The Motley Fool argues Nvidia fits Warren Buffett’s investing profile even though Berkshire Hathaway has never owned the chipmaker, citing its AI infrastructure ecosystem, a visible chip-replacement cycle and what it considers an attractive valuation.
The article traces Nvidia’s moat to CUDA, its platform for programming GPUs, saying it helped train a generation of AI engineers and left much foundational AI code optimized for Nvidia chips. It also cites NVLink and Mellanox networking as parts of the broader ecosystem. The article says cloud providers typically recoup chip costs in two to three years, while the chips last five to six years.
For valuation, the article cites forward P/E multiples of 24 for fiscal 2027, ending January 2027, and just above 14 for fiscal 2028. It also cites gross margins of about 75%, revenue growth above 100% in the previous quarter and a forecast of about 70% growth next fiscal year. Nvidia was not among the 10 stocks on The Motley Fool Stock Advisor team’s list of best buys discussed in the article.
