Research Note · Pre-Earnings · InitiationNovember 13, 2026 · reports Tuesday Nov 17 after the close · call 5:00 PM ET
NVIDIANVDA · NASDAQ
Nvidia reports Tuesday after the close without its founder. The board accepted Jensen Huang's resignation on November 11; CFO Colette Kress is interim CEO and keeps the CFO seat, and Harvey Jones becomes the first chair the board has had. The quarter being reported ended October 25, before any of it, and the August guide of $108B ± 2% is not what the market is arguing about. At $162.44 the stock is 32% below its October 6 record close and about 10× the Street's fiscal 2028 earnings — a price that says the estimates are wrong, not the quarter. Two things put them in doubt, and only one is the scandal. The November 3 midterms turned data-center permitting into a political fight in Texas and Ohio, and Nvidia's growth has been helped by about $190B of customer-facing commitments and guarantees, the largest of which the new chief executive reportedly opposed. We initiate at a probability-weighted $176.
Last
$162.44
Nov 13, ~1:00 PM CT · Thursday close $166.19 · day range $158.39–170.00 · 52-wk $148.80–243.37
Fair value (prob.-wtd)
$176
+8% vs last · base $182 · initiation
From record close
−32%
$239.24 on Oct 6 · $186.64 on Nov 6, the last close before the admission · on course for a sixth straight weekly decline
Q3 guide · Street
$108.0B · ~$108.8B
± 2% ($105.8–110.2B) · assumes no China data-center compute · EPS Street ~$2.47
January-quarter bar
~$124B
Street revenue, EPS ~$2.75 · Wedbush looks for a $124–130B guide
Options-implied move
±9.6%
About ±$16, $147–178 · largest into a print since Aug 2024 (as of Thursday's close)
Commitments + guarantees
$530B
$366B supply, cloud, leases, equity · $56B AI-cloud support · $108.5B guarantees (Jul 26)
Valuation
17.4× / ~10×
P/E on FY27E ~$9.31 · on Street FY28 ~$15.91 · market value ~$3.92T
What is known, from the filing. The 8-K (Item 5.02) says the board accepted Huang's resignation as President, CEO and director on November 11, effective immediately. Colette Kress, 59, CFO since 2013, is interim CEO and remains CFO; Harvey C. Jones, 73, a director since 1993, is the first board chair. The search will consider internal and external candidates; no timeline is given. The board says it expects "operations, customer commitments and product roadmap to continue without interruption," and the release confirms results for Tuesday, November 17, about 1:20 PM PT, call at 2:00 PM PT. What the filing does not say: anything about the board's investigation, Huang's separation terms or his shares, export-control inquiries, or whether guidance stands. What sits around it, per press reports: the Justice Department has taken over the federal probe of Megaspeed, a Southeast Asian buyer of Nvidia systems; House and Senate committees have asked Huang to appear; two Democratic tax-writers opened an inquiry into the December 2025 China licence arrangement; and a securities suit has been filed. The Attorney General said Thursday the department has not determined whether the woman at the centre of the reports is a foreign agent. None of that is in an Nvidia filing yet — the 10-Q, due within days of the print, is where it would first appear.
The setup into Tuesday
| Line | Q2 FY27 (July) | Q3 guide · Street | Read |
|---|
| Revenue | $96.22B · +106% | $108.0B ± 2% · ~$108.8B | Midpoint is +12% sequential. Q2 EPS beat the Street by $0.13; Wedbush models $113–115B for Q3 |
| Data Center | $89.02B · +117% | — | Hyperscale $48.71B (+13% q/q); AI clouds, industrial and enterprise $40.31B (+25% q/q) — the faster bucket is the one Nvidia helps finance |
| Gross margin (non-GAAP) | 75.0% | 74.0% ± 50 bp | Rubin ramp. In August management put the trough at 71–72% in the January quarter (per call coverage) |
| January-quarter revenue guide | — | Street ~$124B | The number that sets the tape. +14% sequential on the Street's Q3; EPS ~$2.75 |
| Non-GAAP EPS | $2.22 | Street ~$2.47 | Non-GAAP has included stock compensation since Q1; GAAP was $2.46 on $7.8B of equity-investment gains |
| Operating expenses (non-GAAP) | $8.23B | ~$9.0B | +54% y/y in Q2 on compute infrastructure and pay |
| Free cash flow | $21.3B | — | $48.6B in Q1. Receivables absorbed $22.3B, inventory $5.8B |
| Days sales outstanding | 60 | — | 45 a quarter earlier — "extended payment terms on large, multi-quarter agreements"; receivables $63.1B |
| Inventory | $31.6B | — | $25.8B in Q1, built ahead of Vera Rubin |
| Commitments | $366B + $56B | — | Supply and capacity $279B (from $119B a quarter earlier, mostly memory); $36B AI-cloud agreements and $20B of leases held for third parties |
| Guarantees (maximum) | $108.5B | — | $105B is credit support for SB Energy's PORTS-Pike campus in Ohio, leased to OpenAI; first phase effective fiscal 2029 |
| Repurchases | $19.7B | — | ~$26.0B with dividends; $99.0B authorization left; $25.0B of notes issued in the quarter |
The one question that matters
Does Nvidia keep underwriting its customers? The July-quarter filing shows how much of the build-out now runs through Nvidia's own balance sheet: $42.4B of equity purchases in six months, $94B of equity securities held, $36B of AI-cloud agreements, $20B of data-center leases taken on for third parties, and $108.5B of guarantees — against $56.6B of cash and debt securities and $33.4B of debt. The CFO commentary gave the reason in plain terms: AI clouds and model makers "are growing faster than their balance sheets and long-term credit profiles can support." That was Huang's answer to the funding gap, and it shows in the mix — the AI-cloud and enterprise bucket grew 25% sequentially against 13% for hyperscale.
The person now running the company signed those statements as CFO, and The Information reported this week (via CNBC) that she opposed the $105B OpenAI guarantee. If the interim CEO slows new commitments, near-term risk falls and so does the growth rate of the customers that have been growing fastest. If she repeats the August framing — about 70% revenue growth in fiscal 2028, limited by supply — the Street's $15.91 holds and 10× is the wrong multiple. Tuesday's call is the first time she has to choose in public.
Two shocks, not one
The decline has two parts and they are roughly equal. From $213.66 on October 29 to $186.64 on November 6 the stock lost 13%, and most of that came on November 5 (−9.3% to $181.60) as the market read the midterms: voters backed limits in 40 of 41 local data-center measures across 10 states, and the governor-elect of Texas, home to roughly a quarter of planned U.S. capacity, has pledged a moratorium on approvals. Democrats also won the governorship in Ohio, where PORTS-Pike sits. From November 6 to Thursday's $166.19 close the stock lost another 11% as the reporting moved from a relationship to a board investigation to a resignation, with an intraday low of $148.80 on 743M shares.
Credit moved on the first shock, not the second. Our DTCC-derived median for Nvidia's five-year CDS went from about 105 bp in mid-October to 123 bp on October 29 and 136 bp on election day, and has sat at 130–135 bp since — 133.5 bp on Thursday on 19 prints, unchanged through the resignation. Credit is pricing the build-out and its financing; equity added a founder discount on top.
Coded language and flags for Tuesday
- "Without interruption." The board's phrase covers operations, customer commitments and the roadmap. Listen for whether Kress extends it to new commitments — the August quarter added $160B of supply obligations and the $105B guarantee.
- The fiscal 2028 frame. August's preliminary ~70% growth, capped by supply, is what the Street's ~$700B rests on. Repeated, trimmed or left out are three different outcomes.
- The China line. Guidance has assumed no China data-center compute. With Congress and the Justice Department now examining licences and re-export channels, the exposure to watch is Southeast Asia, not China itself; The Information reported $7.5B of purchases routed through one intermediary.
- Cash conversion. DSO went from 45 to 60 days and operating cash flow halved sequentially on working capital. Another step up in either would say growth is being bought with terms.
- Who speaks. Kress holds both chairs. Whether product leadership — Ian Buck is the name the press puts first among insiders — is on the call matters for the roadmap question a finance chief cannot answer alone.
- Buyback. $99B was left on the authorization in July. A CFO-CEO with the stock at 10× next year's Street number has an obvious lever; not pulling it would also say something.
Where it touches the threads
- Peak AI capex versus backlog. The demand evidence from this week — Cisco, Applied Materials, Cerebras — is intact. The constraint that moved is permission to build, and it moved at the ballot box, not in the order book.
- Funding strain. Nvidia has been the lender of last resort to the layer below the hyperscalers. Any pullback lands first on the AI clouds and model makers, then on Nvidia's own 25%-a-quarter growth bucket.
- Power and grid. The bottleneck was physical; in Texas and Ohio it is now also political. PORTS-Pike is 4.25 GW of the guarantee and an option on 3.8 GW more.
- Micron as the barometer. Most of the $160B jump in supply commitments was memory. Nvidia is contractually long memory through fiscal 2029; a slower build leaves it holding those obligations.
- Commoditization. Whether customers use the vacancy to push custom silicon and second sources harder is a 2027 question the January-quarter guide will not answer.
Valuation and scenarios
At $162.44 Nvidia is about $3.92T of market value on roughly 24.15B shares, with $56.6B of cash and debt securities, $33.4B of debt and $94B of equity investments at July 26. That is 20.5× trailing GAAP earnings of $7.91, 17.4× fiscal 2027 on the Street's ~$9.31 (non-GAAP, first half reported at $4.09), and 10.2× the Street's ~$15.91 for fiscal 2028, the year ending January 2028. Fair values are independent house estimates on fiscal 2028 earnings at 10–15×. The top of that range is where the October record close sits on today's estimate; the bottom is a multiple for earnings the market expects to fall. Our base EPS of $14.00 is 12% below the Street because we assume the interim leadership slows new customer financing and that permitting delays push some revenue out of the year; we use about 24.0B shares.
Bull25% probability
$250+54%
- Fiscal 2028 revenue ~$710B (+73%): the August framing holds, Rubin ramps on schedule, financing commitments continue
- Gross margin ~73%; EPS ~$16.60, above the Street
- 15× — the October multiple, with a credible permanent CEO named by spring
Base45% probability
$182+12%
- Fiscal 2028 revenue ~$620B (+50%): demand intact, new commitments slow, some Texas and Ohio capacity slips a year
- Gross margin ~72%; EPS ~$14.00, about 12% below consensus
- 13× — a founder-less discount that narrows but does not close
Bear30% probability
$105−35%
- Fiscal 2028 revenue ~$500B (+21%): financed customers retrench, export enforcement closes the re-export channel, moratoriums bite
- Gross margin ~70%; EPS ~$10.60; guarantees and supply obligations become the story
- 10× on falling estimates — roughly today's multiple on a lower number
Probability-weighted fair value
$176
Modestly above the price, with the bear weighted heavier than the bull. The quarter and the guide argue for the base or better; the open investigations, the financing question and the search keep 30% on the downside. A repeated fiscal 2028 frame and a named successor move weight up; a 10-Q with new legal disclosures or a pause in commitments moves it down.
What to watch
- January-quarter guide against ~$124B, and whether it still assumes no China data-center compute
- Gross margin guide against the 71–72% trough flagged in August
- Fiscal 2028: the ~70% growth frame — repeated, trimmed or dropped
- Commitments and guarantees in the CFO commentary against $366B / $56B / $108.5B, and any change to PORTS-Pike
- DSO against 60 days; operating cash flow against $24.1B
- Repurchases against $19.7B and any new authorization
- The search: timeline, internal or external, retention awards, Huang's separation terms
- The 10-Q: legal proceedings and risk-factor language on export inquiries
The desk read: the print is the least uncertain thing about Tuesday. Guidance was set by the person now presenting it, the quarter closed before the news, and the Street sits barely above the midpoint. The stock trades on the outlook and on how much of Huang's financing model survives him. Levels: $158.39 (today's low) and $148.80 (Thursday's low, the 52-week low) below; $170.00 (today's high), $177.54 (Wednesday's high) and $186.64 (the November 6 close) above. Options imply roughly $147–178.
Sources
- NVIDIA Form 8-K, Item 5.02, and Exhibit 99.1 "NVIDIA Announces CEO Transition," Nov 12, 2026 — https://www.sec.gov/Archives/edgar/data/1045810/000104581026000082/nvidiaannouncesceotransiti.htm
- NVIDIA Q2 fiscal 2027 results, Form 8-K Exhibit 99.1, Aug 26, 2026 — https://www.sec.gov/Archives/edgar/data/1045810/000104581026000073/q2fy27pr.htm
- NVIDIA Q2 fiscal 2027 CFO Commentary, Exhibit 99.2 (segments, commitments, guarantees, DSO, outlook) — https://www.sec.gov/Archives/edgar/data/1045810/000104581026000073/q2fy27cfocommentary.htm
- Not read directly: the August earnings-call transcript (the 71–72% margin trough, ~70% fiscal 2028 growth and Rubin mix are cited from press coverage of the call) and sell-side notes (Wedbush, Bernstein, HSBC cited from press reports). Consensus per FactSet/Zacks/Yahoo as reported Nov 12–13. Investigations, congressional requests and the report on the OpenAI guarantee per the New York Times, Reuters, Bloomberg, The Information, CNBC and TechCrunch, Nov 8–13; they are allegations and reporting, not company disclosure. Midterm results per CNBC and Reuters.
- CDS: Sikuli Research medians from DTCC public swap data. Options-implied move per Benzinga, as of the Nov 12 close. Price: Yahoo last, Nov 13, 2026 ~1:00 PM CT — confirm against a live feed.
For educational/entertainment purposes. Sikuli Research publishes independent opinions; nothing here is investment advice, a research report under FINRA rules, or a solicitation to buy or sell any security. Fair-value scenarios are the author's assumptions and may change without notice. Prices are as of the time stated and should be confirmed against a live feed. The author may hold positions, long or short, in securities mentioned.