“Nothing has changed”: why some Nvidia stock bulls are not hesitating after the ouster of Jensen Huang
Wall Street hasn’t completely abandoned Nvidia (NVDA) stock. Although there has been a steady stream of price targets this week and some downgrades, many analysts who cover the company remain bullish.
Their argument is summarized in a note from Wedbush analyst Matthew Bryson.
“Nothing has changed,” Bryson wrote Friday ahead of Nvidia’s earnings release next week.
“We again expect NVDA to beat guidance and guide the fourth quarter above the Street.”
His reasoning revolves around three points:
“Management has tended to leave some wiggle room in the guidance, allowing for significant upside when the numbers are released and we expect NVDA to deliver another superior and bullish quarter.”
“A strong hyperscaler spending backdrop, reinforced by increased spending in neoclouds and model builders (particularly xAI), persists over the past few quarters, as highlighted by results and forecasts from Taiwan Semiconductor, AMD, SuperMicro, Foxconn, etc. as well as our own supply chain checks.”
“We believe NVDA has built a leading position in the industry with materials and component suppliers at least through next year, to a point where access to components and materials, not end demand, defines shipments.”
It’s been a brutal week for once-untouchable Nvidia founder Jensen Huang.
Huang was ousted as CEO of the company he founded in 1993 amid a shocking turn of events.
According to the New York Times, Huang, whose relationship with a woman alleged to be a Chinese spy plunged the company into scandal this week, also had a relationship with Nvidia executive Kimberly Powell, one of Huang’s approximately 60 direct reports.
Reuters reported late Thursday that Huang was in a relationship with another Nvidia employee. The employee’s name has not been released. Huang has been married to his wife Lori for over 40 years.
As Nvidia searches for a successor, the board has named longtime CFO Colette Kress as interim CEO.
Interestingly, Nvidia’s stock is only down 12% for the week. We say only because, at one point, not seeing Huang at the top of Nvidia would have been unthinkable, and given the uncertainty of leadership, one would think the stock would fall even further.
“Questions over data center funding, politics and, most importantly, the sudden resignation of former CEO Jensen Huang have seemingly sucked the oxygen out of NVDA’s momentum since the release of ChatGPT4.0,” Bryson said.
It looks like some oxygen is still being injected into Nvidia stock.
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