Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>We’re going thru another iteration of the “AI peak” theory, driven by Hyperscalers’ declining Free Cash Flow. Coinciding with an “AI bubble” narrative, following the April-May stock rally.  </li>
<li>Stocks aren’t expensive. Semiconductors are trading at average PEx (17.7x forward EPS), Hyperscalers at -1 standard deviation (21.1x forward EPS). No valuations bubble. Expectations bubble? Consensus forecasts look reasonable.</li>
<li>Hyperscalers’ declining Free Cash Flows is true. Increasing Debt issuance is true. Also true: Cloud revenues are accelerating, margins are expanding. Most extraordinary is the increase in Remaining Performance Obligations.</li>
</ul>


We’re going thru another iteration of the “AI peak” theory, driven by Hyperscalers’ declining Free Cash Flow. Coinciding with an “AI bubble” narrative, following the April-May stock rally.  
Stocks aren’t expensive. Semiconductors are trading at average PEx (17.7x forward EPS), Hyperscalers at -1 standard deviation (21.1x forward EPS). No valuations bubble. Expectations bubble? Consensus forecasts look reasonable.
Hyperscalers’ declining Free Cash Flows is true. Increasing Debt issuance is true. Also true: Cloud revenues are accelerating, margins are expanding. Most extraordinary is the increase in Remaining Performance Obligations.


AI Is a Bubble, Again? Stocks Aren’t Expensive. Hyperscalers’ Future Revenue Tells a Different Story

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Thematic (Sector/Industry)

<ul>
<li>OpenAI, Anthropic and Google released frontier models, while OpenAI cancelled GPT-6.1 Astra after safety tests and the FTC opened a probe into AI-agent safety.</li>
<li>Anthropic's IPO prospectus showed Q2 revenue of USD 11.5bn, OpenAI sought at least USD 30bn at a USD 1.4tn valuation, and Meta launched an enterprise AI platform.</li>
<li>Amazon explored moving USD 8bn of Nvidia chips into a leaseback vehicle, AMD agreed to buy World Labs for USD 8.2bn, and Firmus priced its ASX IPO.</li>
</ul>


OpenAI, Anthropic and Google released frontier models, while OpenAI cancelled GPT-6.1 Astra after safety tests and the FTC opened a probe into AI-agent safety.
Anthropic's IPO prospectus showed Q2 revenue of USD 11.5bn, OpenAI sought at least USD 30bn at a USD 1.4tn valuation, and Meta launched an enterprise AI platform.
Amazon explored moving USD 8bn of Nvidia chips into a leaseback vehicle, AMD agreed to buy World Labs for USD 8.2bn, and Firmus priced its ASX IPO.


This Week in AI (Sep 27-Oct 3): OpenAI Drops Astra for Sol; Sonnet 5.5 Nears Opus at 1/2 the Price

<ul>
<li>Apr-27 beats Consensus by 6%. Apr-27 revenue guidance was revenue growing at 77% YoY. Actual result is 85% YoY. Jul-27 revenue guidance shows 95% growth YoY. Consensus forecasts 84%. </li>
<li>Forecasts: Consensus is too low. My forecast show 20% upside to Consensus for FY28 and 40% for FY28.</li>
<li>Valuations: Nvidia is trading below average PEx, based on a Consensus that’s ~20-40% too low. On my forecasts, the stock is trading at 16x FY28 and 11x FY29 EPS</li>
</ul>


Apr-27 beats Consensus by 6%. Apr-27 revenue guidance was revenue growing at 77% YoY. Actual result is 85% YoY. Jul-27 revenue guidance shows 95% growth YoY. Consensus forecasts 84%. 
Forecasts: Consensus is too low. My forecast show 20% upside to Consensus for FY28 and 40% for FY28.
Valuations: Nvidia is trading below average PEx, based on a Consensus that’s ~20-40% too low. On my forecasts, the stock is trading at 16x FY28 and 11x FY29 EPS


Nvidia: It’s Very Simple. 90% YoY Growth Trading at ~24x This Year EPS. Consensus Is Too Low.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Nvidia is taking an unusually direct role in solving one of the biggest constraints facing the artificial intelligence boom: money.</li><li>The chipmaker has reached agreements with Apollo Global Management, Blackstone, BlackRock, Brookfield Asset Management, Goldman Sachs and KKR to establish compute-financing platforms aimed at deploying more than $500 billion of outside capital for customers building AI infrastructure.</li><li>The initiative could make it easier for cloud providers, enterprises, sovereign projects and AI-native companies to finance increasingly expensive data centers packed with Nvidia hardware.</li></ul>

Nvidia is taking an unusually direct role in solving one of the biggest constraints facing the artificial intelligence boom: money.The chipmaker has reached agreements with Apollo Global Management, Blackstone, BlackRock, Brookfield Asset Management, Goldman Sachs and KKR to establish compute-financing platforms aimed at deploying more than $500 billion of outside capital for customers building AI infrastructure.The initiative could make it easier for cloud providers, enterprises, sovereign projects and AI-native companies to finance increasingly expensive data centers packed with Nvidia hardware.

Nvidia’s $500 Billion AI Money Machine: Genius Growth Hack Or The Biggest Risk Yet?

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Equity Derivatives

<ul>
<li>Ahead of Q4 earnings, we analyze implied volatility, earnings reactions, and seasonal patterns to assess how the options market is positioned.</li>
<li>Seasonal analysis highlights distinct fourth quarter behavior, including wider dispersion in post-earnings returns and larger absolute moves. </li>
<li>We find a pattern of continued momentum after very strong earnings day price moves. </li>
</ul>


Ahead of Q4 earnings, we analyze implied volatility, earnings reactions, and seasonal patterns to assess how the options market is positioned.
Seasonal analysis highlights distinct fourth quarter behavior, including wider dispersion in post-earnings returns and larger absolute moves. 
We find a pattern of continued momentum after very strong earnings day price moves. 


NVDA Q4 Earnings Setup: Historically Strong Q4 Moves and Soft Vol Pricing

United States

NVIDIA Corporation designs, develops, and markets three dimensional (3D) graphics processors and related software.  The Company's products provide interactive 3D graphics to the mainstream personal computer market.

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NVIDIA Corp (NVDA US)

AI Is a Bubble, Again? Stocks Aren’t Expensive. Hyperscalers’ Future Revenue Tells a Different Story

AI peak theory revisited as Hyperscalers' declining Free Cash Flow sparks "AI bubble" narrative. Valuations not bubble, expectations not inflated....

Nicolas Baratte

This Week in AI (Sep 27-Oct 3): OpenAI Drops Astra for Sol; Sonnet 5.5 Nears Opus at 1/2 the Price

This week in AI: OpenAI scrapped GPT-6.1 Astra and shipped Sol, Anthropic released Sonnet 5.5 at half Opus's price, and Google launched Gemini 4...

Ke Yan, CFA, FRM

Nvidia: It’s Very Simple. 90% YoY Growth Trading at ~24x This Year EPS. Consensus Is Too Low.

Nvidia's strong revenue growth beats consensus. Guidance for even higher growth. Significant upside potential compared to consensus estimates,...

Nicolas Baratte

Nvidia’s $500 Billion AI Money Machine: Genius Growth Hack Or The Biggest Risk Yet?

Nvidia is taking an unusually direct role in solving one of the biggest constraints facing the artificial intelligence boom: money. The chipmaker...

Baptista Research

NVDA Q4 Earnings Setup: Historically Strong Q4 Moves and Soft Vol Pricing

NVDA heads into Q4 earnings with a history of outsized fourth quarter moves, while current implied volatility appears modest relative to past...

John Ley

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AI Is a Bubble, Again? Stocks Aren’t Expensive. Hyperscalers’ Future Revenue Tells a Different Story

​AI peak theory revisited as Hyperscalers' declining Free Cash Flow sparks "AI bubble" narrative. Valuations not bubble, expectations not inflated....

Nicolas Baratte

This Week in AI (Sep 27-Oct 3): OpenAI Drops Astra for Sol; Sonnet 5.5 Nears Opus at 1/2 the Price

This week in AI: OpenAI scrapped GPT-6.1 Astra and shipped Sol, Anthropic released Sonnet 5.5 at half Opus's price, and Google launched Gemini 4...

Ke Yan, CFA, FRM

Nvidia: It’s Very Simple. 90% YoY Growth Trading at ~24x This Year EPS. Consensus Is Too Low.

​Nvidia's strong revenue growth beats consensus. Guidance for even higher growth. Significant upside potential compared to consensus estimates,...

Nicolas Baratte

Nvidia’s $500 Billion AI Money Machine: Genius Growth Hack Or The Biggest Risk Yet?

Nvidia is taking an unusually direct role in solving one of the biggest constraints facing the artificial intelligence boom: money. The chipmaker...

Baptista Research

NVDA Q4 Earnings Setup: Historically Strong Q4 Moves and Soft Vol Pricing

NVDA heads into Q4 earnings with a history of outsized fourth quarter moves, while current implied volatility appears modest relative to past...

John Ley

AI peak theory revisited as Hyperscalers' declining Free Cash Flow sparks "AI bubble" narrative. Valuations not bubble, expectations not inflated....

Nvidia's strong revenue growth beats consensus. Guidance for even higher growth. Significant upside potential compared to consensus estimates,...