NVIDIA CORP NASDAQ: NVDA ©2020 Argus Research Company Analyst Report Argus NVidia Corp., based in Santa Clara, California, is a visual computing company with worldwide operations and markets. The company operates through two segments, Graphics and Compute & Networking. The company's four main markets are gaming; professional visualization; data center; and automotive. In calendar 2020, NVidia completed the acquisition of data center connectivity leader Mellanox. Analyst's Notes Analysis by Jim Kelleher, CFA, September 14, 2020 ARGUS RATING: BUY • Transformative acquisition of ARM • NVidia and Japan's SoftBank announced a definitive agreement under which NVidia will acquire ARM Limited in a transaction valued at $40 billion. • We believe the deal will accelerate NVidia's data center processing business, which recently took a step up with the Mellanox acquisition. • NVDA stock represents more than half of deal value. Using stock to pay for ARM prevents NVidia from becoming overburdened with debt. • We believe that most technology investors should own NVDA in the age of deep learning, AI, and GPU-driven applications acceleration. INVESTMENT THESIS BUY-rated NVidia Corp. (NGS: NVDA) rallied in a recovering market on 9/14/20 after the company announced plans to acquire ARM Holdings from Softbank for $40 billion. ARM licenses the technology for application processors used in the world's smartphones and increasingly in data center server. We believe the deal will accelerate NVidia's data center processing business, which recently took a step up with the Mellanox acquisition. NVidia is already a leader in cloud data centers; the new deal will potentially result in leadership in edge data centers, fueling the internet of things. NVidia will pay $40 billion for ARM in the form of $21.5 billion in NVDA stock, $12 billion in cash (including $2 billion payable at deal signing), $1.5 billion in equity directly to ARM employees, and an up to $5 billion earn-out based on financial performance targets. Given the number of impacted participants, which includes the entire mobile phone value chain worldwide, NVidia anticipates that the deal will take up to 18 months to close. We believe the deal is a transformative step forward for NVidia. We like the NVDA stock component representing more than half of deal value. Using stock to pay for ARM prevents NVidia from becoming overburdened with debt; and, with its growth, NVidia can handle the resulting dilution. NVidia's cash-generation machine just got another boost with its RTX 30 series 'Ampere' gaming cards, expected to draw huge interest for the Market Data Pricing reflects previous trading week's closing price. 200-Day Moving Average Price ($) 200 400 Closed at $486.58 on 9/11 52 Week Low: $457.62 52 Week High: $589.07 Target Price: $600.00 Target Price: $600.00 Rating EPS ($) 2.05 Quarterly Annual 1.94 Quarterly Annual 1.84 Quarterly Annual 0.77 Quarterly Annual 6.60 0.88 Quarterly Annual 1.24 Quarterly Annual 1.79 Quarterly Annual 1.89 Quarterly Annual 5.79 1.80 Quarterly Annual 2.18 Quarterly Annual 2.71 Quarterly Annual 2.79 Quarterly Annual ( Estimate) 9.49 2.83 Quarterly Annual 2.93 Quarterly Annual 3.00 Quarterly Annual 3.08 Quarterly Annual ( Estimate) 11.83 3.2 Quarterly Annual 3.1 Quarterly Annual 3.2 Quarterly Annual 2.2 Quarterly Annual 11.7 2.2 Quarterly Annual 2.6 Quarterly Annual 3.0 Quarterly Annual 3.1 Quarterly Annual 10.9 3.1 Quarterly Annual 3.9 Quarterly Annual 4.4 Quarterly Annual 4.6 Quarterly Annual ( Estimate) 16.0 4.6 Quarterly Annual 4.8 Quarterly Annual 4.9 Quarterly Annual 5.0 Quarterly Annual ( Estimate) 19.3 Revenue ($ in Bil.) FY ends Jan 31 Q1 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 Q2 Q3 Q4 Q1 2021 Q2 Q3 Q4 2022 BUY HOLD SELL Argus Recommendations Twelve Month Rating SELL HOLD BUY Five Year Rating SELL HOLD BUY Sector Rating Under Weight Market Weight Over Weight Argus assigns a 12-month BUY, HOLD, or SELL rating to each stock under coverage. • BUY-rated stocks are expected to outperform the market (the benchmark S&P 500 Index) on a risk-adjusted basis over the next year. • HOLD-rated stocks are expected to perform in line with the market. • SELL-rated stocks are expected to underperform the market on a risk-adjusted basis. The distribution of ratings across Argus' entire company universe is: 63% Buy, 36% Hold, 1% Sell. Key Statistics Key Statistics pricing data reflects previous trading day's closing price. Other applicable data are trailing 12-months unless otherwise specified Market Overview Price $486.58 Target Price $600.00 52 Week Price Range $169.32 to $589.07 Shares Outstanding 617.00 Million Dividend $0.64 Sector Overview Sector Technology Sector Rating OVER WEIGHT Total % of S&P 500 Market Cap. 28.00% Financial Strength Financial Strength Rating MEDIUM-HIGH Debt/Capital Ratio 17.8% Return on Equity 42.1% Net Margin 25.9% Payout Ratio 0.07 Current Ratio 7.67 Revenue $13.07 Billion After-Tax Income $3.39 Billion Valuation Current FY P/E 51.27 Prior FY P/E 84.04 Price/Sales 22.98 Price/Book 21.58 Book Value/Share $22.55 Market Capitalization $300.22 Billion Forecasted Growth 1 Year EPS Growth Forecast 63.90% 5 Year EPS Growth Forecast 11.00% 1 Year Dividend Growth Forecast 0% Risk Beta 1.23 Institutional Ownership 69.19% Page 1 OF 6 Report created Sep 14, 2020 Please see important information about this report on page 6 NVIDIA CORP NASDAQ: NVDA ©2020 Argus Research Company Analyst Report Argus Analyst's Notes ...Continued holiday season. With Mellanox and its existing suite of advanced solutions, NVidia is uniquely positioned to advance GPU compute technology across multiple growth opportunities, including AI data center and machine learning, professional visualization, and autonomous driving. NVidia-owned AMR will be positioned to drive ARM-based technology into AI data centers, edge, and IoT markets such as automotive. NVDA has vastly outperformed the market in 2020 and in most recent years. We believe that NVidia is in the early innings of major market expansions in data center, autonomous vehicles, professional visualization, and gaming. We recommend establishing or adding to positions in this preeminent vehicle for participation in the AI economy. We believe that most technology investors should own NVDA in the age of deep learning, AI, and GPU-driven applications acceleration. We are reiterating our BUY rating to a 12-month target price of $600. RECENT DEVELOPMENTS NVDA is up 116% in 2020, while the peer group is up 16%. NVDA rose 76% in 2019, while the Argus-covered semiconductor peer group increased 54%. NVDA declined 31% in 2018, versus a 4% decline for the peer group and an 8% drop for the Philadelphia Semiconductor Index (SOX). NVDA rose 81% in 2017, while peers advanced 33% and the SOX was up 38%. NVDA soared 224% in 2016, compared to a 70% simple average gain for Argus-covered semiconductor companies, a 40% gain in the SOX Index, and an 11% gain for the S&P 500. On Sunday 9/13/20, NVidia and Japan's SoftBank announced a definitive agreement under which NVidia will acquire ARM Limited from SBG and the SoftBank Vision Fund in a transaction valued at $40 billion. NVidia stated that the transaction is expected to be immediately accretive to NVidia's non-GAAP gross margin and non-GAAP earnings per share. Given the number of impacted participants, which includes the entire mobile phone value chain worldwide, NVidia anticipates that the deal will take up to 18 months to close. The combination brings together NVidia's leading AI computing platform with ARM's vast licensed eco-system to create what NVidia called the premier computing company for the age of artificial intelligence. The deal accelerates innovation at NVidia while pushing the company into large, high-growth markets. In the years ahead, according to CEO Jensen Huang, trillions of computers running AI will create a new internet of things that is thousands of times larger than today's internet of people. The combined company will be 'fabulously positioned' for this opportunity, according to the CEO. ARM, which will remain headquartered in Cambridge, England, should benefit as NVidia 'turbocharges' its R&D capacity and expands its IP capacity with leading GPU compute and AI technology. NVidia intends to expand ARM's existing site and build a world-class AI research facility, including an AI Growth & Valuation Analysis GROWTH ANALYSIS ($ in Millions, except per share data) 2016 2017 2018 2019 2020 Revenue 5,010 6,910 9,714 11,716 10,918 COGS 2,199 2,847 3,892 4,545 4,150 Gross Profit 2,811 4,063 5,822 7,171 6,768 SG&A 602 663 815 991 1,093 R&D 1,331 1,463 1,797 2,376 2,829 Operating Income 878 1,937 3,210 3,804 2,846 Interest Expense 8 4 -8 -78 -126 Pretax Income 743 1,905 3,196 3,896 2,970 Income Taxes 129 239 149 -245 174 Tax Rate (%) 17 13 5 — 6 Net Income 614 1,666 3,047 4,141 2,796 Diluted Shares Outstanding 569 649 632 625 618 EPS 1.08 2.57 4.82 6.63 4.52 Dividend 0.39 0.49 0.57 0.61 0.64 GROWTH RATES (%) Revenue 7.0 37.9 40.6 20.6 -6.8 Operating Income 15.7 120.6 65.7 18.5 -25.2 Net Income -2.7 171.3 82.9 35.9 -32.5 EPS -3.6 138.0 87.5 37.6 -31.8 Dividend 16.0 22.9 17.5 7.0 4.9 Sustainable Growth Rate 19.1 38.1 54.6 19.5 24.7 VALUATION ANALYSIS Price: High $119.93 $218.67 $292.76 $241.81 — Price: Low $24.75 $95.17 $124.46 $127.69 — Price/Sales: High-Low 13.6 - 2.8 20.5 - 8.9 19.0 - 8.1 12.9 - 6.8 — - — P/E: High-Low 111.0 - 22.9 85.1 - 37.0 60.7 - 25.8 36.5 - 19.3 — - — Price/Cash Flow: High-Low 51.2 - 10.6 49.4 - 21.5 43.7 - 18.6 35.6 - 18.8 — - — Financial & Risk Analysis FINANCIAL STRENGTH 2018 2019 2020 Cash ($ in Millions) 4,002 782 10,896 Working Capital ($ in Millions) 8,102 9,228 11,906 Current Ratio 8.03 7.94 7.67 LT Debt/Equity Ratio (%) 26.6 21.3 20.9 Total Debt/Equity Ratio (%) 26.8 21.3 21.7 RATIOS (%) Gross Profit Margin 59.9 61.2 62.0 Operating Margin 33.0 32.5 26.1 Net Margin 31.4 35.3 25.6 Return On Assets 28.9 33.8 18.3 Return On Equity 46.1 49.3 26.0 RISK ANALYSIS Cash Cycle (days) 63.2 92.6 111.1 Cash Flow/Cap Ex 5.9 6.2 9.7 Oper. Income/Int. Exp. (ratio) 53.4 68.2 58.1 Payout Ratio 13.9 8.0 16.4 The data contained on this page of this report has been provided by Morningstar, Inc. (© 2020 Morningstar, Inc. All Rights Reserved). This data (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. This data is set forth herein for historical reference only and is not necessarily used in Argus’ analysis of the stock set forth on this page of this report or any other stock or other security. All earnings figures are in GAAP. Page 2 OF 6 Report created Sep 14, 2020 Please see important information about this report on page 6 NVIDIA CORP NASDAQ: NVDA ©2020 Argus Research Company Analyst Report Argus Analyst's Notes ...Continued supercomputer powered by ARM CPUs and NVidia GPUs. In the compute space, NVidia in the past decade has served a somewhat narrow wedge of AI data centers. In acquiring ARM, NVidia will own a vast CPU ecosystem. ARM-based technology is the basis of applications processors used worldwide. About 180 billion ARM-based chips have been shipped cumulatively, including nearly 23 billion in 2019 alone. ARM-based processors are now being used in some PCs, including some Chromebooks (which also have an Intel option). Companies such as Marvell Technology Group license ARM for its ThunderX server CPUs. Use of ARM technology has now spread well beyond the mobile phone to embedded applications in vehicles, appliances, personal consumer electronics, and multiple other uses. As a private company, ARM does not publish detailed financial data. Prior to being acquired by SoftBank, ARM was generating about $1.5 billion in annual revenue; recent revenue estimates are closer to $2 billion. That would suggest NVidia paid a price/sales multiple of 20-times, which is high. Because all revenue is licensing-derived, however, margins are very rich. A useful proxy would be Qualcomm's QTL business, which generates EBIT margins ranging from 65% in tough times to 80% in good times. While we are not ready to calculate an EBITDA/EV multiple on the sale price, it is likely more reasonable than the purchase P/S multiple. NVidia will pay $40 billion for ARM in the form of $21.5 billion in NVDA stock, $12 billion in cash (including $2 billion payable at deal signing), $1.5 billion in equity directly to ARM employees, and an up to $5 billion earn-out based on financial performance targets. We like that the NVDA stock component represents more than half of deal value. Using stock to pay for ARM prevents NVidia from becoming overburdened with debt. Analog Devices (ADI) recently announced plans to acquire Maxim Integrated in a $21 billion all-stock deal. Maxim's shareholders will end up owning a piece of ADI, which will see some dilution but avoids major debt inflation. In this case, SoftBank Vision Fund will end up owning $21.5 billion in NVDA stock or about 44 million new shares (determined using NVDA average closing price for the preceding 30 days). That would represent an estimated 7% of the float, based on 626 million NVDA shares outstanding as of fiscal 2Q21 (ended 7/26/20). We believe that NVidia can handle the resulting dilution. NVidia's high double-digit sales and EPS growth is running much hotter than 7% dilution resulting from the SoftBank stake. We also believe the cash component is affordable. As of the end of fiscal 2Q21, NVidia had gross cash of $10.98 billion and net cash of $4.0 billion. The market will have plenty of time to digest this deal and its implications. The deal has been approved by the boards of NVidia and SoftBank, and is subject to customary regulatory approvals. Given the number of impacted participants, which includes the entire mobile phone value chain worldwide, NVidia anticipates Peer & Industry Analysis The graphics in this section are designed to allow investors to compare NVDA versus its industry peers, the broader sector, and the market as a whole, as defined by the Argus Universe of Coverage. • The scatterplot shows how NVDA stacks up versus its peers on two key characteristics: long-term growth and value. In general, companies in the lower left-hand corner are more value-oriented, while those in the upper right-hand corner are more growth-oriented. • The table builds on the scatterplot by displaying more financial information. • The bar charts on the right take the analysis two steps further, by broadening the comparison groups into the sector level and the market as a whole. This tool is designed to help investors understand how NVDA might fit into or modify a diversified portfolio. Value Growth P/E 5-yr Growth Rate(%) 10 12 14 16 20 40 60 80 NVDA NVDA NVDA NVDA NVDA INTC INTC INTC INTC INTC AVGO AVGO AVGO AVGO AVGO TXN TXN TXN TXN TXN AMD AMD AMD AMD AMD AMAT AMAT AMAT AMAT AMAT LRCX LRCX LRCX LRCX LRCX ADI ADI ADI ADI ADI 5-yr Net 1-yr EPS Market Cap Growth Current Margin Growth Argus Ticker Company ($ in Millions) Rate (%) FY P/E (%) (%) Rating NVDA NVIDIA Corp 313,029 11.0 53.5 25.9 24.7 BUY INTC Intel Corp. 209,588 10.0 10.4 30.0 .2 BUY AVGO Broadcom Inc 132,729 11.0 15.6 11.0 13.5 BUY TXN Texas Instruments Inc. 128,534 10.0 27.4 36.9 .0 BUY AMD Advanced Micro Devices Inc. 98,398 15.0 79.1 8.0 37.7 BUY AMAT Applied Materials Inc. 56,870 11.0 15.2 19.6 16.1 BUY LRCX Lam Research Corp. 51,470 10.0 17.1 22.4 6.4 BUY ADI Analog Devices Inc. 42,831 10.0 25.8 20.1 15.8 BUY Peer Average 129,181 11.0 30.5 21.7 14.3 P/E NVDA vs. Market NVDA vs. Sector More Value More Growth Price/Sales NVDA vs. Market NVDA vs. Sector More Value More Growth Price/Book NVDA vs. Market NVDA vs. Sector More Value More Growth PEG NVDA vs. Market NVDA vs. Sector More Value More Growth 5 Year Growth NVDA vs. Market NVDA vs. Sector More Value More Growth Debt/Capital NVDA vs. Market NVDA vs. Sector More Value More Growth Page 3 OF 6 Report created Sep 14, 2020 Please see important information about this report on page 6 NVIDIA CORP NASDAQ: NVDA ©2020 Argus Research Company Analyst Report Argus Analyst's Notes ...Continued that the deal will take up to 18 months to close. We expect NVidia to generate additional gross and net cash into deal close. On 9/1/20, NVidia introduced its new 'Ampere'-based gaming cards that have been well received critically and are expected to drive a solid upgrade cycle. The 'Ampere' generation GeForce RTX series 30 gaming cards provide a performance boost of up to 2-times the prior 'Turing' generation GPUs. Moreover, many gamers skipped the 'Turing' upgrade and are using the predecessor 'Pascal'-based architecture; these gamers will see a four-times performance upgrade from their Pascal cards. Mainstream series 30 GeForce GPUs have been priced in line with predecessor products, which should drive traction into the holiday quarter. 'Pascal' generation cards do not offer the ray-tracing technology available in Turing and now Ampere cards. We thus look for a strong upgrade cycle this holiday season, particularly given the level pricing for mainstream RTX cards. With Mellanox and its existing suite of advanced solutions, NVidia is uniquely positioned to advance GPU compute technology across multiple growth opportunities, including AI data center and machine learning, professional visualization, and autonomous driving. NVidia-owned AMR will be positioned to drive ARM-based technology into AI data centers, edge, and IoT markets such as automotive. We believe that most technology investors should own NVDA in the age of deep learning, AI, and GPU-driven applications acceleration. EARNINGS & GROWTH ANALYSIS For fiscal 2Q21 (ended 7/26/20), NVidia posted revenue of $3.87 billion, which was up 50% year-over-year and 26% sequentially. Revenue was above the top of management's guidance range of $3.58-$3.72 billion and the consensus call of $3.65 billion. The non-GAAP gross margin was 66.0% in 2Q21, versus 65.8% in 1Q21 and 60.1% a year earlier. The non-GAAP operating margin inched higher to 39.2% in 2Q21 from 39.1% in 1Q21, and expanded meaningfully from 31.1% a year earlier. With Mellanox now acquired, the Street is tracking non-GAAP performance for NVidia. Non-GAAP earnings of $2.18 per diluted share were up 76% from $1.24 in fiscal 2Q20, and also topped the $1.97 consensus call; line-item guidance pointed to adjusted EPS in the $2.00 range. For all of FY20, revenue of $10.92 billion declined 7% from $11.72 billion in FY19. Non-GAAP earnings totaled $5.79 per diluted share, down 12% from $6.64 in FY19. For fiscal 3Q21, NVidia is modeling revenue of $4.40 billion, +/- 2%, or $4.32-$4.49 billion; at the midpoint, revenue would be up about 46% annually and 14% sequentially. Non-GAAP gross margins are forecast at 66.5%, +/- 50 basis points. Non-GAAP operating costs are forecast at about $1.09 billion. Based on other elements of line-item guidance, we look for NVidia to earn upwards of $2.55 per share in 3Q21, compared to $1.78 a year earlier. Our non-GAAP earnings forecast for fiscal 2021 is $9.49 per diluted share. Our forecast for fiscal 2022 non-GAAP EPS is $11.83 per diluted share. Our long-term EPS growth rate forecast remains 11%. FINANCIAL STRENGTH & DIVIDEND Our financial strength ranking on NVidia is Medium-High. The NVidia balance sheet now fully reflects the acquisition of Mellanox. Cash was $10.98 billion at the end of fiscal 2Q21, down from $16.0 billion before the Mellanox acquisition. Cash, equivalents and investments were $10.90 billion at the end of FY20, $7.42 billion at the end of FY19, $7.10 billion at the end of FY18, $6.80 billion at the end of FY17, $5.04 billion at the end of FY16, and $4.62 billion at the end of FY15. Debt was $6.96 billion at the end of fiscal 1Q21. Debt was $1.99 billion at the end of FY20, $1.99 billion at the end of FY19, $2.0 billion at the end of FY18, $2.78 billion at the end of FY17, and $1.43 billion at the end of 2Q17. Debt was $1.87 billion at the end of FY16 and $1.40 billion at the end of FY15. Cash flow from operations was $4.76 billion in FY20. Cash flow from operations was $3.74 billion in FY19, $3.50 billion in FY18, $1.67 billion in FY17, $1.18 billion in FY16, and $905 million in FY15. In terms of capital allocation, NVidia returned more than $3.0 billion to shareholders in FY20. During FY19, NVidia returned $1.95 billion to shareholders via buybacks and dividends. It returned $1.25 billion in FY18, $1.0 billion in FY17, $800 million in FY16, $1.0 billion in FY15, and $1.1 billion in FY14. NVidia raised its quarterly dividend by 6.7% to $0.16 in December 2018. The annualized payout of $0.64 yields about 0.1%. Our dividend estimates are $0.65 for both FY21 and FY22. MANAGEMENT & RISKS Jen-Hsun ('Jensen') Huang is co-founder, president and CEO of NVidia, as well as a board member. Chris Malachowsky, the other co-founder, is an NVidia fellow. Colette Kress is CFO; Debra Shoquist is EVP of Operations; and Jay Puri is EVP of World Field Operations. A main risk for NVidia, as for other semiconductor companies, is the possibility of a general economic downturn and a corresponding dip in PC and printer sales. However, we believe that NVidia has the financial strength, market leadership, and growth characteristics to weather the current storm and emerge a stronger player. We also believe that the percentage of hours worked away from the office will continue to increase. That should drive long-term demand for personal PCs served by NVDA GPUs and for data center acceleration products from NVidia to manage fast-growing data traffic. Any major acquisition brings risks. We believe Mellanox provides a worthwhile balance of opportunity that offsets risks, given that NVidia and Mellanox offer complementary rather than overlapping assets; have a history of successful collaboration; and serve the fastest-growing and most promising market in technology, AI data center. Other risks facing NVidia include the possibility that CPU industry leaders such as Intel or Qualcomm could incorporate GPU functionality into their chipset and SoCs. While these devices may have some level of graphics capability, we believe that NVidia's expertise, market leadership and continued investment in new technology gives it a sustainable advantage in its markets. NVidia is also at risk from downturns in the global economy, which would reduce consumer and enterprise spending on technology investments. NVidia also risks investing extensively to support technologies, such as autonomous driving and VR gaming, that do not fully justify that spending. However, we believe that Page 4 OF 6 Report created Sep 14, 2020 Please see important information about this report on page 6 NVIDIA CORP NASDAQ: NVDA ©2020 Argus Research Company Analyst Report Argus Analyst's Notes ...Continued these two niches offer strong growth opportunities. COMPANY DESCRIPTION NVidia Corp., based in Santa Clara, California, is a visual computing company with worldwide operations and markets. The company operates through two segments, Graphics and Compute & Networking. The company's four main markets are gaming; professional visualization; data center; and automotive. In calendar 2020, NVidia completed the acquisition of data center connectivity leader Mellanox. VALUATION NVDA trades at 51.3-times our FY21 non-GAAP EPS estimate and at 41.1-times our FY22 non-GAAP projection. The two-year forward average P/E is 46.2, above the five-year average (FY16-FY20) of 27.6. The stock trades at 2.0-times the market P/E, now above the historical relative P/E of 1.6. NVDA trades in line with or at slight premiums on other price-based comparable valuations, including price/sales and price/book, for an indicated comparable historical value in the $290s - below current prices, though in a sharply rising trend. Relative to the peer group, NVDA trades at premiums on P/E, price/sales, PEG, and EV/EBITDA. Notwithstanding near-term headwinds, NVidia has become a much faster-growing company than it was over the preceding five years and deserves to trade at rich premiums to peers. On our more forward-looking DFCF valuation, NVDA is valued in the high $700s, above current prices and rising rapidly based on the cash flow potential of Mellanox. Our blended valuation is in the $680 range, in a clear rising trend. NVidia operates powerful and profitable franchises. We believe that most technology investors should own NVDA in the age of deep learning, AI, and GPU-driven applications acceleration. We are reiterating our BUY rating to a 12-month target price of $600. On September 14 at midday, BUY-rated NVDA traded at $513.50, up $26.92. Page 5 OF 6 Report created Sep 14, 2020 Please see important information about this report on page 6 METHODOLOGY & DISCLAIMERS NASDAQ: NVDA ©2020 Argus Research Company Analyst Report Argus About Argus Argus Research, founded by Economist Harold Dorsey in 1934, has built a top-down, fundamental system that is used by Argus analysts. This six-point system includes Industry Analysis, Growth Analysis, Financial Strength Analysis, Management Assessment, Risk Analysis and Valuation Analysis. Utilizing forecasts from Argus’ Economist, the Industry Analysis identifies industries expected to perform well over the next one-to-two years. The Growth Analysis generates proprietary estimates for companies under coverage. In the Financial Strength Analysis, analysts study ratios to understand profitability, liquidity and capital structure. During the Management Assessment, analysts meet with and familiarize themselves with the processes of corporate management teams. Quantitative trends and qualitative threats are assessed under the Risk Analysis. And finally, Argus’ Valuation Analysis model integrates a historical ratio matrix, discounted cash flow modeling, and peer comparison. THE ARGUS RESEARCH RATING SYSTEM Argus uses three ratings for stocks: BUY, HOLD, and SELL. Stocks are rated relative to a benchmark, the S&P 500. • A BUY-rated stock is expected to outperform the S&P 500 on a risk-adjusted basis over a 12-month period. To make this determination, Argus Analysts set target prices, use beta as the measure of risk, and compare expected risk-adjusted stock returns to the S&P 500 forecasts set by the Argus Market Strategist. • A HOLD-rated stock is expected to perform in line with the S&P 500. • A SELL-rated stock is expected to underperform the S&P 500. Argus Research Disclaimer Argus Research Co. 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Morningstar Disclaimer © 2020 Morningstar, Inc. All Rights Reserved. Certain financial information included in this report: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Page 6 OF 6 Report created Sep 14, 2020