Nvidia could be 'ultimate winner of the AI race': Strategist

As Nvidia (NVDA) prepares to report its first-quarter earnings for the fiscal 2025 year, Hennion & Walsh CIO Kevin Mahn joins Market Domination to discuss expectations for the chip maker and how they may affect the market (^DJI,^GSPC, ^IXIC).

The chip company is expected to report earnings per share of about $5.22, which will be a 406% year-over-year increase. Mahn says he expects Nvidia to announce more data centers, a critical component of the AI ecosystem. He adds that there's a unique opportunity in energy companies, as data centers alone are estimated to consume about 10% of the country's electricity by 2030.

Mahn says that Nvidia "could be the ultimate winner of the AI race," as it promises 25 times less cost and less electricity use in its new Blackwell chips. "Nvidia is trying to go beyond just chips and offer the whole packaged AI solution, plus getting more CapEx spending in data centers. They're not stopping here and they're only going to continue to grow," he adds.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl

Video transcript

Yes, that's I. I was gonna go there, Kat.

I wanted your take a video on deck earnings after the bell tomorrow.

I, I wanna, you know, just kind of walk us through what you expect there.

And how important is this for the market?

It it's very important, I expectations are for earnings per share of about $5.22.

If that comes through, that represents a 406% year over year increase.

And I do believe that there's gonna be more talk by NVIDIA about building out their own data centres.

Data centres is often very forgotten.

Part of the A I ecosystem.

You mentioned ear in your earlier segment that tremendous electricity demand coming from data centres.

It's estimated by 2030 data centres alone will consume about 10% of our country's electricity.

That's tremendous, right?

But there's other companies that are stepping in to help address that very type of need.

A company like ver of which we like in the industrial sector.

What do they do?

They supply the electricity, the infrastructure and the cooling solutions to data centres.

How about a wrist and networks?

They supply the Ethernet switches that power and make data centres work efficiently.

There's so many other opportunities beyond NVIDIA out there, but everyone's focused on NVIDIA rightly So is it an or or an?

And it's an A.

It's clearly an and I don't think you abandon NVIDIA by any means.

They could be the ultimate winner of the air race.

But there's so many more opportunities and just a specific question to NVIDIA because there was a report today in the Financial Times that Amazon was sort of putting on pause its orders with NVIDIA.

Yeah, it's waiting for Blackwell to come out.

That's the next generation of NVIDIA chips.

And this has been a concern among some investors and analysts that because clients were saying, Well, we've got the hopper chip that's here.

We want the better one that's coming out later this year, so we're not gonna order any more Hopper.

We're gonna wait.

Is that a concern for an NVIDIA?

Is it gonna cost some hiccups?

Or does it provide for more back loaded positive earnings growth later in the year?

Blackwell is promising 25 times cost and 25 times less electricity usage.

That's powerful plus NVIDIA is trying to go go beyond just chips and offer the whole packaged A I solution plus getting more Capex spending in data centres.

They're not stopping here and they're gonna continue to grow.

And Blackwell is also gonna be more expensive, by the way, so, but it's also the it's made, though Kevin into this print is a headline wrapper.

I mean, it's up 90% already this year.

I mean, expectations are just red hot.

I mean, clearly it's setting up for a potential disappointment, but I don't see that disappointment coming.

I think they're gonna guide forward, looking ahead to projected Blackwell sales with the deliveries anticipated for the second half of this year.

And then once they start focusing now on data centre expenditures and growing in that market as well, I think it could move even higher.

Which is tough for me to say, because I'm a value oriented investor and they're trading at pretty rich multiples right now.

But if you factor in the earnings expectations, not too expensive.

Always Good to see you, Kevin.

Thanks for coming in.

Appreciate it.