Analysis of NVIDIA (NVDA) Investment Case Amid TPU Competition and Valuation Concerns

The analysis is based on a Reddit discussion (2025-11-28 EST) assessing NVDA’s investment case amid Google TPU competition. NVDA has seen a 13% month-over-month price drop to $176.51 [0], with a P/E ratio of ~43.69 and net margin of ~53% [1]. Blackwell chips deliver a 2.2x performance leap over Hopper and reduce GPT-3 training costs by 4x [2]. Google’s Ironwood TPUs are more power-efficient but niche to its ecosystem [4], and Google uses a dual-track strategy (NVDA + TPUs) [3]. AMD, an alternative, has a 14.64% month-over-month decline but gained 1.53% day-over-day [5,6].

1. NVDA’s CUDA ecosystem is a strong moat, as even Google doesn’t abandon NVDA entirely [3].
2. Blackwell’s cost-effectiveness (4x lower training cost) and strong demand (exceeding supply) are key growth drivers [2].
3. High valuation (P/E ~43) contrasts with analyst consensus target of $250 (+41.6% upside) [0].
4. TPUs are not direct GPU killers but could impact margins if adoption grows [4].

• Competition Risk
  : TPUs and AMD may compress NVDA’s margins from current ~53% to 30% (per Reddit discussion) [0].
• Valuation Risk
  : High P/E ratio makes NVDA vulnerable to growth slowdowns [1].
• Supply Risk
  : Blackwell ramp is constrained by supply, delaying revenue growth [2].

• Blackwell Demand
  : Strong demand for Blackwell chips with expected gross margin recovery to mid-70s by H2 2025 [2].
• Analyst Targets
  : Consensus target of $250 provides significant upside potential [0].

NVDA’s investment case is mixed. Bullish factors: ecosystem lead and Blackwell performance; bearish factors: valuation and competition. Key metrics: NVDA P/E ~43.69, net margin ~53%, analyst target $250; AMD P/E ~113.88, net margin ~10.32%. Factors to monitor: Blackwell ramp progress, TPU adoption rate, AMD’s market share gains [0,1,2,3,4,5,6].