Polen Capital Management, LLC - Focus Growth Composite on NVIDIA Corporation
Thesis
Polen added to NVIDIA because earnings had grown much faster than the share price, causing valuation to compress without a deterioration in the business. NVIDIA remains the dominant provider of data-center GPUs and related systems, and Polen also sees a large opportunity for the company to gain share in data-center CPUs. The firm believes NVIDIA combines direct exposure to the scale of AI infrastructure investment with the competitive advantages, ecosystem, balance sheet, and earnings power required by the strategy.
“We believe the stock offered an attractive opportunity to add to one of the world’s most advantaged businesses at a more reasonable valuation.”
Key risks
- Dependence on sustained AI infrastructure investment
- Valuation could become less attractive if earnings growth slows