Should You Buy Nvidia Stock Before the Huge Investor Update? | NVDA Stock Analysis | NVDA Stock News

All right, Nvidia is scheduled to report a major investor update on November 19th, 2025.

And a lot of investors are asking me if they should buy Nvidia stock before that update.

So, I'll answer that question in this video.

I'll also preview what you should look out for from Nvidia in that upcoming quarterly financial update.

I'll provide you the latest developments.

I'll provide you some insights from what I've seen from other large cap tech companies and how that correlates to Nvidia's upcoming earnings release and its numbers.

I'll also share with you my updated fair value calculation for Nvidia stock.

I made some revisions today that increase the intrinsic value per share I calculated for Nvidia.

So, I'll share that with you in this video.

So, that's a lot to cover in a relatively short video. So, let's get started.

So, in its most recently completed quarter, Nvidia reported revenue of 46.7 billion, which was up 56% year-over-year.

They also reported a gross profit margin of 72.4%.

That was down from 75.1% in the same quarter last year.

But Nvidia's management team said that by the end of the fiscal year 2026, they expect their gross profit margins to recover back above 75% or back around 75% after they ramp up production of the latest generation Blackwell Technology.

The company reported operating income of 28.4 billion, which is up 53% yearover-year.

Nvidia's operating income generally increases by a much larger number than its revenue growth rate. But the recent developments considering the company's lower gross profit margins and ramping up of the technology has reduced the financial leverage, the operating leverage that Nvidia typically operates with.

So an interesting thing to note about Nvidia in recent quarters is it's developing its networking business.

Previously a larger percentage of its data center revenue was coming from compute, the GPUs that go into those data centers optimized for AI.

But more and more so recently, Nvidia is expanding into networking equipment along with the services it provides with the GPU.

So, it's broadening out the products and services it's offering to its customers.

And customers appreciate that because they can go to Nvidia for one solution.

They don't have to go to Nvidia for the GPU and then go to another company for something else and then another vendor for something else.

they can just get more from Nvidia and I think big companies prefer that dealing with one vendor instead of dealing with multiple vendors and that's allowing Nvidia to boost its revenue from this segment 7.2 2 billion in the most recent quarter.

That's up 46% from the previous quarter.

A huge growth rate, right?

Whereas the compute segment saw 1% decrease quarter over quarter.

Networking increased 46% and overall revenue increased 98% year-over-year.

So, this is something to watch out for.

a nice incremental revenue driver that gives Nvidia a stronger competitive advantage by bundling its services and giving lowering the cost of purchasing, lowering the cost of procurement for its customers.

Now, a segment that I'm also watching closely as the next catalyst for Nvidia, maybe in 3 years time or 5 years time is the automotive segment.

It's increased by 69% year-over-year to 586 million.

And you can see it's a relatively small part of its business right now.

About 1% of its overall revenue, 586 million compared to 46.7 billion overall.

But with the development of driverless car technology and assisted driver advanced systems, that's going to drive this segment forward because it's not just Tesla.

that's working on driverless car technology.

Nearly every manufacturer of automobiles is working on some level of driverless car technology. Whether it be advanced cruise control or parking assistance or lane change warning systems, whatever the case, nearly every automaker is working on developing these kinds of assisted driver systems. And Nvidia is a strong participant in that category.

It's one of the leaders in that category.

And while it's still in very early days right now, 3 years from now, it could grow at similar rates where you're seeing growth for the data center business.

I don't think it's going to be the size of its data center business anytime soon. But in about 3 years time, it could generate significant growth of 100% or more for several consecutive years as that segment grows to become a larger percentage of Nvidia's overall business.

And then down the line, we're looking at least 3 years down the line, I think, before this segment becomes a meaningful contributor to Nvidia's results.

So they continued to ramp their Blackwell architecture which grew 17% sequentially including their newest architecture Blackwell Ultra.

They recognized Blackwell revenue across all categories of course led by large cloud service providers which represented approximately 50% of their data center revenue.

These large cloud service providers are Amazon, Microsoft and Alphabet.

three of the largest cloud service providers.

And if you saw my recent analysis of their earnings reports that they released a couple of weeks ago, all three of those companies announced that they will be spending a lot more money building these data centers optimized for AI both this year and next year. So, Amazon, for instance, increased its estimate about how much it's going to spend on capital expenditure this year by roughly $20 billion, up from $105 billion previously estimated to 125 billion. And we saw similar across the board upgrades from Alphabet and Microsoft and then even Meta Platforms, which is not a cloud service provider, but it is building these data centers optimized for AI for its own internal use.

They also indicated they will be spending billions more on this technology and this is roughly half of Nvidia's revenue from these three or four companies.

And so with them increasing their estimates on how much they will be spending this year and next year, that's great news for Nvidia in its upcoming earnings release.

I expect Nvidia to provide more details on those deals with those large customers and upgrade their expectations on what they think they're going to generate in revenue in the upcoming quarter and in the upcoming fiscal year.

So inventory at 15 billion was up from 11.3 billion in the previous quarter to support the ramp of Blackwell Ultra.

Now, when you see inventory increasing, it doesn't always mean it's a positive sign for the business. Sometimes it can be positive, sometimes it can be negative.

In this case, it's very positive because Nvidia's business is growing so rapidly and demand for its products exceeds supply in some categories.

And so, when you see Nvidia's inventory building up, it's a good sign because it means that it has orders that it wants to fulfill.

and that is going to lead into greater sales for Nvidia.

Sometimes though, this increase in inventory can be a bad sign when you're looking at companies that are experiencing declining sales and the inventory is building up because the management team thought that sales were going to be higher and so they built up more inventory, but sales actually came in much below their estimates and so they had extra inventory. So, it's not always a good sign, but in this particular case for Nvidia, it is a good sign that inventory is increasing because they're demonstrating an ability to scale up and produce more and be able to sell more. And that's not an easy thing to do when you're selling mostly hardware, right?

It's easy to scale up a services business.

For instance, for Netflix, if there was a rush of a new 100 million customers for Netflix, Netflix would hardly experience any difficulty serving an extra 100 million customers.

But for Nvidia, it's more difficult because they have to produce the physical product, deliver those physical products.

And so, it's a lot more difficult to experience a surge in sales and execute and deliver on that increase in sales when you're selling mostly hardware.

And so kudos to Nvidia's management team for executing on this surge in business with limited downside, limited hiccups, limited executional difficulties.

And that's been one reason why I've been bullish on Nvidia stock is because of their ability to deal with this surge in demand and increase capacity and fulfill on all this extra demand from the marketplace.

So what's Nvidia doing with all this cash?

Remember, Nvidia is an asset light business.

It doesn't manufacture these GPUs themselves.

They outsource that manufacturing and that's an asset light way to generate all these profits.

And so the cash flow they're generating, they're returning a lot of that to shareholders with buybacks. In the most recent quarter, they bought back almost $10 billion worth of stock.

9.7 billion to be precise. And I wouldn't be surprised to see more of that in the upcoming quarters and upcoming years because the company generates so much cash flow.

It's way more than it needs internally.

So, it's returning a lot of that to shareholders.

You're seeing Nvidia make strategic investments in companies like Intel and others.

Open AAI as well because it has so much cash flow.

It can afford to make these strategic investments and return capital to shareholders.

So in the upcoming quarter, management told investors to expect revenue of 54 billion and operating or gross profit margins between 73.3 and 73.5%.

Now, I wouldn't be surprised if Nvidia reports revenue uh well above 54 billion.

Uh anywhere between 57 billion and 60 billion would not well I guess closer to 60 billion would surprise me but anywhere between 57 and 58 billion in revenue wouldn't surprise me for Nvidia given what I've seen from its largest customers and how they increased their capital expenditures in their most recently completed quarter by more than estimated.

And so I expect those increases in spending from Meta, Alphabet, Amazon, and Microsoft to have resulted in a more than expected revenue figure for Nvidia in its current upcoming quarter with gross profit margins closer to the higher end of that 73 uh.

5% forecast uh rather than the lower end of that uh midpoint that they provided here.

So I mentioned that I updated my Nvidia cash flow estimates and it resulted in an increase in the intrinsic value per share.

The update to my free cash flow valuation for Nvidia came from 2027 onward where the estimates were increased by roughly $10 billion annually from 2027 onward to reflect the increasing capital expenditure plans from large cloud service providers and the overall market demand for building these data centers optimized for AI.

So, the update caused my intrinsic value per share to rise from around $190 per share up to $24 per share for its intrinsic value compared to the current market price at $190.

I like to apply a margin of safety to my calculations.

And so, I don't say that it's undervalued on my discounted cash flow valuation calculation because of the margin of safety. I would say it's fairly valued at these valuations.

Now, when I go to fiscal.ai, which is my preferred data provider, and I retrieve the forward price to earnings and forward price to operating cash flow, Nvidia is trading at a forward price to OCF of 36 and forward price to earnings of 33. And when using the market multiples basis to evaluate Nvidia's valuation, I can say that Nvidia stock looks undervalued.

a company with these levels of growth rates at these levels of profit margins and cash flow margins with these levels of returns on invested capital which for Nvidia we didn't go over that in this video but Nvidia's return on invested capital ROIC is above 100% it's so high that I think it's unsustainably high but it's well above the highest of any other company that I'm following and you've got all of that trading at this kind of valuation on a market multiples basis it looks undervalued based on these levels also.

So to answer the question, should you buy Nvidia stock before the company announces earnings? Well, I have Nvidia rated as one of the top five stocks to buy. So I'm bullish on Nvidia stock overall.

I bought Nvidia stock for my own portfolio a few months ago.

I bought shares at around $903.

So, I'm happy with the returns so far, and I have no intention of selling my Nvidia stock anytime soon. I still like the value, but if you're thinking about the timing, should you buy it before or should you buy after?

uh with earnings so close so close and the risk from the upcoming earnings release so high remember even though these large cap tech companies are reporting great results investors have become skittish about the AI market about a potential for an AI bubble so even if Nvidia reports revenue and profits that is better than expected the stock price might still decline significantly following the earnings release there is an above average level of risk here given how the market is perceiving the artificial intelligence spending in recent weeks. And so I would say this is a situation where I would wait until after the earnings come out, digest the figures, and then make your decision afterwards.

I'm bullish on Nvidia stock.

I have it rated on a buy, but if you're just thinking about timing, then the timing I would say would be on a risk versus return adjusted basis.

It would be more prudent to wait until after the earnings results.

By the way, this spreadsheet you're looking at, you can access this spreadsheet with the channel membership at the investor tier or above.

You'll get access to this spreadsheet that has all my buy, holder, and sell ratings.

And then with that investor tier membership, you'll also get access to all my discounted cash flow valuation calculations, which includes Nvidia, but it also includes hundreds of other companies as well. I've calculated a discounted cash flow valuation for.

You'll get all that with an investor tier membership at less than $15 a month.

I think it's a great deal.