Deepwater Asset Management’s Gene Munster was asked Tuesday morning if he would buy, sell or hold big tech stocks at current levels.
He emphatically recommended buying the Magnificent Seven, specifically highlighting Apple Inc AAPL and NVIDIA Corp NVDA as being positioned for significant upside over the coming years.
What To Know: Tuesday on CNBC’s “Squawk Box,” Munster argued mega-cap tech stocks are still in the beginning stages of a massive bull run being driven by AI.
“I am a buyer here. I continue to believe we’re in the first stage — this may be hard to wrap many heads around — first stage of a three- to five-year bull market,” Munster said.
Munster is bullish even in the near term as there are multiple upcoming catalysts that are likely to help push stocks higher in September, he said.
Munster expects anticipation over Tesla Inc’s TSLA upcoming autonomous vehicle event to start building this month. The analyst expects investors to begin changing how they view Nvidia and Munster also highlighted Apple’s upcoming event on Sept. 9 in which the company is expected to unveil new AI features for its smartphones and introduce the iPhone 16.
“I think when you put those three kind of cornerstone elements together, I think you are going to continue to see the tech trade move higher in the month of September,” Munster said.
Apple’s September event is the biggest of the last decade, according to Munster. He expects Apple’s new AI functionality to drive a huge upgrade cycle similar to what happened when the company introduced larger screens on the iPhone 6. That upgrade cycle should help push shares higher, he said.
“Ultimately I believe that this can go much higher. I think if you look at what happened [with the iPhone 5] a decade ago, it was up 12%. With the iPhone 6, it was up 52%, it just absolutely ripped,” Munster said.
If the new AI features are as strong as Munster believes they will be, he expects consumers to view them as “must-have.” If just 10% of iPhone users expected to upgrade in 2026 end up upgrading early in 2025 to gain access to the AI features, iPhone growth will climb to 15% next year versus Street estimates of 7%, the analyst explained.
“I think consumers, overwhelmingly, are going to embrace these features. It may take a few quarters, but I think you are going to see meaningful upside at Apple over that period,” he said.
Munster also believes Nvidia continues to be well positioned for the multi-year bull run given its continued dominance in the AI chip world. The Deepwater analyst told CNBC that the recent decline in shares appears to be a misunderstanding related to the company’s guidance.
Nvidia guided up by 2.5% for the October quarter, but raised guidance by 5% in the July quarter, which has created a narrative around deceleration, Munster said, adding what people are missing is that Blackwell delays account for about $3 billion.
If Blackwell wasn’t delayed, Nvidia would have guided up by 12% instead of 2.5%, he said.
“We think that it is still reasonably priced at 35 times [earnings] and can grow faster than what the Street thinks next year and in 2026. Ultimately, the risk for big companies not to invest in this is just too high and Nvidia is going to be a big beneficiary of that,” Munster said.
AAPL, NVDA Price Action: At publication time, Apple shares were down 2.59% at $223.06 and Nvidia shares were down 7.26% at $109.13, according to Benzinga Pro.
This illustration was generated using artificial intelligence via Midjourney.
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