Nvidia Stock Slips Ahead Of Earnings: Gene Munster Explains Why Blackwell Chip Demand Commentary Is Important For Investors
By Stocktwits Inc | First Published Nov 20, 2024, 9:14 PM ISTWall Street currently models 50% growth for the calendar year 2025, likely moderating to 20% in 2026.
Nvidia Corp. ($NVDA) slipped early Wednesday, as retail is glued to whether the artificial intelligence stalwart will deliver another bumper quarter.
On Stocktwits, sentiment toward the stock has improved from ‘bullish’ (68/100) a day ago to ‘extremely bullish' (86/100), with message volume spurting to ‘extremely high’ levels.
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The stock was among the top five trending stocks on Stocktwits and the third most-active ticker.
Morgan Stanley’s Joseph Moore recently said the third quarter marks a ‘transitional’ period, unlikely impacting the stock very much. The views were echoed by Deepwater Asset Management’s Gene Munster.
In a post on X, the tech venture capitalist said, “Investors will grade $NVDA results largely on one comment from Jensen [Huang].”
The most important factor will be the management commentary on Blackwell demand for next year, he said.
Huang mentioned on the second-quarter earnings call that demand for Blackwell AI accelerators outweighs supply into next year. Munster said any changes to the timeline like “early next year” would be viewed negatively by the market. On the other hand, a “middle to late next year” timeline would be a positive, he added.
Explaining why Blackwell demand commentary is important, the Deepwater Asset Management Managing Partner said it will determine how long Nvidia’s growth will last.
Wall Street currently models 50% growth for the calendar year 2025, likely moderating to 20% in 2026, Munster noted. He, however, sees Nvidia growing at an above-consensus 30% pace in the calendar year 2026.
“The demand will be higher for longer because there are four phases of AI growth, of which we’re half way through the first phase, the hyperscalers; That will be followed by applications, industrial (AI tools to improve, productive in manufacturing, energy, transportation and logistics), and sovereign AI infrastructure,” he added.
Following Tuesday’s nearly 5% rally, Nvidia stock slipped early Wednesday. It was last seen trading down 2.33% at $143.58.
Analysts, on average, expect Nvidia to report third-quarter non-GAAP earnings per share of $0.75 and revenue of $33.15 billion, up $0.40 and $18.12 billion, respectively, a year ago.
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