NVDA grew revenue 85% and the stock rose 22%. Micron rose 725%. I think the interesting question is what you're actually buying at 21x.

Leading into next weeks results, the thing that got my attention is the 52-week scoreboard in NVIDIA's own supply chain: \- Micron +725% \- Intel +283% \- Marvell +233% \- AMD +186% \- NVIDIA +22% Meanwhile NVIDIA grew FY2026 revenue 65% to \~$216bn at a 60% operating margin, and the most recent quarter grew 85%. So the best business in the sector was the worst performer in it. That gap is the actual story, and I don't think "the market is wrong" covers it. **Where I think the value migrated** The constraint on AI output moved downstream of GPU design - to high-bandwidth memory, advanced packaging, leading-edge foundry and power. Owning the best business in a sector isn't the same as owning the best position in it, and the supply chain repriced on that basis. **The quality-of-earnings question** This is the part I'd want other people's view on. NVIDIA spent \~$17.5bn on private equity stakes in FY2026, plus $13.0bn on a Groq technology license, then $18.6bn more on private securities in a single quarter. In August it agreed to provide credit support on land, power and shell for an 8GW Ohio campus where OpenAI is the customer, and put $1.5bn into the developer. Unrealized gains on those holdings contributed roughly $16bn to a single quarter's GAAP earnings. So a portion of reported earnings is mark-to-market on private stakes in the customers buying the product. Which isn't improper as it's disclosed, but it's a different earnings quality than product margin, and I'm not sure a headline P/E treats it differently. **Two other things I keep coming back to** Concentration: one direct customer was 22% of FY2026 revenue and another 14%. That's 36% between them, against 13% for the largest customer two years earlier. China went from 19% of revenue to 9%, and Q2 guidance assumes zero Data Center compute revenue from China. The forward book: $95.2bn of inventory purchase and supply obligations on the balance sheet, at a company that took $7.2bn of inventory provisions in FY2026 alone. That's a moat if demand holds and a problem if it doesn't. **Here is another key risk to Nvidia** Broadcom is the competitor people underrate. It co-designs custom AI chips for six hyperscalers, and guided FY2026 AI revenue to $56bn, up around 180% and with $100bn+ reiterated for FY2027. But the sharper development is Google. In April it announced it would start selling TPUs into customers' own data centers rather than only renting capacity, and it began recognizing hardware revenue on those shipments in Q2. That turns a hyperscaler from an internal-silicon story into a direct merchant competitor. The share tables still understate this. Meta's MTIA is internal and appears in nobody's revenue. Google's TPUs are only now starting to. NVIDIA's share looks steadier than the underlying demand picture suggests. There are two ways this goes. * If total AI spending keeps growing faster than the challengers take share, NVIDIA can lose share and still grow revenue. On that path, 21x is cheap. * If spending flattens — and hyperscaler capex can't grow 77% a year forever — then losing share means losing revenue. On that path, the $95bn of purchase commitments stops being a moat and starts being a problem. [Where the value in the AI buildout is actually being captured — read through NVIDIA Corporation (NASDAQ: NVDA)](https://substack.com/home/post/p-212241168)