TD Cowen maintained a neutral stance on Nvidia and Broadcom ahead of their upcoming earnings reports, citing unresolved industry debates that are unlikely to be addressed in the results. The brokerage raised its 2030 datacenter total addressable market (TAM) estimate to above $1.6 trillion, reflecting strong demand dynamics in the sector.
The firm’s caution contrasts with a shift in market sentiment from July’s pessimism, as capital expenditure trends and fundamentals point toward a robust 2027. Oversupply concerns have diminished in favor of "relentless demand," particularly in compute and networking semiconductors, where TD Cowen sees upside to estimates. The brokerage also expressed a positive outlook on Credo and Marvell, highlighting their positioning in the evolving semiconductor landscape.
For Nvidia, TD Cowen expects a typical beat-and-raise performance with visibility extending through 2027, though it noted that recent earnings have failed to catalyze stock gains. Investors are likely to focus on gross margin trends amid rising High Bandwidth Memory (HBM) prices, roadmap updates, and potential new financing arrangements. The analyst did not anticipate these issues being resolved in the upcoming earnings call.
Broadcom’s results are expected to leave key debates unresolved, including the timeline for non-TPU ASIC roadmaps and TPU share dynamics. TD Cowen’s Joshua Buchalter emphasized the firm’s neutral stance, stating, "We see upside to numbers but are neutral into the print on NVIDIA and Broadcom given key debates are unlikely to be settled on earnings, while positive on Credo and Marvell."
The brokerage also cautioned on non-TPU roadmaps, citing past delays despite management-provided timelines. Buchalter added, "We remain cautious on non-TPU roadmaps (despite management's disclosed specific timelines) given past slips, and we think investors will be looking for explicit upside and timeline commentary to drive the stock."
