Author argues Nvidia FCF growth is conservative and 2026 will be much better, with institutions underowning the stock.
NVDA — LONG Nvidia's 60% FCF expansion is viewed as a conservative base case after a weak 2025, and 2026 is expected to be much better as ramp issues resolve and China returns. The AI bubble moment has not yet occurred, and institutions underown Nvidia relative to other mega-cap tech names, implying further upside.
If FCF expansion is 60% we should see that at least in share price as base case. But IMO 60% is conservative, and it's based on the very bad 2025 we just had. 2026 will be much better, growth will exceed, with the ramp issues behind us and China returning. The bubble moment is also yet to occur. Only some people (devs using claude code mostly) are clued in on AI being good, vast majority (both retail and institution) still thinks it's fake or something (obviously nonscientific just IMO based on commentary on cnbc and social media). Nvidia is underowned by institutions as compared to the other mag 7.