Nvidia Earnings: Messy Quarter, Okay Outlook, Says Bernstein Analyst

Nvidia's Upcoming Earnings Report

• 💡 Analyst Stacy Rasgon anticipates Nvidia's upcoming earnings report to be "messy" due to estimates not fully reflecting the impact of the China ban.
• ⚠️ Headline numbers might miss expectations, and gross margins could be affected by a charge, though the buy-side is reportedly aware of this.

Addressing China Bans and Supply Constraints

• 🎯 Rasgon suggests that a guide below consensus due to China-related issues wouldn't be overly problematic, as the buy-side is largely anticipating it.
• 🚀 The focus will be on Nvidia's outlook for the rest of the year and how they plan to work around China bans, with potential revenue recovery over coming quarters.
• 📈 Supply constraints for "black hole" (likely referring to specific hardware) seem to be easing, which could drive upside.

Medium-Term Outlook and AI Optimism

• 🧩 While China-related issues are seen as a "blip" and not structural in the medium term, the outlook for capex appears significantly better than three months ago.
• 🧠 Despite potential short-term messiness, the overall outlook is considered "okay", with expectations that investors will remain bullish on AI after hearing from Jensen Huang.

Investor Concerns and Stock Performance

• 📊 Key investor concerns include demand outside China, potential "deepseek overhang", and new Middle East partnerships, especially after Jensen Huang's visit with the President.
• 📈 The stock has seen a significant 40% rise since April 4th, creating a high bar for this earnings print, with expectations largely priced in.
• 💰 The option market suggests a potential move of plus or minus 6% after the earnings release, with a move up potentially hitting resistance around $145.

Trading Strategy and Future Demand

• 💬 Selling calls against part of a position is suggested as a trading strategy, given the stock's range-bound behavior.
• 🌍 Significant GPU demand is expected from Saudi Arabia (18,000 GPUs over 5 years) and the UAE, alongside increased spending from ChatGPT/OpenAI and hyperscalers.
• ✨ Jensen Huang is expected to delight investors on the conference call with successes in the Middle East, positioning 2025 as a potentially good year to invest in Nvidia.