Guinness Global Equity Income Fund on Nvidia
Thesis
Nvidia is the dominant supplier of AI compute, with its GPUs, CUDA software, networking products and AI services creating network effects and high switching costs. August results beat expectations across revenue, earnings per share and Data Centre, while management guided to roughly 70% year-over-year revenue growth in FY28, almost double consensus estimates. The fund believes the growth opportunity is broadening as non-hyperscaler demand expands and Nvidia moves into AI-specific CPUs and networking. With the shares trading at 24 times FY27 earnings and less than 15 times FY28 earnings, alongside significant free cash flow and room for higher dividends and buybacks, the fund sees potential for a re-rating.
“Nvidia is the leading fabless semiconductor chip company with a dominant position in AI, data centres and accelerated computing.”
Key risks
- Concerns around circular financing and the broader AI trade
- Supply constraints that could limit the company's ability to meet demand