Apple’s Post-WWDC Rally Mirrors Nvidia’s Strong Quarter, Analyst Says
Wedbush analyst Dan Ives sees a parallel between the recent performance of Apple Inc.’s AAPL stock following WWDC 2024 and Nvidia Corp.’s NVDA strong second-quarter earnings. Despite initial negativity post-WWDC, Apple stock has rebounded, mirroring the positive sentiment around Nvidia’s strong performance, as Ives highlighted on social media platform X.
Key Takeaways
- Apple’s stock has rebounded: Despite initial pessimism following WWDC, Apple stock has risen from around $190 to $226.
- Nvidia’s strong quarter: Nvidia exceeded earnings and revenue expectations, driven by robust data center revenue.
- Nvidia’s stock performance: Despite the strong quarter, Nvidia’s stock price has dipped slightly. The dip is attributed to a slight contraction in gross margin from the previous quarter.
- Ives’ focus on fundamentals: Ives emphasizes the importance of demand, guidance, and growth as key metrics for evaluating a company’s performance.
- Nvidia’s Blackwell GPU: The upcoming release of the Blackwell GPU is set to boost Nvidia’s production and has generated "incredible" customer anticipation.
Apple’s Post-WWDC Rebound: Shifting Sentiment
Following WWDC 2024, initial market sentiment towards Apple was negative, with analysts expressing concerns about the company’s future growth prospects. "Bears were all out at $190," Ives tweeted, referring to the bearish sentiment that prevailed around Apple stock at that time. However, the stock has since rebounded significantly, reaching $226, a sign that investors are adjusting their outlook.
Nvidia’s Strong Q2: Data Center Boom and Blackwell GPU Hype
Nvidia’s second-quarter earnings report showcased a robust performance fueled by strong growth in the data center segment. This strong performance led to a positive market reaction, with the company exceeding revenue and earnings expectations. “Nvidia checked all 3 boxes tonite [sic] with a massive quarter,” Ives tweeted, highlighting the company’s success in meeting or exceeding his key metrics of demand, guidance, and growth.
However, despite the overall positive performance, Nvidia’s stock price dipped slightly, attributed to a minor contraction in gross margin from the previous quarter. This slight dip is not concerning to Ives, who remains optimistic about the company’s future prospects.
A significant factor in the positive outlook is the upcoming release of the Blackwell GPU. Nvidia has made modifications to the Blackwell GPU mask to increase production yields, a move expected to bolster the company’s manufacturing capabilities. The production ramp for Blackwell is set to begin in the fourth quarter and continue into fiscal year 2026, as confirmed by Nvidia’s CFO, Colette M. Kress. This upcoming release has generated "incredible" customer anticipation, according to Nvidia executives, further reinforcing positive sentiment surrounding the company.
Looking Ahead: Apple and Nvidia’s Future Prospects
Ives’ analysis suggests that both Apple and Nvidia are on strong trajectories, with their recent performance reflecting positive fundamentals. Despite some initial skepticism following WWDC, Apple is showing signs of a rebound, while Nvidia’s strong earnings and upcoming Blackwell GPU release are generating excitement in the market. This positive outlook suggests that both companies are well-positioned for continued success in the future, particularly as the tech sector continues to experience rapid evolution driven by AI advancements and increasing demand for computing power.
"We always focus on demand, guidance, and growth," Ives stated, emphasizing the need to look beyond short-term price fluctuations and focus on the underlying fundamentals that drive long-term value.
The parallel between Apple’s post-WWDC rally and Nvidia’s strong earnings performance serves as a reminder that market sentiment can shift quickly. Investors who are able to correctly identify and assess the fundamentals behind these shifts will be well-positioned to capitalize on opportunities in the dynamic tech sector.