NVIDIA Corp (NVDA)

NVIDIA is the largest company in most index funds and the most argued-about share in the market. This page covers what the business actually is, where the moat sits, and the specific things worth checking before putting a value on it.

The business

NVIDIA designs the graphics and AI accelerator chips that train and run large models, and it does not manufacture them — fabrication is outsourced, which keeps capital intensity far below a company like Intel or Micron. Data centre revenue now dwarfs the gaming business it was built on. That matters for valuation because the customer base has narrowed sharply: a handful of hyperscale buyers account for the bulk of demand growth, and their capital budgets are discretionary.

The moat

The chip design lead is real but replicable given enough time and money. The harder moat is CUDA — the software layer researchers and engineers have written a decade of work against. Switching to a competitor means rewriting that work, which is why AMD selling a comparable accelerator has not translated into a comparable share of the market. Assess the moat by watching whether major customers ship production workloads on non-NVIDIA silicon, not by comparing chip specifications.

What to check before you value it

• Normalised earnings, not this year's — Semiconductors are deeply cyclical, and a cyclical looks cheapest exactly when it is most expensive. Average operating profit across a full cycle before applying any multiple.
• Customer concentration — Work out what share of revenue depends on a handful of hyperscalers continuing to spend at the current rate. Those budgets can be cut in a quarter.
• Inventory against revenue — Rising inventory days ahead of a downturn is the classic tell in this industry.
• The new debt — The June 2026 bond issue added roughly $1.2bn of annual pre-tax interest and grew the capital base by $25bn, which lowers return on invested capital until that money earns more than its cost.

How much of it you already own

NVIDIA is the largest single holding in S&P 500 trackers — roughly 7.9% of the Vanguard S&P 500 UCITS ETF as at July 2026. If you hold a global or US index fund, NVIDIA is already your biggest position, and buying the share directly concentrates a bet you have partly made already. See what is inside an ETF.

Recent filings

A company with an enormous cash pile and no obvious need for debt raising $25bn is a capital allocation signal, not a routine financing. It says the AI data centre buildout now outruns even NVIDIA’s cash generation, or that management judged borrowing cheaper than spending reserves. Watch what the money buys — productive assets or buybacks — because that tells you more than the borrowing did. Separately, semiconductor shares sold off sharply through July 2026 as investors reassessed AI capital spending; see valuing chip stocks through a cycle.

How Oak Growth scores it

Oak Growth runs NVIDIA through the same four pillars as every other company it covers — moat, management, economics and value — and publishes a discounted cash flow intrinsic value alongside the margin of safety against the current price. Because those figures move with the market and with each set of results, they live in the app rather than on this page. See the 4-pillar method →

Common questions

Is NVIDIA Corp undervalued?

That depends on the price on the day you ask. Oak Growth publishes a discounted cash flow intrinsic value for NVIDIA Corp and the resulting margin of safety, updated from live market data rather than a fixed figure. The checks that decide it are set out on this page.

Does NVIDIA Corp have an economic moat?

Yes, and the durable part is software rather than silicon. CUDA is the layer a decade of machine learning work has been written against, and moving away from it means rewriting that work. The chip design lead is genuine but more replicable over time.

Is NVDA in index funds and ETFs?

Yes, heavily. NVIDIA was roughly 7.9% of the Vanguard S&P 500 UCITS ETF as at July 2026, making it the largest single constituent — so index fund holders already own a substantial position.

How do you value NVIDIA Corp?

Value it on average earnings across a full semiconductor cycle rather than the current year, because peak-cycle earnings make the P/E look artificially low. Then check customer concentration, inventory trends and the effect of the 2026 debt issue on return on invested capital.

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