Five consecutive gains, one step away from a new high! NVIDIA is expected to break through the trading range
NVIDIA is expected to break through the trading range in the near future, mainly driven by several factors: the company has updated its investor presentation, Jensen Huang sent positive signals at the AI summit, and it is expected that Blackwell's production in the first quarter of next year will exceed the old chip Hopper. The market is optimistic about NVIDIA's future performance, especially with the CFO expressing confidence to investors, believing that Q1 Blackwell revenue will exceed Hopper
Previously, everyone assumed that NVIDIA (NV) entered a range trade, but the recent trend indicates a gradual breakthrough of the range. There are a few things happening:
- NV updated its Investor Presentation and added o1's so-called reasoning scaling law (seems to have some official certification).
From Monday to Wednesday, Jensen Huang at Morgan Stanley will be speaking with investors for three days. This is very important... Jensen Huang's usual words, you know, are nothing but "insane," "fabulous," "amazing," blablabla. After the presentation yesterday, a kind-hearted senior shared some notes with me. I won't go into specifics, but it's probably something like — very very bullish...
Recent changes in the supply chain, including the switch from B200A to B300A (which actually doesn't make much difference...), and the cancellation of NVL36*2 (which was already a "make-do" product). In essence, the annual iteration, the all-encompassing approach like GB200, is testing the limits of the supply chain and customer tolerance. With back and forth pushbacks, NV continuously modifying and adjusting its product line is not surprising. However, these are no longer the main contradictions affecting NV, they can be considered as supply chain noise. As long as mass production and delivery are seen, American investors will simply conclude — "ok, uncertainty has been eliminated." Moreover, the CFO himself told investors, " Q1 Blackwell revenue exceeds Hopper," which is a strong reassurance.
4. The core issue of NV's current pricing is whether 2026 will see an upsurge in growth. The anchor for range trading in the past period was an EPS of $5 for 25 years, with a PE ratio of 20x or 30x determining the upper and lower limits. The issue for 2026 not only determines whether a 30x PE ratio is feasible, but also determines the switch of the EPS anchor. I remember when I wrote about NV in November 23, the core debate was whether capex revenue for 25 years would continue to grow. After the debate was settled, the stock price doubled all the way up. I'm not sure if Jensen Huang will directly address this issue in the roadshow these days, or how he will respond, but at least from the leaked notes, investors seem quite positiveHowever, the author believes that if the issue of 26 years is only sealed by NV unilaterally, it is not convincing enough. For example, Microsoft currently only calibrates the yoy + growth of the 25 fiscal year, which means it only looks at before June 25th. How CSP's capex will be in H2 of 25 or even the full year of 26 is actually a step-by-step process. Just like, it is easy to imagine one thing, in the upcoming CSP third-quarter performance, ROI and Capex issues will be subject to more stringent scrutiny, think about the last quarter, everyone will only be more sensitive to the tone of capex.
Having said that, the market has the final say. If NV really hits a new high, it is because the market allows it to do so. The grand narrative phase is over, let's slowly calculate the details