NVIDIA Corp (NASDAQ:NVDA) is seeing its stock slide as investors look past 2026 and fixate on uncertainty surrounding 2027, according to Gene Munster.
Strong Earnings, Weak Stock Reaction
Munster noted that shares of the chip designer fell about 9% in the two sessions following earnings, compared with a roughly 2% decline in the Nasdaq Composite.
In a blog post, Munster argued that accelerating revenue is no longer the primary catalyst. Instead, investors are increasingly focused on what growth looks like in 2027.
Street estimates for 2027 call for about 31% growth, up from earlier projections.
“The debate is whether those numbers are too low or still too uncertain for investors to underwrite today,” Munster said.
AI Infrastructure Buildout Still ‘Early’
Data center sales now account for nearly 90% of revenue, with hyperscalers representing about half of the business.
While customer diversification is improving, concentration among a small group of large buyers remains a key risk.
Munster said the broader takeaway is clear: the AI infrastructure cycle is still in its early innings. Capital spending plans from major cloud players continue to rise, reinforcing the view that demand for advanced AI chips remains strong.
Still, even if fundamentals continue to exceed expectations, Munster cautioned that investor anxiety may simply shift further out, potentially keeping the stock rangebound despite strong execution.
He shared the blog post on X, writing, “Two days after strong $NVDA earnings, the stock continues to slide, which begs the question: Will fundamentals ever be enough?”
NVIDIA Guides Up To Roughly 79% Growth
NVIDIA reported revenue growth of about 73% in its January quarter and guided to roughly 79% growth at the high end for the April quarter, well above prior expectations.
The chipmaking giant posted record full-year revenue of $215.9 billion, marking a 65% increase from the prior year.
Following the blowout quarter, Goldman Sachs doubled down on Nvidia, saying the AI chip giant now has a “clearer path” to outperform in the coming months.
Price Action: On Friday, Nvidia shares were down 4.16%, closing at $177.19. In the past five days, the shares have been down 7.41%, according to Benzinga Pro.
NVDA ranks strongly on quality in Benzinga’s Edge Stock Rankings, showing a positive long-term price trend but a weaker trend across the short and medium-time frames.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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