Shares of Nvidia (NVDA) are down nearly 8% today in Tuesday’s trading session after investors were disappointed by the chip giant’s earnings, despite posting a beat on both the top and bottom lines. Bernstein senior analyst Stacy Rasgon joins Catalysts to discuss the negative reaction and catalysts ahead for the company that will continue its growth.
“The print was actually very good. It was fine. The issue that people had on it was not so much the revenues, it was the gross margins. They’re guiding gross margins down a little bit into the end of the year. I don’t actually think they’re guiding them down that much. It’s just mixed as they have some of their newer products ramp, and because it’s early in those ramps, they have not yet optimized the cost structure,” Rasgon explains.
He notes that the bigger story is Nvidia’s Blackwell chips, which could drive the company’s growth throughout the next year: “It does seem very plausible that product cycle, once it starts going, could actually potentially drive another major reflection that is going to be what probably drives the stock like into year end.” He argues that once the Blackwell chips hit the market, the ramp moving forward will likely be “solid,” and the stock will grow alongside it.
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This post was written by Melanie Riehl
Source Agencies
