Core Insights - Nvidia has a significant backlog of booked business amounting to $500 billion for 2025 and 2026, indicating strong future revenue growth potential [2][3] - The company is expected to grow its data center revenues by nearly 20% sequentially each quarter until the end of 2026, which is not reflected in current consensus expectations [3][4] - Major customers like Amazon, Google, Microsoft, and Meta are planning substantial capital expenditures that align with Nvidia's growth trajectory [4] Supply Chain Considerations - Potential supply bottlenecks exist in GPU manufacturing, particularly concerning high-volume memory and packaging, but Nvidia has worked to secure supply [5][6] - Issues related to AI shell rollouts are currently isolated and not expected to significantly impact Nvidia's largest customers due to their diversified partnerships [6] - Power supply concerns are mitigated by efficiencies throughout the supply chain, suggesting no major supply issues for 2026 [7] Stock Performance Outlook - Despite a 40% increase in stock value this year, Nvidia's stock has historically declined after earnings beats, indicating high expectations [8] - If Nvidia delivers on its booked business, earnings could approach $9 next year, with the stock currently trading at low 20s multiples [9] - Visibility into future growth is strong, with Amazon planning to double its data center footprint by 2027, suggesting continued optimism beyond 2026 [10] Long-term Investment Landscape - The global economy has the capacity to absorb over $3 trillion in data center capital expenditures, with current spending at half a trillion for the top four hyperscalers [13][14] - There is potential for global data center spending to grow tenfold by 2035, provided productivity gains continue [15] - Concerns about potential margin compression and investment slowdowns exist, but the overall outlook remains positive for the data center sector [15] Market Sentiment - Recent sales of Nvidia shares by Soft Bank and Peter Thiel have raised questions, but these moves are seen as reallocating investments rather than a negative signal for Nvidia [16][17]

(v) This author is a registered US equity research analyst who is subject to US FINRA Rule 2241 and who may write debt research under FINRA Rule 2242. Please see analyst certifications and important disclosures beginning on page 22. Completed: 24-Sep-25, 22:15 GMT Released: 25-Sep-25, 04:00 GMT Restricted - External SIGNATURE Equity Research 25 September 2025 Equity Strategy Lost My Chain-of-Thought: Could the AI narrative stumble? We remain constructive on AI as an investment theme, but explore some 'what- ...