An analyst is encouraged by rumblings that Nvidia's next-generation Rubin chip could be out earlier than expected in a boon to 2026 financials
Nvidia Corp.'s growth has been spectacular - but Melius Research analyst Ben Reitzes said that some investors are worried that the "law of large numbers" could catch up with the company in the next few years.
As the law implies, rapidly growing companies can't expand at fast clips forever, and investors are starting to wonder more about Nvidia's (NVDA) growth trajectory going forward. The company is projected to see sales more than double this calendar year, and analysts are expecting something in the 50% range next calendar year.
Granted, 50% growth is still very impressive, enough to rank first in the semiconductor sector on MarketWatch's recent screen of chip names. The real question is what comes after that. Reitzes says analysts are modeling about 20% sales growth for calendar 2026, but he sees signs that could be more in the 30% range.
Read: 10 semiconductor stocks that might make you a lot of money in 2025
He's encouraged that "speculation is mounting" over Nvidia's ability to deliver its next-generation Rubin chip months ahead of expected in calendar 2026. Reitzes pointed to recent reports indicating that Nvidia wants its suppliers to get memory components ready more quickly.
"The reason this matters is that the earlier Rubin ships, the better the likelihood of CY26 being a stronger growth year than consensus," he wrote.
Nvidia previously signaled that Rubin was due out in calendar 2026, but thinks investors were "anchored" to that being a second-half event that would be "heavily weighed" toward the fourth quarter given supply-chain rumblings. "Even a [one-quarter] move up in the 'volume' quarter for Rubin could matter," Reitzes wrote.
Nvidia declined to comment.
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The possibility of an earlier Rubin ramp is notable as investors contemplate growth beyond next year and wonder if there could be an artificial-intelligence "bubble."
"Accelerating the Rubin release (likely a blockbuster - with blazing speeds, lower power and tons of memory) would blunt some of these concerns and could increase target multiples on the buy side," Reitzes wrote.
"One can venture to guess it could be worth up to a few turns and have some folks more confident in long-term earnings power over $6.50/share," he wrote. "We don't think an earlier release would impact Blackwell demand in 2025 either, since customers need the boost to hit their goals right now - and we mean urgently."
On the more cautious side, however, Reitzes thinks investors will need to look out for the potential impact of this sort of move on Nvidia's gross margins. They could "take a hit due to a faster release schedule," but that's "hard to gauge and Nvidia should get better and better at managing these transitions."
-Emily Bary
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