Nvidia: Durable FCF As Company Expands Beyond Datacenter GPUs

Nvidia (NVDA) is initiated with a buy rating, driven by exceptional free cash flow generation and reasonable valuation multiples versus peers. NVDA's FCF reached $96.6B in FY26, with plans to return over 50% to shareholders and an $80B buyback boost. Customer diversification beyond hyperscalers and resilient GPU pricing trends support durable growth and reduce cyclicality risks. New CPU product lines, such as Vera, open a $200B TAM, further enhancing NVDA's growth profile and market positioning.