NVIDIA's Increased Stock Investments Highlight Cash Strength Amid Lingering Business Risks

What happened

NVIDIA's recent 13-F filing shows a massive increase in its stock portfolio investments between Q3 and Q4 2025, reflecting robust cash generation. The DeepValue report notes NVIDIA's latest quarter free cash flow of $22.1B, supporting such capital deployment. However, the report maintains a 'WAIT' rating due to risks like a $4.5B inventory charge and high customer concentration. This investment move does not address core operational challenges, such as the Blackwell ramp-up or export control vulnerabilities. Investors should view this activity in light of the broader thesis, which hinges on May 2026 confirmations of demand and margin stability.

Implication

The surge in NVIDIA's stock portfolio investments underscores its exceptional cash flow from Data Center dominance, as highlighted in the DeepValue report. However, this capital allocation does not directly impact key investment thesis drivers, such as Blackwell execution and hyperscaler capex follow-through. The report emphasizes NVIDIA's substantial commitments, including $30.8B in supply obligations, against modest contracted visibility of $2.4B deferred revenue. Moreover, inventory management errors or expanded export controls could trigger margin compression, similar to the $4.5B H20 charge. Thus, while the investment activity signals financial health, investors should remain cautious and await clearer demand and execution signals in the coming months.

Thesis delta

The investment portfolio increase does not alter the fundamental investment thesis, which remains focused on Data Center growth and margin sustainability. The 'WAIT' rating is still appropriate, as key proof points around Blackwell execution and demand signals are unaffected by this financial maneuver. No significant shift in thesis is warranted based on this news alone.