Nvidia Shares Will Be Rewarding Over The Long-Term, Says Gene Munster, Citing Strong Fundamentals

• Munster also noted that the company’s stock could be one where price remains rangebound despite fundamentals getting better. 
• For Q4, Nvidia reported a 73% year-on-year growth in revenue to $68.1 billion, much above analyst expectations, while forecasts also beat Street consensus. 
• Munster said that the market reaction could stem from a concern over Nvidia’s ability to sustain these results.

As shares of Nvidia Corp. (NVDA) have declined about 9% since reporting blowout fourth-quarter (Q4) results on Wednesday, Deepwater Management founder Gene Munster said he believes the shares will be rewarding in time.

In an article on his website posted on Friday, Munster said that the drop despite strong results is due to the disconnect that accelerating revenue growth is no longer the catalyst it once was for the company.

However, Munster also noted that the company’s stock could be one where price remains rangebound despite fundamentals getting better.

“Ultimately, I believe shares will be rewarded over time by these better-than-expected fundamentals, an outcome I believe remains firmly on the table,” he said.

For Q4, the world’s most valuable technology company reported a 73% year-on-year growth in revenue to $68.1 billion, much above analyst expectations. Nvidia’s outlook for the upcoming quarter also topped Wall Street projections, with the company forecasting revenues of $78 billion, plus or minus 2%, against a consensus of $71.64 billion.

The Catch-22

Munster noted that the market reaction could stem from a concern over Nvidia’s ability to sustain these results. “The focal point is shifting to next year and, more importantly, the 2027 setup,” he said, adding that Wall Street now expects growth of 31% for 2027 after its latest results.

“The center of the debate is whether those numbers are too low or still too uncertain for investors to underwrite with confidence today,” he added.

Munster said that he believes Nvidia will post growth closer to 50% in 2027, but the “Catch-22” will be that the anxiety will then shift to 2028 growth expectations, keeping the stock’s price rangebound.

The managing partner at Deepwater also flagged customer concentration as a risk that investors focused on.

On China

While Nvidia did not provide any clarity or update on its China operations, Munster said in the article that he believes “the market will likely discount China’s contribution given recent volatility in that revenue stream.”

“The bigger story remains demand outside of China,” he added.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around NVDA shares remained in the ‘extremely bullish’ territory over the past 24 hours amid ‘extremely high’ message volumes.

One user said that nothing had changed for Nvidia, except that it had turned out to be an even better company than the market expected.

Shares of NVDA have surged more than 47% in the past year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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