Gene Munster, managing partner at Deepwater Asset Management, shared insights on NVIDIA Corp. NVDA earnings and artificial intelligence potential on X. “The bears will say $NVDA earnings were good but not great,” he wrote on Wednesday.
What Happened: According to Munster, bears believe Nvidia’s earnings were satisfactory but not outstanding. In contrast, bulls argue that the company’s favorable July and October guidance is less significant because AI’s long-term potential will surpass the internet.
Munster noted that Nvidia’s stock experienced a 9% decline, combining a 7% drop in after-hours trading and a 2% dip during the day. He attributed this to the market “blowing off some steam” and expressed confidence in the stock’s upward trajectory over the next week. “I continue to believe that this stock will treat higher over the next week,” he said.
He also discussed two key pressure points: the Blackwell topic and the timing of supply-demand equilibrium. Munster suggested that Blackwell’s ramp-up has been delayed by 2-3 months, impacting October quarter revenue projections. He emphasized that AI’s transformative potential could drive Nvidia’s growth well into 2026.
Why It Matters On Wednesday, Nvidia reported its second-quarter earnings, revealing that its revenue and earnings more than doubled from a year ago. The company also issued above-consensus third-quarter revenue guidance and announced a $50 billion stock repurchase authorization.
Jim Cramer, host of CNBC's "Mad Money," commented on Nvidia’s earnings, noting that the steep drop in Nvidia’s stock price occurred despite the company’s revenue more than doubling. Cramer criticized those who abandoned the stock, suggesting they never understood the company.
Prior to the earnings report, Munster had already anticipated a potential dip in Nvidia’s stock, citing the recent surge and proximity to all-time highs. He also highlighted the ongoing demand-supply imbalance and potential delays in Blackwell as factors that could negatively impact investor sentiment.
Price Action: In after-hours trading, Nvidia fell 6.89% to $116.95. During the regular trading session, the stock was down 2.10%. Year to date, NVDA has seen a remarkable gain of 160.76%, according to data from Benzinga Pro.
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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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