Gene Munster from Deepwater Asset Management discussed NVIDIA’s upcoming earnings report, expressing concerns about potential revenue impacts due to delays in their Blackwell technology, while emphasizing the long-term growth potential of AI that may be overlooked by the market. He believes that despite possible short-term setbacks, the tech sector, particularly companies involved in AI, will continue to thrive and evolve, with significant opportunities ahead.
In a recent discussion, Gene Munster from Deepwater Asset Management shared insights on the upcoming earnings report from NVIDIA, which is highly anticipated by investors following a market sell-off in August. Munster highlighted concerns regarding NVIDIA’s Blackwell delay, which he believes could lead to modest revenue expectations for the company in the upcoming quarter. He noted that the stock has seen a significant increase of 30% in the last three weeks, nearing its all-time highs, and suggested that any negative news related to Blackwell could result in a slight decline in the stock price.
Despite the potential for a short-term pullback, Munster emphasized that this should not overshadow NVIDIA’s long-term prospects. He believes that the current market focus on immediate earnings results may distract investors from recognizing the substantial opportunities presented by artificial intelligence (AI) over the next few years. Munster is optimistic about a tech bull market driven by AI, suggesting that many major tech companies will thrive as the technology continues to evolve.
The conversation also touched on the broader implications for the tech sector, particularly if NVIDIA’s earnings do not meet expectations. Munster warned that a negative reaction to NVIDIA’s report could have a ripple effect on other large tech companies that have benefited from the AI trend. He reiterated that while the immediate market reaction may be challenging, the long-term outlook for these companies remains strong as AI continues to gain traction.
Munster further discussed the current state of the market, noting that while there has been a shift in investor sentiment towards positive earnings growth in the broader market, the tech sector, particularly stocks in the NASDAQ 100, has experienced significant outperformance. He believes that this trend may persist, but he also cautioned that the tech sector is still in the early stages of a potential bubble fueled by AI advancements.
Finally, Munster addressed the differences between public and private markets regarding AI investments. He pointed out that the public market is currently focused on hardware, while the software phase of AI development is still largely taking place in private markets. He expressed confidence in the growth potential of hardware companies like NVIDIA and Micron, suggesting that despite some deceleration in growth rates, the market may exceed current estimates, leading to further opportunities in the AI space.