Will NVIDIA Earnings TURN AROUND Tesla and the Stock Market?
Overall Thesis
Bhakdi expects NVIDIA earnings tonight to be outstanding and thinks the recent market selloff has been phony, driven by irrational bubble fears rather than fundamentals. Demand for NVIDIA chips is 12:1 vs supply, capex from best-in-class operators is rational, and a year-end rally should kick off after the Dec 9 Fed decision. He sees the selloff ending with either a violent flush or NVIDIA-driven stabilization, with macro tailwinds supporting the bullish view.
Narratives
NVIDIA will deliver outstanding earnings with demand-to-supply ratio of 12:1, half a trillion in orders over two years, and strategic investments flowing out to OpenAI, Anthropic, Intel, Nokia, and xAI. Bhakdi believes current 2026 sales forecast of 286 billion will be exceeded and there are no competitors that can threaten NVIDIA anytime soon. The market's bubble narrative is irrational and NVIDIA is the eye of the AI storm.
Key Arguments
- Demand to supply for NVIDIA chips is 12:1 - zero dark fiber, every GPU sold utilized at 100%
- Half a trillion in orders for 2025 and 2026 combined per CEO Jensen Huang
- 2026 sales forecast of 286 billion will likely be exceeded, hitting 300 billion or more
- Strategic investments: 10 billion in OpenAI, 10 billion in Anthropic, 5 billion in Intel, 1 billion in Nokia
- Best-in-class operators (Nadella, Musk, Zuckerberg, Altman) doing AI capex have more sophisticated guidelines than institutional fund managers calling it a bubble
Tesla is part of the AI trade and Bhakdi is positioning cautiously bullish into NVIDIA earnings and the Dec 9 Fed decision. The selloff looks exhausted with fear gauge at 13, VIX around 23, and Tesla trading up pre-NVIDIA earnings. Macro tailwinds from liquidity, Fed rate cuts, and AI buildout favor Tesla.
Key Arguments
- Tesla is up pre-NVIDIA earnings indicating positive sentiment
- Strategically we are in an enormous transformative AI buildout phase that is bullish
- Dec 9 Fed decision will likely cut rates given unemployment shambles and declining shelter costs
- Positioning cautiously bullish without margin