Munro Concentrated Global Growth Fund on NVIDIA Corporation
Thesis
Nvidia dominates accelerated computing for AI training and inference, and Munro believes its earnings potential remains underestimated. Management guided to approximately 70% growth in the next fiscal year compared with consensus expectations around 45%, with supply constraints holding back still stronger potential sales. The fund argues that either the addressable AI market is expanding more quickly than expected or Nvidia is gaining share, both favourable outcomes. Rubin, Rubin Ultra and Feynman product cycles should increase revenue content per gigawatt and widen performance differentiation, while the stock trades below 15 times next-year earnings. A commitment to return half of free cash flow to shareholders reinforces an investment case Munro calls one of the market’s most compelling.
“We still see Nvidia as one of the most compelling risk-reward opportunities in the market today.”
Key risks
- Potential erosion of Nvidia’s dominant market share
- AI investment spending proving less durable than anticipated
- Political opposition to data centres and possible AI regulation
- Higher interest rates and elevated expectations causing valuation de-rating