Is NVDA a good stock to buy? 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 $206.84 as of July 24th. NVDA’s trailing and forward P/E were 32 and 23.5 respectively according to Yahoo Finance.
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NVIDIA Corporation operates as a data center scale AI infrastructure company in the United States and internationally. NVDA remains the dominant supplier of AI compute infrastructure and has evolved far beyond a traditional semiconductor company into a full-stack AI platform spanning GPUs, CPUs, networking, systems, CUDA software, AI libraries, and a deeply integrated partner ecosystem.
As AI data centers increasingly optimize for token throughput, cost per token, utilization, uptime, and software efficiency rather than standalone hardware performance, NVIDIA’s vertically integrated platform has strengthened its competitive advantage.
The company’s Blackwell architecture has been broadly deployed across hyperscalers, frontier AI model developers, AI cloud providers, sovereign AI initiatives, and enterprise AI infrastructure, with management noting adoption by every major hyperscaler and leading model builder. Networking has also become a meaningful growth engine, as Spectrum-X has surpassed the combined scale of competing Ethernet networking peers while InfiniBand revenue increased more than fourfold year over year.
NVIDIA reported exceptional financial performance, with revenue reaching $82 billion, up 85% year over year and 20% sequentially, marking its fourteenth consecutive quarter of sequential growth. Data center revenue climbed 92% to $75 billion, driven by $60 billion of compute revenue and $15 billion of networking revenue, while hyperscalers generated roughly half of data center sales. Despite the rapid Blackwell production ramp, gross margins remained around 75%, free cash flow reached a record $49 billion, and the company returned $20 billion to shareholders while authorizing an additional $80 billion share repurchase program.
NVIDIA’s system-level integration across Grace Blackwell, Vera CPUs, NVLink, Spectrum-X, InfiniBand, CUDA, and AI software creates a formidable competitive moat that is difficult for rivals to replicate. MLPerf benchmarks further demonstrated Blackwell Ultra’s advantages by delivering 2.7 times higher throughput while reducing cost per token by 60%, reinforcing the platform’s value proposition.
According to the bulls, although supply constraints, China-related risks, customer concentration, and custom AI silicon remain key challenges, NVIDIA has proactively expanded supply commitments, inventory, and prepayments to support future demand. With second-quarter guidance of $91 billion in revenue, stable margins, the upcoming Vera Rubin platform, and continued AI infrastructure investment, the company appears well positioned for sustained growth if enterprise AI spending continues translating into profitable customer deployments, supporting a favorable long-term outlook.
Not everyone is bullish on NVDA. Famous investor Michael Burry is one of them. Michael Burry’s bearish thesis on Nvidia relies on a macro market-bubble framework combined with classic semiconductor cyclicality. At the macro level, Burry views the aggressive, multi-billion-dollar infrastructure spending spree by mega-cap technology hyperscalers as a classic speculative mania, drawing direct parallels to the late-1990s Dot-Com bubble. His core argument posits that enterprise monetization and end-user return on investment from software applications will inevitably lag far behind the front-loaded costs of hardware deployment. When hyperscalers realize their current infrastructure yields diminishing marginal returns, capital expenditure budgets will face severe rationalization, exposing the semiconductor supply chain to an abrupt demand drop.
From a microeconomic perspective, Burry treats Nvidia as a hardware provider subject to the classic “bullwhip effect” that historically plagues semiconductor cycles. During periods of extreme chip supply constraints, enterprise customers typically double-order GPUs to secure allocation. Once supply catches up with actual immediate utilization, buyers pause purchases to absorb excess inventory, leading to sharp order cancellations and inventory drawdowns. Furthermore, Burry views Nvidia’s record-high gross margins as cyclically unsustainable; as custom enterprise silicon and competing hardware options mature, Nvidia’s pricing power must normalize down toward historical industry averages.
Previously, we covered a bullish thesis on NVIDIA Corporation (NVDA) by Compounding Your Wealth in April 2025, which highlighted the company’s AI hardware leadership, CUDA ecosystem, expanding data center opportunity, and attractive valuation despite moderating growth. NVDA’s stock price has appreciated by approximately 90.17% since our coverage. Sergey shares a similar view but emphasizes on NVIDIA’s evolution into a full-stack AI infrastructure platform, Blackwell adoption, and system-level integration driving future growth.
We believe NVDA shares may continue to deliver positive returns in the short-term, however, its current valuation implies that NVDA will continue to generate around $250 billion in net profits every single year for the next 20 years. Twenty years is a very long time frame and $250 billion in net profits is a very large number.
NVIDIA Corporation is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 275 hedge fund portfolios held NVDA at the end of the first quarter which was 264 in the previous quarter. So, hedge funds are also short-term bullish on NVDA. While we acknowledge the risk and potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
