Bank of America has reiterated its “Buy” rating on NVIDIA Corporation, maintaining a price objective of $275 per share, despite the recent correction in the company’s stock price following its fiscal third-quarter results. The report asserts that investor concerns over increased receivables and inventory are misplaced, arguing that NVIDIA’s underlying demand signals and exceptional free cash flow (FCF) generation remain robust.
Third-quarter free cash flow surged by 60% quarter-over-quarter, reaching over $22 billion—marking the second-largest figure in the company’s history. Bank of America highlights that more than 90% of NVIDIA’s sales are attributed to profitable public hyperscale, government, and enterprise customers, alleviating worries about vendor financing risks.
The analysis notes that headline concerns over working capital are common for high-growth companies such as NVIDIA. Crucially, days sales outstanding (DSO) actually improved slightly to 53 days from 54 days the previous quarter, remaining well within historical averages. Increased inventory is attributed to the broader range of products, such as Blackwell systems and NVLink switches, and the sheer scale of deployments, which can take more than six months.
On the competitive front, the report discusses Google’s progress with the Gemini 3 Large Language Model trained on custom TPU chips. Despite these advances, NVIDIA’s GPUs continue to dominate industry benchmarks and enjoy universal adoption across public clouds.
Bank of America sees NVIDIA’s current valuation—24x and 18x estimated 2026/27 PE, respectively—as compelling given projected sales and EPS growth exceeding 40%. The firm encourages investors to focus on cash flow and long-term demand rather than quarterly fluctuations, reaffirming confidence in NVIDIA’s growth trajectory.
