Market after NVDA
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Morgan Stanley analyst Joseph Moore: "Largest, cleanest beat and raise in the history of the semis industry - surpassing the second best, which was NVIDIA 3 months ago. Numbers were at the high end of anyone’s expectations, based on our conversations, yet the stock reaction after hours was muted. We are surprised at that, though we have highlighted that the bigger debates holding the stock back are longer term in nature. We would continue to argue that the long term also looks pretty good, while conceding that the growth next year will still be somewhat capital markets driven."
Raymond James analyst Simon Leopold: "We are a little perplexed by the muted stock response. Demand remains robust and operational execution is impressive."
Stifel analyst Ruben Roy: "Our fundamental thesis is reinforced: compute has become the primary revenue-generating "factory" for the global economy, and NVDA’s one-year product cadence (Vera Rubin 2H delivery) provides a multi generational lead. We think GTC in March will offer longer-term outlook, likely more impactful to the stock."
BofA analyst Vivek Arya: "The muted stock reaction post-print is likely on continued market concerns around AI disruption (fatigue), greater upside from networking vs. compute in the reported quarter, and no additional update to the $500bn+ in CY25/26 data center sales. However, we view this as short term noise, and trading at just 24x/18x CY26/27E PE (or <0.5x PEG vs Mag-7 peers at 1.5x+), the stock presents a compelling valuation."
Barclays analyst Tom O’Malley: "More news likely to come from the recent Groq acquisition at GTC, which can potentially help break the stock free from the paralysis... This is the most interesting name in the group."
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@horace the short term noise and the upside (of AI) I agree seems to be there. A rising internet tide will raise all stock ships, or something like that. I think from a zoomed out view that the market is a bit frothy and may continue to be that way so as long as Trump has his thumb on the fed scale but eventually (who knows when... in 3-5 years maybe) there will be a need to release a lot of steam out of the market. I won't try and time it, but I think I may convert to much less risky portfolio options the higher the froth seems to go.
Separately, that discussion about affordability of having a family and the fact that boomers own so much of the real estate and stock market wealth, and that their natural conversion of 401ks back into cash may eventually put some downward pressure on the market... not sure how strong or valid any of that is, but I suppose it may help mute the froth.
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Here’s a concise summary:
Howard Marks (Co-Chairman of Oaktree Capital Management) issued a follow-up memo on AI, noting how rapidly the technology has advanced even in a few months. He observes that AI is increasingly moving toward autonomous systems where humans set objectives and guardrails, and the AI executes, reviews, and delivers finished work independently.
Marks believes AI is real, powerful, and likely capable of replacing substantial knowledge work. He suggests its long-term potential is more likely underestimated than overestimated. However, he cautions that this does not automatically mean AI-related investments are cheap or fairly priced.
He points out that soaring demand for AI capacity is already driving major revenue growth and validating the large capital expenditures by hyperscalers such as Microsoft, Alphabet, and Amazon. While these companies could turn out to be either overvalued or undervalued, Marks doubts they will ultimately be remembered as dramatically overpriced given their profitability.
His conclusion: since no one can definitively say whether this is a bubble, investors should avoid going “all-in” (risking ruin) or “all-out” (risking missing a major technological shift). Instead, he recommends a moderate, selective, and prudent allocation to AI.
