Veteran analyst drops surprising twist on Nvidia stock post-earnings

Nvidia (NVDA) just posted another blowout quarterly report in Q2, silencing the bears once again.

Sales and earnings blew past expectations as it continues to fuel the AI boom with aplomb. Yet despite the stellar earnings print, the stock slipped after hours.

That raises the question: Why would Wall Street blink after one of the most impressive earnings calls of the year?

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That’s the puzzle a longtime tech investor unpacked in his post-earnings take on Nvidia stock. Veteran fund manager and analyst Gene Munster has been bullish on Nvidia for years, but his latest take offers a surprising twist on what’s really driving Mr. Market's reaction.

His latest read on Nvidia’s earnings fallout delivers perhaps one of the sharpest takes yet.

Gene Munster reframes a Wall Street “miss” as a whisper beat once China is stripped out

Image source: Justin Sullivan/Getty Images

Who is Gene Munster?

Gene Munster is one of Wall Street's most recognizable and respected tech voices, with decades of experience tracking sector heavyweights.

He’s the co-founder and managing partner at Deepwater Asset Management, a fund that boasts over $580 million in assets under management and advisory.

Before launching Deepwater, Munster spent over two decades at Piper Jaffray as a managing director and senior research analyst, covering the likes of Nvidia, Apple, Amazon, Google, and other tech giants.

His work earned recognition as Forbes' “Top Stock Picker” and The Wall Street Journal’s “Best on the Street.”

Also, these days he’s been more vocal than ever on X (formerly Twitter), weighing in on all things AI and the emerging tech trends that are rewriting the long game in investing.

Gene Munster feels Nvidia’s selloff misplaced

For Gene Munster, Nvidia’s quarter was more of a beat hiding in plain sight.

In a video posted on X shortly after the earnings report, he said the 2.7% drop in Nvidia stock’s after-hours seemed misplaced once the China factor is taken into account.

“I’m surprised that the stock is down a few percent,” Munster said, pointing to how Mr. Market framed expectations.

The October-quarter (Q3) “whisper” sat close to the $55 billion mark, while Nvidia’s formal guide was at $54 billion. On the surface, that looked light, so the market reacted the way it did.

However, Munster feels the Street’s numbers were padded with China H20 assumptions that didn’t quite materialize.

“We’re just going to assume that $2 billion in that whisper number was related to China,” he said.

On that adjusted basis, Nvidia actually beat by 2%. “They beat the higher imprint number by 2%… And that’s one of the reasons why I think that the stock should be up.”

He then switched gears to 2026, where CEO Jensen Huang talked up a massive $50 billion China opportunity and staggering growth far stronger than consensus.

Munster said:

“Jensen… thinks that they’re going to grow next year between 40% and 50%. As I mentioned, Wall Street’s at 29%.”

Munster reiterated that demand for Nvidia’s products remains as robust as ever and is still far from being satisfied.

He also pointed to the ongoing supply tightness as a chief reason for remaining constructive on the stock.

Nvidia slips after earnings beat, $60 billion buyback announcement

Nvidia's stock price dipped 2.7% in after-hours trading on Wednesday, despite breezing past analyst expectations across both lines in its Q2 earnings print. Also, it sweetened the deal further by unveiling a massive $60 billion buyback program.

Nvidia posted adjusted earnings of $1.05 per share on $46.74 billion in revenue, beating analyst estimates of $1.01 per share on $46.13 billion.

Zooming in on the particulars, data center sales surged 56% year-over-year to $41.1 billion, just shy of the $41.29 billion estimate.

Naturally, with no H20 sales to Chinese customers during the quarter, that was a given, though it benefited from a $180 million release of previously reserved H20 inventory.

Also, it included $650 million in unrestricted H20 sales to a customer outside of China.

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Gaming sales skyrocketed 49%, while professional visualization jumped 32%. Also, surprisingly, automotive sales posted the fastest growth, up 69% year-over-year to $586 million.

Jensen Huang sees trillion-dollar AI buildout, China upside

Nvidia CEO Jensen Huang just delivered a sweeping view of where Nvidia and the AI sector are headed. During the Q2 earnings call, Huang said that demand is only getting bigger, and Nvidia’s platforms are tailor-made to meet it.

On the compute side, Huang feels the shift to “long-thinking” or agentic AI is effectively rewriting the entire math.

Huang explained:

“Now the AI does research… It’s called long thinking… the amount of computation necessary… could be a 100 times, a thousand times.”

That’s exactly why Nvidia has built its Blackwell NVLink 72 system, a power-packed rack-scale computing system, to capitalize on this moment.

He framed the opportunity as historic. “We’re gonna scale into effectively a $3 to $4 trillion AI infrastructure opportunity,” he said, adding that “performance per watt drives directly to revenues.”

China also loomed large. Huang put the country’s AI market at a whopping $50 billion this year, potentially growing at 50% annually with licensing issues ironed out.

And the cadence isn’t slowing either.

“Blackwell is the next generation AI platform the world’s been waiting for,” Huang said. “This year is obviously a record breaking year. I expect next year to be a record breaking year.”