their integration of networking (Mellanox) allows them to sell high-margin full-racks, not just individual GPUs. Spectrum-6 switches are part of the Vera Rubin platform in the same print.

**Moat verdict:** NVIDIA's moat remains predominantly AI-resilient — CUDA, proprietary compute-optimisation data, and infrastructure-layer embedding all deepen as AI spend grows. The Q2 FY2027 beat ($96.2B vs a $91B guide) does not change that, and it does not repair the soft spot: regulatory lock-in stays weakened because the Q3 outlook still assumes zero China Data Center compute, and bundling stays weakened until a filing reverses the French finding or the DOJ look. NVIDIA remains the infrastructure layer of the AI economy; the print confirmed demand, not a freer hand to bundle or to sell into China.

### Top competitors

- **[Advanced Micro Devices (AMD)](https://investmoat.com/stocks/amd):** Instinct GPUs and the ROCm software stack.
- **[Broadcom (AVGO)](https://investmoat.com/stocks/avgo):** Custom XPUs co-designed with hyperscalers.
- **[Alphabet (GOOGL)](https://investmoat.com/stocks/google):** TPUs, now offered to outside customers.

## Growth

Q2 FY2027 (quarter ended July 26, reported Aug 26) printed revenue $96.221B, +18% from Q1's $81.615B and +106% from $46.743B a year ago, beating NVIDIA's own $91B guide. Data Center was $89.0B, +18% QoQ and +117% YoY. GAAP and non-GAAP gross margins were both 75.0%. GAAP diluted EPS $2.46, non-GAAP $2.22; GAAP operating income $63.734B. The Q1 falsifier — miss $91B by more than 5% — did not fire. Q3 is guided at $108.0B ±2% with GM 74.0% ±50 bps, and the outlook still assumes no Data Center compute revenue from China. Vera Rubin is named as ramping into full production. Cash conversion is the new residual: Q2 free cash flow $21.341B vs Q1 $48.554B, accounts receivable $63.059B vs $38.466B at Jan 25, inventories $31.575B vs $21.403B, long-term debt $32.366B vs $7.469B after issuing about $24.9B of debt in the quarter. $26.0B was returned to shareholders; ~$99B of buyback authorization remains; next dividend is $0.25 on Oct 1 (record Sep 10).

- **Revenue CAGR estimate:** 35–50%
- **Primary type:** TAM expansion
- **Margin trend:** stable
- **Key risk (moderate):** The $91B Q2 test passed. The next hard test is Q3 FY2027 at $108.0B ±2% with GM 74.0% ±50 bps and still no China Data Center compute in the outlook. Falsifiable: miss that $108B guide by more than 5% (below ~$102.6B), print GM through the 73.5% floor, or a top-3 hyperscaler cuts FY2027 AI capex guidance by more than 10% on a single print. A second residual: Q2 free cash flow fell to $21.341B from Q1 $48.554B as receivables hit $63.059B and inventories $31.575B, funded in part by ~$24.9B of new debt — if that working-capital draw repeats in Q3 while revenue is still guided up, the demand print is running ahead of cash.
- **Drivers:**
  - Data Center (AI Training & Inference) — Q2 FY2027 $89.0B, +18% QoQ, +117% YoY; Q3 company revenue guided $108.0B ±2% with no China Data Center compute in the outlook (accelerating)
  - Edge Computing — Q2 FY2027 $7.2B, +13% QoQ, +27% YoY — the second segment the PR reports (gaming not broken out this quarter) (accelerating)
  - Gaming (GeForce) — Last sourced Q4 FY2026 $3.7B (+47% YoY). Not in the Q2 FY2027 release; left stable rather than invented (stable)
- **Score derivation:** Base 93 (35–50% CAGR, midpoint 42.5%, baseFromCagr) + 2.7 trajectory (2 of 3 drivers accelerating) + 0 stable margins (printed 75.0%; Q3 GM 74.0% ±50 bps is mix, not a compression charge) − 5 moderate keyRisk (a hyperscaler capex cut and the Q2 working-capital draw). China is zero in the Q3 guide already, so it sits in the estimate and is not charged again here; the capex-cycle risk is graded moderate for the name with the widest margin and the least-exposed balance sheet in the AI-hardware cohort, below SMCI, DELL and MU = 91. Do not bump because they beat. The old author string that added TAM expansion points is retired — primaryType does not score.

## Valuation

After-hours ~$218 on Aug 26 (regular-session close $209.66 was pre-print; market cap ~$5.3T at the after-hours tape on ~24.19B basic shares). Unchanged ladder $130 / $260 / $430. At ~$218 the stock is 16% below the $260 base and 68% of the way from bear to base — piecewise 73, same as the Aug 10 card. The Q2 beat and $108B Q3 guide do not move the ladder; China is still zero in the outlook, so the old base-case H200 $15–20B increment is retired rather than earned. Live valuation will recompute against the tape; this static 73 is the after-hours print against the held corridor.

| Multiple | Value | Note |
| --- | --- | --- |
| Trailing P/E (GAAP) | ~33× | TTM EPS ~$6.54 at ~$218 |
| Forward P/E (NTM) | ~24× | last-sourced NTM EPS ~$9.00, pre-Street refresh |
| PEG Ratio | ~0.5× | fwd P/E ÷ ~50% EPS CAGR |
| Price / Sales (FY27) | ~13× | ~$5.3T ÷ ~$394B implied (H1 $178B + two $108B quarters) |
| Price / H1 FCF | n/m as TTM | Q2 FCF $21.3B vs Q1 $48.6B; H1 $69.9B — TTM not restated from this PR |

At ~$218 the forward multiple is still ~24× on the last-sourced ~$9 NTM EPS, PEG ~0.5×, which is the same GARP frame as Aug 10 — the print confirmed the $91B guide rather than cheapening the stock. Trailing GAAP ~33× on ~$6.54 TTM EPS. Do not treat H1 FCF $69.9B as a clean TTM: Q2 conversion halved as receivables and inventory absorbed cash. The $108B Q3 guide with GM 74.0% is the multiple the tape has to underwrite next; China is still not in it. _(as of August 26, 2026)_

## Price scenarios

### Bear — $130

Export controls re-escalate targeting Blackwell/Rubin-class chips; hyperscaler in-house ASICs capture 20%+ of AI training workloads; working-capital draw repeats so the $108B guide prints without cash.

- U.S. imposes new export restrictions on Blackwell/Rubin-class chips to allied nations, removing $15B+ in annual revenue
- Google TPU v6 and Amazon Trainium3 capture 20%+ of hyperscaler AI training by end of 2026, pressuring NVIDIA market share below 75%
- Q3 misses $108B by more than 5% or GM prints through 73.5%, and the Q2 pattern — FCF $21.3B, AR $63.1B, inventories $31.6B, ~$24.9B of new debt — repeats

### Base — $260

Q3 lands near $108B ±2% at GM ~74%; Vera Rubin stays in production at the named clouds; FY2027 tracks toward ~$390B from the guided run-rate with China still zero in the model. NVIDIA Enterprise software reaches $5B+ ARR.

- Q3 FY2027 revenue lands near the $108.0B ±2% guide, confirming the Blackwell-to-Rubin handoff after Q2 beat $91B at $96.2B
- China Data Center compute stays out of the model — the Q3 outlook assumes none, so base does not count H200 as $15–20B of FY2027 revenue
- Vera Rubin remains in full production at CoreWeave, Google Cloud, Azure, OCI and Nebius, extending the cycle into FY2028 without needing a China reopening

### Bull — $430

Vera Rubin cycle exceeds the current run-rate; sovereign AI buildout accelerates; China Data Center compute returns to the guide; software inflects above $10B ARR.

- A subsequent guide includes China Data Center compute after a sourced policy change — that is upside, not the base
- Vera Rubin yields exceed roadmap targets and sovereign/national AI factories (Korea, Japan, Europe HPC named in the PR) add a recurring government layer
- NIM / NVIDIA AI Enterprise scale to $10B+ ARR, re-rating toward software multiples on a higher-margin mix

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