Afleveringen
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Welcome to Pitch The PM where host Doug Garber is joined by Gil Luria, Head of Technology Research at D.A. Davidson for a deep-dive on NVDA.
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In this episode of Pitch The PM, Doug and Gil candidly debate where Nvidia is in the GPU cycle, how Nvidia came to dominate the advanced chip market and what the road map looks like for advanced chip supply and demand. Gil outlines the current state of the industry for GPU chips that is in short supply and how the behavior of some key customers, like Microsoft, might be shifting to focus on returns over growth.
The discussion goes into depth on hyperscaler capabilities to manufacture their own chips and their plans to reduce their dependence on Nvidia. Gil believes that Nvidia’s customer capex growth has reached its peak and this could also impact NVDA if other buyers cannot fill-in to support the street’s high expected growth.
They also examine Nvidia’s valuation, competitive advantages and the shifting dynamics of AI hardware spending, breaking down how Wall Street could be overestimating future growth. Gil’s thesis centers on the idea that Nvidia’s hypergrowth is transitioning to modest growth and then forecasts a decline in 2026 CY revenue. Gil discusses how this could surprise the street and might lead to a lower valuation multiple. Please see the episode for D.A. Davidson disclosures.
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Gill Luria is the Head Technology Research for D.A Davidson, where he’s worked for the past 8 years. Previously he was the Director of Research at Wedbush. Gil worked as a consultant at Deloitte and a research associate at Sanford Bernstein. He earned a degree in economics from the Hebrew University of Jerusalem and an MBA in Finance from Colombia Business School.
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Chapters:
00:00 – Introduction to Nvidia & DA Davidson
01:45 – Gil Luria’s Background & Approach to Tech Research
03:20 – How Nvidia Became the AI Dominator
06:15 – Bull vs. Bear: The Core Debate on Nvidia’s Future
11:10 – Hyperscaler AI Spending – Is CapEx Peaking?
16:45 – Big Tech’s AI Chip Strategy – A Real Threat to Nvidia?
22:30 – Hyperscaler Plans for 50% Internal Chip Usage.
27:40 – Falling GPU Rental Prices – A Canary in the Coal Mine?
32:20 – Nvidia’s Competitive Moat – Can CUDA & Networking Defend Its Lead?
38:00 – China’s Role and Size as a Nvidia End User.
43:10 – AI Investment Cycle: Boom, Bust, or a Plateau?
48:45 – Valuation Insights – Can Nvidia Justify Its Price?
54:30 – Gil’s Variant View – Street Low EPS Estimates for 2026 CY
59:15 – Final Verdict: Is Nvidia As Good As It Gets?
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▶️ MORE EPISODES:
BNED: 3x Return Potential Post Recap https://youtu.be/P6xy67DtqQ4?si=S7RyvfnPceYAmJGx
ZM: Growth Acceleration, A Catalyst https://youtu.be/D8THaDUBkTA?si=gKYXfFLL6nLUVnuc
POOL: Reverse Engineering Berkshire’s POOL Investment: Buying a Great Company in a Lull https://youtu.be/190LgD6BdmQ?si=2rRej5lAdh4RLa0s
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Not Investment Advice. For Educational Purposes. See disclaimers at PitchThePM.com
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In addition to presenting high-conviction investment ideas, we also reverse engineer great investors’ theses to improve our process.
Pool Corp. has a leading position in a good industry and has demonstrated the ability to consistently grow FCF/share in the mid-teens with a high ROIC.
The current post-COVID pool industry downturn has led to negative sentiment, and long-term investors of great companies such as Berkshire see this as an opportunity to buy a great company at a “fair” price.
We use a reverse DCF to impute that consensus expects FCF to grow in the mid-single digits, which is below historical levels.
While it is unclear if the pool industry is “out of the woods” yet based on expert network channel checks from AlphaSense, it is likely based on peer ‘25 revenue growth commentary that Pool Corp. might envision a return to low single-digit growth in 2025 as consensus expects (+3.4%).
This might cause some of the remaining 2.6 MM (7% of float) shares short (down from 4.4 MM shares in 2023) to abandon their thesis.
Earnings revisions will be the key.
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Berkshire’s Investment Checklist:
00:00 Intro
05:02 Is this business in my CIRCLE OF COMPETENCE?
Yes, I covered the pool industry as a PM at Millennium, and it’s a relatively simple business to understand.
06:28 What is the MARGIN OF SAFETY?
No replacement value or BV support. Good business as measured by ROIC and FCF and a leading position in a good industry where scale has advantages.
10:00 Is the stock available BELOW INTRINSIC VALUE?
No, the stock seems fully valued at a 4% unlevered FCF yield.
What is Berkshire’s Potential VARIANT VIEW?
Berkshire likely thinks the company can get back to mid-teens FCF/share growth per historical trends vs the implied consensus of mid-single digit growth.
17:28 Does the business operate in a GOOD INDUSTRY?
Yes, the pool distribution business is a good industry. It is mostly recurring revenue and asset light.
19:55 Is this a BAD, GOOD, or GREAT BUSINESS?
Great business at an “almost fair price” in a post-COVID downturn.
21:36 Does the business have a WIDE MOAT?
The company has constantly generated excess ROIC and has advantages in its store locations being near customer pool routes, in being the largest buyer from manufacturers to obtain procurement discounts, in having a large footprint to optimize inventory management, and a leading tech interface for customers.
24:11 Are management INCENTIVE ALIGNED?
Yes, management is compensated on ROIC and EPS growth.
28:18 Is this one of your 20 lifetime PUNCH CARDS?
No, it is not one of my lifetime 20 investments.
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▶️ MORE EPISODES:
BNED: 3x Return Potential Post Recap https://youtu.be/P6xy67DtqQ4?si=S7RyvfnPceYAmJGx
ZM: Growth Acceleration, A Catalyst https://youtu.be/D8THaDUBkTA?si=gKYXfFLL6nLUVnu
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Thank you for tuning in. We would be grateful for your comment or like!
⚠️ Disclaimer: This is for educational purposes. It is not investment advice. Contact your financial advisor for suitable investments for you.
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Zijn er afleveringen die ontbreken?
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Hello and welcome back to Pitch The PM, where we debate high-conviction investment ideas with top PMs using our 10 Step Variant View Investment Checklist.
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2-2.5x Return Potential. Post the COVID stock bubble, a laser-focused management team at Zoom worked to transform from a single-product company to an Enterprise platform. Revenue growth acceleration from low single-digits to high single-digits could be the catalyst for positive earnings revisions and potentially multiple re-rating.
In the second episode of Pitch the PM, ex-Citadel Analyst & Millennium Senior Portfolio Manager Doug Garber is swayed by Sean Emory’s ZM pitch. Sean has high conviction in his ZM thesis with a mid-teens weight in his portfolios. After more research, Doug also took a position.
10-Step Variant View Investment Checklist
[00:00] Intro
[02:29] What ACTION do I want the Portfolio Manager to take?
- Buy
[12:06] Do I UNDERSTAND this business and industry?
- Yes, Sean uses it for his business.
[21:51] Is the stock available at a REASONABLE price today?
- Yes, at 10x EV/EBITDA and at the low end of the Enterprise Software peers.
[32:48] Why is this stock MISPRICED?
Low growth at 3% as the Online Segment churn at 2-3%/month has reduced the overall company’s growth rate from the Enterprise Segment.
[35:57] What is my VARIANT VIEW vs the street?
- Growth accelerating to high single-digits from low single-digits.
- Adoption of Zoom phone and Zoom Call Center and stability from the Online Segment.
[38:34] What is my EVIDENCE?
- AlphaSense expert calls demonstrate the uplift from Zoom Phone can be 3x for an Enterprise client.
- And AlphaSense expert calls also discuss the strong, founder-led culture that is laser-focused on winning in UCaaS.
[51:58] What are the CATALYSTS for the street to realize my view?
- Quarterly results with accelerating Enterprise revenue growth and stable Online revenue.
[55:35] What is the company WORTH if my bet is right?
- $100 - $210 based on $5-$7 in FCF/share at 20-30x P/FCF.
[57:38] What is the OTHER SIDE of the bet?
- Competition makes it hard for Zoom to accelerate Enterprise growth and/or the Online Segment churn increases.
[1:02:54] Is management ALIGNED with ownership?
- Yes, this is a founder-led company with 8% insider ownership and a laser focus on being the best in UCaaS.
[1:04:51] Kill Criteria
[1:08:16] Short Interests
[1:09:27] Variant View Checklist
[1:22:25] Outro
Thank you for tuning in. We would be grateful for your comment or like!
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▶️ MORE EPISODES:
BNED: 3x Return Potential Post Recaphttps://youtu.be/P6xy67DtqQ4?si=S7RyvfnPceYAmJGx
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Follow Pitch The PM:
📩 Subscribe to our Newsletter for more high-conviction research, quarterly research updates, the research pipeline, and the job board
:https://pitchthepm.beehiiv.com/subscribe
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🎧 Listen to the episodes here:https://spotifycreators-web.app.link/e/GZFTproPLQb
LinkedIn:https://www.linkedin.com/in/doug-garber-42aa508/
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Avory & Company - Investing Where The World is Headed. Avory & Co runs a high-conviction growth equity strategy focusing on quality, well-led companies offering long-term sustainable growth. Sean Emory earned his degree at Yale. He was a co-founder of Blink App and founder and current CIO of Avory & Co.
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💡 EPISODE PARTNER:
Please support our partners to keep our episodes free.
This episode is powered by AlphaSense. Use our link here for Complimentary access —https://www.alpha-sense.com/Pitch/
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⚠️ Disclaimer: This is for educational purposes. It is not investment advice. Contact your financial advisor for suitable investments for you.
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In the first episode of Pitch the PM, ex-Citadel Analyst & Millennium Senior Portfolio Manager, Doug Garber, grills, Analyst, Alex Nuta's BNED pitch. The Analyst uses the 10 Step Variant View Investment Checklist to convince his PM that BNED has the potential to be a 3-bagger.
