NVIDIA Corporation

(NASDAQ Global Select)
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Bullish +55

These 2 Billionaires Like Nvidia (NVDA). Should You Buy the Dip Ahead of Earnings?

AI infrastructure Company update AI-generated analysis

πŸ“‰ Nvidia shares fell more than 3% on October 14 due to sector-wide worries about AI financing costs and rising Treasury yields.

πŸ’° The stock trades around $218 per share, down from record highs reached in early October.

πŸš€ Management expects revenue to grow approximately 70% in fiscal 2028.

🏭 Nvidia more than doubled its purchase commitments for memory and manufacturing capacity in one quarter to meet demand.

🀝 Customers continue to request more computing power than Nvidia can currently supply.

πŸ“ˆ Microsoft's Azure cloud grew 43% in the latest quarter, driving demand for Nvidia chips.

🏦 L1 Capital raised its Nvidia stake, counting it among its five largest holdings.

πŸ“Š The number of hedge funds holding Nvidia rose to 285 in the second quarter from 275.

⚠️ Nvidia owns about 10% of CoreWeave and agreed to buy unsold capacity through 2032.

πŸ”‹ Customer payment timing is a concern, with days sales outstanding rising to 60 in the second quarter.

🎯 Investors will watch for confirmation of the 70% growth outlook and Q4 gross margin guidance of 71-72%.

🧠 The Vera Rubin chip ramp is a key metric investors will monitor in the upcoming earnings report.

Bullish Signals
  • Nvidia ranks first among AI stocks held by billionaires Ken Fisher and Paul Tudor Jones, who maintained positions in the second quarter.
  • Management expects revenue to grow about 70% in fiscal 2028, driving a significant increase in memory and manufacturing capacity commitments.
  • Customer demand consistently outstrips supply, with major clients like Microsoft growing their AI spending significantly.
  • Hedge fund ownership increased to 285 funds in the second quarter, indicating growing institutional interest.
  • Nvidia beat analyst earnings estimates in its last report and investors are looking for another beat ahead of November earnings.
Risk Factors
  • The stock slipped more than 3% on October 14 as worries about 'AI debt' and rising Treasury yields hit chip stocks.
  • Nvidia faces risks from customers who finance AI builds with borrowed money, as seen when CoreWeave's bond yields climbed to 15%.
  • Nvidia agreed to provide credit support for an OpenAI data center project, exposing it to downside risk if AI spending slows.
  • Investors will watch closely whether gross margins dip to the 71% to 72% range guided for the fourth quarter.
Full Analysis
Nvidia (NVDA) shares slipped over 3% in mid-October amid broader AI sector concerns regarding 'AI debt' and rising Treasury yields, causing the stock to trade around $218, below its early October highs. Despite this dip, major investors including billionaires Ken Fisher and Paul Tudor Jones maintain bullish positions, with NVDA ranking first among their top AI holdings. The company remains a critical bottleneck for the AI industry, with management projecting revenue growth of approximately 70% in fiscal 2028. To support this expansion, Nvidia has significantly increased its commitments for memory and manufacturing capacity, noting that customer demand consistently outstrips available supply. Major cloud providers like Microsoft continue to rely heavily on Nvidia chips despite building their own alternatives. Investors are closely watching the upcoming November earnings report for confirmation of the 70% growth outlook and guidance for gross margins in the 71-72% range for the fourth quarter. While risks exist regarding customer financing costs and potential delays in new chip ramps like Vera Rubin, hedge fund ownership has increased to 285 funds in the second quarter, signaling continued institutional confidence.