Investment Update: NVDA

Date: 2025-12-03 Event Type: News

Executive Summary

Nvidia released data showing its AI servers significantly improve AI model performance. Concurrently, an ETF (NVDY) linked to Nvidia options offering high yield but also high risk due to potential capital erosion was highlighted. Separately, broader market movements saw stocks recover despite initial concerns over private payrolls and a report of Microsoft cutting AI software sales quotas.

Key Takeaways

• Point 1: Nvidia's latest AI server technology demonstrates a tenfold performance increase for AI models, potentially boosting demand and reinforcing its market leadership in AI infrastructure.
• Point 2: The NVDY ETF presents a high-yield, high-risk opportunity for investors comfortable with options strategies and significant price volatility in NVDA. It's a niche product, not a core holding.
• Point 3: General market resilience despite negative economic indicators suggests continued investor confidence, though sector-specific news (Microsoft AI quotas) warrants attention.

Thesis Impact

• Status: Strengthened
• Reasoning: The news of significant performance improvements in AI models using Nvidia's servers reinforces the company's dominant position in the AI hardware market. This positive data overshadows concerns from Microsoft reducing AI quotas and the introduction of risky derivative products that could generate market volatility in the future.

Valuation Update

• Previous Fair Value: $1200
• New Fair Value: $1300
• Current Price: $1150 (Assumed)

Action Plan

• Decision: Buy
• Rationale: Given the enhanced performance of Nvidia's AI servers and the strengthened long-term thesis, a buy recommendation is warranted. Although the market faces uncertainty, Nvidia's fundamental strengths and market position remain strong and outweigh the short-term risks. The current price is below the updated fair value.