Nvidia Bears are Blind: 3 Reasons to Ignore Them and Buy Now
NVIDIA's valuation has compressed to roughly 20x forward earnings even as the company delivered 85% year-over-year revenue growth at a 75% gross margin.
NVDA approved $80 billion in new buybacks and raised its dividend 25x while generating $48 billion in free cash flow last quarter.
Meta, OpenAI, Anthropic, and CoreWeave have locked in massive multi-year GPU commitments, supporting Q2 revenue guidance of $91 billion.
Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.
I keep hitting the buy button on NVIDIA (NASDAQ:NVDA), and after the June pullback I hit it again. I bought near $225 in May, I bought near $212 in June, and I added last week close to $194.83. The story that got me into this position keeps getting louder.
Here is what pulls me back every time. NVIDIA sells the picks and shovels for what CEO Jensen Huang calls "the buildout of AI factories, the largest infrastructure expansion in human history." The checks his customers are writing agree with him, and the numbers behind those checks are why I own more shares this week than I did last month.
Forward earnings sit near 20x, and the trailing multiple prints at 30. For a business that just delivered 85.2% year-over-year revenue growth to $81.61 billion at a 75.0% non-GAAP gross margin, that reads like a mature-industrial multiple on a platform running every frontier AI model. Shares are down 12.46% over the past month and sit 28% below the 52-week high of $236.26, even as Q1 non-GAAP EPS came in at $1.87 against a $1.7738 consensus.
Q1 free cash flow was $48.554 billion, roughly 59.5% of revenue turning directly into cash. Full-year FY2026 free cash flow hit $96.575 billion, up 58.7%. Management returned $41.1 billion to shareholders in FY2026 and another $20.0 billion in Q1, then approved an additional $80.0 billion buyback authorization on top of $38.5 billion still remaining. The dividend jumped from $0.01 to $0.25, a 25x raise declared May 18, 2026. Owners are getting paid while Blackwell 300, Vera Rubin, and BlueField-4 get funded out of the same wallet.
The $119.0 billion in supply-related commitments that spooks the bears reads differently when you know the customer list. Meta committed to millions of Blackwell and Rubin GPUs. OpenAI signed for at least 10 GW of NVIDIA systems. Anthropic is scaling on 1 GW of initial capacity. CoreWeave is building 5+ GW of AI factories by 2030. Sovereign deals with the UK, South Korea, and Germany layer on top. Q2 FY27 guidance calls for $91.0 billion in revenue at a 75.0% gross margin, and that number excludes any China Data Center compute.
China exposure is real. H20 Data Center compute revenue from China is zero in the guide, versus $4.6 billion in the year-ago quarter. A cash tax step-up hits in Q2. And $119.0 billion in supply commitments cuts both ways if hyperscaler capex ever cools. I sat with all of it. My answer is that Data Center networking revenue grew 199% year over year, hyperscalers are roughly half of Data Center revenue with sovereign, enterprise, and industrial buyers filling the other half, and multi-year cloud service commitments have grown to $30.0 billion. The book keeps deepening.
Analyst consensus sits at a $301.62 price target with 58 buys against one sell. I focus on the free cash flow, the platform, and the runway of a company that just went from a penny dividend to a quarter and told me another $80.0 billion of buybacks is coming. When the market sells the picks-and-shovels vendor of the biggest capex cycle of my lifetime at roughly 20x forward earnings, I keep buying.
Contact editorial@247wallst.com for any questions or corrections.