Gary Black believes Nvidia Corporation's NVDA stock remains resilient despite production delays for its Blackwell chips and missing fourth-quarter whisper numbers.
What Happened: On Wednesday, Black, managing partner of The Future Fund, took to X, formerly Twitter, and said that Nvidia's Blackwell chips are ramping up a few months later than expected.
The company also missed fourth-quarter whisper numbers — which reflected higher investor expectations than official forecasts.
Despite this, Nvidia’s management assured that demand for its chips will exceed supply through 2025, indicating strong growth prospects.
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He also highlighted Nvidia CFO Colette Kress addressing concerns about gross margins, forecasting a start in the low 70% range during the first half of 2025, gradually increasing to mid-70% as Blackwell chip production stabilizes.
Nvidia's near-term hurdles, including delayed chip rollouts and margin pressures, are balanced by unprecedented demand in the AI and data center markets.
Black remains optimistic, stating that Nvidia's stock is likely to “shake off” the fourth-quarter whisper miss and reach new highs due to its dominant position in the semiconductor industry.
Why It’s Important: On Wednesday, Nvidia also reported third-quarter revenue of $35.1 billion, a 94% increase year-over-year, surpassing the Street consensus estimate of $33.12 billion, according to data from Benzinga Pro.
The Jensen Huang-led AI chip giant projected fourth-quarter revenue to be about $37.5 billion, with a margin of error of 2%.
The company also announced that production shipments for its Blackwell chips are set to start in the fourth quarter of 2025, with scaling expected to continue into fiscal 2026.
In September 2024, Beth Kindig, lead tech analyst at I/O Fund, predicted that Nvidia could achieve a $10 trillion valuation, with the Blackwell chips anticipated to drive the company to deliver “fireworks again” in 2025.
However, historically, December has been a difficult month for Nvidia investors. Seasonal trends indicate that the semiconductor leader frequently experiences a short-term bearish period after releasing its third-quarter earnings report.
Price Action: Nvidia shares fell 0.76% on Wednesday, closing at $145.89, and dropped an additional 2.53% in after-hours trading, reaching $142.20 at the time of writing.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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