Nvidia’s earnings day could be awkward? Well-known analyst: Even if the results are strong, the market will be “nervous and uneasy.”
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Although the market generally expects NVIDIA to deliver another strong earnings report, the AI chip giant is facing a “dilemma”—no matter what the results are, they could trigger investor anxiety and market volatility.
Gene Munster, a well-known tech investor and Deepwater Asset Management analyst, warned in a report released this Wednesday that NVIDIA is in a tough position. He pointed out that an excessively strong earnings guidance could intensify concerns about over-investment in the AI sector, potentially putting pressure on the stock price.
However, if the guidance is only moderately raised, the market may interpret it as an early sign that growth is returning to normalization faster than expected, which could also lead to a negative reaction. Munster believes that this “damned if you do, damned if you don’t” scenario adds significant volatility risk to next week’s upcoming earnings report.
This tension reflects the complex mindset of investors amid the AI boom. While the long-term outlook is promising, concerns over short-term valuations and the pace of investment are mounting. NVIDIA’s stock fell 0.5% in pre-market trading to $186.86.
Wall Street’s Expectations Still Have Room for Upgrades
Despite the complex short-term market sentiment, Munster points out that Wall Street’s growth expectations for NVIDIA still have substantial upward potential. Jensen Huang revealed at an event that by the end of 2026, market demand for the company’s Blackwell and Rubin chip series could reach $500 billion.
Munster analyzes that this outlook suggests Wall Street’s current consensus forecasts have at least 10% upside potential. He said, “Currently, Wall Street’s forecast numbers have only been raised by 4%, which means there’s about 10% growth still left on the table.” Analysts remain cautious partly due to ongoing supply constraints and differences in forecast adjustment paces among institutions.
Still, Munster expects that as the market gradually digests NVIDIA’s expanding AI product line, analysts’ revenue growth forecasts for the company’s 2026 calendar year will rise from the current 39% to around 45%.
Investor Sentiment Cools, but Long-term Outlook Remains Optimistic
Munster acknowledges that investor sentiment has cooled recently. SoftBank Group exiting its NVIDIA position, and Meta warning that next year’s spending growth will outpace revenue growth, have both heightened concerns of over-investment in AI.
However, he emphasizes that the long-term opportunity remains bright. Munster continues to be bullish on NVIDIA stock and believes that over the next two years, its growth will “remain at a higher level for longer”:
“AI use cases, utility, and eventually business monetization models will emerge, because the scale of intelligence itself is extremely valuable.”
He added that as more profitable AI applications emerge, “the AI trade flywheel will accelerate,” boosting investor confidence and potentially driving up NVIDIA and other AI infrastructure stocks in the coming years.
Meanwhile, other analysts have also expressed confidence in NVIDIA. BofA analyst Vivek Arya reiterated his “Buy” rating for leading data center and semiconductor equipment stocks.
Arya specifically noted that NVIDIA’s strong visibility in its data center business makes its stock “particularly striking.” He stated that, based on NVIDIA’s current order backlog, the chip maker is expected to achieve 50% revenue growth and 70% EPS growth by 2026, while its forward P/E ratio is a relatively modest 24 times.
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