Dear Reader,
Happy Monday.
Today is Monday, April 13th and today I’ve got a big question for you:
Because that's what a very sophisticated institutional financial modeling tool called the UBS HOLT System is saying.
$22 trillion.
That's roughly $800 to $1,000 a share.
About 400% more than where the stock is trading today.
What Is the HOLT System?
The HOLT System is something you learn about on Wall Street.
It's institutional grade — most individual investors have never heard of it.
And it has a genuinely impressive track record.
It famously predicted fading growth at Yahoo, Cisco, and Sun Microsystems during the Dot-Com bubble.
It predicted that many of the SaaS software firms that have gotten hammered in recent years would be worth less.
These guys really have their finger on the pulse of tech.
The Metric Behind the Model
The HOLT System runs on something called Cash Flow Return on Investment — CFROI.
It's built on Buffett's owner earnings concept.
Buffett always said you want to look at owner earnings — cash flow minus capital expenditures — to understand what a business is really generating.
The problem is, how do you properly estimate future capital spending?
Here's the key insight.
Accounting statements distort reality because depreciation doesn't match replacement cost.
Let me give you a simple example.
Imagine you own a rental house and you need to replace the washer and dryer every seven to ten years.
In 2015, that set cost you $1,000.
Today, it would cost you $1,400.
The accounting statement is still depreciating the old $1,000 figure.
But the real cost to replace it is $1,400.
That gap — between what the books say and what replacement actually costs — is where most financial models go wrong.
What HOLT Does Differently
The HOLT System strips out the accounting depreciation and tries to replace it with actual estimated replacement cost on property, plant, and equipment going forward.
It is genuinely difficult to do well.
This is why it's institutional grade research.
It tends to work best with high-ROI, low-asset-intensity businesses — which is exactly what NVIDIA is.
So What Is NVIDIA Actually Worth?
According to the HOLT model, $22 trillion.
Our entire economy is about $30 trillion.
It's almost shocking to say out loud.
But the model also builds in the assumption that NVIDIA's competitive advantage will degrade over time — which is the honest part of the analysis.
The Counter Argument
The counter argument is real and worth taking seriously.
Everybody has watched NVIDIA make extraordinary money selling chips.
Google is now selling chips.
Amazon is selling chips.
ARM is selling chips.
AMD has always been in the game.
All of these companies have watched NVIDIA's margins and said, we want a piece of that.
They are all chipping away — pun intended — at NVIDIA's dominance.
The Bottom Line
We'll see how it all plays out.
But if the HOLT model is right — and it has a high batting average — NVIDIA right now is cheaper than it's been in years.
To me, it’s a screaming buy.
Anyway, that's all I have for you today.
Have a wonderful Monday.
I'll see you tomorrow.
“The Buck Stops Here,”
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Written by Dylan Jovine