Key insights
- Analyst suggests Nvidia's long-term AI demand remains strong, citing a significant increase in order forecasts for Blackwell and Rubin chips. The market needs confirmation that the economy can support this level of spending. Positive catalysts include hyperscaler plans for next year and Nvidia beating earnings expectations, potentially leading to substantial revenue and EPS growth. This could support a higher stock valuation.
New Street Research technology infrastructure analyst Antoine Chkaiban joins Market Domination Anchor Josh Lipton to explain why Nvidia's (NVDA) long-term AI demand remains strong despite recent stock weakness, alongside what investors need to see before buying the dip.
If you look back in October, you know, at uh in Washington, uh Jensen, you know, talked about $500 billion um of uh Blackwell and Rubin orders until the end of 26.
And uh two weeks ago, that number increased to 1 trillion. And that goes of course until the end of 27 now.
If you do the math, you know, like that's an incremental $500 billion of bookings in just four months now. So it's like a 1.3 trillion dollars of uh run rate and bookings these days that Nvidia, you know, is is adding from its customers.
And so that's that's just facts, you know, like there is no there's no way you know, to negotiate here and so what what I think, you know, is happening right now is that the markets, you know, need to wait and see because these numbers are so large that at this point, you know, you you you need to build the conviction, uh not just based on what Jensen is saying, but based, you know, on how much the economy can afford that this money is actually going to get spent.
That's really what's going to be the catalyst. And I think, you know, we're we're going to probably going to going to get more visibility from the hyper scalers, um on, you know, what their plans are for next year, the same way, you know, we got visibility on what their plans were for this year, uh early in 2025.
That's probably going to help and of course, just seeing, you know, an Nvidia beating and raising, because this this kind of run rate that gets us to uh from a revenue standpoint to an Nvidia generating, you know, close to like a trillion dollars of revenues exiting next year.
So that's like 20 25 bucks of EPS maybe. And so that's that's definitely not sustainable to have a stock trading in below 200 uh on that kind of earnings. I think just Nvidia beating and raising is also going to be a catalyst.