Nvidia Corp.’s NVDA earnings, due this week, have put macro and rate concerns on the back burner, with investor attention solely focused on the AI bellwether’s fiscal-year 2025 first-quarter report. Deepwater Asset Management Managing Partner Gene Munster on Monday offered his take on what to expect from the report when it drops in after the market close on Wednesday.
Disappointment In The Cards? The impending launch of Blackwell, Nvidia’s new flagship GPU platform, this fall creates a risk for the April, July and even October quarters, said Munster in a post on X, formerly Twitter. Customers may delay or cancel orders for the current H200 flagship chip and wait for the new chips this fall, he said, terming it as the “Osborne Effect.”
Osborne Effect refers to customers canceling or deferring orders for the current product in anticipation of the next iteration that would launched imminently.
Munster expects the company to go all out in dampening the Osborne Effect. “There are rumors that Nvidia will push any customers who delay or cancel orders to the back of the waitlist for any Blackwell,” he said, adding that he believes the rumors are true.
“Nvidia is doing what it can to manage the product transition without a blow-up,” the venture capitalist said. He expects investors to react negatively at first to any potential disappointment and then quickly realize “today’s pain is for next quarter’s gain.”
Munster expects orders to rebound once the Blackwell series, namely B100 B200, and GB200, are released.
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Forward Outlook: Munster sees any commentary about the July quarter to be extrapolated to what it would mean for calendar year 2025 earnings and revenue growth. The tech investor expects Nvidia to grow by about 85% this year. The current consensus calls for 2025 calendar year earnings growth of about 30% and revenue growth of 28%.
Nvidia shares traded at a surprisingly conservative price-earnings growth ratio of one time and forward price-earnings multiple of 29 times.
“My sense is results in CY25 will comfortably exceed the 30%. In other words, the AI build is still just starting, and Nvidia will grow faster for longer,” Munster said.
Analysts, on average, expect Nvidia to report first-quarter non-GAAP earnings per share of $5.12, sharply higher than the 98 cents per share reported a year ago. The consensus calls for nearly 247% revenue growth to $22.58 billion.
Nvidia shares ended Monday’s session up 2.49% at $947.80, according to Benzinga Pro data. The stock has soared over 91% this year.
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