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I recently discussed NVIDIA Corporation (NASDAQ:NVDA) in my earnings preview article, "Nvidia Has A Demand Problem," in which I explained why Nvidia's growth rate is slowing, valued the company at $1.9T or 45% lower
Nvidia Has An Expense Problem
Summary
- Nvidia Corporation's revenue growth is slowing while operating expenses are rising faster than expected, undermining operating leverage assumptions.
- My revised forecasts show lower revenue and higher operating expenses, leading to a $2.2T intrinsic value—38% below Nvidia's current $3.5T market cap.
- Consensus estimates remain far more optimistic than mine, with Street net income forecasts 39% higher for FY 2027 than my projections.
- Despite margin improvements, I reiterate my Sell rating on NVDA stock due to deteriorating fundamentals and overvaluation versus realistic earnings potential.
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Analyst’s Disclosure:I/we have a beneficial short position in the shares of NVDA 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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