Nvidia Upgrade to Buy: Supply Constraints Drive AI Boom

Nvidia Corporation's Q2 results and guidance confirm a multi-year, supply-constrained AI platform buildout, according to a recent upgrade to Buy. The company's revenue hit $96.2B, with data center sales at $89B, and free cash flow was $21.3B. Management guides for ~70% fiscal 2028 revenue growth, still supply-limited.

The AI landscape is converging on NVDA's platform, driven by hyperscaler CapEx/backlog, neocloud scaling, and memory scarcity. This convergence reinforces platform durability and pricing power. While risks include elevated valuation (~25x forward EPS), potential hyperscaler overbuild, China exposure, and neocloud financing, supply constraints and compute intensity sustain the bullish thesis.

The upgrade to Buy comes with a $300 fair value estimate. The analyst notes that investors can stay long the AI boom without owning its most crowded expression by taking a long position in Micron Technology (MU) and shorting Nvidia Corporation (NVDA).