Nvidia Shares Plunge Despite Blowout Q4 Results

Nvidia shares have taken a hit following the company's blowout fourth-quarter results. The stock has declined around 9% since reporting revenue growth of 73% year-over-year to $68.1 billion, far exceeding analyst expectations.

Gene Munster, founder of Deepwater Management, believes that the drop in shares is due to a concern over Nvidia's ability to sustain these results. He notes that accelerating revenue growth is no longer the catalyst it once was for the company.

Munster also points out that the market reaction could be attributed to a shift in focus towards next year and, more importantly, the 2027 setup. Wall Street now expects growth of 31% for 2027 after Nvidia's latest results. However, Munster believes that the actual growth will be closer to 50%, which would then lead to anxiety over 2028 growth expectations.

The managing partner at Deepwater also flags customer concentration as a risk that investors should focus on. Additionally, while Nvidia did not provide any clarity or update on its China operations, Munster believes that the market will likely discount China's contribution given recent volatility in that revenue stream.