Nvidia Must Deliver A Blowout To Reassure Investors That AI Trade Is Still Young, Expert Says Ahead Of NVDA's Q4 Results

• Mahoney added that investors are going to brace themselves, while citing the post-earnings selloff in equities despite strong results.
• He said that even if Nvidia’s Q4 results beat Wall Street expectations, investors will still ask what’s next for the company.
• Analysts at Aletheia Capital upgraded the NVDA stock to ‘Buy’ from ‘Hold’ on Monday, saying that the company, along with TPU firms, is expected to capture a lion’s share of the $530 billion in compute capital expenditure.

Nvidia Corp.’s (NVDA) fourth-quarter (Q4) earnings are due out on Wednesday, and ahead of the results, Ken Mahoney, president and CEO of Mahoney Asset Management, said that investors need reassurance about the AI trade’s prospects.

During an interview with Schwab Network, Mahoney pointed to tech stocks like Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN) struggling after reporting their latest quarterly results.

“They’re the epicenter of AI, maybe they can kinda fill us in [as to] what’s happening,” Mahoney said, referring to Nvidia.

Nvidia shares were down 0.1% in Monday’s pre-market trade. Retail sentiment on Stocktwits around the company trended in the ‘bearish’ territory at the time of writing.

What Nvidia Needs To Deliver This Quarter 

Wall Street is expecting Nvidia to report earnings per share (EPS) of $1.53 in Q4, soaring by 80% year-on-year compared to $0.8 during the same period a year ago, according to Stocktwits data. The AI giant is expected to report revenue of $65.97 billion, from $39.33 billion in the year-ago period, growing by about 68% YoY.

“It’s not about beating and guiding higher — I think all those companies did that, all Mag 7 did that, I think, except for Tesla — it’s the reaction to it,” Mahoney said, while referring to the muted market reaction to Mag 7 stocks post earnings.

“Even if Nvidia blows out the numbers, investors are still kinda gonna go like, ‘Okay, what’s gonna happen next?’” he said, while noting that even Palantir Technologies Inc. (PLTR) lost its post-earnings gains in a few sessions.

Mahoney added that investors are going to brace themselves, while citing the post-earnings selloff in equities despite strong results.

“They (Nvidia) really need to blow it out as far as the topline [is concerned]. They really need to blow it out as far as the net [profit is concerned]. And they kind of need to come around and let us feel reassured that the AI trade is still in its early innings,” he added.

Nvidia Expected To Capture Lion’s Share Of $530 Billion Compute Capex

Ahead of Nvidia’s Q4 earnings, analysts at Aletheia Capital upgraded the NVDA stock to ‘Buy’ from ‘Hold’ with a price target of $250, according to TheFly. This implies an upside of nearly 32% from Friday’s closing price.

The firm’s analysts expect Nvidia and Tensor Processing Unit (TPU) supply chain participants to capture a lion’s share of the $530 billion in compute capital expenditure.

Explaining its rationale for upgrading Nvidia, Aletheia Capital said the inventory hike on the company’s balance sheet could normalize from Q4 FY2026, supported by robust module build and the anticipated improvement in rack shipments.

“Against this backdrop, we forecast NVDA’s data center revenue to reach $475 billion in fiscal 3Q26 through fiscal 4Q27E, closely aligned with NVDA’s $500 billion guidance,” the firm said in its latest note.

It expects Nvidia to beat both Q4 expectations and first-quarter (Q1) guidance.

The Barometer For A Multi-Year AI Megatrend

I/O Fund’s Beth Kindig stated in a recent note that, based on Taiwan Semiconductor Manufacturing Co.’s (TSM) latest results, there is a multi-year AI megatrend.

“When the world’s most advanced foundry raises its long-term AI growth forecasts, commits more than $50 billion annually to capacity, and openly states that hyperscalers are coming directly to secure wafers years in advance, it provides a level of visibility that few companies in the AI ecosystem can match,” Kindig said.

The analyst said that TSMC’s material capex expansion through 2026 points to confidence that extends well beyond the next product cycle and into the latter half of the decade.

NVDA stock is up 2% year-to-date and 35% over the past 12 months.

Also See: Why Is NVO Stock Falling Pre-Market Today?

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