Nvidia(US:NVDA)2025-11-20 08:46Investment Rating - The report assigns a "Buy" rating to NVIDIA (NVDA US) with a target price of $235 [3]. Core Insights - NVIDIA's Q3 2026 performance and Q4 2026 guidance exceeded market expectations, with Q3 revenue reaching $57 billion, a 22% quarter-over-quarter increase and a 62% year-over-year increase [3]. - The company anticipates Q4 2026 revenue of $65 billion, surpassing market expectations of $64 billion, with a gross margin guidance of 75% [3]. - NVIDIA's data center revenue for Q3 was $51.2 billion, driven by the production and shipment of the GB300, while the networking business generated $8.2 billion, making it the largest networking business supplier globally [3][4]. Financial Performance - For FY 2025, NVIDIA reported revenue of $130.5 billion, with a year-over-year growth of 114%. Projections for FY 2026 and FY 2027 are $215.5 billion and $337.1 billion, respectively, with expected growth rates of 65% and 56% [5][13]. - Net income for FY 2025 was $74.2 billion, with projections of $119.0 billion for FY 2026 and $189.1 billion for FY 2027, reflecting year-over-year growth rates of 60% and 59% [5][13]. - Earnings per share (EPS) are projected to increase from $3.0 in FY 2025 to $4.9 in FY 2026 and $7.8 in FY 2027 [5][13]. Business Segments and Market Position - NVIDIA's GB300 demand and shipment have surpassed that of the GB200, contributing approximately two-thirds of the total revenue from Blackwell in Q3 [4]. - The company has secured significant orders, including a partnership with Saudi Arabia for the shipment of 400,000 to 600,000 GPUs over the next three years [4]. - NVIDIA's GPUs are noted for their energy efficiency, particularly in the context of the current power shortages in the U.S., positioning them favorably against competitors like AMD [4]. Inventory and Supply Chain - Supply commitments on the balance sheet increased by 63% quarter-over-quarter, while inventory grew by 32% [4]. - Revenue from China for Q3 was only $50 million, with no assumptions made for data center revenue from China in the Q4 guidance [4].