Growth Gazette | Portfolio Positioning: NVDA — Earnings Doubled, Price Went Nowhere

Hey Reader,

Following our upgrade earlier this week, we want to lay out the full case for why we are doubling down on NVIDIA (NVDA). Put simply: the price is where it was a year ago, and the business is roughly twice as profitable.

NVDA: Back at a Critical Support

NVDA has pulled back into the $163-167 zone. This is the same level that held at the September 2025 lows and again at the March 2026 lows. This week is the third test of that support, and weekly RSI is near 33, close to oversold territory.

Each of the last two times NVDA reached this zone, it was the start of a move to new highs. We treat it as our buy zone.

Key Level: $163-167 is triple-tested support. Below that, $150 is the next support where we would add the next tranche. A reclaim of $190-200 confirms buyers are back in control.

Price and Earnings Have Decoupled

Here is what has happened to the business while the stock went nowhere:

• Revenue: Last quarter came in at $96.2B, up 106% year over year, with Data Center at $89.0B. Guidance for the current quarter is $108B, about $4B above what the Street expected.

• Earnings: Fiscal 2026 EPS was $4.77. Consensus for this fiscal year is now ~$9.30, close to double.

• Next year: Fiscal 2028 EPS estimates went from $12.81 to $15.91 in just 90 days, with zero downward revisions in the last month. Management is pointing to roughly 70% revenue growth next year.

• Estimates only went up: This year's EPS estimate was ~$8.16 earlier in 2026, $8.79 in July, and $9.30 now.

Same price. Roughly twice the earnings. That is the whole story.

The Valuation That Matters

At ~$167, NVDA trades at about 18x this year's earnings and ~10.5x next year's. That is cheaper than the S&P 500 on a forward basis, for a company growing earnings faster than almost anything in the index.

The stock did not get cheaper because the business got worse. It got cheaper because the multiple came in while earnings kept climbing.

Our Approach Going Forward

The business keeps beating and raising. What has come off is the multiple, driven by headlines and leverage leaving the AI trade. That is sentiment, and sentiment turns. When a stock holds the same price while its earnings double, the market is giving you the growth for free.

NVDA stays our highest-conviction position at Rating AA (up to 32% of portfolio allocation). If you are under-allocated, this is a great zone to build.

Alert: NVDA and tech can swing hard. Leverage in semis is huge, so moves overshoot in both directions and we are not trying to call the exact bottom. Do not go all in at once. Accumulate in tranches, step by step, and add more on further weakness within your rating allocation.

We'll keep you updated in real time as these levels develop.

Stay sharp.

— The Proflex Team