Dominant GPU company that's front-and-center in the AI revolution. Main threats are AMD and FPGAs but should carve out a space in markets beyond Gaming and data-centers like Autonomous Vehicles and Virtual Reality.
Competitive Advantage: The Castle
- Core Competency? Graphics Processing Units (GPUs) for Gaming and AI Computing.
- Products: Better or Cheaper? Better. Improving GPU’s and making them more AI-friendly.
- Evidence: Growth? Revenue growing at 40%-plus. EBITDA margins expanding.
Durability of Competitive Advantage: The Moat
- Competition/Threats? AMD for GPUs. Xilinx/Intel for FPGAs. And ASICs.
- Protection? Complexity, IP rights, and CUDA – Nvidia’s software stack for GPUs.
- Cash Flow Resiliency? Resilient. Common Architecture and CUDA extend product cycle.
Management Quality: The Generals
- Strategy & Action? Positive. Founder Huang focused on the right end-markets.
- Financial Productivity? High. ROE > 50%, due to high margins.
- Sustainable Free Cash Flow? ***Redacted