Cash generation and growth support an Overweight view
NVDA · Equity research
AI-assisted research · Data as of 2026-11-06 09:10 UTC · Last session 2026-11-05
RESEARCH VIEW · 3-MONTH HORIZON
Overweight
Overweight is supported by the computed gap between the free-cash-flow margin implied by today’s enterprise value and the margin delivered: the implied level is materially lower.
Enterprise value is about $4.42T, 14.6× trailing sales of $303B. Our cash-flow grid reaches $16.1T in its most optimistic case and $6.75T in the middle case: today's price sits between the weakest and the middle case.
Last close
$181.60
Session 2026-11-05
Revenue growth
+105.9%
Quarter to 2026-07-26, year over year
Operating margin
66.2%
Same quarter
Forward EV / sales
10.7×
Peers’ median 12.9×
FCF yield after SBC
2.7%
Trailing 12 months, on enterprise value
Analysts’ median target
$315.00
+73.5% vs close · 62 analysts
HOW THE VIEW IS SCORED
Valuation
Price implies a lower free-cash-flow margin than delivered
Computed from daily prices to session 2026-11-05 · descriptive, not a trading signal
NVDA closed at $181.60, 17.7% below its 50-day average and 11.3% below its 200-day average; the 50-day average is above the 200-day. Over the last month the price fell 23.5%, over three months it fell 18.9%. RSI is 25.4, and the average daily range is about 4% of the price.
Close50-day average200-day average
126 sessions2026-11-05 · $181.60
Measure
Value
Reading
Close vs 50-day average
Below; average $220.64
−17.7%
Below; average $220.64
Close vs 200-day average
Below; average $204.66
−11.3%
Below; average $204.66
50-day vs 200-day average
50-day above 200-day
+7.8%
50-day above 200-day
RSI (14)
Scale 0–100; 30 and 70 are the usual bounds
25.4
Scale 0–100; 30 and 70 are the usual bounds
Average true range (14)
Typical daily range, share of price
4.04%
Typical daily range, share of price
Volume vs 20-session median
Session 2026-11-05
3.28×
Session 2026-11-05
Return, 1 month / 3 months
21 and 63 sessions
−23.5% / −18.9%
21 and 63 sessions
52-week range
Close 25.4% below the high
$164.27–$243.37
Close 25.4% below the high
20-session low / high
Recent trading range
$181.46 / $233.92
Recent trading range
Simple moving averages; RSI and average true range use 14-session Wilder smoothing. Daily bars from the report's source snapshot; dividends are not adjusted, and a split inside the window blocks the report. This section is computed, not written by the model.
What drives the case
Compute and Networking dominated reported segment revenue and supplied nearly all reported segment growth, while Graphics grew more slowly. Within the separate product partition, Hyperscale was the largest category and AI Clouds, Industrial and Enterprise contributed strongly; Edge Computing was weaker. These partitions describe the same revenue and should not be added together. The United States led geography, with Taiwan also material. Because one segment grew far faster than the rest, the supplied figures do not separate acquired growth from organic growth. Concentration in infrastructure demand makes deployment and customer spending important sensitivities.
Reportable Segments
Reported quarter ended 2026-07-26. Contributions are percentage points of total-company revenue growth; these partitions overlap and must not be added.
Business category
Revenue
Share of revenue
Year-over-year change
Growth contribution
Compute And Networking
$88.30B
91.77%
+113.64%
+100.48 pp
Graphics
$7.92B
8.23%
+46.38%
+5.37 pp
Product Categories
Reported quarter ended 2026-07-26. Contributions are percentage points of total-company revenue growth; these partitions overlap and must not be added.
Business category
Revenue
Share of revenue
Year-over-year change
Growth contribution
AI Clouds Industrial Enterprise
$40.31B
41.90%
+138.14%
+50.03 pp
Edge Computing
$7.20B
7.48%
+27.47%
+3.32 pp
Hyperscale
$48.71B
50.62%
+101.55%
+52.50 pp
Geographies
Reported quarter ended 2026-07-26. Contributions are percentage points of total-company revenue growth; these partitions overlap and must not be added.
Business category
Revenue
Share of revenue
Year-over-year change
Growth contribution
TW
$26.98B
28.04%
+203.13%
+38.69 pp
United States
$60.07B
62.43%
+82.61%
+58.14 pp
China Including Hong Kong
$7.88B
8.19%
+97.74%
+8.33 pp
Other Countries
$1.28B
1.33%
+33.68%
+0.69 pp
What the price implies
The forward EV/sales multiple is below the peer median, and today’s enterprise value would require revenue below the supplied consensus to match that peer multiple. Yet sales are not like for like: NVDA’s net margin is far above the peer median, so margin explains part of the gap. Its EV/EBITDA and indicative P/E are below peer context as well; AMD’s much higher P/E reflects a different margin and earnings profile. The indicative P/E uses an approximate trailing EPS bridge, not verified forward EPS. Trailing free-cash-flow margin, both before and after treating stock compensation as a cost, exceeds the reverse-DCF steady margin implied by enterprise value, a plausible but demanding level for this high-margin business. The operating DCF uses free cash flow after stock compensation; outcomes depend materially on revenue growth, persistent margin, aggregate net reinvestment, WACC and terminal assumptions. It lacks a dynamic margin model and explicit investment schedule; the equity bridge is unreconciled.
Peers, priced on the same day
Company
P/E (trailing)
EV / sales
Forward EV / sales
TTM net margin
NVDA
22.96×
14.59×
10.74×
63.66%
AMD
87.72×
14.59×
12.94×
16.77%
AVGO
37.18×
16.39×
13.78×
42.94%
QCOM
12.34×
4.02×
3.86×
31.60%
Earnings quality and cash
Trailing operating cash flow was below net income, so cash conversion—matched-period operating cash flow divided by net income—was less than earnings, despite substantial cash after capex. Free cash flow here is operating cash flow less cash capex; it does not deduct stock compensation. Compensation was meaningful but smaller than cash generation, while repurchases were substantial. Working-capital movements and noncash adjustments affect operating cash flow. The reported quarter showed very high operating income and net income; the filing excerpts supplied are outlook reconciliations, not a detailed cash-flow adjustment bridge.
Analyst view
Sell-side ratings and price targets as of 2026-11-06 · third-party opinions, not our rating
Of 62 analysts covering NVDA, 59 rate it Buy or Strong Buy, 2 Hold and 1 Sell or Strong Sell. The median price target is $315.00, 73.5% above the last close of $181.60; targets run from $180 to $515.
Ratings · 62 analysts
Strong Buy 10Buy 49Hold 2Sell 1Strong Sell 0
One month ago: the same split. Three months ago: Strong Buy 9, Buy 48.
12-month price targets vs last close
Lowest target
$180.00
−0.9%
Mean target
$327.14
+80.1%
Median target
$315.00
+73.5%
Highest target
$515.00
+183.6%
Rating actions, last seven days
Date
Firm
Rating
Target
2026-11-02
Melius Research
2026-11-02
Buy
$420 → $315
Ratings, targets and rating actions as collected by Yahoo Finance. They are forecasts and opinions of third parties, not reported results, and they do not change our rating above. Percentages are measured against the last completed session's close.
News and sentiment
40 headlines naming NVDA, 2026-11-05 to 2026-11-06 · tone set by the model per headline, counted by code
Of 40 headlines between 2026-11-05 and 2026-11-06, 9 read negative for the stock, 29 neutral and 2 positive.
Headlines from the Yahoo Finance news feed that name the company; we do not verify their content. The model labels each headline's tone toward the stock from the headline alone, and code counts the labels. Tone describes coverage, not the outlook.
The strongest counter-case
The bearish case is that rapid infrastructure investment does not translate into durable orders, deployments or margins, while customer and segment concentration amplify any slowdown. The recent drawdown is material, but the available news feed begins after it started and contains no results release within the window, so its cause is not established and the amount of bad news already reflected is unclear. The latest sharp down session had company-news headlines, but their presence alone does not prove causation. The stock also underperformed the broad technology benchmark over the observed window.
What to watch
Check
Now
Risk rises if
Forward EV / sales vs peers’ median
Risk rises if the gap widens without faster growth
10.7× vs 12.9×
the gap widens without faster growth
Free-cash-flow margin
Risk rises if it falls
41.9%
it falls
EPS estimate change, this fiscal year, last 30 days
Risk rises if it falls
0.06%
it falls
Next scheduled report: 2026-11-17 (provider calendar, not yet confirmed by the company).
What would change our view
The view would strengthen if reported demand and deliveries substantiate the published outlook, margins remain resilient, and trailing cash generation holds up. It would weaken if management qualifies demand, customer deployments or supply timing, or if reported margins and cash generation deteriorate. Analyst estimates are secondary forecasts: sustained downward revisions would add concern, while continued upward revisions would support the growth case. The key evidence is realized operating performance and specific customer or schedule commentary, not price weakness alone.
Appendix
Full tables for readers who want to check the work. Closed by default.
Cash-flow grid and illustrative path9 cases: growth 54–162% in year one, WACC 8–12%
Year-one revenue growth from the next twelve months' consensus revenue against the trailing twelve, taken in three cases (half of it, all of it and one and a half times it); the excess over 3% halves each later year; trailing free-cash-flow margin after stock compensation persists and is discounted as is; terminal growth 2%, five annual periods, WACC 8-12%. Scenario inputs, not management guidance, an estimated market WACC or calibrated forecasts.
No dynamic margin model, explicit D&A/capex/NWC schedule, acquisitions or calibrated terminal economics. Net reinvestment is an aggregate assumption; no claim of intrinsic fair value or a dated price target.
Historical operating basis: 2025-07-28 to 2026-07-26. This run rate is assumed to apply at the price date; no partial-year/stub-period adjustment is made. Forecast periods below are hypothetical annual steps, not fiscal guidance.
Assumed annual revenue growth
Assumed WACC
Conditional enterprise value
Terminal share of EV
54% in year one, fading to 6%
8%
$4.71T
78.2%
54% in year one, fading to 6%
10%
$3.49T
72.2%
54% in year one, fading to 6%
12%
$2.76T
66.7%
108% in year one, fading to 10%
8%
$9.18T
80.2%
108% in year one, fading to 10%
10%
$6.75T
74.6%
108% in year one, fading to 10%
12%
$5.30T
69.5%
162% in year one, fading to 13%
8%
$16.05T
81.7%
162% in year one, fading to 13%
10%
$11.73T
76.5%
162% in year one, fading to 13%
12%
$9.16T
71.6%
Illustrative cash-flow path
This displays the assumed middle cell for auditability; it is not a preferred forecast.
Earnings and multiple sensitivityEPS ±10%, multiple ±15%
These are mechanical assumptions applied to the current arithmetic EPS bridge and indicative multiple. They have no forecast date and do not predict the report horizon. They are not fair values, price targets, forecasts or calibrated probabilities; the unchanged-input cell simply reproduces the current closing price.
Assumed EPS change
Assumed multiple change
Conditional price
Change vs. last close
-10%
-15%
$138.92
-23.5%
-10%
+0%
$163.44
-10.0%
-10%
+15%
$187.96
+3.5%
+0%
-15%
$154.36
-15.0%
+0%
+0%
$181.60
+0.0%
+0%
+15%
$208.84
+15.0%
+10%
-15%
$169.80
-6.5%
+10%
+0%
$199.76
+10.0%
+10%
+15%
$229.72
+26.5%
Bear, base and bull on this year's revenue
Case
Revenue
Basis
EV / sales
Multiple
Price
Change vs. last close
Bear
$370.49B
forecast less 10%
10.74×
today's
$163.40
-10.0%
Base
$411.65B
forecast
12.94×
peer median
$218.94
+20.6%
Bull
$452.82B
forecast plus 10%
12.94×
peer median
$240.88
+32.6%
Trailing EPS is the sum of reported periods, so share-count changes make it approximate.
Segments and peer detailsReconciled segments; peers with periods and cash conversion
Peers: chosen by business model for this company; business models and fiscal year-ends differ.
P/E uses trailing EPS summed from reported quarters; EV / sales uses reported debt and cash, on trailing revenue and on this fiscal year's consensus.
How this asset was picked1 of 21 eligible today; catalyst: reported regulatory decision
Selected from 21 eligible candidates across 30 supported assets. Completed-session move -9.26% (4.84 standard deviations); volume 3.28x the previous 20-session median; median daily dollar volume $19,828m. Catalyst: reported regulatory decision. Editorial score 85.2/100. Event classification uses dated source metadata, not verified economic impact. Editorial interest is not an investment ranking.
Data coverage and limitationsData quality: partial; what was and was not verified
Read once, applies throughout: every number links to its source; the narrative is model interpretation. Guidance and consensus are forecasts, past price reactions are history, multiples and DCF cases are context — none of it is a fair value, a price target or a probability of profit.
Research dimension
Evidence status
Valuation
P/E on reported earnings
Cash generation
from SEC filings, matched periods
Earnings quality
adjustments read from SEC filings
Benchmark comparison
price returns vs. QQQ and sector ETF
Sensitivity
stated assumptions, not forecasts
Competitive position
limited fixed peer context
Next event
data-provider calendar
Business mix
primary reconciled
Discounted cash flow
stated assumptions, see table
The API response carries each figure's source, period and calculation. Benchmarks use price returns, not dividend-reinvested returns. Trading sessions are not calendar days.
Limitations recorded for this report:
Secondary quote metrics are not independently reconciled with primary SEC facts
Secondary fundamentals publication times are unverified; no historical ML labels
Current session excluded until 16:15 America/New_York; early closes may be delayed
Forward estimates, earnings calendar, macro and social sentiment are not verified
Provider context is secondary; forecasts, schedules and management statements are not realized financial facts.
Provider publication time and revision history may be unavailable; no historical ML labels.
Optional alphavantage transcript: fiscal quarter not selected; this context remains unknown.
FRED macro values use a completed US knowledge date; observation periods are not publication timestamps. No intraday historical or ML-label authority.
Method and sources
AI-assisted research. Every number links to its filing or data provider; the narrative is the model's interpretation, and the rating comes from a fixed rule. Consensus, guidance and schedules are forecasts; scenarios and sensitivities are assumptions, not price targets. This is research, not investment advice.
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