The Cashflow Memo

Earnings Week Is a Split Screen — Nvidia, the Big-Box Gauntlet, and the Retail Read-Across

The AI trade and the tariff trade get tested on the same three days. By Friday, the market knows which side delivered.

The Telltales Weekend Update. Ava Cabot and analyst Marcus Graham walk through what happened this week — and what’s coming next — across the 86 companies in the Cash Flow Memo. About 13 minutes. No filler.

Download the memo at telltales.us. Hunt, Jason, and Mike are back Wednesday on episode E2621.

Chapter markers

* Time | Segment

* 0:00 | Opening disclaimer

* 0:15 | Cold open & this week’s split screen

* 0:45 | Theme — The Big-Box Gauntlet (HD, LOW, TGT, WMT)

* 4:45 | Deep dive — Nvidia going into Q1 FY27

* 8:45 | Rapid-fire — EQT, UnitedHealth, Microsoft

* 11:45 | Close & Consensus Watch

* 12:30 | Closing disclaimer

Full transcript

Opening disclaimer

Ava: The following conversation is intended for informational purposes only. You should always do your own work to determine if an investment is suitable for you.

Cold open

Ava: You’re listening to the Telltales Weekend Update. I’m Ava Cabot.

Marcus: And I’m Marcus Graham — the cashflow desk.

Ava: Quick note: the show is produced entirely with AI tools, and both voices you’re hearing are AI-generated. Send feedback through the Substack. We’re still in the early run of the show — listener feedback is shaping what we do.

Ava: This week is a split screen. Nvidia prints Wednesday after the close. The big-box retailers print Tuesday through Thursday — Home Depot, Lowe’s, Target, Walmart. The AI trade and the tariff trade get tested on the same three days. By Friday, the market knows which side delivered.

Ava: On Wednesday’s main show, Hunt, Jason, and Mike walked through Meta as the most profitable AI application ever built — the answer to whether AI capex actually compounds back into the income statement[^ep-e2620]. This week the test moves to the picks-and-shovels side. Nvidia. And the read-across to whether the tariff regime is showing up at the cash register.

Theme — The Big-Box Gauntlet

Ava: On page 8 of the memo this week — Home Depot Tuesday morning[^earn-hd], Lowe’s and Target Wednesday before the open[^earn-low][^earn-tgt], Walmart Thursday[^earn-wmt]. Four big-box prints, three days, one customer.

Ava: The customer is the same — middle America, mortgage-burdened, tariff-exposed. The wound isn’t.

Ava: Home Depot is the only one of the four where the stock has already done the work. 25% off the 52-week high going into the print[^hd-performance-20260513]. Reports Tuesday at 9:00 AM ET, $3.42 consensus on $41.6B[^hd-earnings-20260505]. Truist cut its price target from $424 to $394 three days ago[^hd-truist-20260512]. And management already told everyone they will source no more than 10% of products from any single foreign country — that’s the tariff hedge, on the record, before the print[^hd-tariffs-20260512].

Ava: Lowe’s is the rare print where two top-tier analysts disagree on the same number. Reports Wednesday before the open. $2.96 EPS on $23B[^earn-low]. Citi upgraded to Buy on May 12, $285 target — they cited four straight quarters of positive comps[^low-citi-upgrade-20260512]. BofA downgraded to Neutral on May 5, $260 target — they cited housing turnover at multi-decade lows[^low-bofa-downgrade-20260505]. Same company. Same week. Two completely different setups.

Ava: Target is the only one of the four printing into a customer base that left. Reports Wednesday before the open — same morning as Lowe’s. Consensus $1.41 on $24.5B[^tgt-earnings-20260515]. Foot traffic at Target stores is down year-over-year for 25 of the last 27 weeks since the January DEI announcement[^tgt-dei-20260515]. The boycott officially ended in March — with no new diversity commitments. And Ulta Beauty is walking out of the partnership in August after five years[^tgt-ulta-20260515].

Ava: Walmart is the only one of the four restructuring while expanding. New CEO John Furner cut 1,000 corporate roles this week[^wmt-restructuring-20260513]. Prints Thursday. $0.65 on $175B. The ad business is up 50% year-over-year and the U.S. e-commerce business posted its first profitable quarter globally[^wmt-ad-growth-20260323][^wmt-ecom-profit-20260215]. The memo can’t anchor Walmart — trailing-twelve free cash flow is negative because of capex[^memo-wmt-fcf-20260515]. Marcus stays off the name.

Ava: Marcus, two of these are pricing differently than they look. The cashflow take.

Marcus: Target is the wounded one in the gauntlet, and the memo isn’t pricing it as wounded yet. 24x trailing free cash flow on $3B of TTM FCF, 10-K confirmed[^memo-tgt-evfcf-20260515][^memo-tgt-fcf-20260515]. The market is pricing Target like the foot-traffic hole closes on its own — 25 of the last 27 weeks say it doesn’t[^tgt-dei-20260515]. The gross-margin guide Wednesday morning is what tells you which side is closer to right.

Marcus: Home Depot is the cleanest test of the four. 24x trailing free cash flow on $16B of TTM FCF, 10-K confirmed[^memo-hd-evfcf-20260515][^memo-hd-fcf-20260515]. That’s not punitive for the share-leader of home improvement. The stock is 25% off the high — most of that move is housing turnover, not Home Depot losing share[^hd-performance-20260513]. The test Tuesday morning is whether the pro-contractor segment is actually offsetting DIY weakness[^hd-contractor-20260224], or whether management has been packaging hope as a thesis.

Ava: Two prints, two questions. Whether the foot traffic comes back at Target. Whether the pro contractor is real at Home Depot. Lowe’s settles a disagreement between two analysts. And Walmart has to convince anyone watching that cutting jobs is part of the growth story, not in spite of it.

Deep dive — Nvidia

Ava: Nvidia. Wednesday after the close. This is the most consequential print of the year.

Ava: Consensus is $1.74 EPS on $78B in revenue, plus or minus 2%[^nvda-fy27-guidance-202605][^nvda-earnings-consensus-202605][^earn-nvda]. Blackwell B200 and GB200 are sold out through mid-2026 on a backlog described as, quote, insane — 3.6 million units[^nvda-blackwell-backlog-202605]. Hyperscaler capex for 2026 is guided at $725B, up 77% year over year[^nvda-hyperscaler-capex-202605]. Nvidia takes roughly 90% of the AI accelerator dollar inside that.

Ava: Now the China complication. On March 5, Nvidia halted all H200 production for China — about 400,000 units of orders that don’t get filled, roughly $30B of walked-away revenue[^nvda-h200-halt-202605]. Then this week, Jensen Huang rode Air Force One to Beijing. For context — Trump brought 17 CEOs to China; only two got Air Force One seats. Musk and Huang[^nvda-huang-trump-202605]. Huang secured U.S. export approval for H200 sales to 10 Chinese firms — Alibaba, Tencent, ByteDance, JD.com — opening an estimated $50B annual market[^nvda-china-h200-202605]. And then Beijing told its tech companies to pause orders while the government decides on import approval[^nvda-china-h200-pause-202605].

Ava: And one more. The Rubin platform was announced at CES — 5x Blackwell on inference, 3.5x Blackwell on training, 10x reduction in inference token cost[^nvda-rubin-202605][^nvda-rubin-economics-202605]. Production ramps the back half of this year. AWS, Google Cloud, Microsoft, and Oracle are first in line.

Ava: Marcus, the cashflow take.

Marcus: Nvidia going into Wednesday night is the only mega-cap in the AI stack where the multiple looks reasonable against the cash. 50x trailing free cash flow on $103B of TTM FCF, fiscal year 2026 10-K confirmed[^memo-nvda-evfcf-20260515][^memo-nvda-fcf-20260515]. Free cash flow grew about 80% year over year[^memo-nvda-fcfgrowth-20260515]. That’s the reasonable end of expensive in the AI stack — and reasonable means the math has to keep compounding. The test Wednesday isn’t the print. It’s whether the Q2 guide carries Rubin pricing.

Ava: The China story — net positive or net negative for the next twelve months?

Marcus: Net positive. And that’s the contrarian read. The H200 halt walked away from roughly $30B in China revenue, which everyone scored as a loss. But Nvidia carries a $95B supply commitment with TSMC[^nvda-tsmc-supply-202605]. That capacity doesn’t sit idle — it reallocates to Vera Rubin. So the trade is: walk away from H200 China at H200 margins, redirect TSMC capacity to the highest-priced product in the lineup. That’s the better margin trade. The export approval and the China pause net to noise — Nvidia keeps the option, the 10 Chinese firms stay in the queue. The downside case is the policy whiplash recurs and the option goes to zero. Probability-weighted, I take the trade.

Ava: And what changes the read after Wednesday?

Marcus: The demand side is set. Hyperscaler capex guided up 77% this year[^nvda-hyperscaler-capex-202605], Nvidia at the center of the dollar. The variable is Rubin pricing on the Q2 call. The new platform is 5x Blackwell on inference[^nvda-rubin-202605]. If management talks Rubin pricing on Wednesday, the multiple has room. If they don’t, this is as good as the cycle gets — and the next derate comes in the back half. The print is consensus minus surprise. The guide is the trade.

Ava: So the quest...