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Back of Napkin

NVIDIA Corporation NVDA

Three-pass checkedFresh as companies report

NVIDIA grew revenue 85% last quarter, to $81.6B, and its growth rate has accelerated for four consecutive quarters at that scale.

It is priced at roughly 23 times next year's expected earnings, which is what the market pays for a company it does not believe can keep doing this.

NVDA · price with moving averages

Daily · 6MWeekly · 3Y
$19$74$130$185$241 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

NVIDIA designs the chips that train and run artificial-intelligence models, and the networking equipment that ties thousands of them together into a single machine. Data center is now $75.2B of the $81.6B quarter, split between hyperscale cloud operators and a rapidly growing category of AI clouds, enterprises and governments buying their own capacity. Everything else, gaming graphics cards and the automotive and visualization businesses, has been collapsed into a segment called Edge Computing worth $6.4B.

The moat is not really the silicon. It is CUDA, the software layer every AI researcher has written against for fifteen years, which makes switching a retraining exercise rather than a purchasing decision.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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