the earnings report of all earnings

reports from chip king Nvidia on August

26. What I am wondering at the moment is

if the stock has gotten too darn cheap,

BFA analyst VC Arya said today in a note

that Nvidia may be 50% undervalued. I

mean why not 80% but he said 50%. Taking

uh this one to the round table, Jared,

let me get back to you. Uh the call out

is interesting in the sense Nvidia stock

is coming up against that all-time high

I believe hit on May 14th.

>> Yeah. So, it's a really interesting

setup here and there's going to be a lot

of questions uh about their not their

free cash flow but the way it's deployed

and so the way Bank of America is coming

at this is through a sum of parts free

cash flow and they're comparing Nvidia

to some of their peers like uh Marll or

AMD which on that basis are very much

over uh you can see AMD Marll for 2027

they got those 46 49 times uh multiple

and then uh BFA kind of backs into the

calculation you Nvidia has all these

so-called circular financing deals. Even

if you impair 50% of its cash flow, they

still end up with uh some pretty big

numbers and so based on that, yeah,

they're saying Nvidia should be trading

a lot higher or should be a lot more

expensive. Uh in other words, it's cheap

right now. Um I think there's going to

be two really interesting things to come

on the call. First, what is Nvidia doing

with buybacks? This is something that

BFA really calls out here because if

you're if you increase your buybacks and

Nvidia hasn't done as many as a percent

of its total free cash flow as some of

its peers, but if you increase that, a

lot of the concerns about uh circular

financing deals go away because you're

giving shareholders back the the cash

flow. The other is uh all their

investments including off balance sheet

investments and the size of those and

how they're being treated uh on you know

on an accounting basis. So, I think

those are two things that investors are

really going to look for. And uh that's

something that kind of blows my mind

because a year ago that was on nobody's

radar.

>> Uh Eric, it's days like this where I

miss picking stocks because I would have

come out and made this call uh on Nvidia

head of earnings.

Well, uh, I thought it's been cheap for

a while, but if I could pretend I'm

Jared and say, "Hey, let's go to Wi-Fi

Interactive and you could pull up a, you

know, the last threeear chart of

Nvidia."

>> Go ahead, Eric.

>> You know, and so I think it's sort of

law of large numbers that's that's

plaguing them. The great company, great

CEO, got nothing bad to say about

Jensen, but I think, you know, there's a

reason why Marll is a is a higher

multiple. cuz it's smaller and the

market sort of believes the growth is is

coming. So, I don't know is can stock

buybacks do the trick to kind of juice

this thing? I mean, I guess it did for

Apple, but it didn't do it right away.

It took a couple of years for the market

to realize that the EPS was getting

better over time and so forth. So, I'm

not sure. I I you know, I I think that

uh names like Nvidia and all the memory

stocks, they've obviously all had a run.

Nvidia had it first, then the memory

stocks later. I think the market is kind

of smiffing out like what are going to

be the next set of stocks to benefit

from AI that are going to go 5x or so

forth.

>> And Eric, I think investors are are not

given the respect uh this portfolio of

stocks that Nvidia or companies the

companies or the companies Nvidia has

invested in enough respect. Why is it so

bad that Nvidia has invested in Open AI

and Enthropic? I mean, I get they're

basically the same companies, but still

both of them are likely to have massive

IPOs. Nvidia is going to get paid.

>> It's not bad. It it's a good thing. It's

not cir I don't I I I I I don't have

time for these people to say it's all

circular financing. Oh, do it's a house

of cards is going to fall. I mean, these

are just the bears that are perennial

bears. Uh I you know, there's a reason

why they want to support this uh

ecosystem around them to to buy their

chips. So makes perfect sense from an

operating perspective and that's a

different question from is the stock

going to work over the next 6 12 months.