NVIDIA Corp. (NASDAQ:NVDA) is having a good morning. Shares are up more than 7% in Thursday's premarket session, and it's not hard to see why. The company just reported quarterly results that beat expectations on both the top and bottom lines, and management is saying all the right things about AI demand. CEO Jensen Huang even used the phrase "at full steam" to describe the AI infrastructure buildout, which is about as bullish as it gets.
Let's get to the numbers. Second-quarter revenue came in at $96.22 billion, ahead of the $92.18 billion analysts were looking for. Adjusted EPS was $2.22, beating the $2.10 estimate. Gross margin checked in at a healthy 75.0%. And for the current quarter, NVIDIA is guiding revenue to a range of $105.84 billion to $110.16 billion. The company also said it ended the quarter with $99.0 billion remaining under its share repurchase authorization. That's a lot of firepower.
So the story is intact: NVIDIA remains the centerpiece of the AI investment thesis. But here's the thing about being the centerpiece: everyone is watching, and everyone has an opinion. Some analysts see nothing but blue sky. Others think the easy money has been made. Let's break down what the experts are saying.
Moorhead Says NVIDIA Remains The AI Bellwether
Patrick Moorhead, CEO and Chief Analyst at Moor Insights & Strategy, told CNBC that NVIDIA still serves as the bellwether for AI. His reasoning? Far more software companies use NVIDIA's GPUs than any competing platform. That's a pretty strong moat.
Moorhead acknowledged that NVIDIA delivered a four-way beat and 126% revenue growth, but he also noted that the company didn't quite hit some buy-side whisper expectations. Investors have gotten used to NVIDIA blowing past estimates by huge margins, so a merely great quarter doesn't move the needle the way it used to. It's a classic case of high expectations being a tough opponent.
He expects large hyperscalers and major AI model developers to eventually create their own chips, but he believes the rapidly expanding AI demand makes it difficult for rivals to take enough share to materially disrupt NVIDIA in the near term. In other words, the pie is growing so fast that even if competitors get a slice, NVIDIA's piece keeps getting bigger.
Moorhead also highlighted NVIDIA's ability to secure high-bandwidth memory ahead of its competitors, which is a critical advantage in the AI chip world. And he pointed to robotics and industrial IoT as longer-term AI growth opportunities that could keep the engine running for years.
Meeks Sees No Meaningful Slowdown Before 2028
Paul Meeks, Head of Technology Research at Freedom Capital Markets, is even more bullish. He told CNBC he remains very bullish on NVIDIA and the broader AI ecosystem, and he doesn't expect a meaningful slowdown until 2028 or later. That's a bold statement, but Meeks has the data to back it up.
He said NVIDIA's results and guidance continue to counter concerns that massive GPU and AI infrastructure investments will fail to generate adequate returns. The fear has been that companies are spending billions on AI without a clear path to profitability. NVIDIA's numbers suggest the spending is translating into real revenue, which is a good sign for the entire sector.
Meeks also made a compelling valuation argument. He noted that NVIDIA trades at roughly 16 to 17 times earnings, which is below the broader S&P 500 multiple and about half of AMD's multiple. For a company growing at this pace, that's a pretty attractive price tag.
He believes stronger evidence that companies can monetize AI investments could unlock further upside. And he sees lower counterparty risk in NVIDIA's financing arrangements because financially strong hyperscalers have driven roughly 90% of AI infrastructure spending to date. When your customers are the biggest, richest companies in the world, the risk of non-payment is pretty low.
Hickey Says NVIDIA's Stock Hypergrowth May Be Over
Not everyone is singing from the same hymn sheet. Paul Hickey, co-founder of Bespoke Investment Group, takes a more measured view of NVIDIA's stock prospects.
Hickey told CNBC that NVIDIA's enormous size ensures it will remain important to the broader market, but heavy investor attention makes it increasingly difficult for the company to deliver surprises capable of driving outsized share-price gains. When everyone already owns the stock and expects great things, there's less room for positive surprises.
He also noted an interesting technical detail: NVIDIA showed essentially zero correlation with the SOXX semiconductor ETF over the previous three months, even as the stock continued to outperform weaker semiconductor shares. That's a sign that NVIDIA is trading on its own fundamentals, not just riding the sector wave.
Hickey believes NVIDIA's period of hypergrowth in its stock price is likely behind it. But he's not bearish on the broader market. He considers the current market an AI bull market, and he said AI stocks eventually need to regain leadership for that bull market to continue. So even the cautious guy thinks AI is the story, he just thinks NVIDIA's stock might not be the best way to play it going forward.
Top ETF Exposure
For ETF investors, NVIDIA's weight in certain funds is worth watching. Here are a few funds with significant NVIDIA exposure:
- Sapient Quality Select ETF (NASDAQ:SQS): 9.60% Weight
- Franklin Focused Dynamic Growth ETF (NASDAQ:FFOG): 9.73% Weight
- First Trust Innovation Leaders ETF (NYSE:ILDR): 9.79% Weight
Significance: Because NVDA carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock. So if you're watching NVDA, keep an eye on these funds too.
Price Action
NVDA Stock Price Activity: NVIDIA shares were up 7.41% at $225.19 during premarket trading on Thursday, according to market data.
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