Coverage summary
Four companies under coverage. Two sit on either side of the same argument about who supplies artificial intelligence compute. One is a commodity producer whose earnings are currently a function of a war. One is a software business the market spent a year writing off. In each case the view below is this publication's own, stated as opinion, and set against the published consensus rather than derived from it.
| Name | Ticker | View | Price | Entry | Fwd P/E | Consensus | Analysts |
|---|---|---|---|---|---|---|---|
| NVIDIA | NVDA | Hold | 230.36 | 200 | 18.7x | 325.99 | 60 |
| Broadcom | AVGO | Buy | 357.90 | 358 | 21.3x | 533.41 | 49 |
| Magnolia Oil & Gas | MGY | Hold | 27.42 | 24 | 8.9x | 32.88 | 19 |
| Workday | WDAY | Buy | 195.79 | 196 | 15.5x | 207.10 | 42 |
Prices at the close of 8 September 2026. Consensus targets, analyst counts and forward multiples from S&P Global Market Intelligence via StockAnalysis.com, retrieved 9 September 2026. Entry is the level at or below which this publication would establish the position and is the author's own estimate.
NVIDIA Corporation
The compute incumbent
- Price
- $230.36
- Market cap
- $5.42tn
- Forward P/E
- 18.7x
- Consensus
- $325.99
Trailing price to earnings 28.54 times, trailing revenue 302.97 billion dollars up 83.4 per cent, net income 192.88 billion, beta 2.22, 52 week range 164.27 to 236.54 dollars, dividend 1.00 dollar for a 0.45 per cent yield, 42,000 employees. Consensus rating Strong Buy across 60 analysts.
Second quarter fiscal 2027 results, reported 26 August for the quarter ended 26 July 2026, showed revenue of 96.2 billion dollars, up 18 per cent sequentially and 106 per cent year on year, against consensus near 92.07 billion and guidance of 91 billion plus or minus 2 per cent. Data centre revenue was 89.0 billion dollars, up 117 per cent. Gross margin was 75.0 per cent on both bases. Diluted earnings per share were 2.46 dollars GAAP and 2.22 dollars adjusted against 2.09 expected. Return on invested capital is 92.03 per cent and free cash flow over the trailing twelve months was 127.01 billion dollars.
Hold, adding on weakness rather than at 230 dollars. The operating performance is not in question and 18.7 times forward earnings is not demanding for this rate of compounding. The reason not to chase is disclosed customer concentration: in the prior quarter three customers accounted for 21, 17 and 16 per cent of total revenue, and those same customers are commissioning their own silicon. Amazon Web Services agreed to buy two million processors and to adopt Nvidia's Vera central processor in the same announcement in which the hyperscaler capital expenditure forecast was raised to 1.3 trillion dollars for next year, from 800 billion in 2026. Both facts are true at once.
Catalysts. Jensen Huang at the Goldman Sachs Communacopia conference on 10 September, which is also the ex-dividend date for the 25 cent quarterly payment. Third quarter results in November, and the first test of whether the 1.3 trillion dollar capital expenditure figure survives contact with the financing market.
Downside case. Not that demand falls but that the customer becomes the competitor. If the top three customers shift a material share of training workloads to custom silicon, growth compresses toward the semiconductor cycle and the multiple compresses with it. A rerating to the low teens on unchanged estimates places the shares near 160 dollars, close to the 164.27 dollar 52 week low. Jim Chanos publicly challenged the return on capital available to buyers of Nvidia processors this month, which is the same argument approached from the customer's side.
Levels. Add below 200 dollars. Treat 164.27 dollars as the level at which the thesis requires re-examination rather than reinforcement. A fall driven by the oil price or the discount rate improves the entry. A fall driven by a named hyperscaler disclosing a shift to custom silicon does not, and that distinction is the whole of the risk management.
Position. The author holds no position in this security.
Broadcom Inc.
The custom silicon challenger
- Price
- $357.90
- Market cap
- $1.73tn
- Forward P/E
- 21.3x
- Consensus
- $533.41
Trailing price to earnings 47.04 times, trailing revenue 89.10 billion dollars up 48.7 per cent, net income 38.27 billion up 102.1 per cent, beta 1.46, 52 week range 289.96 to 495.00 dollars, dividend 2.60 dollars for a 0.72 per cent yield, 33,000 employees. Consensus rating Strong Buy across 49 analysts.
Third quarter fiscal 2026 results, reported 2 September for the quarter ended 2 August, showed revenue of 29.59 billion dollars against 29.36 billion expected, up 86 per cent. Adjusted earnings per share were 3.32 dollars against 3.24 expected. Net income more than tripled to 13.09 billion dollars. Artificial intelligence semiconductor revenue reached 16.7 billion dollars, up 221 per cent year on year and 54 per cent sequentially, with fourth quarter guidance of 21.7 billion, a 236 per cent annual increase, at approximately 66 per cent non-GAAP operating margin.
The shares fell regardless, because fourth quarter total revenue guidance of 34.8 billion dollars sat below the 35.03 billion LSEG consensus. Citi raised its target to 515 dollars with a Buy rating. Joseph Moore at Morgan Stanley maintained Overweight. Gil Luria at DA Davidson cut to 350 dollars with a Neutral rating, the street low.
Buy. A company that tripled artificial intelligence revenue and fell on a guidance figure 0.7 per cent below consensus is being marked on the second derivative rather than the business. This is the cleanest listed expression of the argument that hyperscalers will specify their own silicon, and the company is named in public reporting as a supplier to Google, Meta, OpenAI and Anthropic, having disclosed the custom Jalapeno part developed with OpenAI. At 21.3 times forward earnings against Nvidia at 18.7 times, the premium is modest for faster percentage growth from a smaller base. The shares sit 27.7 per cent below the 495.00 dollar 52 week high.
Catalysts. Fourth quarter results in December, at which the 21.7 billion dollar guidance is tested. The 65 cent dividend goes ex on 21 September. Management indicated at the Goldman Sachs Communacopia conference on 8 September that capital allocation will favour dividends and buybacks.
Downside case. Customer concentration is more acute here than at Nvidia, not less, and reporting on the quarter flagged Google specifically. A single programme cancellation at a single hyperscaler removes a visible slice of the guided number. The multi-year targets discussed on the call extend to fiscal 2028, and a target that far out is an assumption rather than a backlog. If the ramp slows enough to halve fiscal 2027 growth, the DA Davidson 350 dollar target becomes the anchor rather than the outlier, which is close to the current price.
Levels. The 289.96 dollar 52 week low is where the market would be pricing the custom silicon thesis as broken rather than delayed. Between here and there, weakness on quarterly guidance is an entry. Watch the difference between a customer deferring an order and a customer cancelling a design.
Position. The author holds no position in this security.
Magnolia Oil & Gas Corporation
Discipline, spent at the top of a cycle
- Price
- $27.42
- Market cap
- $6.50bn
- Forward P/E
- 8.9x
- Consensus
- $32.88
Higher by 2.31 per cent on 8 September. Trailing price to earnings 12.00 times, trailing revenue 1.48 billion dollars up 11.4 per cent, net income 419.88 million up 16.2 per cent, beta 0.70, 52 week range 21.07 to 32.76 dollars, dividend 0.72 dollars for a 2.63 per cent yield, 262 employees. Consensus rating Buy across 19 analysts.
A South Texas producer operating in Karnes County and the Giddings area across the Eagle Ford Shale and Austin Chalk. Second quarter 2026 results, reported 5 August, showed net income of 181.8 million dollars, adjusted EBITDAX of 370.3 million and free cash flow of 234.6 million, each more than doubling year on year, on production of 106.1 thousand barrels of oil equivalent a day, up 8 per cent. Revenue was 478.8 million dollars against 462.58 million expected and earnings per share 97 cents against 94 cents. Drilling and completion capital of 125 million dollars held the reinvestment rate near one third of cash flow, and 80.1 million dollars, or 34 per cent of free cash flow, was returned to shareholders.
Note the mechanism. Production rose 8 per cent while net income more than doubled. Volume growth of that order cannot produce earnings growth of that order, so the difference is the realised barrel, and the realised barrel is a function of the Persian Gulf.
On 20 July the company agreed to acquire WildFire Energy for approximately 4.06 billion dollars, funded roughly half in equity at 23.75 to 24.75 dollars per share and half in debt including 500 million dollars of senior unsecured notes due 2034. The board raised the quarterly dividend 9 per cent to 18 cents in the same announcement. J.P. Morgan upgraded the shares to Overweight from Neutral on 8 September with a 33 dollar target, up from 32.
Hold. The assets are good and the balance sheet was, before this transaction, close to the least levered in the mid capitalisation exploration and production universe at roughly 0.1 times. The reason not to buy at 27.42 dollars is that the earnings producing the 8.9 times forward multiple depend on a barrel price set by a war, and Goldman Sachs expects that premium to decay toward 85 dollars for Brent by December and 80 dollars in 2027. Buying an oil producer on peak realised prices after it has spent its balance sheet advantage at the top of the cycle is a recognisable shape of mistake, however good the acreage.
Catalysts. Completion of the WildFire acquisition, guided to late in the third quarter. Third quarter results on 28 October, the first full period at the elevated barrel and the first commentary on integration. Any credible progress on the Iran and Oman corridor through the Strait of Hormuz, which works against the position.
Downside case. Brent settling durably below 80 dollars removes the earnings uplift and puts the purchase price under scrutiny. Citi's published target of 27 dollars already sits below the current price. On unchanged production and an 80 dollar assumption the low twenties is defensible.
Levels. A case exists below 24 dollars, roughly where the equity offering priced. Novi Labs' analysis implies Magnolia paid around 0.49 million dollars per remaining WildFire location against the 0.80 million the market applies to its own, which is the strongest argument for the deal and rests entirely on a third party location count. That is the assumption most likely to prove wrong.
Position. The author holds no position in this security.
Workday, Inc.
The disruption that has not arrived
- Price
- $195.79
- Market cap
- $44.9bn
- Forward P/E
- 15.5x
- Consensus
- $207.10
Trailing price to earnings 38.37 times, trailing revenue 10.16 billion dollars up 13.4 per cent, net income 1.25 billion up 114.6 per cent, beta 1.08, 52 week range 110.36 to 249.85 dollars, no dividend, 21,000 employees. Consensus rating Buy across 42 analysts.
Fiscal 2026 revenue was 9.55 billion dollars, up 13.09 per cent, with earnings of 693 million. Second quarter results on 27 August beat and the shares rose between 5 and 7 per cent. The company was named a leader in the Gartner Magic Quadrant for cloud human capital management suites for the eleventh consecutive year on 2 September and reports signing a new state or local government client nearly every week.
The published targets show how little agreement exists. Goldman Sachs raised to 164 dollars with a Neutral rating and Stifel to 160 dollars with a Hold. RBC Capital moved to 240 dollars with an Outperform rating and Bernstein to 238 dollars. KeyBanc raised to 215 dollars from 158, Needham and BMO Capital to 230, Piper Sandler and DA Davidson to 190 with Neutral ratings, Cantor Fitzgerald cut to 205 while keeping Overweight, TD Cowen cut to 210 with a Hold, and Brent Thill at Jefferies cut to 220 with a Hold, saying the company lacks a clear catalyst. An 80 dollar spread across a single mid cap software name is disagreement about the terminal value, not about the quarter.
Buy, and the most interesting of the four. A 15.5 times forward multiple on a business growing subscription revenue in the low teens with improving profitability is not the multiple of a company being disrupted out of existence. The Wall Street Journal reported this month that artificial intelligence is disrupting software companies considerably more slowly than feared, and Workday's own results support that. The optionality on a Silver Lake bid is close to free at this price, because the premium is no longer in the shares: the market capitalisation was roughly 43 billion dollars before the report, above 51 billion after, and 44.85 billion on 8 September. The risk is that the thesis needs the market to change its mind, and that is not forecastable.
Catalysts. The annual financial analyst day on 13 October 2026, at which multi-year targets are usually restated. Third quarter results in late November. Any confirmation or abandonment of the Silver Lake discussions, neither on a schedule.
Downside case. Goldman Sachs and Stifel are at 164 and 160 dollars for a reason. If agents genuinely compress seat based pricing over a three to five year horizon, low teens growth becomes mid single digit growth and the multiple has considerably further to fall. A move to the low 160s is roughly 18 per cent below the current price and is the published view of two substantial houses, not a tail. The 110.36 dollar 52 week low shows what this stock does when the market believes the disruption case.
Levels. Buy here, add below 175 dollars. A fall toward the Goldman and Stifel targets on unchanged reported growth improves the price. A fall accompanied by deceleration in subscription revenue growth or a decline in net revenue retention breaks the thesis, and those are the two disclosures to read first in November.
Position. The author holds no position in this security.
Method and limitations
Prices, multiples, market capitalisations and consensus figures were retrieved on 9 September 2026 and reflect the close of 8 September 2026. Company financial figures are from the primary results announcements and filings named in the text. Where a rating or target is attributed to a named firm, it is that firm's published position as reported by TheFly, TipRanks or MarketBeat, reproduced for context rather than endorsed. The boxed views are this publication's own.
Three limitations. The energy valuation is dominated by an assumed oil price currently set by a live conflict rather than by fundamentals, and no discounted cash flow resolves that; it only relocates the uncertainty into the terminal assumption. The semiconductor names are valued on multi-year targets extending to fiscal 2028 which are management assumptions rather than contracted backlog. And twelve month point estimates carry wide error bars in all four cases, so entry levels should be read as ranges rather than prices.