WEBVTT - Dan Ives, Senior Equity Analyst at Wedbush Securities, Talks Nvidia earnings, the NASDAQ, and Bull Case for Tech

0:00:00.000 --> 0:00:01.480
<v Speaker 1>You're gonna get right to this right now, Dan, I

0:00:01.480 --> 0:00:03.720
<v Speaker 1>have shows us some Wedbush here all over the media.

0:00:03.760 --> 0:00:05.960
<v Speaker 1>Of course, as we go into the mag eight Frenzy

0:00:06.720 --> 0:00:08.879
<v Speaker 1>Warren't buffet. He's part of the mag eate right now,

0:00:09.000 --> 0:00:12.280
<v Speaker 1>sixty five buys on Nvidio eight holds no sols like

0:00:12.400 --> 0:00:15.080
<v Speaker 1>you don't follow in video. You got a thug at

0:00:15.080 --> 0:00:16.960
<v Speaker 1>Webbush that follows it.

0:00:16.960 --> 0:00:19.880
<v Speaker 2>Right, Yeah, So our view and Nvidio, you know, we

0:00:19.880 --> 0:00:22.400
<v Speaker 2>have one hundred and thirty eight hour probably start bult

0:00:22.480 --> 0:00:24.040
<v Speaker 2>cases one seventy five.

0:00:24.239 --> 0:00:26.480
<v Speaker 1>Bernstein went to one fifty this morning, and.

0:00:26.480 --> 0:00:28.360
<v Speaker 2>I think this is just a star. I mean, look,

0:00:28.400 --> 0:00:30.680
<v Speaker 2>I think this by the end of the day or

0:00:30.720 --> 0:00:32.360
<v Speaker 2>even the next twenty four hours, this is a stock

0:00:32.440 --> 0:00:35.120
<v Speaker 2>that should be in the green based on everything we

0:00:35.200 --> 0:00:37.840
<v Speaker 2>saw from Godfather of Ai Jensen the video.

0:00:37.760 --> 0:00:39.720
<v Speaker 1>Pull get one more in here and I will so

0:00:39.800 --> 0:00:40.080
<v Speaker 1>good at that.

0:00:40.240 --> 0:00:42.319
<v Speaker 3>So, Dan, give us a sense. What did you hear

0:00:42.400 --> 0:00:46.920
<v Speaker 3>from nvidio last night? They beat numbers? Maybe the guidance

0:00:47.000 --> 0:00:49.320
<v Speaker 3>wasn't where the street was expecting, But what did you

0:00:49.360 --> 0:00:50.839
<v Speaker 3>really take away from Nvidia last night?

0:00:51.440 --> 0:00:55.200
<v Speaker 2>So three things? One demand, because the question is is

0:00:55.200 --> 0:00:59.840
<v Speaker 2>they're double ordering. What is enterprise demands actually accelerating. And

0:01:00.000 --> 0:01:02.160
<v Speaker 2>there's no better perch in terms of everything we're seeing

0:01:02.160 --> 0:01:06.479
<v Speaker 2>from AI than what Jensen sees. To Blackwell, all the

0:01:06.520 --> 0:01:10.520
<v Speaker 2>fears right, the worries is a gendle. They essentially put

0:01:10.560 --> 0:01:13.680
<v Speaker 2>those fears to rest, and that was so important.

0:01:13.720 --> 0:01:15.640
<v Speaker 1>Okay, you know I'm the only one that does Matthews

0:01:15.720 --> 0:01:18.440
<v Speaker 1>do not all this fancy dan eyes talk. You take

0:01:18.480 --> 0:01:20.800
<v Speaker 1>the ten billion share bibic of Apple, they've been doing

0:01:20.840 --> 0:01:23.280
<v Speaker 1>it for years, divided by free cash flow. You take

0:01:23.319 --> 0:01:26.839
<v Speaker 1>a fifty billion statistic divided by invidious free cash flow.

0:01:27.240 --> 0:01:31.560
<v Speaker 1>To me, it was a ginormous announcement. Everybody's saying it's

0:01:31.560 --> 0:01:33.399
<v Speaker 1>not a big deal. Was a share buy back a

0:01:33.400 --> 0:01:33.839
<v Speaker 1>big deal?

0:01:33.920 --> 0:01:36.800
<v Speaker 2>It's a monster deal. And also this also goes to

0:01:36.840 --> 0:01:39.760
<v Speaker 2>a company. You go back six months ago, out year,

0:01:39.800 --> 0:01:42.560
<v Speaker 2>by twenty five, twenty six, two dollars in earnings. Now

0:01:42.600 --> 0:01:43.919
<v Speaker 2>it's gonna be five to six hours.

0:01:44.160 --> 0:01:46.600
<v Speaker 1>I'm extended time here this morning with Dani's were welcome

0:01:46.720 --> 0:01:50.600
<v Speaker 1>you all around the world on YouTube and Android, Android

0:01:50.600 --> 0:01:53.920
<v Speaker 1>auto Apple car play as well. Okay, I go to Apple,

0:01:54.000 --> 0:01:57.440
<v Speaker 1>I go to the famed aggregation of Tom Secunda in

0:01:57.440 --> 0:01:59.640
<v Speaker 1>the Bloomberg news, and I'm just gonna read these Paul

0:01:59.720 --> 0:02:04.840
<v Speaker 1>quick mashable. Apple music playlists now transferable to YouTube music.

0:02:05.360 --> 0:02:09.440
<v Speaker 1>University of Wisconsin deny new trial as that go after somebody.

0:02:09.840 --> 0:02:13.800
<v Speaker 1>Apple orders ten percent more iPhones than last year. Apple

0:02:13.880 --> 0:02:17.720
<v Speaker 1>iPhone seventeen rumored to arrive at the Sweeney House before

0:02:17.800 --> 0:02:22.720
<v Speaker 1>September fifteenth. And on the last headline, Dan Ives on

0:02:22.840 --> 0:02:25.320
<v Speaker 1>Bloomberg Right now, I mean, here's the news out of

0:02:25.360 --> 0:02:29.840
<v Speaker 1>Tokyo shock. There's more iPhone orders. How do you translate that?

0:02:30.200 --> 0:02:33.160
<v Speaker 2>I mean, this is the start of an AI driven

0:02:33.240 --> 0:02:35.640
<v Speaker 2>super psych with iPhone sixteen. I think it's gonna be

0:02:35.720 --> 0:02:38.360
<v Speaker 2>historical period. Look, we've talked about a lot on the show.

0:02:38.880 --> 0:02:43.760
<v Speaker 2>Three hundred million of one point five billion iPhones, including Sweeney,

0:02:44.160 --> 0:02:49.079
<v Speaker 2>haven't upgraded in four plus years AI. Twenty five percent

0:02:49.080 --> 0:02:51.880
<v Speaker 2>of the world is going to access AI through an

0:02:51.919 --> 0:02:54.520
<v Speaker 2>Apple device. The consumer revolution all starts.

0:02:54.560 --> 0:02:57.919
<v Speaker 1>Stop it a push against you, Tom Keen and Paul Sweeney.

0:02:57.919 --> 0:03:01.040
<v Speaker 1>Don't give a damn about AI. Just want an iPhone

0:03:01.320 --> 0:03:03.959
<v Speaker 1>to know where our kids are. What's a big deal

0:03:03.960 --> 0:03:06.520
<v Speaker 1>about AI If Paul Sweeney's not gonna use it?

0:03:06.800 --> 0:03:09.679
<v Speaker 2>So that's today. If you look at the app There's

0:03:09.680 --> 0:03:13.880
<v Speaker 2>gonna be hundreds of apps built on Apple Intelligence that

0:03:13.919 --> 0:03:18.000
<v Speaker 2>are gonna be AI driven as well as this open AI.

0:03:18.080 --> 0:03:20.280
<v Speaker 2>It's good. It's essentially gonna be a personal assistant that

0:03:20.360 --> 0:03:24.359
<v Speaker 2>really from a data perspective, understands paul sway understands, can

0:03:24.560 --> 0:03:27.840
<v Speaker 2>understand your habits. This is gonna change. This is how

0:03:27.919 --> 0:03:31.560
<v Speaker 2>most consumers are now going to interact with AI.

0:03:32.400 --> 0:03:35.600
<v Speaker 3>China. What's the latest on China? My concern always in

0:03:35.640 --> 0:03:38.240
<v Speaker 3>the back of my mind is that the average Chinese

0:03:38.240 --> 0:03:40.880
<v Speaker 3>consumer is saying, I'm just not buying American. Is that

0:03:40.960 --> 0:03:43.560
<v Speaker 3>an issue for Apple in terms of market share?

0:03:43.760 --> 0:03:46.160
<v Speaker 2>I mean, as someone that spends time in the region,

0:03:46.640 --> 0:03:50.400
<v Speaker 2>the average Chinese consumer wants the best product in the world,

0:03:50.480 --> 0:03:53.600
<v Speaker 2>which is an Apple device. So I'm not saying that

0:03:53.640 --> 0:03:57.880
<v Speaker 2>there aren't some geopolitical headwinds. We're actually seeing more tail

0:03:57.920 --> 0:04:01.200
<v Speaker 2>wins out of China, especially iPhone sixteen. You have one

0:04:01.240 --> 0:04:04.120
<v Speaker 2>hundred million iPhones that are basically having upgrade four years,

0:04:04.240 --> 0:04:07.320
<v Speaker 2>So I think any headwinds there starting now come down.

0:04:07.520 --> 0:04:11.160
<v Speaker 2>That's why I cook ninety percent CEO ten percent politician.

0:04:11.480 --> 0:04:13.920
<v Speaker 3>Right, Yeah, it's smart. How about India? We were just

0:04:13.920 --> 0:04:15.480
<v Speaker 3>I was just talking about this with somebody at the

0:04:15.520 --> 0:04:17.360
<v Speaker 3>club last night. Tom at the bar, we were talking

0:04:17.480 --> 0:04:20.160
<v Speaker 3>iPhones in India. How that came about? I have no

0:04:20.200 --> 0:04:24.239
<v Speaker 3>idea you at the club last night. There's no club

0:04:24.279 --> 0:04:26.919
<v Speaker 3>that would take or would I want to be in

0:04:26.960 --> 0:04:27.360
<v Speaker 3>that club?

0:04:27.920 --> 0:04:29.799
<v Speaker 2>Or were you at the watch party for a video?

0:04:30.320 --> 0:04:33.839
<v Speaker 1>Yes, wisan Thal was that whatever?

0:04:34.920 --> 0:04:36.600
<v Speaker 2>I thought Sweeney was going to be at that watch

0:04:36.640 --> 0:04:38.360
<v Speaker 2>But I.

0:04:38.160 --> 0:04:40.760
<v Speaker 1>At least day trading office couch at the cottage. I

0:04:41.279 --> 0:04:43.760
<v Speaker 1>can only say my club last night, I was a club.

0:04:43.800 --> 0:04:47.040
<v Speaker 1>Do the dishes club? India?

0:04:47.360 --> 0:04:50.240
<v Speaker 3>What's the opportunity there for Apple in India? Don't they

0:04:50.279 --> 0:04:53.040
<v Speaker 3>have to have a lower price phone in that market?

0:04:53.279 --> 0:04:56.320
<v Speaker 2>But in India you've actually had a rising middle class,

0:04:56.360 --> 0:04:58.600
<v Speaker 2>and I think if you that's always been a tough

0:04:58.640 --> 0:05:03.280
<v Speaker 2>market for Apple. Three percent iPhones we think called by

0:05:03.279 --> 0:05:05.520
<v Speaker 2>the next two years it's gonna be ten to twelve

0:05:05.520 --> 0:05:09.760
<v Speaker 2>percent overall iPhones. India is actually gonna be robust for Apple,

0:05:09.880 --> 0:05:11.200
<v Speaker 2>especially on different price points.

0:05:11.279 --> 0:05:14.960
<v Speaker 1>How many iPhones are purchased a wise one on a

0:05:15.000 --> 0:05:18.159
<v Speaker 1>plan from a phone company and not where somebody spends

0:05:18.240 --> 0:05:20.359
<v Speaker 1>eight hundred or one thousand dollars on the toy.

0:05:20.720 --> 0:05:22.839
<v Speaker 2>I mean, it's a huge number. I mean, it's a

0:05:22.920 --> 0:05:26.159
<v Speaker 2>huge number. And if you look at the carrier discounts

0:05:26.160 --> 0:05:28.160
<v Speaker 2>that's gonna come and this is the big thing.

0:05:28.240 --> 0:05:30.520
<v Speaker 1>Do you have information on them? You'd like to break

0:05:30.640 --> 0:05:31.240
<v Speaker 1>on Bloomberg.

0:05:31.320 --> 0:05:35.760
<v Speaker 2>So everything we're seeing, we think it was gonna essentially

0:05:35.800 --> 0:05:42.080
<v Speaker 2>be unprecedented types of promotion from especially US carriers at

0:05:42.200 --> 0:05:46.360
<v Speaker 2>and just because this is the time in other words,

0:05:46.480 --> 0:05:49.080
<v Speaker 2>when you think about five G when that came out,

0:05:49.400 --> 0:05:52.359
<v Speaker 2>and now essentially AI, this is really gonna be the

0:05:52.400 --> 0:05:56.160
<v Speaker 2>opportunity in terms of carrier discounts and what really starts

0:05:56.279 --> 0:05:59.880
<v Speaker 2>to about maturity on a smartphone cycle. This is now

0:06:00.520 --> 0:06:03.719
<v Speaker 2>that consumer AI revolution that actually will go through Cooper

0:06:03.760 --> 0:06:06.440
<v Speaker 2>Tino and we think that's how we have a four

0:06:06.560 --> 0:06:08.800
<v Speaker 2>trillion dollar mark cap as you know going to early

0:06:08.839 --> 0:06:09.440
<v Speaker 2>next year.

0:06:09.360 --> 0:06:11.039
<v Speaker 1>Do you have some of the parts on Apple you

0:06:11.080 --> 0:06:11.559
<v Speaker 1>can update?

0:06:11.760 --> 0:06:15.160
<v Speaker 2>Yeah, so we have one point seven trillion is what

0:06:15.160 --> 0:06:18.560
<v Speaker 2>what I view is the services value. And when you

0:06:18.640 --> 0:06:21.559
<v Speaker 2>sort of some of the parts that that's something where

0:06:21.600 --> 0:06:23.440
<v Speaker 2>you know, you got a one hundred billion a rev

0:06:23.640 --> 0:06:27.719
<v Speaker 2>growing mid teens, free cash margins are double the hardware business.

0:06:27.960 --> 0:06:30.920
<v Speaker 2>You combine it, it's over four trillion. I think bull

0:06:31.040 --> 0:06:33.320
<v Speaker 2>cases ultimately you know over over three.

0:06:33.200 --> 0:06:37.200
<v Speaker 3>Hundred Microsoft, which I know you've been very bullish on Microsoft.

0:06:37.279 --> 0:06:38.640
<v Speaker 3>What's the thought these days?

0:06:38.760 --> 0:06:41.520
<v Speaker 2>You look in a video's call last night, you also

0:06:41.560 --> 0:06:44.680
<v Speaker 2>buy Microsoft because Nadella and Redmud are weeding. Then on

0:06:44.720 --> 0:06:47.960
<v Speaker 2>the software side, you look at open Ai. They're really

0:06:48.040 --> 0:06:51.760
<v Speaker 2>dominating in that amount rushmore. That's where Nadella is along

0:06:51.800 --> 0:06:52.600
<v Speaker 2>with Jensen.

0:06:52.960 --> 0:06:59.279
<v Speaker 1>Does Blackwell compete with Azure or do they cohabitate They're complementary.

0:06:59.440 --> 0:07:01.920
<v Speaker 1>Thing about I don't understand that exploits.

0:07:01.720 --> 0:07:05.560
<v Speaker 2>So essentially Blackwell is almost the architecture, the foundation of

0:07:05.600 --> 0:07:10.680
<v Speaker 2>a house. Microsoft is the actual house. The actual rooms

0:07:10.920 --> 0:07:14.680
<v Speaker 2>will be different software players, service now you know called

0:07:14.720 --> 0:07:18.360
<v Speaker 2>salesforce and others. What protects the house, cybersecurity names like

0:07:18.400 --> 0:07:21.640
<v Speaker 2>pale out though and others. Look, I continue to think

0:07:21.760 --> 0:07:26.800
<v Speaker 2>in Vidia today it's Lebron in high school. That's essentially

0:07:26.800 --> 0:07:31.080
<v Speaker 2>where they are. Lebron in high school, in Vidia, that's

0:07:31.120 --> 0:07:31.720
<v Speaker 2>where they are.

0:07:32.360 --> 0:07:35.120
<v Speaker 3>So I guess so when we think about this AI

0:07:35.240 --> 0:07:38.520
<v Speaker 3>spending here, the numbers are just almost numbing. That is

0:07:38.680 --> 0:07:42.880
<v Speaker 3>so big. How much of the AI capital spending the

0:07:43.280 --> 0:07:46.120
<v Speaker 3>is it incremental versus just taken away from other tech

0:07:46.440 --> 0:07:47.720
<v Speaker 3>budgets like it or something.

0:07:47.840 --> 0:07:51.720
<v Speaker 2>So I'd say about eight hundred billion of the trillion

0:07:52.520 --> 0:07:55.880
<v Speaker 2>is incremental. Wow, so there's two hundred billion that. Of

0:07:55.920 --> 0:07:59.040
<v Speaker 2>course there's accounnibalization impact and there will be losers on that,

0:07:59.400 --> 0:08:01.600
<v Speaker 2>but it really is incremental, and it just speaks to

0:08:02.000 --> 0:08:04.640
<v Speaker 2>strong get stronger in tech. And then you can say

0:08:04.640 --> 0:08:08.200
<v Speaker 2>about about regulatory. Regulatory is in a minivan going forty

0:08:08.200 --> 0:08:10.360
<v Speaker 2>miles an hour in the right lane, and the technology

0:08:10.400 --> 0:08:13.040
<v Speaker 2>is in a Ferrari key in the Ferrari left leane

0:08:13.080 --> 0:08:14.160
<v Speaker 2>going one hundred miles an hour.

0:08:14.360 --> 0:08:17.160
<v Speaker 1>What is the free cash flow growth of the MAG

0:08:17.280 --> 0:08:20.600
<v Speaker 1>seven when you aggregate them together. There's a secret Exel

0:08:20.800 --> 0:08:23.400
<v Speaker 1>spreadsheet in the basement of the eyves.

0:08:23.000 --> 0:08:26.680
<v Speaker 2>Of free cash for growth of MAG seven is i'd

0:08:26.720 --> 0:08:29.960
<v Speaker 2>say upper teams into potentially.

0:08:29.600 --> 0:08:31.280
<v Speaker 1>Really, you're gonna give me a two zero one.

0:08:31.320 --> 0:08:34.560
<v Speaker 2>I think it could start to now get that high

0:08:34.679 --> 0:08:37.280
<v Speaker 2>till we go into next two three. And that's why, look,

0:08:37.320 --> 0:08:40.439
<v Speaker 2>I get it. The bears continue to you know, they

0:08:40.480 --> 0:08:44.679
<v Speaker 2>sit there with their spreadsheets DCF being negative. Ontack, I'm

0:08:44.679 --> 0:08:45.319
<v Speaker 2>gonna stop there.

0:08:45.360 --> 0:08:48.280
<v Speaker 1>This is too important. You're going to DCF. I asked

0:08:48.280 --> 0:08:51.240
<v Speaker 1>this with Paul yesterday. How do you do with terminal

0:08:51.360 --> 0:08:55.199
<v Speaker 1>value on these juggernuts. This does not see FA one

0:08:55.240 --> 0:08:56.079
<v Speaker 1>on one, but you.

0:08:56.160 --> 0:09:00.160
<v Speaker 2>Have to ultimately trajectory out what the capax looks like,

0:09:00.880 --> 0:09:04.760
<v Speaker 2>what's the incremental dollars and what that ultimately means to

0:09:04.800 --> 0:09:05.160
<v Speaker 2>the WARLD.

0:09:05.520 --> 0:09:06.920
<v Speaker 1>How far out does Dana ives go?

0:09:07.040 --> 0:09:10.360
<v Speaker 2>You basically have to go out six, eight, ten years

0:09:10.360 --> 0:09:12.280
<v Speaker 2>to actually do a tradrest like when you look at

0:09:12.280 --> 0:09:15.199
<v Speaker 2>Microsoft the way that you get four and a half

0:09:15.280 --> 0:09:18.160
<v Speaker 2>five trillion, okay, just for you have to bas gonna

0:09:18.160 --> 0:09:20.800
<v Speaker 2>say how much of percentage of cappacks they're gonna get,

0:09:21.000 --> 0:09:24.680
<v Speaker 2>what demonization, what does the free cash will incrementally look like?

0:09:25.520 --> 0:09:27.760
<v Speaker 2>And that's where all these stories change. But then there's

0:09:27.760 --> 0:09:31.160
<v Speaker 2>other names like a pall and Teer, the Messi of AI.

0:09:31.679 --> 0:09:33.920
<v Speaker 2>It wasn't even on the radar. Now they're Lebron and

0:09:35.360 --> 0:09:36.640
<v Speaker 2>their core AI play.

0:09:37.080 --> 0:09:39.160
<v Speaker 3>Hey, Dan, one of the key action which of your

0:09:39.200 --> 0:09:41.320
<v Speaker 3>research is that you travel the globe. You see people

0:09:41.360 --> 0:09:42.920
<v Speaker 3>all over the place. What's your next trip?

0:09:43.480 --> 0:09:45.640
<v Speaker 2>So you'll be going to Asia on Monday, be there

0:09:45.679 --> 0:09:48.839
<v Speaker 2>for two weeks and look to me, that's where we've

0:09:48.840 --> 0:09:51.720
<v Speaker 2>got That's where we get edged. Because I think a

0:09:51.720 --> 0:09:54.880
<v Speaker 2>lot of investors how they've missed AI Revolution. They try

0:09:54.920 --> 0:09:58.160
<v Speaker 2>to find it on the Metro North Jersey transit on

0:09:58.240 --> 0:09:59.920
<v Speaker 2>the tenth four of their office building in New York.

0:10:00.040 --> 0:10:02.680
<v Speaker 2>Her Sam Frand you gotta travel to see it, And

0:10:02.720 --> 0:10:03.840
<v Speaker 2>I think that, So what.

0:10:03.720 --> 0:10:06.240
<v Speaker 1>Do you see when you go to We see.

0:10:06.000 --> 0:10:09.800
<v Speaker 2>The suppliers, we see the component players. I also think

0:10:09.840 --> 0:10:13.840
<v Speaker 2>by seeing global investors you get a very good sense

0:10:14.160 --> 0:10:16.200
<v Speaker 2>in terms of where things are, and I think it

0:10:16.280 --> 0:10:18.520
<v Speaker 2>just gives you a little more perspective.

0:10:18.600 --> 0:10:21.720
<v Speaker 1>Final, can you convince John Tucker to upgrade this time around?

0:10:21.960 --> 0:10:22.000
<v Speaker 2>No?

0:10:22.200 --> 0:10:26.360
<v Speaker 4>I think I think I think Tucker after going to

0:10:26.440 --> 0:10:29.680
<v Speaker 4>the Inn video watch party last night, that he might

0:10:29.840 --> 0:10:32.720
<v Speaker 4>now potentially upgrade to an iPhone.

0:10:33.440 --> 0:10:35.840
<v Speaker 1>O cursonally Blackwell Ship Where have I heard that name?

0:10:36.000 --> 0:10:38.840
<v Speaker 1>Remember mister Blackwell, the guy who did the best and

0:10:38.920 --> 0:10:40.400
<v Speaker 1>worst stress less? Oh yeah?

0:10:40.320 --> 0:10:40.520
<v Speaker 3>Where?

0:10:42.840 --> 0:10:45.280
<v Speaker 2>I think Kean would be at the top. Kean would

0:10:45.280 --> 0:10:46.960
<v Speaker 2>be at the top, and I'd be and maybe like

0:10:47.040 --> 0:10:48.840
<v Speaker 2>the like other category.

0:10:48.679 --> 0:10:53.080
<v Speaker 1>Mister travels qugely valuable well curse future, mister Rymes, mister

0:10:53.200 --> 0:10:56.959
<v Speaker 1>Munster together today on Bloomberg Surveillance. That's the way that

0:10:57.000 --> 0:10:57.439
<v Speaker 1>we roll