Companies

I believe we're still in the second inning of AI, and shares of NVDA will underperform the broader silicon trade over the next six months. Nvidia reports on May 20th, and expectations began to get amped up two months ago at the March GTC event, where Jensen projected the company would see at least $1T in cumulative data center revenue through CY27, which implies about 40% growth, vs. the Street currently at 32%. Since those March comments, NVDA is up 18%, vs. AMD up 129% and INTC up 183%. The issue is that investors know the April quarter will be strong and that numbers for CY26 will likely increase by 10%, but they struggle with the the law of large numbers resulting in slowing growth next year and the risk of custom silicon. Unfortunately for NVDA, the company likely won't be able to ease those fears on the April call.

Apple delivered a solid March quarter and guided June revenue 7% above expectations. The stock reaction, up 4%, was muted relative to the guide, which reflects a concern that the June quarter is the last quarter of the latest iPhone supercycle. The good news is the Street is already reflecting a slowdown in iPhone in FY27 to 6% growth from an average of 20% from Sep-25 through June-26. The bigger question is, can Apple Intelligence, starting in the form of a new Siri, which rolls out later this year, break the iPhone supercycle narrative and drive incremental revenue starting next year? I believe the answer is it can. If successful, that will likely rerate AAPL's multiple.

Meta’s March quarter rhymed with results over the past year in that they have shown that AI is already having a meaningful impact on growth. March revenue was up 33% y/y, compared to March of 2025, which was up 16%. It's clear that Meta and Google are the two best examples of AI's impact on a business at scale. Despite all of the positives around AI driving higher growth, shares of META traded down 7% on capex guidance that was 7% higher than what they projected three months ago. That translates to CY26 capex likely being up 93% y/y. While the current view is to be negative on more capex for companies that don't have a cloud business, I believe over time investors will change their view and will reward Meta for their infrastructure investments, given it increases the chances that they can grow revenue higher for longer.

Tesla’s March quarter was better than the stock’s post-call reaction suggests, with shares essentially flat in after-hours trading. Profitability came in well ahead of expectations, and delivery commentary for the rest of the year pointed to growth in line with the Street. However, the headline was the Capex guide for 2026, which came in 25% higher than what they said last quarter. My take is that this level of increase in Capex is a good thing, putting more space between Tesla and its competitors, though at this point, I'm not sure who those competitors even are.

Investors knew this was coming, as evidenced by AAPL shares being down only 0.5% on the news that Cook is moving into the chairman role. This opens the door for a new investor conversation around Apple and AI. Fifteen years ago, Cook began to orchestrate an AAPL multiple re-rating around Services that started with a new narrative. I expect Ternus will take a page out of that book and shift the stock narrative to show that they can win in AI. I'll be watching for success with the new Siri later this year, additions of leadership from AI-first companies, and maintenance of their gold standard culture around product quality as evidence that it's working.

Tesla’s March quarter delivery report slightly missed the estimates, up 6.3% y/y vs. the Street at up 8% and the whisper of up 10%. The more important takeaway is that deliveries still grew 6% y/y in the first quarter, which offers a cleaner read on demand without the benefit of the U.S. tax credit that ended last September and added noise in the December report. March deliveries reinforce the view that Tesla's auto business is stabilizing, which remains strategically important to the broader autonomy story. Separately, the big miss in Energy and Storage (about 13% of the business), was a timing issue.

The bottom line: If Model 3 & Y deliveries come in at 324k or better (vs. the Street at 351k), it is a win for TSLA shares. It would demonstrate stability (flat y/y) in the first clear read on underlying demand following the expiration of U.S. EV credits. Taking a step back, while investor focus has shifted — with Robotaxi, FSD, and Optimus progress now central to the investment thesis — deliveries still matter. For the headline number, the Street is expecting 366k (up 8.5% y/y), compared to a 16% decrease in Dec-25 and a 7% increase in Sep-25. I am expecting 345k (up 2%). The key metric will be Model 3/Y deliveries, as S/X are being phased out. The Street is expecting 351k (up 8%), while I am expecting 330k (up 2%).

Jensen’s keynote reinforced a simple point: demand is tracking well above even high expectations, while investors remain concerned that growth beyond 2027 could slow sharply or even decline. Shares of NVDA fell 3% in the three days following GTC, compared to a 1.4% decline for the Nasdaq.

At next Monday's GTC 2026, Jensen will make it clear that demand continues to run ahead of investor expectations. This will likely be viewed by investors as a non-event, given it's consistent with their earnings comments three weeks ago. Investors will be keyed into any impact the conflict in the Middle East is having on business; however, I believe the impact is not measurable. The stock has a bigger challenge than a read on the next six months: the investors' "wall of worry" that growth will drop off in CY27. That reality is evidenced by shares being down 7% since they reported earnings on Feb 24th, compared to the Nasdaq being down 4%.

Apple’s product updates this week accomplished two goals: lifting revenue for the June quarter by 2%. It also demonstrates the Company's an ability to protect gross margins despite a tougher memory cost environment. We now forecast June growth of 10% y/y (Street at 8%) alongside slight upside to margins. Beyond June, while the new MacBook Neo should contribute a steady 1% to sales, with the initial tailwinds from the iPhone 17e and MacBook refreshes are expected to normalize toward neutral.

It's been two days since Nvidia delivered January results and April-quarter guidance that cleared both Street and whisper expectations, yet the stock has traded down 9% since earnings compared to the Nasdaq being down 2%. Investors are already looking through what will be another monster year in 2026 and landing on anxiety over what 2027 will hold. The biggest risk to the stock is that fundamentals continue to exceed expectations and the "anxiety year" gets pushed out to 2028, resulting in shares remaining rangebound. As for the broader AI takeaway, Nvidia’s guide is the latest evidence that we're still in the early innings of the AI buildout.

Heading into Nvidia’s earnings next Wednesday, expectations are being shaped by two developments over the past month: AI models are showing clearer utility, and the hyperscalers guided to a bigger infrastructure buildout. During that time, Nvidia growth estimates for CY26 have increased from 50% to 55%. The demand story is well understood, yet NVDA shares are up only about 5% over the past month versus the Nasdaq roughly flat. The disconnect between the bullish updates and modest share price increase highlights that the real debate is what growth looks like in 2027 and 2028. Ultimately, investors have to decide what inning of the AI buildout we are in, if it's the 5th inning, 2027 growth should look more modest, and if it is the 2nd inning, which I believe, Nvidia’s growth outlook over the next several years remains robust.