Quick Read – NVIDIA’s CUDA runtime creates software-gravity lock-in that sustains 75% gross margins even through GPU demand cycles and hyperscaler capex pauses. – NVDA’s 23x forward P/E and 0.56 PEG undercut AMD and AVGO for AI value, given software-company margins no hardware…
val currently matches. – Microsoft processed 100 trillion tokens in Q1, a fivefold increase that suggests installed-base utilization is climbing faster than new capex and protecting margins. – I keep buying NVIDIA (NASDAQ:NVDA) because the loudest fears on my feed are about a demand cliff that the company’s own income statement refuses to confirm. Every dip fed by a DeepSeek headline or a delayed server rumor sends me back to the buy button, and after this last quarter I stopped apologizing for it
The Thesis I Keep Coming Back To My conviction rests on software gravity, not the next GPU cycle. Even if hyperscalers slow raw GPU procurement, the installed base of enterprise applications built on the NVIDIA runtime keeps generating high-margin utility billing, which is what allows a 74% to 75% gross margin profile to hold through the late 2020s and avoid the 20% to 30% margin collapses that usually gut chip valuations during capital digestion phases. That is the sentence I underline.
Silicon revenue is cyclical. CUDA rent is not. The Receipts Start with margins, because that is the whole ballgame.