---
endpoint: analytics
pattern: 03 · House view · stance
status: done
latency_ms: 251903
conversation_id: 94f0d49f-6398-4b0c-aaf8-9c5a737fffc0
citations: 6
created: 2026-05-31 16:56:15Z
---

# According to our research, should we buy or sell NVIDIA — and why?

## Recommendation: **BUY** — bias is constructive

Our research base on NVDA is dominated by CLSA Asia-supply-chain read-across notes (CLSA does not publish a stand-alone NVDA rating/TP; it is an Asia house, and many NVDA-tagged notes carry CLSA Sinopac / CLST authorship). Synthesising those notes with NVDA's own most recent quarterly print (Q1 FY27, 20-May-2026), the weight of evidence is **firmly bullish** with two specific, identifiable risks.

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### 1. What our internal research says (CLSA / CLSA Sinopac)

**A. Top-line momentum — verified by CLSA's own read-across.** CLSA's 30-May-2025 India IT note (the most recent, direct NVDA fundamental commentary in our archive) wrote: "Nvidia beat its revenue guidance again in 1Q. Revenues came in at US$44.1bn (up 12% QoQ and 69% YoY) versus guidance of $43bn (+-2%). Even its 2QFY26 was strong, with revenues of $45bn (+-2%) implying 50% YoY growth… Data centre revenues came in strong at $39bn, up 73% YoY. Blackwell chips contributed to 70% of data centre compute revenues during the quarter with the transition from Hopper almost complete." CLSA explicitly endorses the structural call: "AI is a transformational shift… Agentic AI is the game changer. Enterprise AI is ready to take off at this stage." [7]

The same note tracks NVDA's 8-quarter beat-versus-guide history (every quarter beat, ranging +2% to +11%) — i.e., a structural sandbag pattern. [8]

**B. Asia-supply-chain proxies skew positive.**
- **InnoScience (2577 HK) — Outperform.** CLSA flagged NVDA's launch of "next-generation 800V HVDC data centre power infrastructure" (deployed from 2027 with Rubin Ultra) as accelerating GaN/SiC adoption — a forward indicator that NVDA's roadmap is dragging an entire new power-semi ecosystem with it. [11]
- **AVC, Auras, Kaori (CLSA Sinopac / CLST) — Outperform.** CLST's 19-Mar-2025 thermal note: "Nvidia announced the new Vera Rubin Ultra NVL576 to be launched in 2H27, and the chip will be over 3kW and the rack will be 600kW, both surpassing the current liquid cooling limitations. This could lead to another round of liquid cooling and thermal component upgrades from rack to server and at the chip packaging level." [10] Demand intensity is rising, not normalising.

**C. Risks our internal research itself flagged.**
- **GTC 2025 was an "in-line to negative read."** CLST's Sam Kao: "The GB system upgrade cycle is behind expectations, with Nvidia set to launch the higher-end NVL576 solution in 2H27 (Rubin Ultra), later than the 2H26 the market was anticipating. The introduction of CPO switches was largely expected, but the lack of disclosure on OIO adoption in future GPU roadmaps will be read negatively in terms of CPO progress." [9] Worth tracking, but a roadmap-cadence issue, not a demand-thesis break.
- **China H20 export ban.** CLSA noted Q2 FY26 guidance included **"a loss of c.$8bn revenue on export restrictions to China for H20 chips."** [7] A persistent overhang.

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### 2. What public data confirms (NVDA Q1 FY27 results, 20-May-2026)

The most recent NVDA print is materially stronger than CLSA's read-across base case from a year earlier — a critical data point because it post-dates all the internal research above and validates the bullish thesis.

| Metric | Q1 FY27 actual | Read |
|---|---|---|
| **Total revenue** | **$82bn, +85% YoY, +20% QoQ** [1] | Re-acceleration vs +69% YoY a year earlier |
| Data Center revenue | $75bn, +92% YoY [1] | Reaccel from +73% YoY |
| Gross margin | 75.0% non-GAAP [1] | Holding peak levels with Blackwell ramp |
| **Free cash flow** | **$49bn (vs $35bn in Q4)** [2] | Record |
| **Q2 FY27 guide** | **$91bn ± 2% — sequential growth driven by Data Center** [3] | Implies ~$108bn run-rate by Q2 |
| Capital return | **$80bn buyback authorised (+ $39bn remaining)**; dividend raised $0.01 → $0.25; returning ~50% of FCF to shareholders [3] | Management signalling confidence in durable FCF |

Management framing on the call was unusually emphatic — Jensen Huang: **"Demand has gone parabolic. The reason is simple. Agentic AI has arrived. AI can now do productive and valuable work. Tokens are now profitable."** [4]

Forward visibility quantified directly by the company:
- **"$1 trillion in Blackwell and Rubin revenue we foresee from 2025 through calendar 2027"** [3]
- New **Vera CPU = ~$200bn incremental TAM**, with $20bn CPU revenue visible in this year alone [5]
- **"AI infrastructure spending is on track to reach $3 trillion to $4 trillion annually by the end of this decade"**; H100 rental prices already up 20% YTD on tight supply [6]

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### 3. Synthesis — why BUY

1. **Internal research and public results both pointing the same way.** CLSA's Asia-supply-chain proxies (AVC/Auras/Kaori in liquid cooling [10]; InnoScience in GaN [11]; Indian IT system integrators [7]) all benefit from a *larger* NVDA build cycle. The Q1 FY27 results then quantify that larger cycle in NVDA's own P&L — revenue acceleration, not deceleration, three quarters into a Blackwell ramp that was supposed to be the peak. [1]
2. **Quality of growth is durable, not optical.** GAAP gross margin held 74.9% as Blackwell scaled [2]; capital return shifted from peripheral to material ($80bn buyback + 25x dividend hike) [3]. This is a company growing into its FCF, not financial-engineering its EPS.
3. **The two real risks are bounded.** (i) The Rubin Ultra cadence slipping to 2H27 is a six-month roadmap delta [9], not a demand break — and the supply-chain partners building for it (CLST's thermal names [10], InnoScience [11]) are still ramping. (ii) The China H20 hole [7] is a known, sized headwind already in guides; management explicitly *excludes* China DC compute from outlook [5], so any thaw is upside.
4. **What would change the call:** Hyperscaler capex guides cutting at next print, or evidence that token economics deteriorate (the asset that's currently letting customers finance the next $145bn of NVDA purchase commitments [2]). Neither is visible in our research base today.

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### 4. Important caveats on internal research scope

- CLSA does **not** carry a standalone Buy/Hold/Sell rating on NVDA in our archive. All NVDA-tagged notes are either (a) read-across notes anchored on an Asia name (e.g. Aspeed, AVC, Auras, Kaori, InnoScience, Indian IT) or (b) chartbook / sector outlook pieces. So this conclusion is built from the *direction* of CLSA's Asia coverage, not a published CLSA NVDA target price.
- Corpus latest date: **29-Jun-2025**. Anything after that is from public sources (transcripts/news), not internal research.
- The most recent public earnings data point is from **20-May-2026** (Q1 FY27), which post-dates our entire CLSA archive — so the "Buy" case has actually strengthened since CLSA last wrote on the name.

---

**Sources**

[1] NVIDIA Corp., Q1 2027 Earnings Call — 20-May-2026 (Colette Kress on Q1 results / Data Center / GB300)
[2] NVIDIA Corp., Q1 2027 Earnings Call — 20-May-2026 (Q1 FCF $49bn, $145bn supply commitments, gross margin)
[3] NVIDIA Corp., Q1 2027 Earnings Call — 20-May-2026 ($80bn buyback authorisation, Q2 $91bn outlook, $1T Blackwell+Rubin)
[4] NVIDIA Corp., Q1 2027 Earnings Call — 20-May-2026 (Jensen Huang closing — "Demand has gone parabolic")
[5] NVIDIA Corp., Q1 2027 Earnings Call — 20-May-2026 (Vera CPU $200bn TAM, China DC not in outlook)
[6] NVIDIA Corp., Q1 2027 Earnings Call — 20-May-2026 (H100 rents +20% YTD; AI infra $3-4T annually by end of decade)
[7] India IT sector outlook (Nvidia 1QFY26 read-across) — CLSA, 30-May-2025 — 607960956LinqAlpha.PDF
[8] India IT sector outlook (Nvidia 1QFY26 read-across) — CLSA, 30-May-2025 — beat-vs-guide history table — 607960956LinqAlpha.PDF
[9] Taiwan Technology (Key takeaways from GTC 2025) — CLSA Sinopac, 19-Mar-2025 — 607953415LinqAlpha.PDF
[10] Taiwan thermal solutions (Another thermal design upgrade) — CLSA Sinopac, 19-Mar-2025 — 607953425LinqAlpha.PDF
[11] InnoScience (Suzhou) — O-PF (Faster GaN industry growth) — CLSA, 22-May-2025 — 607960220LinqAlpha.PDF

## Citations

- [1] **NVIDIA Corp., Q1 2027 Earnings Call, 20-May-2026 5** · external
- [2] **NVIDIA Corp., Q1 2027 Earnings Call, 20-May-2026 5** · external
- [3] **NVIDIA Corp., Q1 2027 Earnings Call, 20-May-2026 5** · external
- [4] **NVIDIA Corp., Q1 2027 Earnings Call, 20-May-2026 5** · external
- [5] **NVIDIA Corp., Q1 2027 Earnings Call, 20-May-2026 5** · external
- [6] **NVIDIA Corp., Q1 2027 Earnings Call, 20-May-2026 5** · external

