NVDA - Reiterating our Buy on NVDA heading into Q1 (April) earnings

Research evidence excerpt

NVDA - Reiterating our Buy on NVDA heading into Q1 (April) earnings

Truist Securities

Valuation remains attractive. NVDA trades at 26x NTM consensus EPS and 19x our CY27 EPS estimate. Considering the medium-

term sales & EPS growth of over 50%, and the S&P’s current valuation of 21x NTM EPS, NVDA appears inexpensive. This appears

even more obvious in the following graphic.

Source: Truist Securities

Some idiosyncratic thoughts on NVDA's stock price performance

We see intra-sector positioning and trading mechanics as NVDA’s biggest challenges now. NVDA has delivered strong performance

since 3/30/26, YTD, and over the last year, exceeding returns of the S&P. Still, the company's performance over these periods has

underperformed relative to the SOX, as we show below.

NVDA's underperformance versus the SOX is challenged by three things, in our opinion. First, we believe investors have shifted focus

from some of the more traditional AI winners like NVDA to the derivative and incremental suppliers, where growth is either faster, or more

surprising (memory, optical, and even PCBs). Second, we believe there are inherent technical challenges in the performance of any stock

representing >5% of the S&P 500, considering the "5% rule" in mutual funds. See our notes about how #1 can become #1-er here, and

here). Third, we believe fund flows into semi ETFs contribute to NVDA’s underperformance (vs. SOXX / SMH) owing to its weighting in

these indexes that under-represents its market cap. See below for some surprising details on NVDA and, by comparison, INTC (Hold).

One might conclude that flows into these ETFs drive, or at least contribute to, NVDA's underperformance vs. the sector.

We expect updates on the following topics.

Truist Securities Page 2