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Performance Assessment
NVIDIA Corporation (NASDAQ:NVDA) looks like it has recently started an alpha run vs. the S&P 500 (SP500, SPX):
Thesis
I have recently added Nvidia to my portfolio ahead of the Q1 FY26 (the
Nvidia Q1 Preview: Market Is Grossly Underestimating Its Potential (Upgrade)
Summary
- Foxconn's (a major supplier of Nvidia Corporation hardware) robust AI server demand is a good sign for NVDA's future revenue prospects.
- Although there are mixed signals from hyperscalers' consensus capex revisions, we should pay heed to Nvidia's CEO's cries from the rooftops about the immense AI factory and AI agents opportunity.
- Management is bullish on gross margin expansion due to production efficiencies, but my expectations here are muted due to higher costs for TSMC's chips.
- Nvidia's valuations are compelling, given the growth prospects ahead. The relative technicals vs. the S&P 500 also give us a buy signal.
- I expect broadly in line results on revenues and earnings for the upcoming Q1 FY26 earnings release. Yet, I am very bullish as I think the company is on the cusp of expanding its customer base to a much broader set of enterprise customers beyond the existing hyperscalers.
Providing alpha-generating investment ideas. I am an independent investor managing my family's portfolio, primarily via a Self Managed Super Fund. You can expect my articles to deliver a clearly structured, evidence-based thesis. But first and foremost, I encourage readers to judge me on my performance.I have a generalist approach as I explore, analyze and invest in any sector so long there is perceived alpha potential vs the S&P500. The typical holding period ranges between a few quarters to multiple years.It is a good idea to review the ratings history for the articles published by authors. This gives you another indication of how often the author's recommendations work out, which is a proxy for genuine investing and alpha-generating skill.Associated with Seeking Alpha account VishValue Research.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA, TSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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