Deep Dive: Luke Hallard Discusses Nvidia Stock
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Show Notes
This week we had Luke Hallard from our friends at 7investing to discuss Nvidia. Nvidia is one of the largest companies in the world by market cap and is a leading fabless computer chip maker. Here are some questions we asked Luke on the show:
What intrigues you about Nvidia as an investment? What is the elevator pitch on the business?
Unit economics. As a design-only chipmaker, what are Nvidia’s major costs and what are their margins?
Nvidia has two large segments: Gaming and Datacenter. Why are these such lucrative markets? Why did Nvidia win these customers?
The company has a ton of different computing solutions for virtually every industry. What are some that have you most excited for Nvidia this decade?
What are the positives and negatives of the relationship with TSMC? Is this a risk to the business at all? Could they leave for another foundry?
Nvidia has exposure to the cryptocurrency market. Can you explain why? How do you think about this part of customer demand?
What threat is there from in-house chipmakers like Amazon with its Graviton product line?
Valuation. At today’s market cap of $377 billion, what future growth are you expecting from Nvidia in the coming years?
Premortem: What could go wrong with an Nvidia investment over the next five years?
Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.