The video discusses Nvidia’s upcoming earnings, which are expected to be somewhat “messy” due to China sales disruptions and geopolitical uncertainties, but the overall outlook remains cautiously optimistic with potential supply chain improvements and strong AI demand. Experts predict limited stock movement around current resistance levels, though Nvidia’s strategic expansion and long-term growth prospects remain positive.
The video features a discussion with Bernstein’s Stacy Rasgon and CNBC contributor Brant, focusing on Nvidia’s upcoming earnings report. Rasgon predicts the quarter will be somewhat “messy” due to the current impact of China’s ban on certain sales, which has not yet been fully reflected in analyst estimates. She notes that gross margins might miss expectations because of this, but a guide below consensus wouldn’t be surprising or problematic, as the market is aware of these issues. The overall outlook, however, remains cautiously optimistic, depending largely on Nvidia’s future commentary about recovering revenue from China and how they navigate these geopolitical challenges.
Rasgon emphasizes that the recent supply constraints, particularly for Nvidia’s racks used in AI and data centers, are easing, which could boost revenue in the second half of the year. She views the China-related disruptions as temporary “blips” rather than structural long-term issues. Additionally, she highlights that Nvidia’s capital expenditure (CapEx) outlook has improved significantly over the past few months, with supply chain improvements supporting a stronger investment environment. Despite current uncertainties, she believes the company’s enthusiasm for AI and related technologies remains high, and Nvidia’s leadership is likely to maintain a bullish tone.
Brant raises concerns about broader investor issues, including demand outside of China and recent geopolitical developments, such as Nvidia’s partnerships in the Middle East. He notes that Jensen Huang, Nvidia’s CEO, recently met with Middle Eastern leaders, signaling strategic expansion. Brant suggests that while the stock has gained substantially since April, expectations are now largely priced in, especially given the stock’s recent range-bound performance. He warns that the market may be hesitant to push Nvidia to new highs due to existing overhangs, including geopolitical risks and demand uncertainties.
Regarding Nvidia’s stock performance, Brant explains that the current valuation reflects the market’s cautious stance. He predicts that the stock is unlikely to break through its recent resistance levels around $143-$145, given the overhangs and upcoming earnings. Traders might consider selling call options against their holdings to capitalize on the expected limited upside, as the options market indicates a potential move of plus or minus six dollars post-earnings. Despite these cautious views, he remains optimistic about Nvidia’s long-term prospects, especially with significant demand from Middle Eastern countries like Saudi Arabia and the UAE.
Finally, Brant anticipates that Nvidia’s upcoming conference call will be positive, with Jensen Huang likely to highlight successes in the Middle East and ongoing demand from hyperscalers and AI developers. He believes that Nvidia’s strategic positioning and recent partnerships will reassure investors and support future growth. Overall, while the upcoming earnings might be somewhat volatile and uncertain, both Rasgon and Brant see 2025 as a promising year for Nvidia, with strong demand and strategic expansion opportunities making it a good time to hold or add to positions in the company.