The AI Stock Beating Nvidia Almost Four to One This Year Just Burned Nearly $1 Billion in Cash
TD SYNNEX has quietly crushed Nvidia's returns in 2026, yet its record-breaking quarter sent the stock tumbling on a cash flow number so alarming it stopped investors cold.
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Record Quarter, Record Sell-Off
TD SYNNEX (NYSE:SNX | SNX Price Prediction) posted its best quarter ever before the open on Sept. 24, 2026, and investors sold it anyway. The stock dropped 8.74% intraday despite a 20.8% earnings beat. Profit taking notwithstanding, the explanation sits in the cash flow statement. Despite Thursday’s punishing session, TD SYNNEX has still outpaced NVIDIA year to date, up 72.7% versus NVIDIA (NASDAQ:NVDA)’s 20.4%.
AI Infrastructure Demand Rewrites the Top Line
Both of TD’s key segments blew past expectations. Distribution grew double digits across every region, and Hyve Solutions, the hyperscaler hardware arm, put up a monster quarter. Hyve gross billings jumped 117% year over year to $7 billion, with manufacturing growing more than 130%. Networking rose 19% year over year, and AI PCs represented close to 50% of total PC revenue. There is a great deal of breadth here to appreciate. Multiple hyperscalers contributed to the quarter.
TD SYNNEX also signed on to support an NVIDIA AI factory with Mark III Systems powered by Vera Rubin NVL72 systems, one of the largest enterprise AI deployments moving through the channel.
Nearly $1 Billion Walks Out the Door
Here’s the rub. TD SYNNEX’s free cash flow came in at negative $975.6 million, driven by working capital tied up financing AI hardware for Hyve customers. The cash conversion cycle stretched five days sequentially to 22. Management framed the outflow as ramp investment, but a billion-dollar cash burn in a single quarter is why the stock got hit, especially with AI capex under a microscope. If you own it, this is the line to watch next quarter.
Beats Everywhere Except the Cash Line
Key Figures (Q3 FY26)
- Non-GAAP EPS: $5.68 vs. $4.70 expected; up 58.7% YoY
- Revenue: $21.56B vs. $18.90B expected; up 37.75% YoY
- Non-GAAP gross billings: $31.83B, up 40.0% YoY
- GAAP net income: $416.24M, up 83.53% YoY
- Non-GAAP operating margin: 3.42%, expanded 39 bps YoY
- Free cash flow: -$975.6M
- Capital returned: $100M in buybacks, $38M in dividends; dividend raised 9% to $0.48/share
Investors may want to examine Hyve gross billings. That 117% growth is the engine, and it is also the reason the cash disappeared.
Zammit Draws a Line Under the Working Capital Story
TD SYNNEX CEO Patrick Zammit called it “another record quarter, with Distribution and Hyve both performing above our expectations and growing above market.” CFO David Jordan addressed the cash flow question directly: “Year to date, we have made substantial investments in Hive’s working capital and believe we now have a significant portion of the investments to support our expected growth now in place.” He added that “as those programs ramp, we expect them to be cash generative.”
Watch Q4 Cash Conversion Alongside EPS
Management guidance calls for Q4 revenue of $21.8B to $22.6B and non-GAAP EPS of $5.65 to $6.15, an approximately 54% jump at the midpoint. We’ll be watching whether Hyve programs start converting to cash. If they do, this sell-off ages badly.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
