Six-year segment-driver model with a vintage depreciation schedule. Base year TTM to 2026-04-26, all statement inputs from SEC XBRL.
NO POSITIONConviction 1/312-month horizonEdge: none
| Fiscal year | Our revenue | Street avg | Street low–high | Δ | Percentile | Analysts | Our EBIT mgn | Street EBIT mgn |
|---|---|---|---|---|---|---|---|---|
| 2027 | $381bn | $393bn | 364–403 | -3.2% | 44th | 40 | 64.0% | 48.1% |
| 2028 | $552bn | $563bn | 454–622 | -2.0% | 58th | 40 | 61.9% | 48.1% |
| 2029 | $699bn | $685bn | 597–786 | +2.1% | 54th | 27 | 59.2% | 48.1% |
| 2030 | $805bn | $774bn | 647–886 | +4.0% | 66th | 13 | 56.4% | 48.1% |
| 2031 | $863bn | $1,005bn | 839–1,150 | -14.2% | 7th | 22 | 53.6% | 48.1% |
We forecast EBITDA margin — a cash margin driven by mix, pricing and opex — and derive EBIT by subtracting depreciation built from the capex programme, vintage by vintage. Forecasting EBIT margin directly, which both the published consensus feed and most sell-side models do, hides the depreciation assumption inside a single number.
| Year | Revenue | Growth | EBITDA mgn | Capex | Capex %rev | D&A | D&A %rev | EBIT mgn | FCFF |
|---|---|---|---|---|---|---|---|---|---|
| 2027E | $381bn | 76.4% | 64.5% | $7bn | 1.8% | $2bn | 0.5% | 64.0% | $181bn |
| 2028E | $552bn | 44.9% | 62.5% | $14bn | 2.5% | $3bn | 0.6% | 61.9% | $256bn |
| 2029E | $699bn | 26.7% | 60.0% | $22bn | 3.2% | $6bn | 0.8% | 59.2% | $314bn |
| 2030E | $805bn | 15.2% | 57.5% | $28bn | 3.5% | $9bn | 1.1% | 56.4% | $348bn |
| 2031E | $863bn | 7.1% | 55.0% | $30bn | 3.5% | $12bn | 1.4% | 53.6% | $362bn |
| 2032E | $889bn | 3.1% | 53.5% | $31bn | 3.5% | $16bn | 1.8% | 51.7% | $366bn |
Forecast year 2027 is part history. $1.8bn of capex through Q1 is a filed fact, not an estimate. The remaining 3 quarters are held at the last observed quarterly rate of $1.8bn (2026-04-26), giving $7.0bn for the full year. Freezing the exit rate is deliberately conservative: quarterly capex has risen in each of the last seven quarters, so this assumes the ramp stops today. Anchoring on a trailing-twelve-month ratio instead — the conventional choice — would put the full year below the half-year already reported.
Contributions are exact Shapley values over all 27 = 128 driver coalitions, so they sum to the total without residual (residual $-0.0000). One-at-a-time sensitivity would not, because DCF driver interactions are large.
| Step | $/share | |
|---|---|---|
| Street-calibrated value | $231.94 | |
| revenue | -48.69 | |
| ebitda margin | +15.48 | |
| da pct revenue | -1.34 | |
| Our base case | $197.39 | |
| Market price | $218.99 |
The gap from our base case to the market price is not decomposed into drivers, because it is not a forecast disagreement — it is the discount rate and terminal assumptions the market is applying. That is stated below rather than disguised as precision.
At $218.99, holding everything else at our base case, the market is paying for either…
| Case | Value/share | vs spot | Probability | WACC | Terminal g | TV % of EV | Anchor |
|---|---|---|---|---|---|---|---|
| Bear | $67.39 | -69.2% | 25% | 11.00% | 2.0% | 53% | historical base rate |
| Base | $197.39 | -9.9% | 50% | 9.75% | 3.0% | 71% | consensus dispersion |
| Bull | $437.47 | +99.8% | 25% | 9.25% | 3.5% | 80% | judgment |
| Expected value | $224.91 | +2.7% | 100% | ||||
| Street-calibrated (their revenue, EBIT and D&A; our capex, our engine) | $231.94 | +5.9% | |||||
| Street published price target (median 300, range 218–500) | $319.48 | +45.9% | |||||
A digestion year of the kind semiconductor cycles have produced repeatedly, plus custom-ASIC share gain on incremental sockets and gross-margin compression from HBM and advanced packaging cost. A cycle, not a thesis break.
Our revenue path sits within the analyst range in every covered year, so this is genuinely the central expectation rather than a variant. The disagreement with the Street is on terminal margin, not near-term demand.
Rubin holds pricing, networking attach keeps climbing, and accelerated computing takes a larger share of a still-growing infrastructure budget. The width of this case against the bear case is the reason we carry no position.
Computed through a constraint cascade, not chosen. Basis: illustrative $1bn book.
| Term | Value | Note |
|---|---|---|
| Payoff ratio b | 0.04 | reward ÷ risk |
| p(win) | 75% | probability mass favouring the position |
| Kelly f | -565.1% | full Kelly fraction |
| Quarter-Kelly | 0.00% | 0.25 × Kelly |
| Liquidity cap | 4180.00% | 20% of ADV over 5 days |
| Risk-budget cap | 2.17% | 1.5% of NAV at risk to the adverse case |
| Concentration cap | 5.00% | single-name hard limit |
| Position size | 0.00% of NAV | binding constraint: quarter-Kelly |
| # | If this happens | Observable | Threshold | By | Action |
|---|---|---|---|---|---|
| k1 | Equity stakes in customers exceed 40% of revenue Currently 28.6%, up from ~3% a year ago. The cleanest tell on demand quality. | Equity securities (marketable + non-marketable) / TTM revenue | > 40% | 2027-02-28 | review |
| k2 | Gross margin below 68% for two consecutive quarters Would confirm the cost and mix compression the base case models. | GrossProfit / Revenues, quarterly | < 68% x2 | 2027-05-31 | review |
| k3 | Inventory grows faster than guided forward revenue Inventory is $25.8bn and rising; it leads demand inflections both ways. | InventoryNet vs next-quarter revenue guidance | two consecutive quarters | 2027-05-31 | review |
| Date | Event | What we learn | Tests |
|---|---|---|---|
| 2026-08-26 (tentative) | Q2 FY2027 results | Rubin ramp pricing, networking attach, China contribution | k2 |
| 2026-11-18 (tentative) | Q3 FY2027 results | Inventory and purchase commitments against the forward guide | k3 |
| 2027-02-25 (tentative) | Q4 FY2027 results and Form 10-K | Customer concentration and the full equity-stake disclosure | k1 |
The case for owning it anyway: at 37.8x economic earnings for a business growing revenue 85% at 64% operating margins the multiple is not obviously wrong, and our terminal-margin fade to 53.5% may be too aggressive for a company with this much architectural lock-in. If terminal margin holds at 60% the base case clears spot comfortably.
The case for shorting it: $72.6bn of equity stakes in customers who use the proceeds to buy accelerators means some share of reported demand is self-funded, and that share is rising fast. We cannot size it from public disclosure, which is precisely why we will not take the other side either.
Twelve months out we have missed a double. What happened: Rubin shipped into a market still short of compute, networking attach kept climbing, and the terminal-margin debate never arrived because revenue grew fast enough to make it irrelevant on any horizon that mattered. We stood aside because our range was wide -- and a wide range is not the same thing as an unfavourable one.
| TTM to 2026-04-26 | $bn | Comment |
|---|---|---|
| Revenue | 253.5 | |
| Operating income (EBIT) | 162.3 | 64.0% margin |
| Non-operating income | 27.2 | 14.3% of pretax income |
| of which equity-securities gains | 0.0 | non-cash marks on investment stakes |
| Reported net income | 159.6 | includes the marks above |
| NOPAT (EBIT after tax) | 136.7 | at 15.7% effective rate |
Every revenue line is the product of named quantities, not a growth rate. Each driver can be disagreed with individually and checked against disclosure.
| Segment / driver | 2027E | 2028E | 2029E | 2030E | 2031E | 2032E |
|---|---|---|---|---|---|---|
| Data Center ($bn) | 355 | 523 | 668 | 772 | 826 | 851 |
| units | +52.0% | +30.0% | +18.0% | +10.0% | +5.0% | +2.0% |
| asp | +16.0% | +10.0% | +6.0% | +3.0% | +1.0% | +0.0% |
| attach networking | +4.0% | +3.0% | +2.0% | +2.0% | +1.0% | +1.0% |
| Gaming ($bn) | 18 | 19 | 21 | 22 | 22 | 23 |
| growth | +12.0% | +8.0% | +6.0% | +5.0% | +4.0% | +3.0% |
| Professional Visualization ($bn) | 4 | 4 | 5 | 5 | 6 | 6 |
| growth | +20.0% | +15.0% | +12.0% | +10.0% | +8.0% | +6.0% |
| Automotive ($bn) | 3 | 4 | 5 | 6 | 7 | 8 |
| growth | +35.0% | +30.0% | +25.0% | +20.0% | +15.0% | +12.0% |
| OEM & other ($bn) | 1 | 1 | 1 | 1 | 1 | 1 |
| growth | +5.0% | +5.0% | +5.0% | +5.0% | +5.0% | +5.0% |
| Total revenue ($bn) | 381 | 552 | 699 | 805 | 863 | 889 |
| Item | $bn | Note |
|---|---|---|
| Enterprise value (base case) | 4,702 | |
| + Cash & marketable securities | 52.5 | |
| + Equity investments (stakes) | 72.6 | 28.6% of revenue — $2.98/share. Omitted from the published report's bridge. |
| − Debt | 8.5 | |
| − Operating leases | 4.3 | |
| Equity value | 4,815 | ÷ 24,391m diluted shares |
| Value per share | $197.39 |
companyconcept API, CIK 0001045810. Quarterly series are reconstructed from filed facts, with Q4 derived as fiscal year minus the nine-month cumulative and cash-flow items unwound from year-to-date cumulatives.analyst/financial-estimates and analyst/price-target-consensus.statements/revenue-product-segmentation. No SEC fallback exists — companyfacts flattens dimensioned facts — so the only control is reconciling the segment sum to consolidated revenue.get_earnings_results.