Gene Munster of Deepwater Asset Management has indicated that investors might be underestimating the long-term growth potential of NVIDIA Corp. as it approaches its upcoming earnings report.
In a recent post on X, Munster stated that he anticipates NVIDIA's revenue guidance for calendar year 2026 will exceed expectations, but he emphasized that the more pressing question is what 2027 holds for the company.
He commented, "My take: Growth in CY27 will be closer to 40% compared to the Street's estimate of 28%." He elaborated that Wall Street currently forecasts around 55% revenue growth for 2026 for NVIDIA, an increase from previous forecasts of about 50%. Munster also suggested that the commentary from CEO Jensen Huang hints that growth could exceed 65%.
Two key factors driving this optimism are the clearer real-world applications of AI and a significant increase in capital expenditures from major players such as Amazon.com Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG, GOOGL).
Despite market skepticism regarding the returns on this spending, Munster believes it reflects strong conviction from those closest to the AI opportunity.
Looking beyond 2027, Munster pointed out that discussions are evolving around inference demand, exposure to China, and emerging applications of 'physical AI,' which include robotics and autonomous systems. He argued that the demand for inference could surpass training over time, establishing a sustained cycle of demand for NVIDIA's GPUs.
Regarding China, Munster noted that current market expectations do not account for potential upside, indicating there could be surprises ahead.
NVIDIA is set to report its earnings on February 25, 2026. The chipmaker’s quarterly results have garnered significant attention in recent years. In its last announcement in November, NVIDIA reported a third-quarter revenue of $57 billion, a 62% increase year-over-year, surpassing Wall Street's consensus estimate of $54.88 billion according to data from Benzinga Pro.
As NVIDIA continues to show a robust price trend, it also carries a weak value rating according to additional metrics from Benzinga's Edge Stock Rankings. For more details, you can check Inside Ticker for insights on NVIDIA and other stocks.