NVDA · NVIDIA
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a weekly close above $190
Note written ·
Price against the kill line
14.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a weekly close above $190.00, on record since 11 November 2026; only a weekly close settles it. The shares are down 27.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A weekly close above $190, over the 6 November 2026 close of $186.64 set before the board investigation was announced, which would show the shares leading again. On 17 November 2026, fiscal third-quarter revenue above the top of the $108.0 billion, plus or minus 2%, outlook, with a higher January-quarter outlook, would also prove the call wrong.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 26 July 2026, filed 26 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 96,221
- Revenue, change on a year (%)
- +105.9
- Gross margin (%)
- 75.0
- Operating margin (%)
- 66.2
- Free cash flow, four quarters ($M)
- 127,006
- Net cash, cash less debt ($M)
- −10,923
- Price to earnings (×)
- 20.3
- Enterprise value to sales (×)
- 13.0
All filed numbers
What NVIDIA reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 96,221 | +105.9 | 75.0 | 66.2 |
| first filed | 81,615 | +85.2 | 74.9 | 65.6 |
| first filed | 68,127 | +73.2 | 75.0 | 65.0 |
| first filed | 57,006 | +62.5 | 73.4 | 63.2 |
| first filed | 46,743 | +55.6 | 72.4 | 60.8 |
| first filed | 44,062 | +69.2 | 60.5 | 49.1 |
| Pre-tax income ($M) | 71,507 |
| Net income ($M) four quarters: 192,879 | 59,688 |
| Diluted shares, change on a year (%) against the quarter to 27 July 2025 | −1.0 |
| Operating cash flow ($M) | 134,360 |
| Capital spending ($M) | 7,354 |
| Free cash flow ($M) | 127,006 |
| Cash and short-term investments ($M) | 22,443 |
| Debt ($M) non-current long-term debt plus current debt | 33,366 |
| Net cash, cash less debt ($M) | −10,923 |
| Deferred revenue ($M) +215.1% on a year | 6,412 |
| Backlog, orders not yet delivered ($M) +68.4% on a year | 3,200 |
| Receivables ($M) | 63,059 |
| Inventory ($M) | 31,575 |
| Shareholders' equity ($M) | 228,984 |
| Market value ($M) | 3,924,685 |
| Enterprise value, market value plus net debt ($M) | 3,935,608 |
| Enterprise value to sales (×) | 13.0 |
| Enterprise value to operating income (×) | 19.9 |
| Price to earnings (×) | 20.3 |
| Price to book value (×) | 17.1 |
| Free-cash-flow yield (%) | 3.2 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 1.3% of shares outstanding sold short, 2.9 days of average trading to cover, −3.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $967.6M |
| 12 monthsfrom | $0 | $1.9B |
The thesis
NVIDIA's shares are more likely to lag the S&P 500 over the next three months. Chief Executive Officer Jensen Huang resigned on 12 November 2026. The company now has an interim chief executive, an unfinished board investigation and a cluster of analyst downgrades all at once. The fiscal third-quarter report on 17 November 2026 is the first test of whether earnings can outweigh that.
NVIDIA's board announced on 12 November 2026 that Huang had resigned as president, chief executive and director, effective immediately. Chief Financial Officer Colette Kress became interim chief executive and keeps the finance role. Harvey C. Jones became the company's first board chair. The board will consider internal and external candidates for a permanent chief executive and has set no date, the company's release said. NBC News reported that the resignation followed reports of relationships with a woman alleged to be a Chinese intelligence asset and with an executive who reported to him.
The shares fell as much as 16% after the announcement and closed at $166.19 on 12 November 2026, down 4.3%, NBC News reported. That close is 31.7% below the 52-week intraday high of $243.37, set on 6 October 2026. The shares are down 26.1% over three months. Benzinga reported that the forward price-to-earnings ratio fell to 10.64 on 10 November 2026, the lowest in the Dow Jones Industrial Average. At that multiple the price already carries a heavy leadership discount. The question for the next three months is whether that discount narrows while the chief executive's seat is filled only on an interim basis.
The rating is Low. Seven brokers downgraded the shares on 11 November 2026 and 12 November 2026, citing the leadership gap more than the business. The succession search and the investigation both have no end date, so neither is likely to be settled before the report.
Bullish and bearish views on NVIDIA Corporation
The bull case on NVIDIA Corporation (NVDA), in brief: valuation sits at a Dow low. The bear case: downgrades arrived in a cluster.
Bull case
- Valuation sits at a Dow low. The forward price-to-earnings ratio was 10.64 on 10 November 2026, the lowest in the Dow, Benzinga reported. Bernstein's Stacy Rasgon downgraded the shares on 12 November 2026 but called them "almost absurdly cheap," CNBC reported.
- The October-quarter outlook implied strong growth. The 26 August 2026 Form 8-K reported fiscal second-quarter revenue of $96.2 billion, up 106% from a year earlier. It guided the October quarter to $108.0 billion, plus or minus 2%, with a 74.0% gross margin.
- Analysts still see the business as intact. On 12 November 2026, Oppenheimer's Rick Schafer said he sees upside to the October-quarter results and the January-quarter outlook, CNBC reported. Bernstein called the fundamentals "clearly still intact," and KeyBanc expects core fundamentals to stay strong.
- Some brokers kept positive ratings. Citi kept its Buy rating on 12 November 2026 and cut its target to $225 from $285, CNBC reported. Morgan Stanley kept its Overweight rating and $300 target on 11 November 2026, the day before the resignation, Investing.com reported.
- A large customer reported strong demand. CoreWeave reported third-quarter revenue of $3.66 billion and a $132.5 billion backlog on 11 November 2026, and its shares rose 19%, City AM reported.
Bear case
- Downgrades arrived in a cluster. On 12 November 2026, CNBC reported downgrades from six firms. Melius Research moved to Hold and cut its target to $185 from $315. Evercore ISI moved to In Line and cut to $186 from $465. Bernstein cut to $200 from $400, and Oppenheimer moved to Perform and removed its target. William Blair and KeyBanc also downgraded. Baird had already cut the shares to Neutral, with a $200 target from $500, on 11 November 2026.
- There was no succession plan. Evercore's Mark Lipacis wrote on 12 November 2026 that NVIDIA "has no obvious succession plan or number 2 operational executive," CNBC reported. Oppenheimer expects a "lingering share overhang."
- The board investigation is still open. The board opened its investigation on 8 November 2026. It hired a former acting U.S. attorney to lead it on 10 November 2026 and has reported no findings, NBC News reported on 12 November 2026.
- Export-control scrutiny is widening. Megaspeed, a Singapore buyer of NVIDIA chips where the alleged agent held a senior post, is under a U.S. criminal investigation over alleged chip smuggling into China, NBC News reported on 12 November 2026.
- Rates are pressing on growth stocks. The 10-year Treasury yield reached 5% on 10 November 2026 after a hotter-than-expected October consumer price index report, Benzinga reported.
- Large customers are trimming spending. Microsoft cut its 2026 capital-spending forecast by $5 billion and pulled back from some Nebius, IREN and Nscale projects, AI Weekly reported around 5 November 2026, citing Bloomberg.
Price setup
The decline started from the 52-week intraday high of $243.37 on 6 October 2026. The 6 November 2026 close of $186.64 was the last close before the board announced its investigation. After that the shares closed at $178.67 on 9 November 2026 and $168.89 on 10 November 2026. They bounced to $173.73 on 11 November 2026, then fell to $166.19 on 12 November 2026, the day of the resignation.
The last close sits just above the 52-week closing low of $165.17, set on 30 March 2026. A close below that low would put the shares at their weakest close in a year. As of 12 November 2026, the 50-day moving average was $215.94 and the 200-day moving average was $204.07, and the shares are well below both. Recovering the 6 November 2026 close would mean the market had fully reversed the selling that followed the investigation and the resignation.
Catalysts ahead
- 17 November 2026: NVIDIA fiscal third-quarter 2027 results at about 1:20 p.m. Pacific time, with a conference call at 2 p.m. Pacific time. Tests the $108.0 billion revenue and 74.0% gross-margin outlook and sets the January-quarter outlook, the first under the interim CEO. Results above the top of the outlook with a higher January-quarter outlook would challenge the lag call.
- ~18 November 2026 (est.): Closed-door congressional briefing on Jensen Huang's contacts with the alleged Chinese agent. Shows whether congressional scrutiny widens into export-control action against NVIDIA products or its Southeast Asian resellers.
What would change the view
A weekly close above $190, over the 6 November 2026 close of $186.64 set before the board investigation was announced, which would show the shares leading again. On 17 November 2026, fiscal third-quarter revenue above the top of the $108.0 billion, plus or minus 2%, outlook, with a higher January-quarter outlook, would also prove the call wrong.
What it trades with
NVIDIA is one of the largest weights in the S&P 500 and the Nasdaq-100, so index fund flows can outweigh company news on any given day. The shares usually move with the Philadelphia Semiconductor Index, AMD and GPU-cloud customers such as CoreWeave, where NVIDIA holds equity. The leadership crisis has weakened that link. On 12 November 2026, AMD and Broadcom rose as NVIDIA fell, Benzinga reported. NVIDIA had also fallen on 10 November 2026 while AMD and Broadcom gained, TradingKey reported. Until a permanent chief executive is named and the board reports its findings, company-specific news can keep pushing the shares apart from the chip group.
The evidence, claim by claim (8)
- Jensen Huang resigned as NVIDIA's president, chief executive and director, effective immediately. CFO Colette Kress became interim CEO and keeps the CFO role, and Harvey C. Jones became the first board chair. NVIDIA press release 'NVIDIA Announces CEO Transition', 12 November 2026 · as of
- NVIDIA shares fell as much as 16% after the resignation announcement and closed down 4.3% on 12 November 2026, at $166.19. NBC News, 12 November 2026 · as of
- Evercore ISI cut NVIDIA to In Line with a $186 target, from $465. Melius Research cut it to Hold with a $185 target, from $315. CNBC, 12 November 2026 · as of
- Bernstein cut NVIDIA to Market Perform and its target to $200 from $400. Citi kept its Buy rating and cut its target to $225 from $285. CNBC, 12 November 2026 · as of
- Baird cut NVIDIA to Neutral from Outperform and its price target to $200 from $500, citing CEO uncertainty and possible slower hyperscaler AI spending in 2027. Investing.com via Yahoo Finance, 11 November 2026 · as of
- NVIDIA's board opened an investigation on 8 November 2026 into whether Huang was targeted by a foreign intelligence effort. It hired a former acting U.S. attorney to lead it on 10 November 2026 and has reported no findings. NBC News, 12 November 2026; CNBC, 8 November 2026 · as of
- NVIDIA reported fiscal second-quarter 2027 revenue of $96.2 billion, up 106% from a year earlier. It guided the October quarter to $108.0 billion, plus or minus 2%, with a 74.0% gross margin. NVIDIA fiscal second-quarter 2027 results release (Form 8-K) · as of
- NVIDIA's forward price-to-earnings ratio fell to 10.64, the lowest in the Dow Jones Industrial Average. Benzinga, 10 November 2026 · as of
Sources
- NVIDIA Announces CEO Transition · nvidianews.nvidia.com ·
- Jensen Huang: Analysts weigh in on Nvidia's future · cnbc.com ·
- Nvidia CEO Jensen Huang resigns after reports of affair and extramarital relationships · nbcnews.com ·
- Nvidia investigates CEO Jensen Huang's relationship with alleged Chinese spy · cnbc.com ·
- Wall Street analysts turn cautious on Nvidia amid supply issues, Huang uncertainty · finance.yahoo.com ·
- Today's Market Recap: US Stocks Retreat as CPI Tops Estimates; Nvidia Falls Over 5%, AMD and Broadcom Buck the Trend · tradingkey.com
- AI stocks rebound as Coreweave results and Anthropic IPO lift markets · cityam.com
- Microsoft Pulls Back From Neocloud Bets With Nscale, Nebius, IREN · aiweekly.co
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