As NVIDIA Corp NVDA prepares for its upcoming earnings report on Wednesday, Gene Munster, managing partner at Deepwater Asset Management, offers insights into the tech giant’s future. Despite potential short-term setbacks, Munster foresees sustained growth for Nvidia through 2026.
What Happened: Munster believes that despite Nvidia’s recent stock surge, the ongoing demand-supply imbalance and potential delays in Blackwell could negatively impact investor sentiment.
Munster anticipates a possible dip in Nvidia’s stock following the earnings report, citing the recent 30% surge and proximity to all-time highs.
“For investors who are just hyperfocused on every minute of what this company is doing, that could be viewed as slightly negative,” he stated in an interview with CNBC’s Squawk Box.
The key focus, according to Munster, will be CEO Jensen Huang‘s comments on the demand-supply imbalance. Previously, Huang suggested this imbalance would persist “well into next year.” Munster believes that if Nvidia’s next-generation Blackwell architecture faces delays, equilibrium might not be reached until mid-2025.
Munster’s growth projections for Nvidia are notably optimistic, he wrote on X, “I expect Nvidia to grow faster for longer than most investors believe. For CY25, the Street is looking for 39% growth. I believe it will be closer to 50%. For CY26 they’re expecting 17%, and I expect it be closer to 30%.”
While Munster advises caution regarding immediate stock performance, he emphasizes the company’s enduring potential saying, “There is a lot of noise around this quarter, but I believe the Blackwell piece is probably the most important X factor… I don’t think the stock action should be representative of the opportunity Nvidia presents over the next couple of years.”
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Why It Matters: The upcoming earnings report from Nvidia is highly anticipated by investors and analysts alike. Analysts expect another strong performance from the AI giant. For the second quarter of fiscal 2025, the average expectation is earnings of $0.64 per share and revenue of $28.68 billion, a significant increase from the previous year’s figures.
Market expert, Jim Cramer, predicts a potential $2 billion revenue boost in the reported quarter. This optimism is driven by Nvidia’s pivotal role in the AI sector, despite recent market volatility.
Market analyst Peter Boockvar emphasized that Nvidia’s earnings are more crucial to the market than Federal Reserve Chair Jerome Powell‘s commentary. This underscores the significant impact Nvidia’s performance has on market sentiment.
Lastly, Dan Ives from Wedbush Securities described the upcoming earnings call as a “drop the mic” moment for Nvidia. Investors are eagerly awaiting CEO Huang’s insights on future AI chip demand, which could shape the tech industry’s trajectory through 2025.
Price Action: Nvidia’s stock closed at $126.46 on Monday, down 2.25%. In after-hours trading, the stock edged up 0.095%. Year to date, NVDA has surged 162.53%, according to data from Benzinga Pro.
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Image Via Shutterstock
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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