The Official Pitch The PM Newsletter No. 2

Upcoming Webinar: Is Zoom the Next Stealth AI Winner?

We’re hosting a Webinar with AlphaSense, the best AI Market Intelligence and Search Platform, to discuss our bullish view on Zoom!

We believe Zoom ($ZM) is at a true growth inflection point— and AI is the catalyst. The company’s made major strides beyond video calls, with deep investments into AI. To find out why we think Zoom’s growth is about to re-accelerate, click the image below to register!

In Case You Missed Our NVDA Webinar:

Key Topics Discussed:
“Just about everything is cyclical” - Howard Marks

📈Street expects $60B→ $300B in 4 years for NVDA. This steep slope is our concern.
→ it’s a record growth slope, faster than Apple (5 years) or Amazon (8 years).

🌟Our north star is that stocks move with earnings revisions. A steep bar is one of the main reasons we are cautious on NVDA, even though it is a clear leader in a frontier industry.

🐻Bear Case:

Street expectations are stretched
Consensus is modeling $4B of sequential revenue growth per quarter in 2025 — a pace that may be difficult to maintain as Microsoft and Amazon flatten their CapEx trajectories.

Revenue growth is slowing
Key customers CapEx growth is stalling sequentially. China's share of revenue (~30%) is at risk due to export restrictions, and there’s still limited evidence of a compelling ROI on AI infrastructure.

Competition is ramping up fast
Amazon, Google, Microsoft, and Huawei are accelerating their own chip development. Meanwhile, LLM efficiency gains (i.e. Deepseek) are reducing GPU demand from Tencent, Alibaba.

Other longer-term risks
If AI shifts to edge devices, or if quantum computing arrives faster than expected, the long-term datacenter growth story could weaken. Plus, a significant portion of GPU demand still comes from crypto — a use case Buffett dismisses entirely.

Valuation leaves room for downside
At $4.08 (consensus low) of estimated FY-2027 EPS and a 15–20x multiple, the implied downside scenario points to a stock price in the $60–$80 range.

🐂Bull Case:

Secular growth remains powerful
If GPUs replace traditional data center architecture, the total addressable market could exceed $1T. With post-training workloads requiring 100x more compute, NVIDIA is well-positioned for sustained 20%+ growth as Big Tech continues to spend.

Exceptional business fundamentals
NVIDIA boasts 30% EBIT margins, 25% net income, and 58% ROIC. Its chips are the most efficient per token generated, and its software ecosystem (CUDA) strengthens competitive advantage.

Supply remains constrained
Despite more players entering the space, NVIDIA continues to dominate high-end GPU supply. Shortages still exist, and CUDA integration creates high switching costs.

Valuation supports upside
At $5.72 of forecasted 2027 EPS and a 30x multiple, the consensus target lands around $170 — supported by strong fundamentals and still-growing demand.

Historical 10 year P/E
Nvidia’s NTM P/E of 23x is well below the 10 year average of 36x and at a five year low.

— — — — 

Click below to watch a recording of our NVDA: Understanding the Bear Debate - What’s Priced-in Now? and access to the 54-page deck is included below!

 Webinar Q+A Recap:

Q1: Are there other chips out there that could compete with Nvidia?
A: Yes, but most people Doug spoke with dismiss Intel as a serious competitor. He hasn’t dug into Intel deeply due to that sentiment.

Q2: Hyperscalers are designing their own chips. How does that impact future growth for Nvidia?
A: Google is already on its 6th TPU generation and ramping production. They can use it internally and rent it to others, which creates competition for Nvidia. This affects both market share and gross margin, as these companies can build chips more cheaply.

Q3: If Nvidia is technically ahead, why not short a commodity supplier instead of Nvidia directly?
A: Good question, there might be better short candidates in the supply chain. Doug focused on Nvidia first, but acknowledges there may be more levered commodity names.

Q4: If it's a cyclical top, how do you know when the next cycle will begin?
A: The stock often moves 6–9 months before earnings show it. A new cycle typically starts when supply shrinks or demand spikes unexpectedly. He hasn’t seen evidence of a new cycle beginning yet.

Q5: Could other companies in the chip/DC value chain be better vehicles for the same thesis?
A: Possibly, but Doug prefers not to comment on other names without doing full diligence. His portfolio is concentrated, so he does deep research before investing.

Q6: What about data centers generating their own power at the wellhead?
A: Yes, there’s growing concern the grid can’t support the demand. Some data centers are setting up generators or tapping pipelines directly to secure power supply.

Q7: What percent of Nvidia’s sales are for inference vs. training?
A: Doug doesn’t have a firm number. However, he notes competitors like Cerberus are optimizing their chips specifically for inference.

Q8: Could Nvidia’s stock turn around, or has investor confidence broken?
A: A turnaround is possible if Nvidia continues to beat and raise guidance. The stock moves with earnings revisions, so strong results could support a rebound.

Q9: Are the massive CapEx numbers being thrown around for data centers realistic?
A: Possibly—but it depends on whether builders require returns on capital. If everyone builds simultaneously, expected returns could fall due to oversupply.

Q10: Is Nvidia funding its own customers to generate demand?
A: Yes—CoreWeave is a prime example. Nvidia invested in them, sold them chips, and prioritized them for supply. This strategy both creates demand and captures margin.

Pitch The PM Apprentice Program

Pitch The PM is launching an Apprentice Program! We’re building a collaborative space for aspiring investors, current portfolio managers, and buy-side analysts who want to connect, learn, and refine their edge.

This group brings together professionals and learners committed to the craft of equity research and differentiated investment thinking. Whether you're early in your career or already managing capital, this is a place to sharpen your approach.

What you’ll find here:

• Equity Research & Thesis Development – From idea generation to catalyst mapping

• The Variant View Investment Checklist – Apply the Pitch The PM framework to uncover differentiated views

• Live Feedback & Mentorship – Get input from Doug, peers, PMs, analysts, and aspiring investors

• Models, AI Research Platforms & Playbooks – Real-world tools to strengthen your investment process

• Collaborative Network – Build relationships across experience levels and strategies

This is more than a group — it’s a buy-side learning community built for those serious about mastering the process and staying ahead of the market.

Great research gets better when it’s shared — and it never hurts to share a laugh along the way.

If you’re interested in joining as an Apprentice in a community of driven, curious, and ambitious investors — join our group on LinkedIn using the link below!

Updates to Pitch The PM Job Board

New listings for Buy Side Analysts with 2-6 years of experience!

🎉 Congratulations to one of our Job Board candidates, Declan Browell, for starting as a L/S Analyst at Millennium in Dubai! 🎉

Highlighting Pitch The PM Apprentices who are looking for summer internships! Two stellar students at Cornell and NYU— anyone who hires them will undoubtably gain a great asset for their team!

📌4 New Job Opportunities:
- L/S Analyst (TMT)
- L/S Analyst (Cons)
- L/S Analyst (Credit)
- SS Research AVP (IND - Machinery) at Barclays

🔍3 New Job Seekers:
- 14 years LO (Global Macro, IND, MAT) at Sovereign Wealth
- 5 years L/S Generalist with PnL responsibility
- Intern, NYU Stern Class of 2028

Check out the most recent Job Board post with a comprehensive list of opportunities and candidates by clicking the image below!

Ask Me Anything #4 - The Insider’s Wall Street Blog

NVDA Webinar Feedback

Q: WAS THERE PUSHBACK TO THE BEAR CASE?
A: Yes.
COLOR: A few L/S PM’s pushed back indicating they thought it was a long. The reasons being 1) NVDA was oversold at this valuation. 2) The GPU market is still tight and the Blackwell chip is being launched and should be in high demand. 3) Microsoft’s datacenter slowdown is well known now, and is not representative of others behavior as they are no longer the exclusive provider to OpenAI. Other players can step in to fill Microsoft’s position, heard Meta stepped into those datacenter contracts.
MY TWO CENTS: After the recent pullback and with a lot of the competition a medium-term issue, the near-term quarter is likely de-risked. However, the thesis of NVDA being cyclical and having questionable customer returns still stands as part of my core thesis. It is hard to determine when precisely a thesis will play out.

Q: ARE THERE STILL OTHERS IN THE SUPPLY CHAIN THAT ARE BETTER SHORTS?
A: Yes.
COLOR: I started my research on NVDA and there are likely more susceptible players in the value chain.

Q: HOW DO YOU THINK ABOUT THE IMPACT OF TARIFFS?
A: Mixed
COLOR: Near-term it could cause some front loaded orders helping results if customers tried to order before tariffs potentially took hold. It now appears semi’s are exempt. And the rest of the components for a data center, about 1/3rd of the equipment, could likely be impacted causing higher total CapEx for the projects that can hurt data center returns or delays. Longer-term, China is about 30%+ of demand for Nvidia and China is likely focusing on building internal capabilities and potentially dumping in the rest of the world.

Q: ARE OTHER CHIPS BETTER FOR INFERENCE?
A: Some evidence does support a yes answer.
COLOR: I am not a technical expert. And I have read that Cerberus’ chips are better for inference. And have also read that Amazon’s chips have shown better inference efficiency. Nvidia is still the gold standard for GPU’s overall.

Ask Me Anything #5 - The Insider’s Wall Street Blog

CoreWeave ($CRWV): Short Squeeze - NVDA’s Advantaged CRWV IPO Investment - AI Capital Markets Implications

Q: WHAT THE HE*K HAPPENED TO CRWV AFTER THE IPO?
A: It was a short squeeze.
Color: In the days after the IPO, the borrow rate spiked to over 500% (share supply was curtailed from the brokers or the shareholders). As the borrow rate increased, folks likely covered, causing the price to go up 65% to $61 from $37 in days 2 through 4 after the IPO. The current borrow rate is 9.5% and borrow utilization is likely high. There was also positive news after the IPO that likely contributed to the short squeeze as well. On March 31, 2025 OpenAI secured a $40B investment at a $300B valuation from Softbank. On April 2, 2025 there was news of Google potentially contracting Nvidia’s Blackwell chips from CoreWeave.
MY TWO CENTS: I would check in with your broker before investing either way to see what the borrow utilization is, anything over 70% is a red flag in my opinion. Just as there is the S+D for datacenters with Nvidia GPU’s and there is a S+D for a stock, there is also a S+D to borrow or short a stock that can be the main driver at a given point.

Q: WHY DID NVIDIA INVEST IN THE CRWV IPO?
A: To support the IPO and the AI capital markets + it’s likely a very good investment for Nvidia as it supports future sales with a very good return.
COLOR: The IPO was downsized from roughly $4B to $1.25B with NVDA essentially backstopping it with a $250 MM investment at $40/share. NVDA’s investment is asymmetric given their ability to get a return through chip sales that essentially make the equity capital moot. For example, $8.7B (2024 CapEx) of CoreWeave CapEx at a 65% Nvidia content spend estimate = $6.3B at 70% gross margins = $4.4B of gross profit per year to Nvidia. Nvidia is also incentivized to work with CoreWeave to make sure they have access to the ebst chips in the market - the access to scarce chips like Blackwell allows CoreWeave to contract capacity to large players like Microsoft, OpenAI, and now Google.

Q: WHAT DOES THIS MEAN FOR AI INVESTMENT?
A: Mixed
COLOR: It is obviously not ideal to have an early AI IPO downsized by a few billion dollars. And the macro uncertainty around tariffs is also hurting investor appetite. On the positive side, the $40B investment from Softbank into OpenAI is a record .Additionally, the SPAC market is heating up, raising an average of $3.4B for the last three quarters averaging 20 IPO’s per quarter.

Westport Alpha Group’s Stellar Performance Relative to Top Multi-Manager Hedge Funds

Smaller = Better📈💡

A choppy market in 1Q’25 for most.
- Some multi-manager HF’s - Exodus, LMR, Walleye, Schonfeld, BAM are holding their own, up 3-4$ in 1Q’25
- The industry titan, Citadel, down nearly 1% and even the steady Millennium down 2% in 1Q’25
- Westport Alpha, a concentrated single manager, is able to generate 11.2% in 1Q’25 even while having significant long exposure.

The key is a small amount of capital, contrarian thinking, and sticking to the process. Westport Alpha typically runs with 0.5-1x long exposure and 1.5-3x gross exposure.

11 Hard Truths From the Buy Side

1️⃣ You’re Paid Based on Leverage, Not Time
↳If you’re not creating asymmetric outcomes, you’re replaceable
↳ Read Greenblatt: high returns come from doing difficult, misunderstood, and mispriced work
*Large multi-manager’s have HR machines and a handful of Analysts for each industry and PM’s for each sector. At one point, we were even asked to make a list for BD of the top Analysts in our coverage (we didn’t, why would we give management a list of our replacement’s. The internal joke with recruiting summer interns was “what are the odds, I am going to be here when they start in 2 years anyway?”)

2️⃣ No One Cares How Hard You Work
↳ Only the P&L matters
↳ As Cohen says, “The only thing that counts is the scoreboard.”

3️⃣ Your Idea Doesn’t Matter Without Risk Control
↳ Your variant view is worthless if you size it wrong
↳ Great PMs win on sizing, not IQ

4️⃣ Clarity > Complexity
↳ Buffett: “If you can’t explain it to a 5th grader, you don’t understand it.”
↳ A memo no one can read is a thesis no one will back

5️⃣ You're Not Running a Book. You're Running a Business
↳ Munger: “Show me the incentive and I’ll show you the outcome.”
↳ Learn to negotiate your mandate, your team, and your comp—or you’ll always be scaling someone else’s alpha

6️⃣ Your Calendar Reflects Your Real Strategy
↳ Are you protecting deep work time for idea generation? Or chasing inboxes?
↳ Edge is found in hours when no one else protects

7️⃣ Mentorship Is Earned
↳ The best PMs will share playbooks if they see you care
↳ But no one has time to teach someone who isn’t shipping work

8️⃣ Comfort Is the Enemy
↳ Growth never feels good in the moment
↳ The analysts who improve the most? They ask questions that expose what they don’t yet know.

9️⃣ Execution > Conviction
↳ Lynch: “The person who turns over the most rocks wins the game.”
↳ You don’t need conviction, you need process

🔟 Eventually, You Have to Lead
↳ Analysts who don’t learn to manage up, lead projects, and drive meetings stall out
↳ The PM seat won’t just be handed to you

1️⃣1️⃣ This Job Has a Cost
↳ Not just time. Optionality. Energy. Focus.
↳ Know what you’re trading off, and make sure the compounding is worth it. 

For additional context on each point, check out the presentation below!

About Us

Pitch The PM is the Professional Investor's Podcast that provides a deep-dive into a stock's investment case using the Variant View Investment Checklist. It is an open exploration of the research process in real time using high-conviction ideas from top PM’s and Analysts. Join the journey as Doug fills out his Buffett advised, 20-slot lifetime punch card. We learn and laugh together. 

The Variant View Investment Checklist is the process that combines:

• A decade of experience managing $1B at Citadel & Millennium, 

• Studying the great investors like Buffett, Munger, Lynch & Greenblatt, 

• and the latest AI tools to improve idea velocity, accuracy and conviction.

Westport Alpha Group is a family office consortium of like minded finance professionals. Individuals may engage in Special Purpose Vehicle’s (SPV’s), Separately Managed Accounts (SMA’s) or act as an Independent Sponsor for a private company or in a public company take-private. This is not a solicitation to sell/buy any security or engage in any services. This is not an attempt to form a group.

Pitch The PM is hosted by Doug Garber, a former Citadel Analyst and Millennium Senior Portfolio Manager. Doug was initially trained at Citadel by a former SAC/Point 72 Analyst who worked directly for Steve Cohen before becoming a PM at Citadel. Doug was ranked as a top five analyst while at Citadel’s Surveyor Capital and was the only one to receive that designation twice during his tenure. He managed a multi-sector, multi-strategy team at Millennium under Katahdin Capital. Prior to his buy-side career, Doug worked in sell-side equity research honing modeling and primary research skills. Doug is currently the CIO and DoR at the Westport Alpha Group.

Doug graduated from Tulane University with a BSM and Master of Finance. He was selected to participate in the Darwin Fenner Student Managed Endowment Fund that utilized quantitative factors to outperform its benchmark and be an Investment Research Manager in the Burkenroad Reports “Stocks Under Rocks” equity research program. Doug has a passion for iterating on the investment process and a quirky sense of humor. He lives in Westport, CT with his wife, Lexi, and three kids. When he is not reading a 10-K, you can find him coaching youth soccer, inverted on his yoga mat or on an eFoil looking for Zuck.

Disclaimer

Past performance is not indicative of future results. Neither Pitch The PM nor its author (s) guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed in this material or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this letter, on the website or on the show. Before acting on information on this website, in this letter or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

The author (s) of this report may have positions in the securities discussed. The positions may change at a future date and neither Pitch The PM nor any authors are under any obligation to update you. The information may not be accurate and you should do your own research.

This is for educational purposes only. This is not investment advice. Please contact your financial advisor to see what is suitable for you. Please see disclosures at PitchThePM.com