Create a Financial Investment Memo with Vectara Enterprise Deep Research
In financial services, analysts spend countless hours piecing together insights from internal and external documents and research to craft investment memos. What once took weeks of manual effort can now be compressed into hours with Vectara Enterprise Deep Research
6-minute read time
Introduction
In the fast-paced world of financial services, multi-million dollar decisions might hinge on the quality of a single document: the investment memo.
For professionals in venture capital, private equity, and M&A, this memo is the bedrock of their investment thesis. Crafting one isn't just about summarizing facts; it's about synthesizing lots of disparate data, from dense SEC filings, publicly available news articles, and earnings call transcripts. This critical document requires a deep, foundational understanding of all this underlying information to build a compelling case.
As discussed in previous blog posts, Vectara Enterprise Deep Research unlocks the power of AI agents in a deep research framework that is grounded in your private enterprise data, and thus excels at this kind of task, gathering all this information for you and compiling it in a comprehensive and intelligible report.
For any financial services company that produces dozens of documents with a similar structure, the ability to automatically generate high quality investment memos, grounded in internal proprietary information isn't just helpful but transformative. It automates the heavy lifting of research, freeing up human experts to focus on higher-level analysis and decision-making.
The Investment Memo: From Manual Grind to AI-Powered Insight
An investment memo is the bedrock of any sound investment decision. It’s a meticulously crafted document that tells a compelling story about a potential opportunity, backed by rigorous data and analysis. A great memo synthesizes a company's financial health, competitive landscape, market position, and growth prospects into a clear and persuasive narrative while highlighting potential risks as well.
But creating one is often a monumental task.
To build a comprehensive view of a single company, an analyst must manually sift through a mountain of information, including:
- SEC Filings: Annual reports (Form 10-K), quarterly reports (Form 10-Q), and current event reports (Form 8-K).
- Internal documents: Additional (proprietary) information about the company.
- Financial News & Analysis: Articles from dozens of reputable outlets.
- Industry Reports: In-depth analysis from market research firms.
- Economic Data: Macroeconomic trends that could impact the business.
This process can take weeks, consuming hundreds of hours of an analyst's valuable time. Enterprise Deep Research can change this dynamic entirely, drastically expediting the research phase and creating a comprehensive investment memo in a fully automated way, allowing the analyst to focus on what truly matters: using their expertise to review the memo and finalize the document.
Real-World Example: Nvidia Investment Outlook
Let's take a look at how Vectara Enterprise Deep Research can accomplish this task. Suppose that we are a financial institution considering whether to invest in Nvidia. We would like to analyze the past, present, and future outlook of Nvidia in order to make a well-informed financial decision.
To set up Enterprise Deep Research, we created two corpora in Vectara that contain SEC filings (Form 10-K, Form 10-Q, and Form 8-K) and earnings call transcripts for Nvidia and some of its competitors from the past 10 years. We created RAG and semantic search tools for each of these corpora to help Deep Research assistants gather financial data and information about Nvidia and its potential competition.
We also provided our research agents with two additional tools:
- A news tool that can retrieve news articles about a company from the past 6 months.
- A biography tool that can search for information about the professional impact of notable executives and staff at a company.
Unlike the previous use cases we have shown in our blog posts, which only relied on private data in Vectara corpora, this use case combines information from both internal and external sources.
Using this hybrid approach, we can use these tools to generate a draft investment memo with the following prompt:
💡 Investment Memo Prompt
You are a senior equity-research analyst with Big-4 due-diligence standards.
Create a publish-ready investment memo for a buy-side analyst team determining whether to establish a position in Nvidia by October 2025. Your report should include:
- Business Overview & Segment Economics
- Summarize each revenue segment, key products, customers, and geographies.
- Quantify YoY growth rates, margins, and percent of total revenue for the last 5 fiscal years.
- Industry & Competitive Landscape
- Define TAM/SAM/SOM, structural growth drivers, and regulatory backdrop.
- Map at least 3 direct competitors, including market-share estimates and strategic
positioning.
- Historical Financial Performance
- Build a 5-year table of income-statement, balance-sheet, and cash-flow highlights.
- Identify trends in gross margin, operating leverage, and FCF conversion.
- Management & Governance Quality
- Outline C-suite backgrounds, insider ownership, and incentive comp structure.
- Flag any governance red flags, shareholder activism, or related-party transactions.
- Catalysts & Investment Thesis (Bull vs. Bear)
- List upcoming catalysts (earnings, product launches, regulatory decisions).
- Present 3-5 bullet bull arguments and 3-5 bear arguments, each supported by evidence.
- Valuation
- Produce a relative-valuation snapshot (P/E, EV/EBITDA, P/S) vs. peer set.
- Provide a DCF summary with key assumptions (growth, WACC, terminal).
- Risks & Mitigations
- Detail macro, competitive, regulatory, and balance-sheet risks.
- Suggest monitoring metrics or hedging strategies.
- Tone & Style should be professional, concise, and data-driven. Use active voice and avoid marketing language.
Enterprise Deep Research excels at synthesizing a large amount of information into a well-structured final report, as we would expect from a traditional investment memo.
Let’s look at the report that it generated. It contains the following sections:
- Business Overview & Segment Economics
- Industry & Competitive Landscape
- Historical Financial Performance
- Management & Governance Quality
- Catalysts & Investment Thesis (Bull vs. Bear)
- Valuation
- Risks & Mitigations
- Investment Position Options
We will just show some of the highlights here, but we encourage you to check out the full memo.
First, let's look at some of the reasons Enterprise Deep Research found that may encourage you to invest in Nvidia, known as bull arguments:
💡 Investment memo: bull arguments
- Dominant AI Market Leadership and Competitive Moats: NVIDIA holds an estimated 92% share of the data center GPU market, the core of AI infrastructure buildout, with 217% YoY growth in Data Center revenue in fiscal 2024 [Nvidia Just Hit $4 Trillion, But The Real AI Boom Has’t Started Yet]. Its comprehensive, full-stack AI platform, integrating GPUs, CPUs, DPUs, networking, and the expansive CUDA software ecosystem (over 4.7 million developers), creates significant switching costs and high barriers to entry [How Nvidia Got Huge—and Almost Invincible - WSJ].
- Explosive and Sustained Demand for AI Infrastructure: The Data Center segment's revenue surged 217% YoY to $47.5 billion in fiscal 2024, with 40% of this revenue from AI inference workloads. This growth is driven by hyperscale cloud providers (over 50% of Data Center revenue in Q4 FY2024) and broad industry adoption across enterprise software, transportation, healthcare, and financial services. Next-gen products like Blackwell are expected to be supply-constrained, indicating robust, sustained demand [NVIDIA 2024 10-K].
- High-Margin Software Business Growth: NVIDIA's software business, embedded within its Data Center segment, is growing at a hyper-accelerated pace. The Data Center segment's gross margin reached 72.7% in FY2024, and operating income increased 681% to $32.972 billion, demonstrating significant operating leverage. The expanding AI software ecosystem (AI Enterprise, DGX Cloud) enhances profitability, cash flow, and recurring revenue streams [NVDA-2024-01-28-10-K, U.S. SEC EDGAR].
- Robust Innovation Pipeline and R&D Capabilities: NVIDIA invested $8.7 billion in R&D in fiscal 2024, with a cumulative R&D spend exceeding $45.3 billion. The company employs 22,200 R&D personnel (75% of its workforce) and consistently pioneers new technologies, from GPUs and CUDA to Tensor Core GPUs and autonomous driving SoCs. This continuous innovation fuels frequent product transitions and new introductions, maintaining its technological leadership [NVIDIA 2024 10-K].
- Long-Term Secular Growth Trends and TAM Expansion: NVIDIA is at the forefront of several long-term secular growth trends, including explosive AI and accelerated computing demand, data center expansion, and cloud partnerships. New market opportunities span generative AI, enterprise AI, autonomous vehicles, healthcare, industrial digitalization, and more, enabled by its integrated platform and representing significant TAM expansion [NVDA-2024-01-28-10-K].
The analysis combines quantitative and qualitative information from internal documents (Nvidia's 2024 10-K) and news articles from reliable media sources to underscore the primary reasons to be optimistic about an investment in Nvidia.
However, the report is not overzealous about an investment and presents a qualified argument, admitting some of the limitations and restrictions that might hinder Nvidia's growth over time. We can see this in the section about the regulatory backdrop of the industry and competitive landscape:
💡 Investment memo: regulatory backdrop and competition
- U.S. Export Controls: Since late 2023, the U.S. government has imposed stringent export controls on NVIDIA’s advanced AI and HPC chips (A100, H100, A800, H800, L4, L40, RTX 4090) to China, Russia, and certain Middle Eastern countries [NVDA-2024-01-28-10-K]. These restrictions have significantly impacted NVIDIA's sales to China, with Data Center revenue from the region declining from 19% in FY2023 to 14% in FY2024, and to a mid-single-digit percentage by Q4 FY2024 [NVDA-2024-01-28-10-K].
- Revenue-Sharing Agreement: In August 2025, NVIDIA entered a revenue-sharing agreement with the U.S. government, allowing it to resume sales of certain AI chips (notably the H20) to China under controlled conditions. NVIDIA must pay 15% of its China AI chip sales revenue to the U.S. government in exchange for export licenses [Trump Nvidia, AMD China chip revenue deal implications - CNBC]. This agreement is expected to reduce gross margin on China sales by 5–15 percentage points, with an estimated ~1 percentage point reduction in overall company margins [Nvidia results to spotlight fallout of China-US trade war - Reuters].
This section effectively synthesizes historical financial data, such as the decline in Nvidia's revenue from the Chinese market, with forward-looking analysis of new policies, including the new revenue-sharing agreement with the U.S. government. This avoids a one-sided argument by showing the tangible impacts of past regulations while also considering how evolving policies could reshape Nvidia's future. By integrating Nvidia's internal evaluation of their past performance with external opinions and insight into future growth, the analysis presents a comprehensive and nuanced view of the regulatory and competitive headwinds facing the company.
After collecting a vast amount of information, the memo concludes with a few potential investment options, presenting positive and negative aspects of each plan, and other factors to consider when executing the investment plan. This helps investors choose the position that best fits their financial situation and strategy:
💡 Investment memo: pro/con arguments
- Core Holding:
- Description: Establish NVIDIA as a foundational, significant portion of the portfolio (e.g., 5-10%+). This approach aligns with a high-conviction, long-term growth thesis, leveraging NVIDIA's market leadership, strong financials, and exposure to the secular AI megatrend.
- Pros: Full exposure to NVIDIA's long-term growth potential, lower turnover and transaction costs, and alignment with a buy-and-hold strategy.
- Cons: Higher concentration risk, potential for significant short-term volatility and drawdowns, and less flexibility to adjust exposure during headwinds.
- Recommendation: Suitable for investors with high risk tolerance and strong conviction in NVIDIA's sustained dominance. Build the position gradually using Dollar-Cost Averaging (DCA) to mitigate timing risk and optimize for long-term capital gains.
- Satellite Position:
- Description: Allocate a smaller, tactical portion of the portfolio (e.g., 2-5%) to gain targeted exposure to AI infrastructure trends. This allows for flexibility and active management.
- Pros: Limits portfolio concentration and downside risk, offers flexibility to adjust exposure in response to product cycles, earnings, or regulatory changes, and provides targeted exposure to high-growth AI chips.
- Cons: May miss out on the full upside if NVIDIA continues to outperform significantly, higher turnover and potential transaction costs due to active management.
- Recommendation: Appropriate for investors with moderate risk tolerance who seek AI exposure but prioritize risk management and tactical flexibility.
- Blended Approach (Core + Satellite):
- Description: Combine a modest core allocation with a smaller, tactical satellite position. This strategy balances steady, long-term exposure with the flexibility to capitalize on short-term opportunities or manage risks.
- Pros: Balances long-term growth potential with risk management, allows for opportunistic additions or reductions, and provides a diversified approach to AI exposure.
- Cons: Requires more active monitoring and management than a pure core holding.
- Recommendation: This approach offers a balanced risk-reward profile, allowing investors to benefit from NVIDIA's secular growth while maintaining the agility to respond to market dynamics.
Optimal Entry Points and Timing Considerations:
- Product Cycles: Consider initiating or adding positions just before or during new GPU architecture launches (e.g., Blackwell ramp in Q4 FY2025) to capture demand acceleration.
- Earnings Beats & Guidance: Use strong earnings beats and positive guidance as confirmation, but consider adding on subsequent pullbacks or consolidations to manage entry price.
- Regulatory Clarity: Enter after favorable regulatory changes, especially regarding China export controls, to reduce uncertainty.
- Technical Analysis: Supplement fundamental analysis with technical indicators to refine timing for entries and exits.
Tax Implications: For direct equity positions, holding for more than one year qualifies for preferential long-term capital gains tax rates. Dollar-cost averaging creates multiple tax lots, allowing for strategic tax-loss harvesting or optimization of gains. Options strategies typically result in short-term capital gains, which are taxed at ordinary income rates, requiring careful tax planning.
Conclusion
Creating structured documents from many different information sources can be a tedious and time-consuming task, but with the help of Vectara Enterprise Deep Research, it's easier than ever before. By leveraging the power of AI agents, you can quickly compile mounds of information from public and private company resources to generate a document in the format you want.
Imagine not just speeding up one investment memo, but transforming document creation across your entire firm. By automating the foundational research and data organization, you free your team from a purely mechanical process. This allows them to shift their focus to where their expertise truly adds value: providing nuanced analysis, building strong client relationships, and developing the strategic plans that will set your firm apart.
Vectara Enterprise Deep Research offers a clear return on investment by accelerating the research phase of critical documents, from investment memos to quarterly reports, ensuring your firm operates faster and with greater confidence.
If you're ready to see how Enterprise Deep Research can boost productivity and expedite document creation at your company, we invite you to contact our team for a demo.
