Mar Vista Investment Partners, LLC on NVIDIA Corporation
Thesis
Mar Vista increased its NVIDIA position during the third quarter because it believes the company's valuation fails to fully capture the durability of its competitive advantages and long-term AI growth potential. NVIDIA's CUDA ecosystem remains the industry standard across AI workloads, strengthening the company's position with hyperscalers, neoclouds, large language model developers and enterprise customers. The growing availability of open-source AI models should accelerate adoption and reinforce demand for NVIDIA's computing platform. Its Vera Rubin architecture is beginning production in the second half of 2026, while the Vera CPU opportunity is expected to generate approximately $20 billion in revenue in the second half of fiscal 2027 and approximately $40 billion in fiscal 2028. Mar Vista believes NVIDIA's annual product cadence, integrated systems approach, software ecosystem and performance-per-watt advantages support a durable competitive position as AI investment expands.
“We believe NVIDIA’s current valuation does not fully reflect the durability of its competitive position or the breadth of its long-term growth opportunities.”
Key risks
- The uncertain return on enormous hyperscaler capital expenditures could eventually lead to slower AI infrastructure investment.
- Increasing capital investment across the AI industry could produce diminishing returns and weaker demand economics.
- Elevated AI equity valuations and higher interest rates could create valuation compression even if business fundamentals remain strong.
- Slower adoption of AI applications and open-source models could weaken expectations for future computing demand.