Special Edition: Nvidia Forecast Misses Loftiest AI Estimates

Bloomberg Audio Studios, podcasts, radio news third. 0:00:07.160 --> 0:00:09.440 Quarter adjusted earnings per share coming in above estimates at 0:00:09.440 --> 0:00:12.760 eighty one cents. Estimate was for seventy four cents. Third 0:00:12.800 --> 0:00:15.040 quarter at revenue coming in at thirty five point one 0:00:15.160 --> 0:00:17.680 billion dollars. Estimates were for thirty three point twenty five 0:00:17.800 --> 0:00:20.319 billion dollars third quarter data center revenue. This is what 0:00:20.360 --> 0:00:23.360 everybody wants to see that coming in above estimates thirty 0:00:23.400 --> 0:00:25.800 point eight billion dollars. The estimate was for twenty nine 0:00:25.840 --> 0:00:30.000 point one four billion dollars. Carrol Nvidiac's fourth quarter revenue 0:00:30.040 --> 0:00:33.200 at thirty seven point five billion plus or minus two percent. 0:00:33.240 --> 0:00:35.560 The estimate was for thirty seven point one billion dollars. 0:00:35.600 --> 0:00:39.440 Gotta say, initial reaction, folks, not an upbeat one. Kunjan 0:00:39.479 --> 0:00:42.839 Zabani of our Bloomberg Intelligence Senior semi conductor team, he's 0:00:42.880 --> 0:00:44.680 an analyst. And then we're going to want to bring 0:00:44.720 --> 0:00:46.360 in another guest to kind of give us some more 0:00:46.360 --> 0:00:48.560 thoughts about what we got from video today. 0:00:48.640 --> 0:00:52.200 Yeah, Caroline Hyde, who hosts Bloomberg Technology on Bloomberg TV, 0:00:52.320 --> 0:00:54.920 is joining us now. She's got our eyes closely watching 0:00:55.000 --> 0:00:57.560 everything happening over ed in video that forecasts failing to 0:00:57.600 --> 0:01:00.560 meet the loftiest estimates for the company cheers in the 0:01:00.600 --> 0:01:03.040 after hours right now down about four percent, so they're 0:01:03.080 --> 0:01:05.560 off of those lows, Caroline, But is this just about 0:01:05.640 --> 0:01:09.080 high expectations, very high expectations and in Nvidia coming out 0:01:09.080 --> 0:01:11.360 and saying Okay, we're almost going to meet them, but 0:01:11.640 --> 0:01:12.080 not quite. 0:01:12.520 --> 0:01:15.840 And a very high market valuation that is the most 0:01:15.920 --> 0:01:17.560 valuable in the world, that has seen a run up 0:01:17.560 --> 0:01:20.640 of almost two hundred percent so far in the years. 0:01:20.680 --> 0:01:23.160 So maybe some profit taking when you are seeing, Yes, 0:01:23.240 --> 0:01:26.400 Luke Capital, if you dig into the analysts expectations for 0:01:26.480 --> 0:01:29.600 the fiscal fourth quarter or twenty twenty five, Luke Capital 0:01:29.680 --> 0:01:31.920 had it at about forty four billion dollars as the 0:01:32.000 --> 0:01:32.720 highest realm. 0:01:32.840 --> 0:01:35.080 Then you had few one and securities at about forty one. 0:01:34.959 --> 0:01:37.200 Billion, and then you get into the thirty seven billion 0:01:37.240 --> 0:01:40.480 dollar range with the likes of Craig Hullum and Da 0:01:40.600 --> 0:01:43.319 Davidson was a little bit above that. So compared to 0:01:43.520 --> 0:01:46.720 perhaps some of the highest levels out there, they're coming 0:01:46.720 --> 0:01:49.440 in below and there's a plus or minus two percent 0:01:49.560 --> 0:01:51.640 there to be built in as well. So I think 0:01:51.680 --> 0:01:54.800 there is some digesting that this isn't beaten raised and 0:01:54.920 --> 0:01:58.480 blown out of every single analysts expectations. 0:01:58.640 --> 0:02:00.680 Still, these are incredibly strong numbers. 0:02:00.800 --> 0:02:02.800 This is a guide to the fact that we're getting 0:02:03.000 --> 0:02:06.400 Blackwell on stream. That supply side will be ironed out, 0:02:06.400 --> 0:02:08.359 and I think we'll have far more from Gensen hung 0:02:08.400 --> 0:02:11.880 on that particular perspective, and that demand is still incredible. 0:02:11.960 --> 0:02:13.520 So I think there's just a little bit of profit 0:02:13.560 --> 0:02:16.320 taking coming on. When we've seen that the rapid rise 0:02:16.360 --> 0:02:18.520 has been two hundred percent over the year, maybe four 0:02:18.600 --> 0:02:21.520 or five percent sell down isn't the most remarkable. 0:02:20.960 --> 0:02:24.200 Shift, Caroline Great point, right, it's not Reay yet. Well, 0:02:24.400 --> 0:02:26.960 you know, listen, this is her world that she's talking 0:02:26.960 --> 0:02:29.760 to these you know, tech companies, following them inside and outside, 0:02:29.760 --> 0:02:32.560 and this idea that there's still supply, that there's demand, 0:02:32.600 --> 0:02:34.560 it's just the supply constraints. It's not like people are 0:02:34.600 --> 0:02:36.880 running away from the products. Having said that, I want 0:02:36.880 --> 0:02:39.040 to tap into your knowledge of this industry and that 0:02:39.320 --> 0:02:42.280 you do have companies that come out and it's gangbusters, 0:02:42.320 --> 0:02:45.119 and then maybe they have some issues with supply constraints 0:02:45.120 --> 0:02:46.480 and so on and so forth. This is kind of 0:02:46.520 --> 0:02:48.040 part of the process. Is that fair? 0:02:48.440 --> 0:02:49.880 I think that's fair when it comes to in Video 0:02:49.919 --> 0:02:51.560 as well, and the rapid rate of innovation. I mean, 0:02:51.600 --> 0:02:54.079 they've almost become an Apple in every single year they're 0:02:54.080 --> 0:02:56.520 bringing out their latest neww chip set and design, and 0:02:56.560 --> 0:02:59.600 we go from Hopper swiftly on to Blackwell, and people 0:02:59.639 --> 0:03:01.400 have got to keep up with that innovation. 0:03:01.880 --> 0:03:04.680 Just the way in which you store your. 0:03:04.560 --> 0:03:08.360 Chips and the infrastructure within your data centers means that 0:03:08.440 --> 0:03:11.000 if they're vertically stored, well, that's going to lead to 0:03:11.000 --> 0:03:13.480 more heating issues. Then if you're doing it more broadly 0:03:13.520 --> 0:03:16.400 on a horizontal perspective. There is a lot of innovation 0:03:16.440 --> 0:03:19.200 that has to come along with in Video's own GPU 0:03:19.280 --> 0:03:23.400 CPUs and overall chipsets. So I think that they have 0:03:23.520 --> 0:03:25.800 said and guided to the market that yes, you're getting 0:03:25.800 --> 0:03:28.760 this reporting of overheating, Yes you're getting these reports of 0:03:28.800 --> 0:03:32.280 snags and design. This is entirely normal, and we're working 0:03:32.400 --> 0:03:36.800 very closely with our hyperscale sub clients to fix this, 0:03:36.920 --> 0:03:38.960 to innovate with them and ensure that we can get 0:03:38.960 --> 0:03:41.520 them out there as swiftly as possible. I think there 0:03:41.520 --> 0:03:45.960 has been also just trying to spreading out of AI demand. 0:03:45.960 --> 0:03:48.280 What's been interesting hearing from Jensen Wong of late has 0:03:48.320 --> 0:03:51.360 been the scaling laws. Basically, the theory goes is that 0:03:51.480 --> 0:03:54.400 the more data you fire, the more compute power you bring, 0:03:54.800 --> 0:03:56.839 the faster and more sophisticated. 0:03:56.280 --> 0:03:57.680 These large language models become. 0:03:58.040 --> 0:04:00.560 But actually we started to hear from the anthrop from 0:04:00.800 --> 0:04:03.120 the great reporting coming out of San Francisco with the 0:04:03.120 --> 0:04:06.680 Bloomberg team that Rachel Mets is saying maybe open aiyes 0:04:06.720 --> 0:04:08.360 had to slow down a little bit in terms of 0:04:08.360 --> 0:04:10.320 the developments of their own large language models because they're 0:04:10.360 --> 0:04:12.760 not getting as sophisticated as it happen in the Leaps 0:04:12.760 --> 0:04:15.360 and Bounds. Jensen still saying, Look, in the next decade, 0:04:15.360 --> 0:04:18.920 you're going to see a million times increase in compute. 0:04:19.200 --> 0:04:21.279 But we've just got to get there in terms of 0:04:21.279 --> 0:04:22.320 actually making it happen. 0:04:23.600 --> 0:04:25.599 Yeah, I mean, hard to even imagine, hard to even 0:04:25.600 --> 0:04:27.960 imagine that kind of increase in compute at this point, 0:04:28.240 --> 0:04:30.000 Kun john'subney, I want to bring you back in here 0:04:30.200 --> 0:04:33.680 over a senior intell senior analysts over at Bloomberg Intelligence. 0:04:34.200 --> 0:04:36.719 We're seeing shares down about two percent in the after hours. 0:04:36.800 --> 0:04:39.680 A couple headlines the company sees fourth quarter revenue coming 0:04:39.720 --> 0:04:42.280 in at thirty seven point five billion dollars plus or 0:04:42.320 --> 0:04:45.200 minus two percent. That's pretty much in line with estimates 0:04:45.200 --> 0:04:47.800 at thirty seven point one billion dollars. Third quarter Data 0:04:47.839 --> 0:04:50.799 center revenue blowing past expectations at thirty point eight billion 0:04:50.839 --> 0:04:54.080 dollars estimates report twenty nine point one billion dollars Coon, John, 0:04:54.720 --> 0:04:56.240 what's the question you'd ask, Jensen Wong? 0:04:56.400 --> 0:04:58.800 I mean, my questions really would focus on trying to 0:04:58.800 --> 0:05:01.760 figure out the physical twenty six calendar twenty twenty five 0:05:01.839 --> 0:05:05.640 black Well revenue ramp magnitudes and around gross margins. I mean, look, 0:05:05.800 --> 0:05:07.960 we have seen in the past when vidias come out 0:05:08.000 --> 0:05:10.679 and beat way more than what they did right now, 0:05:10.720 --> 0:05:14.360 and the stock has still plummeted double digits. You also 0:05:14.400 --> 0:05:16.520 have to keep in mind this end of the year. 0:05:16.600 --> 0:05:19.359 The stock has tripled this year, right, so there is 0:05:19.400 --> 0:05:22.680 some incentive for profit locking and taking the gains away 0:05:22.680 --> 0:05:23.640 from the table as well. 0:05:24.000 --> 0:05:27.640 You know, I also do think about how do you feel, Kunjon, 0:05:27.720 --> 0:05:30.440 that they are giving numbers for fiscal year twenty twenty 0:05:30.480 --> 0:05:34.680 six good sign? Do you trust that visibility? Like, how 0:05:34.680 --> 0:05:37.599 do you think about their ability to put out a 0:05:37.680 --> 0:05:43.960 number and maybe that number might change based on if 0:05:43.960 --> 0:05:45.240 they figure out the supply issues. 0:05:46.279 --> 0:05:48.040 I mean, I see that as a very strong sign 0:05:48.040 --> 0:05:50.640 I mean, look at this earning season across the semi 0:05:50.640 --> 0:05:54.400 sector right nobody is giving out numbers that far out. 0:05:54.600 --> 0:05:57.640 Even in Vida's competitors who are trying to address the 0:05:57.720 --> 0:06:01.640 same opportunity and are sing the same strong demand signals, 0:06:01.920 --> 0:06:06.440 are not giving out numbers, strong confident numbers that in 0:06:06.600 --> 0:06:09.440 year out. So that really speaks to the strength and 0:06:09.480 --> 0:06:11.760 the confidence that they have that they'll be able to 0:06:12.160 --> 0:06:15.360 support this demand and the demand is there, and you guys, it'd. 0:06:15.240 --> 0:06:16.800 Be tech talk to him a lot, like I'm just 0:06:16.839 --> 0:06:18.359 curious with the top of mind, if you were sitting 0:06:18.400 --> 0:06:20.239 down with him right now, like top two. 0:06:20.080 --> 0:06:22.240 Questions, and if Ed Ludlow was but he's out in 0:06:22.240 --> 0:06:24.680 fraternity leaves and congratulations. 0:06:23.920 --> 0:06:25.400 To on Ed Ludler becoming a father. 0:06:25.839 --> 0:06:28.640 But I think first and foremost we'd be asking exactly 0:06:28.680 --> 0:06:30.599 as Kuan Jhn has been saying, as you all have 0:06:30.640 --> 0:06:32.919 been saying, it's got to be about supply coming on 0:06:32.920 --> 0:06:35.280 tap and just talking a little bit more around Blackwell 0:06:35.320 --> 0:06:38.960 and the incredible demand, What exactly does that really mean? 0:06:39.040 --> 0:06:40.080 Who are the key clients? 0:06:40.080 --> 0:06:41.960 How are we seeing that diversify out of the main 0:06:42.000 --> 0:06:42.880 hyper scalers, if. 0:06:42.800 --> 0:06:46.080 At all, and then I think sort of trying. 0:06:45.760 --> 0:06:49.440 To articulate that, look, yes, maybe we haven't blown past 0:06:49.640 --> 0:06:52.960 the highest analyst expectations, but thirty seven and a half 0:06:53.040 --> 0:06:57.400 billion dollar guide that's still seventy percent ramp up in revenue. 0:06:57.680 --> 0:07:00.760 That's following a ninety percent ramp up in revenue of 0:07:00.800 --> 0:07:04.320 the fiscal quarter just reported their fiscal third quarter. I 0:07:04.320 --> 0:07:06.239 think he's just going to have to sort of remind 0:07:06.279 --> 0:07:08.960 the market how far they've come, how far they've still 0:07:09.040 --> 0:07:11.000 to go, and maybe just take a bit of a 0:07:11.040 --> 0:07:13.720 reality check here that you know, at the moment, the 0:07:13.800 --> 0:07:16.000 numbers will go up, but maybe not at the two 0:07:16.120 --> 0:07:18.720 hundred percent that we were hoping to see well, that 0:07:18.760 --> 0:07:21.800 we did see in the first quarter of twenty twenty 0:07:21.840 --> 0:07:23.280 five for their fiscal year reporting. 0:07:23.920 --> 0:07:26.680 Hey coon, John ian King on the live blog bringing 0:07:26.760 --> 0:07:28.520 up a really interesting point, and it kind of gets 0:07:28.520 --> 0:07:30.880 at the question that I was asking with regard to 0:07:30.960 --> 0:07:35.680 super micro computer. Ian notes that cloud computing providers are 0:07:35.680 --> 0:07:38.160 the biggest companies in technology, and they still dominate in 0:07:38.240 --> 0:07:41.080 videous sources of revenue, making up fifty percent of sales 0:07:41.360 --> 0:07:44.040 for its data center unit. So that's just a handful 0:07:44.120 --> 0:07:47.400 of companies that are making up the majority of the 0:07:47.480 --> 0:07:51.520 revenue for the data center in video watchers want that 0:07:51.600 --> 0:07:53.440 number to go down. Three months ago that number was 0:07:53.480 --> 0:07:55.840 forty five percent. Is that a concern to you. 0:07:57.480 --> 0:07:59.400 I mean, I don't want to look at it from 0:07:59.520 --> 0:08:04.080 quarter to because remember these large customers are lumpy in nature, right, 0:08:04.120 --> 0:08:06.720 they have to also manage their capex and deployments. We 0:08:06.840 --> 0:08:09.760 did see over the last two to three quarters, if 0:08:09.760 --> 0:08:12.920 I'm not wrong, the number come down. It was about 0:08:12.920 --> 0:08:15.040 close to fifty or even about fifty and it has 0:08:15.080 --> 0:08:17.920 been coming down steadily. So that was a good sign 0:08:17.960 --> 0:08:19.880 for us. I still have to go and digest the 0:08:19.960 --> 0:08:23.760 numbers later on, but the fifty percent in the short 0:08:23.800 --> 0:08:25.840 term might not be that great of a sign. But 0:08:25.960 --> 0:08:28.680 I would not jump to conclusions just looking at one quarter. 0:08:28.920 --> 0:08:31.240 It could be very well timing of you know, them 0:08:31.520 --> 0:08:35.160 picking up a lot more Hopper supply supply right now 0:08:35.200 --> 0:08:36.880 when they cannot get their hands on blackwell. 0:08:37.280 --> 0:08:39.160 You know, I'm looking at the supply chain analysis on 0:08:39.160 --> 0:08:42.160 the Bloomberg function. When it comes to Nvidia, Microsoft, about 0:08:42.240 --> 0:08:45.559 nineteen percent of the revenue for Invidio, Meta, about ten percent, 0:08:45.600 --> 0:08:50.360 super Micro nearly eight percent Alphabet about six percent, Amazon 0:08:50.360 --> 0:08:52.640 more than five percent, Dell more than three percent. So 0:08:52.640 --> 0:08:55.320 we talk about a handful of companies, these cluster of 0:08:55.360 --> 0:08:58.240 companies that are so involved. You know, Caroline, I want 0:08:58.240 --> 0:09:00.760 to bring you back in here. You know, Nvidia. This 0:09:00.760 --> 0:09:02.640 has been such a focal point right the end of 0:09:02.679 --> 0:09:06.720 the earning season, just thinking about it so much. You know, 0:09:06.800 --> 0:09:09.320 how do you think about you know, Bloomberg Technology, you know, 0:09:09.559 --> 0:09:13.360 into the Thursday edition, you guys when you're on air 0:09:13.480 --> 0:09:16.160 and like, what's the tomorrow's story? 0:09:16.679 --> 0:09:17.520 The tomorrow story. 0:09:17.559 --> 0:09:20.240 I think we'll be trying to articulate where the growth 0:09:20.240 --> 0:09:22.720 trajectory goes from here. I think we're gonna hear from 0:09:22.960 --> 0:09:26.360 Jensen the next decade. You're gonna hear him talking about 0:09:26.440 --> 0:09:30.600 humanoid robots. You're gonna hear him talking about drug discovery, 0:09:30.600 --> 0:09:34.880 the capabilities of generative AI, the return on AI investment. 0:09:35.120 --> 0:09:36.720 So I think we're gonna want to be talking to 0:09:37.280 --> 0:09:39.480 the investors that back that vision. We're going to be 0:09:39.520 --> 0:09:41.600 wanting to hear from the analysts out there that are 0:09:41.600 --> 0:09:44.400 trying to square these numbers with where their own viewpoint 0:09:44.400 --> 0:09:46.000 have been on the here and now at the fiscal 0:09:46.040 --> 0:09:47.920 fourth quarter. But I think we're also going to we 0:09:47.920 --> 0:09:49.760 want to think about who else is in the space 0:09:49.880 --> 0:09:52.720 at the moment. It's answering some of the development issues, 0:09:52.760 --> 0:09:55.640 some of the heating issues, some of the concerns around AI, 0:09:56.240 --> 0:09:59.320 generative AI chip development and manufacturing. Who are the startups 0:09:59.320 --> 0:10:01.120 in the space, wh the rivals in the space? What 0:10:01.160 --> 0:10:02.920 are we seeing in terms of the hyper scalers building 0:10:02.920 --> 0:10:05.280 their own chips. So I think there's so many directions 0:10:05.280 --> 0:10:06.680 that we could go for, But for me, it's going 0:10:06.720 --> 0:10:09.359 to be really interesting talking about where does AI infrastructure 0:10:09.440 --> 0:10:10.000 go from here? 0:10:10.280 --> 0:10:13.080 And where does in video's view on selver in AI? 0:10:13.160 --> 0:10:15.880 Where does in video's view on China? Where does in videos. 0:10:15.640 --> 0:10:18.800 View on the next repurposing of their chips not just 0:10:18.840 --> 0:10:21.439 to keep hammering large language models, but the development of 0:10:21.480 --> 0:10:22.800 generative AI in the real world. 0:10:23.360 --> 0:10:25.000 So what are some of the names, Caroline, that our 0:10:25.040 --> 0:10:27.840 investing audience has to have their eyes on. Is it 0:10:27.840 --> 0:10:29.439 the sam Altman's of the world who are trying to 0:10:29.520 --> 0:10:32.240 raise lots and lots of money to go after Invidia? 0:10:32.400 --> 0:10:35.160 Is it the hyperscalers who are going to be doing 0:10:35.160 --> 0:10:38.000 this in house? Who who holds a candle to them 0:10:38.120 --> 0:10:39.439 or who could hold a candle. 0:10:39.160 --> 0:10:43.120 To them in terms of siphoning off future demand or 0:10:43.160 --> 0:10:45.120 in terms of just wanting to know who the name 0:10:45.440 --> 0:10:46.199 key players are. 0:10:48.760 --> 0:10:52.400 Off future demand because you know, Intel, Intel, Intel's in 0:10:52.440 --> 0:10:54.320 a tough position right now, as you guys have reported 0:10:54.360 --> 0:10:57.000 on a lot over the last year. Am D maybe, 0:10:57.040 --> 0:10:59.040 but what about those upstarts. 0:10:59.040 --> 0:11:01.280 Hmmm, I mean, and that's going to be interesting as 0:11:01.280 --> 0:11:03.320 to whether or not we just get a future type 0:11:03.360 --> 0:11:06.320 of chip development. You know, we've got the grocks for example, 0:11:06.320 --> 0:11:08.440 that are backed by venture backing who have been looking 0:11:08.480 --> 0:11:12.559 to ways in which we expand and have faster and 0:11:13.160 --> 0:11:17.440 more efficient chips. You've also got you know, different players 0:11:17.480 --> 0:11:20.600 out there thinking about not just the data that you 0:11:20.679 --> 0:11:23.000 have to train, but then the inferencing that you do, 0:11:23.040 --> 0:11:25.319 and that does that become a different type of conversation 0:11:25.480 --> 0:11:28.160 around the technology and ultimately whether you need to have 0:11:28.200 --> 0:11:31.120 more efficient chips within an energy source and an energy suck. 0:11:31.200 --> 0:11:33.520 So I think so many people AMPI has been doing 0:11:33.679 --> 0:11:37.720 things around that particular innovation of different types of chips. Eventually, 0:11:37.880 --> 0:11:40.720 will people start to go to Galdhi and what Intel 0:11:40.720 --> 0:11:43.920 has been providing. How much can AMD chip away in 0:11:44.000 --> 0:11:47.720 terms of market share, in terms of the AI part 0:11:47.760 --> 0:11:50.400 of the business as well. So there are so many 0:11:50.480 --> 0:11:55.400 people and analysts and investors that are looking at distributing. 0:11:54.760 --> 0:11:55.600 Some of their bets. 0:11:55.600 --> 0:11:57.320 I'm sure, but for now in video has been the 0:11:57.320 --> 0:11:59.720 only game in town and certainly the easiest one to 0:11:59.760 --> 0:12:01.920 back in terms of up into the right Coon. 0:12:01.880 --> 0:12:03.400 Jent, I want to bring you back in here looking 0:12:03.400 --> 0:12:06.680 at our live blog. Ian King, who follows the semiconductor 0:12:06.679 --> 0:12:09.480 space and video as well. He says, one question analyst 0:12:09.520 --> 0:12:11.720 will have when the conference call begins, what's happening in 0:12:11.800 --> 0:12:15.959 networking sales? And that business slid sequentially dropping by that 0:12:16.320 --> 0:12:19.640 five hundred million dollars and videos acquired. Networking tech has 0:12:19.679 --> 0:12:22.080 faced opposition from many rivals, some of which argue for 0:12:22.080 --> 0:12:24.520 an industry standard approach rather than a reliance on and 0:12:24.640 --> 0:12:29.000 vidious proprietary technology. Weigh in on that, yeah, I. 0:12:28.960 --> 0:12:32.040 Mean, look, we have identified since last year that networking 0:12:32.080 --> 0:12:34.120 in AI servers is going to be sort of the 0:12:34.200 --> 0:12:37.360 next wave of growth, especially in terms of where the 0:12:37.480 --> 0:12:42.480 dollars spend. The dollars go beyond just accelerators. So I mean, 0:12:42.600 --> 0:12:44.920 until now in media, if you look at the market 0:12:45.120 --> 0:12:48.240 for the first Hopper series, right, they had this advantage 0:12:48.240 --> 0:12:51.719 of shipping their own proprietary networking gear, which customers had 0:12:51.760 --> 0:12:54.679 no other option but to just buy that. So two things, right, 0:12:54.720 --> 0:12:56.920 They got all the dollars, but they also got great 0:12:56.920 --> 0:13:00.600 profit margins because they could really charge whatever they wanted. Now, 0:13:00.640 --> 0:13:05.359 the competition there is increasing. Customers want to move to Ethernet, 0:13:05.400 --> 0:13:08.280 which again Nvidia has started offering and starting from the 0:13:08.280 --> 0:13:10.600 black Bell series. So we are going to see that 0:13:10.720 --> 0:13:13.880 Ethernet revenue also increase for Nvidia, But when you compare 0:13:13.920 --> 0:13:18.240 it from perchip dollar perspective, it's still less. We still 0:13:18.480 --> 0:13:23.960 think positive for Nvidia's networking revenue share going forward, but 0:13:24.000 --> 0:13:26.520 there will be a lot more competition there. It won't 0:13:26.559 --> 0:13:28.720 be just one company taking everything in your area. 0:13:29.240 --> 0:13:31.080 That's a really good point, right, And I do think about, 0:13:31.160 --> 0:13:32.840 you know, and Videa's really had this world to its 0:13:32.880 --> 0:13:36.680 own for a while, and you think about increasingly kind 0:13:36.679 --> 0:13:39.119 of what's going on in the future as there's more competition. 0:13:39.760 --> 0:13:44.040 YouTube Dynamic Duo, thank you so much. Your insight really 0:13:44.240 --> 0:13:47.160 so important to breaking down these results from Nvidia. Bloomberg 0:13:47.160 --> 0:13:50.200 Technology co host Caroline Hidketcher at eleven am Wall Street 0:13:50.200 --> 0:13:53.360 Time on Bloomberg Television for Bloomberg Tech and of course 0:13:53.440 --> 0:13:56.360 our thanks to ku Joan Sabani of our Bloomberg Intelligence team. 0:13:56.360 --> 0:13:59.280 He's a senior semiconductor analyst. So again, some great insight 0:13:59.320 --> 0:14:03.160 we'll watch for some of you research. Let's continue our conversations. 0:14:03.800 --> 0:14:06.400 Bloomberg News Equities reporter at Ryan Lostelico with us. He 0:14:06.520 --> 0:14:09.200 has been writing about it and kind of you know, 0:14:09.360 --> 0:14:12.160 talking about markets bracing for what we might get from Nvidia. 0:14:12.400 --> 0:14:14.679 He joins us from Chicago. Also with us is our 0:14:14.720 --> 0:14:17.360 own Red Brown, who follows the earning season and sets 0:14:17.400 --> 0:14:19.400 us up. Bloomberg News Earnings reporter. He's back in New 0:14:19.520 --> 0:14:22.640 York City. Ryan, come on in on this your report. 0:14:22.680 --> 0:14:25.240 Ahead of the release in Nvidia, traders bracing for a 0:14:25.280 --> 0:14:29.040 potential three hundred billion dollar earnings move. It was down 0:14:29.040 --> 0:14:31.160 more than four percent though initially. 0:14:30.760 --> 0:14:32.480 Yeah, absolutely, I don't think it would be all that 0:14:32.560 --> 0:14:34.960 surprising to see the stock really take some swings from 0:14:34.960 --> 0:14:37.000 where it's trading right now. I mean, this is not 0:14:37.080 --> 0:14:39.720 a huge move, especially not for our company as viollatile 0:14:39.760 --> 0:14:42.480 as Nvidia is. Just to put it in context. Palo 0:14:42.480 --> 0:14:44.800 Alto also reported that stock is at about five percent 0:14:44.960 --> 0:14:47.960 and after hours trading in video is obviously much bigger, 0:14:48.080 --> 0:14:50.040 but you know, not a huge move by their standard. 0:14:50.360 --> 0:14:52.880 I like that Ryan's out here talking about Pallelt the networks. 0:14:53.760 --> 0:14:56.320 It's a good well there is Look, there are other 0:14:56.360 --> 0:14:57.040 companies out. 0:14:56.960 --> 0:15:00.760 There, no question, but listen, we're gonna get you in 0:15:00.840 --> 0:15:02.920 just a moment. But Ryan, I mean, it's been so 0:15:03.080 --> 0:15:05.680 important in terms of market momentum, right, Like, give us 0:15:05.680 --> 0:15:07.640 some of that context. We talk about it all. We've 0:15:07.680 --> 0:15:09.840 talked about the mag seven, but when it comes to 0:15:10.040 --> 0:15:12.440 momentum that aid this is a big one. 0:15:12.600 --> 0:15:12.800 Yeah. 0:15:12.840 --> 0:15:15.240 Oh absolutely. The stock is almost tripled this year. It's 0:15:15.240 --> 0:15:18.320 added more than two trillion in market capitalization. Like you mentioned, 0:15:18.360 --> 0:15:20.760 it's the biggest stock in the world. You know, We've 0:15:20.800 --> 0:15:22.440 had plenty of analysts come out and say this is 0:15:22.480 --> 0:15:24.320 more important than the FED, this is more important than 0:15:24.360 --> 0:15:27.080 inflation data. This is the key report for Wall Street 0:15:27.080 --> 0:15:30.280 this week, if not this month. So it's obviously very significant. 0:15:30.560 --> 0:15:32.520 I do think, you know, we just got the numbers. 0:15:32.520 --> 0:15:34.920 People are still digesting the report. We are still waiting 0:15:34.920 --> 0:15:36.840 on the conference call. It's likely we're going to get 0:15:36.880 --> 0:15:39.440 a bigger move maybe, you know, once we get you know, 0:15:39.520 --> 0:15:41.720 full details, once we hear from you know, the management 0:15:41.760 --> 0:15:44.640 team once people get a little bit more context for this. 0:15:44.760 --> 0:15:46.600 But this is certainly not, you know, a sky is 0:15:46.640 --> 0:15:48.600 falling type report. It's falling short of some of the 0:15:48.600 --> 0:15:51.760 most optimistic expectations. But you know, people just got very 0:15:51.880 --> 0:15:54.760 used to forecasts that are just, you know, billions dollars 0:15:54.840 --> 0:15:55.760 above the consensus. 0:15:55.960 --> 0:15:58.720 Carmen Ryanick here, stocks reporter on our live blog, digging 0:15:58.720 --> 0:16:00.600 into the plus or minus two percent on the revenue 0:16:00.600 --> 0:16:03.120 outlook that we got from Video a little math, doing 0:16:03.160 --> 0:16:05.280 some quick math, it means and Video expects fourth quarter 0:16:05.360 --> 0:16:08.320 revenue between thirty six points seventy five billion and thirty 0:16:08.320 --> 0:16:10.840 eight point twenty five billion. The average analyst estimate was 0:16:10.880 --> 0:16:13.520 thirty seven point one billion. So if it's on the 0:16:13.560 --> 0:16:16.120 minus two percent, it would fall short of expectations. And 0:16:16.160 --> 0:16:18.600 I think that's why you are seeing investors, at least 0:16:18.600 --> 0:16:21.240 in the aftermarket, wanting a little bit more color or 0:16:21.280 --> 0:16:22.760 commentary around this. 0:16:23.040 --> 0:16:24.920 Okay, so Red Brown, come on in here, because you've 0:16:24.920 --> 0:16:26.920 got your eye on what's going on after hours and 0:16:27.000 --> 0:16:30.440 Video shares down about two percent? Is that what it is? 0:16:30.440 --> 0:16:33.120 Is that concern around that plus or minus two percent? 0:16:33.480 --> 0:16:36.200 Yeah, I think it kind of has to be the 0:16:36.240 --> 0:16:40.120 main focus for everybody right now, you know sound it 0:16:40.120 --> 0:16:43.720 felt like analysts maybe weren't as kind of euphoric heading 0:16:43.720 --> 0:16:45.960 into this report. Things definitely war more tempered, So I 0:16:45.960 --> 0:16:48.000 guess it isn't that much of a surprise to see, 0:16:48.200 --> 0:16:50.960 you know, stock kind of trading a little bit less 0:16:51.000 --> 0:16:53.560 volatile than it has in recent quarters. I was also 0:16:53.640 --> 0:16:56.160 just looking at some of the customers because we don't 0:16:56.160 --> 0:17:00.560 read Ryan's point just how important this is for the 0:17:00.600 --> 0:17:03.160 wider market. And you know, Microsoft and Meta, two of 0:17:03.200 --> 0:17:05.760 their biggest customers, both not really reacting as well. 0:17:05.880 --> 0:17:09.680 So so what are you read watching out for? Listen, 0:17:09.760 --> 0:17:12.119 you are with us throughout the whole earning season. It's 0:17:12.240 --> 0:17:15.199 been it feels like a long one, you know. But 0:17:15.280 --> 0:17:17.600 here we are with Nvidia, which is such a huge 0:17:17.640 --> 0:17:20.480 one in terms of the reporting season, and you know 0:17:20.520 --> 0:17:22.800 what we get from Nvideo. But you know, how are 0:17:22.800 --> 0:17:24.880 you thinking about it as we were kind of reporting 0:17:24.920 --> 0:17:26.480 into it and now we are on the other side, 0:17:26.480 --> 0:17:28.960 and there's still some questions to be had that will 0:17:28.960 --> 0:17:31.479 hopefully play it on the analyst call, but you know, 0:17:32.200 --> 0:17:34.840 walk us through it in an earning season, you know 0:17:34.960 --> 0:17:37.320 how this kind of fits in, especially against some of 0:17:37.359 --> 0:17:40.359 those MAGS seven, those very important big tech names. 0:17:40.920 --> 0:17:43.240 I think one thing that I'm looking at for and 0:17:43.320 --> 0:17:45.199 Vidia specifically and kind of how it fits into the 0:17:45.200 --> 0:17:48.199 wider landscape is actually the R and D spending. So 0:17:48.200 --> 0:17:50.119 if we look and actually grow forty eight percent, if 0:17:50.160 --> 0:17:53.560 you compare that to their peers, super Micro forty five 0:17:53.600 --> 0:17:58.240 percent up this quarter, Broadcom jump seventy five percent. So 0:17:58.280 --> 0:18:00.159 when we kind of start to dig in beyond on 0:18:00.240 --> 0:18:03.080 just the top line numbers, I think a kind of 0:18:03.119 --> 0:18:05.639 an interesting dynamic is playing out there in video is 0:18:05.720 --> 0:18:07.920 kind of really expending hand over fist to keep up 0:18:08.119 --> 0:18:11.320 or to kind of continue to have their their lead 0:18:11.400 --> 0:18:14.040 in this race, And I think it really helps when 0:18:14.040 --> 0:18:16.800 you can, you know, double your revenue every quarter as well. 0:18:16.840 --> 0:18:18.960 That there's that spending three billion dollars on R and 0:18:19.040 --> 0:18:21.919 D is a little bit easier than it is for 0:18:22.040 --> 0:18:24.200 a company like Broadcom, which is actually you know, the 0:18:24.520 --> 0:18:28.159 percentage wise, the margin that they're spending is actually much higher, 0:18:28.520 --> 0:18:32.200 so that race they are kind of still a distant 0:18:32.280 --> 0:18:35.960 second compared to in videos, so trying to can maintain 0:18:36.000 --> 0:18:38.560 that lead that they have in the air space. 0:18:38.840 --> 0:18:41.880 Hey, Ryan, what about when it comes to blackwell and 0:18:42.080 --> 0:18:45.320 demand around Blackwell. To what extent is that? The question 0:18:45.560 --> 0:18:49.400 on the call later it went from insane to incredible. 0:18:49.480 --> 0:18:51.520 As Caroline Hyde pointed out to us, how are you 0:18:51.520 --> 0:18:52.160 thinking about it? 0:18:52.240 --> 0:18:52.480 Yeah? 0:18:52.600 --> 0:18:54.840 Is that a deceleration to go from insane to incredible? 0:18:54.840 --> 0:18:57.679 I mean I think, you know, in general demand, I 0:18:57.680 --> 0:18:58.199 think it is. 0:18:58.359 --> 0:19:00.959 You tell me, I think it is insane to incredible. 0:19:01.040 --> 0:19:02.280 Yeah, I think that's a declation. 0:19:02.640 --> 0:19:05.040 Yeah, we say incredible a lot. We throw that word around. 0:19:05.080 --> 0:19:08.040 When you say insane, that's like a whole other level. 0:19:08.800 --> 0:19:11.720 Yeah, fair enough. Obviously, you know, people continue to focus 0:19:11.720 --> 0:19:14.359 on supply. There have been some you know, production hiccups here. 0:19:14.640 --> 0:19:16.840 Like I said before, people are focused very much on 0:19:16.880 --> 0:19:19.639 you know, pricing and margins for Blackwell. So all these 0:19:19.640 --> 0:19:21.639 things together, you know, this remains like a point of 0:19:21.880 --> 0:19:24.320 real focus for investors, even kind of beyond just sort 0:19:24.320 --> 0:19:26.639 of the headline numbers of the forecast and so forth. 0:19:26.840 --> 0:19:30.080 Guys, thank you so much. Busy afternoon, of course. Bloomberg 0:19:30.080 --> 0:19:32.320 News Earnings reporter Red Brown out there in New York City. 0:19:32.400 --> 0:19:35.919 Ryan Lostelica in Chicago. He's Bloomberg News Equities reporter