Here’s what to watch when Nvidia reports earnings after the closing bell on February 26.
Transcript:
CONWAY GITTENS: What about NVIDIA? That company doesn’t report until February 26th, late February. So what will you be looking or listening for when that company talks?
CHRIS VERSACE: Well, let’s talk about what we’ve gotten thus far, because there’s been a number of supporting data points for NVIDIA, whether it’s most recently Taiwan Semiconductor talking about their March quarter results. If you parse the numbers versus year over year, up significantly. Hon Hai, which is a big partner for NVIDIA in AI servers, up strong. So those are positives.
But even more recently, Supermicro with their outlook for their AI related business/ Very strong. And that in particular tells us that we’re starting to see the logjam break inside of NVIDIA, if you will, for Blackwell. That’s their next generation chipset. That’s the one that everybody is focused in on. And to the extent that Supermicro’s business kind of follows the path of stronger second half revenue compared to the first half of 2025, that’s a nice leading indicator for what we should hear from NVIDIA in a couple of weeks.
But again, we’ll continue to follow the data points, including those big tech spending numbers. But there too, very positive for what NVIDIA should have to say in the coming weeks. But to be specific with your question, Conway, what are we going to want to hear from NVIDIA? How is the transition to Blackwell going? How does that factor into your revenue forecast for the back half of the year? When does the capacity constraints that you’ve talked about, when do they really fall to the wayside? So that’s what we’ll be listening for.
CONWAY GITTENS: And so how bullish are you on NVIDIA as a stock? It’s still expected to post revenue growth north of 50% this year. And thanks to that haircut it got around January 27th, it’s trading in the high 20s times its forward earnings. So how do you feel about the stock?
CHRIS VERSACE: Well look, we’ve got a 175 price target. Right now it’s kind of bouncing around between 130, 135. So we certainly see enough upside to keep it a one rated stock. And that’s where we think that we’re going to keep it. I wouldn’t be surprised if as capacity constraints fall by the wayside, that we see revenue expectations for the second half of the year strengthen.
Remember too that with big tech capacity constrained, a lot of the dollars that they’re going to go forward in spending for this quarter, the second quarter, even the third quarter, that’s really laying the groundwork for what’s to come. So I wouldn’t be surprised if we see a nice revenue ramp inside of NVIDIA over the ensuing quarters.
CONWAY GITTENS: So nice revenue ramp. Valuations are a bonus. The stock is down 20% from its all time high. So do you gobble up more or do you wait and see?
CHRIS VERSACE: So we actually have a pretty sizable position in the portfolio. And you have to remember that just given where we are, kind of in the landscape of the market having to reassess the timing of Fed rate cuts, especially coming after that hotter than expected January CPI report, but also too the potential tariffs that said that once we get some February inflation data, it’s likely to show that, boy, inflation is not likely to get back on path to the Fed’s 2% target near term.
And on top of that, Conway, we’re still waiting to hear about reciprocal tariffs from Trump. There’s a lot of potential headwinds in the marketplace. And at the same time, the technical setup for the market, well, is it overbought? No. Is it oversold? No. We’re kind of right there in the middle. So I think we’re going to have to bide our time, let some of these factors wash through the market, including the potential for reciprocal tariffs to Trump’s reciprocal tariffs. So there’s a lot of moving pieces. We’re going to want a little more clarity before we make any moves with NVIDIA or really any other positions in the portfolio right now.
Subscribe |
Earn. Live. Invest. |
TheStreet Pro |
#nvidia #earnings #nvidiastock
source
