A recent analysis published by JR Research sheds light on one of the biggest paradoxes in the financial world: Despite Nvidia literally "showing off" in its Q1 results and increasing its annual revenue to $216 billion (3.5 times FY2024), the market remains unconvinced. However, according to the analyst, this skepticism has created an unmissable "Strong Buy" opportunity for long-term investors. Here's the behind-the-scenes look at Nvidia's balance sheet and the enormous potential the market is overlooking:
Vera CPU: A New "Agentic" Option Worth $20 Billion
One of the biggest concerns for the market is that Nvidia, which holds the throne in AI processors (GPUs), cannot be the sole contender against Intel, AMD, and ARM in the CPU (Central Processing Unit) market. However, Jensen Huang provided a clear figure that will shatter this perception.
$20 Billion Annually: Nvidia has confirmed that it has already reached a net demand trajectory of $20 billion annually with its new Vera CPU family. This isn't fabricated data; it's a completely new business line with solid foundations.
The Era of Agent Processors: Jensen Huang reminded us that while AI agents orchestrate on CPUs, GPUs still do the heavy lifting in the background. Vera CPUs were designed from scratch for this "agent age" integration.
Ending M7 Dependence: Diversified Infrastructure Power
The biggest argument of bear market proponents (including Michael Burry) was that Nvidia's revenue was solely tied to its Hyperscalers spending. Q1 data refuted this thesis:
Balanced Distribution: While large cloud giants (Microsoft, Google, etc.) leave Nvidia with $38 billion; Neoclouds (CoreWeave, Nebius, IREN), industrial and enterprise customers made purchases totaling $37.4 billion.
Nvidia's Venture Capital (VC) Strategy: Nvidia invested over $40 billion in "non-marketable stock" within the ecosystem using its available cash. These neoclouds, unlike hyperscalers, lack massive engineering teams to design their own chips, making them entirely dependent on Nvidia's hardware and software (CUDA) stack. As Jensen Huang puts it, Nvidia currently has the "most rentable and fastest revenue-generating" infrastructure in the world.
Incredible Multiples: A Giant at S&P 500 Level!
Earnings per share (EPS CAGR) is expected to remain above 40% for the next three years. In contrast, what is the current price of the stock? Only 21.6x Forward P/E. This brings the company's PEG ratio to 0.5, which is literally "free" for a technology leader in growth. The market expects Google's TPUs or Amazon's custom chips to dethrone merchant chips; however, no enterprise company, except for massive teams like Anthropic, wants to deal with the complex optimization of these chips. Everyone is choosing turnkey Nvidia systems.
The stock is currently testing the $215 resistance level, and there's a fierce tug-of-war between bulls and bears. For NVDA, which has underperformed its semiconductor peers on an index basis since August 2025, two main risks are on the table:
Energy and Power Bottleneck: If the electricity needs of data centers cannot be met globally, the construction of AI infrastructure (CapEx) could be extended beyond what was planned.
Physical AI Factor: The potential of factory automation and robotics (Physical AI) hasn't even been factored into analyst predictions yet. The market somewhat downplayed Vera CPU's May earnings, deeming its $20 billion potential "insufficient." However, it would be foolish for the market to miss out on a global giant heading towards $390 billion in annual revenue and multiplying its networking solutions side by $15 billion annually (a threefold increase). Sooner or later, the awakening will begin.
