Nvidia Q4 Earnings Expectations

Nvidia is set to report its Q4 earnings, and investors are eagerly waiting to see how the company will perform. Gene Munster, managing partner of Deepwater Asset Management, joins 'Fast Money' to discuss what to expect from Nvidia's Q4 earnings.

Introduction to Nvidia's Q4 Earnings

Introduction to Nvidia's Q4 Earnings Nvidia's Q4 earnings are expected to be strong, with Wedbush predicting a $2 billion beat and a $2 billion raise. Gene Munster believes that Nvidia will deliver on these expectations, citing improved supplies over the last month to two months.

Expectations for Nvidia's Q4 Earnings

Expectations for Nvidia's Q4 Earnings Munster thinks that Nvidia will deliver on the expected $2 billion beat and raise, and that the company's gross margin number will be important. However, he believes that what's even more important is the demand for Nvidia's products, particularly the Blackwell chip.

Blackwell Chip Demand

Blackwell Chip Demand Munster suspects that Nvidia will say that they are four quarters out, essentially sold out of Blackwell, through all of 2020 calendar. He believes that this language will be a reassuring comment for AI investors.

Nvidia's Commentary on Demand

Nvidia's Commentary on Demand Munster thinks that Nvidia's commentary on demand will be important, particularly regarding the sub-supply demand equilibrium related to Blackwell. He expects that Nvidia will maintain that they are several quarters out, which will send a shock wave to investors.

Deep Seek and Nvidia

Deep Seek and Nvidia Munster believes that Deep Seek will be addressed by Nvidia, and that the company will reiterate their comments on hyperscalers and their spending. He thinks that the substance of Deep Seek is important, particularly regarding the expected increase in cap spend by hyperscalers.

Hyperscalers' Cap Spend

Hyperscalers' Cap Spend Munster notes that hyperscalers were expected to increase their cap spend by 20% in calendar 2025, but now it's expected to be just above 40%. He thinks that this is a meaningful move higher and will have a positive impact on Nvidia.

AI Hardware Trade

AI Hardware Trade Munster believes that the AI hardware trade will last longer than most investors expect, and that companies like Nvidia will have more upside throughout this year than currently anticipated.

Bullish on AI Trade

Bullish on AI Trade Munster is still bullish on the AI trade, citing the cost of AI inference going through the floor. He thinks that the cost of compute or the cost of inference declining will have a profound impact on the market.

Cost of AI Inference

Cost of AI Inference Munster notes that the cost of AI inference is expected to go down 10 to 12 times per year for the second-tier model, which will make it more attractive for developers to build AI applications.

Apple's Opportunity in AI

Munster believes that Apple is a beneficiary of the declining cost of AI inference, and that the company's shareholder meeting showed that they continue to believe in the AI opportunity. He thinks that Apple's intelligence will be a positive for the company, probably 6 months out, and that it's around the corner.

Conclusion

In conclusion, Gene Munster is bullish on Nvidia's Q4 earnings and believes that the company will deliver on expectations. He thinks that the demand for Nvidia's products, particularly the Blackwell chip, will be strong, and that the company's commentary on demand will be important. Munster also believes that the AI hardware trade will last longer than most investors expect, and that companies like Nvidia will have more upside throughout this year than currently anticipated. Additionally, he thinks that Apple is a beneficiary of the declining cost of AI inference and that the company's intelligence will be a positive for the company in the near future.