Episode summary
Nvidia needs an outside CEO fast, says D.A. Davidson's Gil Luria
CNBC Fast Money
· · 5 min · Hosts: Seema Mody · Guests: Gil Luria
Summary
Gil Luria kept a Buy rating on Nvidia even after cutting his price target to $200 from $300, arguing that the company can still deliver the numbers needed for the stock to move higher next year. His base case is that Nvidia can hit next year’s targets even if sales into Asia are constrained, though he said that risk is real and could create more downside if the business misses expectations.
He said the market should now prefer other AI hardware names that can also benefit from data-center spending, especially AMD, Broadcom and Micron. In his view, those companies can participate in the same AI infrastructure build-out with lower or more reasonable valuations, making them a better way to express the trend than Nvidia right now.
Luria also called next week’s report a critical quarter and said Nvidia cannot afford to miss. Beyond the numbers, he said the company needs a clear and immediate plan to replace Jensen Huang with an external CEO, since any internal candidate could be tied up in a potential investigation. He singled out Johny Srouji of Apple as the cleanest candidate and said Nvidia should move fast to avoid a prolonged transition.
Key takeaways
- Gil Luria still has a Buy on Nvidia, but he cut his price target to $200 from $300 because the stock now carries more event risk.
- Luria said Nvidia can still reach next year’s numbers even if Asia sales are limited, though that is the main downside case he sees.
- He called AMD, Broadcom and Micron a better way to play AI data-center growth because they participate in the same trend at lower multiples.
- Luria said Nvidia’s next earnings report is crucial and that a miss would likely cause another sharp leg down.
- He argued Nvidia needs an external CEO immediately, and named Apple’s Johny Srouji as his preferred candidate.
Notable quotes
“THE PROBABILITY WEIGHT OF OUTCOMES IS STILL THAT THEY ARE ABLE TO DELIVER THE NUMBERS FOR NEXT YEAR, AT WHICH POINT THE STOCK WILL BE HIGHER”
“NVIDIA SHOULD STILL GO UP NEXT YEAR. THAT'S WHY WE KEPT THE BUY. BUT WE DEPRIORITIZED IT”
“THERE IS NO WAY THEY CAN MISS IF THEY MISS THERE'S ANOTHER BIG LEG DOWN”
“IT HAS TO BE SOMEBODY EXTERNAL YOU, AS YOU TALKED ABOUT IN THE PANEL, IF SOMETHING IF THERE WAS WRONGDOING, EVERYBODY INTERNALLY AT NVIDIA IS IMPLICATED”
“MY FAVORITE CANDIDATE, THE ONLY CANDIDATE THAT I THINK IS A CLEAN CANDIDACY. THAT'S JOHNY SROUJI FROM APPLE”
How the episode opens
It's a disaster. So I think we all should just take a collective bk and brian dnn dan, tim and I are fine and let's just get on with it. Back to you.
All right. Well let's get on with more on Nvidia and the fallout there. Da davidson head of tech research gill loria.
He just reiterated a buy rating on Nvidia, cut his price target to $200, down from 300. Gill great to see you. Good to see you.
So you're still telling people to buy this stock. What do you what do you see as the path forward here. I mean as jen-hsun huang heads up to the hill before thanksgiving, Nvidia is in the crosshairs of I don't know how many congressional committees at this point.
We don't know what kind of penalties the company might face for violations, potential violations of national security. We don't know if asia should be completely counted out of its model. What do you see?
The probability weight of outcomes is still that they are able to deliver the numbers for next year, at which point the stock will be higher. Even if there was wrongdoing. Even if they have to limit their sales to asia, they could probably still sell all the chips they were planning to sell next year and and get to those same numbers.
That doesn't mean this isn't a risk. As you've talked about, there could still be a lot of bad things that happened. And that's the primary risk, is that their sales into asia are more limited.
So Nvidia should still go up next year. That's why we kept the buy. But we deprioritized it.
AMD Broadcom and micron are probably a better way to play that same trend of growing ai demand.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nvidia ceo departure
- outside ceo need
- regulatory and national security pressure
- ai demand and data center buildout
- stock outlook and analyst buy rating
Companies and tickers mentioned
- NVDA
- AMD
- AVGO
- MU
- Nvidia
- D.A. Davidson
- Advanced Micro Devices
- Broadcom
- Micron Technology
Watch the episode
Watch “Nvidia needs an outside CEO fast, says D.A. Davidson's Gil Luria” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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