Why Nvidia tanked after Jensen’s speech
The sharp drop in Nvidia’s shares yesterday, despite CEO Jensen Huang’s big CES speech on Monday night, has a pretty simple explanation, according to Morgan Stanley’s chip-stock analysts.
Huang didn’t have a ton to say about Nvidia’s all-important business of selling chips for AI data centers. Investors are especially interested in updates on sales of the new Blackwell GPUs aimed at the data-center market, which is supposed to offer a performance boost over the company’s previous Hopper generation of GPUs.
Morgan Stanley analysts wrote:
“What ultimately makes or breaks the investment thesis at this stage is still the trajectory of the datacenter business, where management is clearly still excited about the Blackwell ramp but nothing we have not heard coming into the event. It’s our sense that Hopper is a little slow but Blackwell supply is ahead of expectations overall, so while we have a couple of transitional quarters (similar to the last two, good but unspectacular), we would stay the course.”
At any rate this might be water under the bridge, with Nvidia trading sideways through 2:00 p.m. ET on Wednesday.
“What ultimately makes or breaks the investment thesis at this stage is still the trajectory of the datacenter business, where management is clearly still excited about the Blackwell ramp but nothing we have not heard coming into the event. It’s our sense that Hopper is a little slow but Blackwell supply is ahead of expectations overall, so while we have a couple of transitional quarters (similar to the last two, good but unspectacular), we would stay the course.”
At any rate this might be water under the bridge, with Nvidia trading sideways through 2:00 p.m. ET on Wednesday.
