/Nvidia%20logo%20and%20sign%20on%20headquarters%20by%20Michael%20Vi%20via%20Shutterstock.jpg)
Of late, Micheal Burry has been skeptical on the developments in the technology sector. Recently, Burry disclosed short positions in Oracle (ORCL) and Nebius Group (NBIS) citing “rising leverage risks linked to off-balance-sheet commitments across the technology and cloud sectors.”
Further, Burry also critiqued Nvidia Corporation's (NVDA) $500 billion infrastructure financing deal and “complex web of private credit and asset-backed securities” that preceded the financial crisis of 2008-09.
Under this deal, the likes of Apollo (APO), BlackRock (BLK), Blackstone (BX), Brookfield (BN), Goldman Sachs (GS), and KKR & Co. (KKR), will be mobilizing over “$500 billion of third-party capital for the buildout of AI infrastructure over time.” This financing platform will help customers “access scarce compute at scale and build the DSX AI factories” and Nvidia will be acting as a marketplace. This move is likely to provide incremental capital infusion into the full-stack AI infrastructure.
Amidst the criticism of this deal, an important point to note is that the current AI boom is different from the dotcom bubble. As Goldman Sachs points out, “corporate profit margins have climbed rather than eroded.”
Further, AI infrastructure spending is significant, but the technology sector has robust cash flows and a strong balance sheet. Nvidia, as a full-stack AI infrastructure company, is therefore well positioned to grow and create value.
About Nvidia Stock
Headquartered in Santa Clara, Nvidia is a technology giant and commands a market valuation of $5.423 trillion. The company describes itself as a global leader in accelerated computing and AI.
The company’s business is divided into two segments: Compute & Networking segment and Graphics segment. Within the compute & networking segment, the key growth driver includes data center accelerated computing, networking platforms, and AI solutions and software.
Nvidia has been on a high-growth trajectory and for FY26, revenue growth was 65% year-over-year (YOY) to $215.9 billion. Further, for FY26, the company reported robust operating cash flow of $102.7 billion.
With the company’s technology powering the world’s AI infrastructure, innovation is the factor that gives Nvidia an edge. The company has more than 9,800 granted patents globally.
Backed by strong growth and cash flow upside, Nvidia stock has trended higher by 23.36% in the last six months. At a forward price-to-earnings ratio of 24.75 times and a price-earnings-to-growth ratio of 0.42 times, there seems to be scope for further upside as industry tailwinds sustain.
Data Center Revenue Driving Growth
For Q1 FY27, Nvidia reported record revenue of $81.6 billion, which was higher by 85% YOY. For the same period, the company reported record data center revenue of $75.2 billion. Strong growth was witnessed in data center compute as well as networking revenue.
During the quarter, the company announced the Nvidia Vera Rubin platform, including the Nvidia Vera CPU. The latter is the world’s first processor purpose-built for agentic AI. With innovation coupled with structural tailwinds, it’s likely that the segment will continue to drive growth and cash flows.
For Q1, Nvidia reported operating cash flow of $50.3 billion. With a strong growth momentum, it’s likely that OCF will be in excess of $200 billion. With a clean balance sheet, healthy cash flows, and swelling cash buffer, the company’s credit profile remains strong. Therefore, there are no concerns from a fundamental perspective.
What Do Analysts Say About NVDA Stock?
Considering the growth momentum and valuations, analysts have an overwhelmingly positive view on Nvidia. Based on 47 analysts with coverage, NVDA stock has a consensus “Strong Buy” rating. While 43 analysts have a “Strong Buy” rating for the stock, three have a “Moderate Buy,” and one has a “Strong Sell” rating.
The mean price target of $304.32 represents potential upside of 34.8% from current levels. Further, the most bullish price target of $500 suggests that NVDA stock could climb as much as 121.4% from here.
