I keep buying NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), and the reason is straightforward: every quarter, the companies that spend money on my behalf tell me they cannot get enough of what NVIDIA sells.
My latest add went in at $211.94, with the shares up 13.78% year to date and 930.5% over five years. My conviction lives in the next five, because the customer receipts for those years are already public.
The Hyperscaler Guarantee
Amazon (NASDAQ:AMZN) just guided to $220B in 2026 capex and said AWS is capacity-constrained through 2027. Microsoft (NASDAQ:MSFT) posted 43% Azure growth on a $678B backlog. Alphabet (NASDAQ:GOOGL) raised full-year capex guidance to $195 billion to $205 billion and reported a $514 billion cloud backlog. Alphabet’s CFO says Google is “still in a supply-constrained environment”. That is my thesis in one sentence.
The Numbers That Keep Me Coming Back
NVIDIA’s Q1 FY27 (reported May 20, 2026) put up $81.61 billion in revenue, up 85.23% year over year, with non-GAAP EPS of $1.87 topping consensus by 5.42%. Data Center revenue hit $75.25 billion, up 92%. Networking alone grew 199%, which tells me the moat now covers the interconnect fabric, not just the accelerator.
The margin picture closes the argument. Non-GAAP gross margin sits at 75.0%, operating margin at 60.4%, net margin at 55.6%, and ROE at 101.5%. Debt-to-equity is 0.073 with interest coverage of 503x. This company earns more than a dollar back on every dollar of equity while carrying almost no leverage.
Capital return matched the operating result. The board authorized $80.0 billion in fresh buybacks and raised the dividend from $0.01 to $0.25 per share. About $20.0 billion went back to shareholders in the quarter.
Why Not Just Buy the Customers?
I own some of them. I still keep coming back to NVIDIA because the arms dealer earns the better spread. NVIDIA’s 75% gross margin compares to Microsoft’s 67.9%, Alphabet’s 59.7%, and Amazon’s 50.3%. Alphabet trades at a P/E of 17, which looks cheap until you notice Q2 free cash flow at negative $5.86 billion after capex doubled year over year. Amazon’s trailing free cash flow flipped to negative $7.6 billion as AWS capex jumped to $54.21 billion in one quarter. Microsoft carries a P/E of 27 while writing $115.95 billion in FY26 capex checks, much of which lands on NVIDIA’s revenue line. I would rather own the invoice than the customer paying it.
The Real Risk
China. NVIDIA shipped zero H20 units to China in Q1 against $4.6 billion in the year-ago quarter, and Q2 guidance excludes China Data Center compute entirely. Supply commitments of $119.0 billion represent real forward inventory risk if demand ever softens. My thesis holds because management guided Q2 revenue to $91.0 billion anyway, with China stripped out.
Why I Keep Buying Into Aug. 26
On August 26, NVIDIA reports Q2 FY27. Sell-side analysts carry an average target of $302.83 with 58 Buys against 1 Sell. The single day matters less to me than the capex book behind it: the commitments from Amazon, Microsoft, and Alphabet are contractual, visible, and still expanding. Until the customers stop signing checks, I keep hitting buy.
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