Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
NVDA· Technology
Nvidia
NVIDIA is a magnificent toll booth on artificial intelligence earning a 64% operating margin, and the only thing wrong with it is the price you must pay to own it.
Buffett fit
Strong fit
Owner
100
Durability
70
Management
79
Price
10
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned this whole business, I would be delighted with the engine and uneasy about the entry ticket.
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The CUDA software lock and the installed base give NVIDIA real switching costs, and a developer who has spent years building on that platform does not move cheaply.
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Management runs the balance sheet the way I like. is a trivial 0.07, interest coverage is an almost comical 544 times, and the share count has actually shrunk slightly rather than ballooning with stock issuance.
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Here is where I take my hat off and keep my wallet shut. The owner-earnings yield is 1.9% and the ratio is 32, with the enterprise valued at roughly 39 times operating profit.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 64% and of 74% show most industrial businesses never approach.
- 2 of 63% this year, with a 49% five-year average, is extraordinary capital efficiency.
- 3Revenue compounded at 68% a year and earnings per share at 89% a year over the last five years.
- 4Fortress balance sheet with of just 0.07 and interest coverage of 544 times.
Concerns
7- 1Valuation is the whole problem: a 1.9% owner-earnings yield and a of 32 leave no whatsoever.
- 2Enterprise value sits near 39 times operating profit, a price that demands a flawless decade just to break even.
- 3Earnings have fallen as much as 54% in a single year historically, proving this is a cyclical, not a steady, business.
- 4Almost all the growth rides on one white-hot end market in artificial intelligence, which can cool as fast as it heated.
Price history
$234+1,023.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
NVIDIA designs the chips and the CUDA software that nearly every serious artificial intelligence model is trained on, then sells them at extraordinary markups. A 74% and a 64% tell you the company keeps most of every dollar it brings in, and revenue growing at a 68% annual clip over five years tells you the customers are lined up out the door.
How this analysis has moved
The call has held across 2 reviews.
Sep 27, 2026 → Oct 4, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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