In the world of investing, there are always exciting developments happening that can impact the stock market. One such recent announcement that has caught the attention of many investors is the 0.16 forward stock split and dividend increase by a prominent company. Joining us to discuss this news is Gil Luria, managing director at DA Davidson.
The company in question has reported impressive results, beating expectations and offering a bullish sales forecast. With industry leaders like Jensen Wong proclaiming the beginning of the next industrial revolution, the future looks bright for this company.
According to Gil, the demand for the company’s products, particularly GPUs, is expected to remain high as major tech giants like Microsoft, Amazon, Google, and Meta continue to invest in generative AI capacity. This strong demand bodes well for the company not just for the current quarter but for the rest of the year.
Looking ahead, Gil highlights the company’s accelerated innovation with the introduction of a new GPU platform, Blackwell. While competition is increasing, the company’s focus on staying ahead of the curve and meeting the evolving needs of its customers is key to its success.
Despite the positive outlook, Gil remains neutral on the stock, citing potential challenges ahead. He believes that revenue growth may turn negative in 2026 due to increased competition from customers developing their own chips for inferencing.
When asked about upside risks to his call, Gil mentions the potential for new applications that rely on data center GPU capacity to drive continued growth for the company. However, until these applications gain widespread commercial viability, the outlook remains uncertain.
In terms of valuation, Gil acknowledges that the company’s current multiples are reasonable if growth continues as expected. However, if revenue starts to decline in the coming years, the stock may become overvalued.
Overall, Gil’s cautious approach to investing in this company serves as a reminder to investors to carefully consider both the potential upside and downside risks before making any investment decisions. As the market continues to evolve, staying informed and adaptable is key to navigating the ever-changing landscape of investing.
