Looking at NVIDIA from Broadcom and Oracle's financial reports

Oracle: AI Data Center CAPEX Continues to Accelerate
• Quarterly CAPEX of approximately $12 billion, primarily allocated to AI data centers and GPU capacity construction;
• Management has raised the FY2026 CAPEX plan by an additional $15 billion on top of the original base, totaling around $50 billion, mainly to absorb the approximately $523 billion cloud/AI order backlog (RPO).
Summary:
Demand-side factors (signed large contracts + GPU demand) are still pushing them to accelerate the construction of factories and data centers.

Broadcom: AI Orders Are Full, But Starting to Erode Gross Margins
• The company expects next quarter’s AI semiconductor revenue (custom ASICs + Ethernet, etc.) to double to approximately $8.2 billion;
• It has an AI-related backlog of about $73 billion, planned for delivery within 18 months;
• The CFO explicitly stated: Due to the increasing proportion of AI systems, overall gross margins will decline by about 1 percentage point, and this pressure will persist throughout the year.
Summary:
AI orders are full, and the outlook for the next two to three years seems solid. However, AI systems are a “high-volume but relatively low-margin” business, which will gradually weigh down the company’s overall profitability.

Insights for NVDA from ORCL and AVGO:
• AI-related revenue is still growing rapidly, with some businesses doubling in size;
• But to accommodate this wave of AI infrastructure, profit margins and FCF quality are beginning to suffer due to high CAPEX and business mix;
For NVIDIA, it can be roughly understood as follows:

1. Revenue/EPS will likely continue to grow at a high rate over the next year or two—
   The backlog and CAPEX plans of hyperscalers, ORCL, and AVGO provide a “floor” for GPU demand over the next two to three years;
2. But whether NVDA’s current mid-to-high valuation can hold largely depends on:
   o Whether free cash flow (FCF) can roughly keep pace with EPS growth, rather than being “eaten up too much” by external investments and ecosystem commitments;
   o Whether gross margins and operating leverage will trend downward—once they drop significantly from 70%+ toward 60%, it will mean the valuation benchmark needs to be adjusted downward.