WEBVTT - Instant Reaction: Nvidia Sales Forecast Falls Short 0:00:02.600 --> 0:00:07.280 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.039 --> 0:00:10.399 Let's talk in video and video shares did shed more 0:00:10.440 --> 0:00:12.920 than two percent ahead of its earnings report that are 0:00:13.039 --> 0:00:15.480 due in the coming minutes. The stock up more than 0:00:15.480 --> 0:00:17.279 one hundred and fifty percent so far this year. It 0:00:17.320 --> 0:00:19.560 is the top performer in the S and P five 0:00:19.640 --> 0:00:22.680 hundred and the NASDAQ one hundred. Let's go down to 0:00:22.840 --> 0:00:26.600 Bloomberg Technology co host ed Ludlow, who joins us from 0:00:26.600 --> 0:00:30.000 our San Francisco bureau, ed the most important numbers you're 0:00:30.040 --> 0:00:33.239 watching in just a few minutes. When these earnings cross, 0:00:33.400 --> 0:00:33.800 what are they? 0:00:34.360 --> 0:00:35.080 I mean, all of them. 0:00:35.080 --> 0:00:37.920 It's probably the most important earnings report in my career, 0:00:38.000 --> 0:00:40.479 which is not quite as long as both of yours. 0:00:40.560 --> 0:00:43.319 But you go straight to the data center business, and 0:00:43.320 --> 0:00:45.960 not necessarily for the quarter gone. We have a good 0:00:46.000 --> 0:00:48.080 sense of how that will go. Will probably be twenty 0:00:48.080 --> 0:00:50.920 five billion dollars of data center revenue. You have to 0:00:50.960 --> 0:00:53.720 go straight to the outlook or the guide for the 0:00:53.760 --> 0:00:57.160 fiscal third quarter because that answers the only question we have, 0:00:57.560 --> 0:01:00.240 which is what is the staying power of this AI 0:01:00.320 --> 0:01:01.240 investment cycle? 0:01:03.560 --> 0:01:06.759 And you know the thing is, I think about the expectations, 0:01:06.760 --> 0:01:09.559 how high they are ed, and we've seen the stock, 0:01:09.600 --> 0:01:12.679 which we saw it sell off kind of like early 0:01:12.880 --> 0:01:15.800 or mid June, right, and then yes, we saw an 0:01:15.880 --> 0:01:19.200 equal bounce like about twenty seven percent from that low 0:01:19.600 --> 0:01:23.440 over the summer. So expectations going into this are super high, 0:01:23.440 --> 0:01:25.600 which makes me think, does it have to be a 0:01:25.600 --> 0:01:28.920 tremendous beat as we've come to expect from this company, 0:01:29.200 --> 0:01:31.360 otherwise there's going to be a little bit of disappointment 0:01:31.440 --> 0:01:32.240 or some questions. 0:01:32.520 --> 0:01:36.240 Well, let's take the third quarter fiscal third quarter guide example. 0:01:36.319 --> 0:01:38.680 You know, the average analyst estimate is thirty one point 0:01:38.760 --> 0:01:41.399 nine billion dollars, but at the very top end of estimates, 0:01:41.440 --> 0:01:44.640 you're talking thirty eight thirty nine billion dollars. There are 0:01:44.680 --> 0:01:48.240 some on the street who have very high expectations. I've 0:01:48.320 --> 0:01:50.760 learned from people like you at Bloomberg over the years. 0:01:50.840 --> 0:01:53.640 One market session a market does not make. This is 0:01:53.640 --> 0:01:55.880 a stock up one hundred and fifty percent year to date, 0:01:56.040 --> 0:01:59.440 but almost one thousand percent from its October twenty twenty 0:01:59.440 --> 0:02:03.160 two bear market low. It was incredibly overbought January through March, 0:02:03.200 --> 0:02:06.040 and then again in June and July, and retail investors 0:02:06.040 --> 0:02:08.919 continue to pile in that sets us up for some tension, I. 0:02:08.880 --> 0:02:12.600 Think, yeah, speaking attention, about thirty seconds away from when 0:02:12.600 --> 0:02:14.239 we are expecting those numbers. 0:02:14.360 --> 0:02:16.560 Doc is up one point six percent here ahead of 0:02:16.560 --> 0:02:19.600 the earnings. So we're just waiting for Nvidia to cross. 0:02:19.639 --> 0:02:23.440 So we're seeing some trade ahead of the results, actually crossing, 0:02:23.480 --> 0:02:26.720 some optimistic trading, if you will. As we said, the stock, 0:02:26.760 --> 0:02:29.160 which was a little bit lower today, it's bouncing here 0:02:29.200 --> 0:02:32.960 almost two percent here in the aftermarket. So I don't know, 0:02:32.960 --> 0:02:34.400 seven seconds and we expect these numbers. 0:02:34.560 --> 0:02:36.120 Yeah, I'm gonna let Ed Ludlow take a look at 0:02:36.120 --> 0:02:39.359 his Bloomberg terminal, as we do expect these numbers to take. 0:02:40.480 --> 0:02:42.920 These numbers to cross imminently right now. As a reminder 0:02:43.200 --> 0:02:45.840 in Kiga notes, let's do this typically hits at twenty 0:02:45.840 --> 0:02:46.400 pass all right. 0:02:46.440 --> 0:02:50.800 Second quarter revenue folks, thirty billion dollars estimate was twenty 0:02:50.800 --> 0:02:53.480 eight point eighty six billion, So again that is a beat. 0:02:53.800 --> 0:02:57.920 Company approving an additional fifty billion dollars in share buyback. Again, 0:02:57.960 --> 0:02:59.760 the stock up about two and a quarter percent here 0:02:59.800 --> 0:03:00.600 in the after market. 0:03:00.720 --> 0:03:02.960 Yeah, the company c's third quarter revenue at thirty two 0:03:03.000 --> 0:03:06.480 point five billion plus or minus two percent. The company 0:03:06.520 --> 0:03:10.320 maintains its quarterly dividend at one cent per share. Second 0:03:10.360 --> 0:03:13.320 quarter data center revenue that is a very important metric 0:03:13.360 --> 0:03:14.840 to keep an eye on. That as the vast majority 0:03:14.840 --> 0:03:16.960 of the company's revenue coming in at twenty six point 0:03:17.000 --> 0:03:20.400 three billion dollars, beating estimates of twenty five point oh 0:03:20.520 --> 0:03:23.280 eight billion dollars. So justin gross margin for the second 0:03:23.360 --> 0:03:26.880 quarter coming in right above, just above estimates, seventy five 0:03:26.919 --> 0:03:29.520 point seven percent, Carol estimates were for seventy five point 0:03:29.600 --> 0:03:30.120 five percent. 0:03:30.160 --> 0:03:32.120 All right, we're talking with Ed Ludlow, the co host 0:03:32.160 --> 0:03:34.760 of Bloomberg Technology, and you said the numbers, you're watching 0:03:34.800 --> 0:03:36.960 all of them, but you did single out initially the 0:03:37.040 --> 0:03:40.080 data center revenue, which we were expecting about twenty five billion. 0:03:40.280 --> 0:03:40.720 That's a bee. 0:03:41.800 --> 0:03:42.320 Yeah, it's a B. 0:03:42.480 --> 0:03:43.960 I mean, I've got the ticker for after I was 0:03:44.000 --> 0:03:45.760 trade in front of me, and my eyes are bouncing 0:03:45.800 --> 0:03:47.839 all around, and I think the market's taking a few 0:03:47.880 --> 0:03:49.080 seconds to make up its mind. 0:03:49.120 --> 0:03:50.080 Let's just run through it. 0:03:50.120 --> 0:03:53.560 Thirty two point five billion dollars plus all minus two 0:03:53.560 --> 0:03:56.520 percent is basically, I think in line with the thirty 0:03:56.520 --> 0:03:59.120 one point nine billion dollars that the street was looking for. 0:03:59.160 --> 0:04:01.200 I'll do the math on the point in due course. 0:04:01.600 --> 0:04:05.120 An impressive beat, I suppose on data center revenue in 0:04:05.160 --> 0:04:08.120 the second court had just gone in overall revenues. Then 0:04:08.160 --> 0:04:10.720 we asked the question, why why was it better? You know, 0:04:10.760 --> 0:04:14.080 they telegraphed that pretty well. And my goodness, don't you 0:04:14.120 --> 0:04:16.960 love it when there's consistency, when something that we were 0:04:17.000 --> 0:04:20.880 talking about continues to happen. And that is shareholder friendly policy. 0:04:20.920 --> 0:04:23.600 And I think that fifty billion dollars of edition will 0:04:23.640 --> 0:04:27.120 share buybacks, no one would be sort of disappointed with that. 0:04:27.240 --> 0:04:29.920 The stock up, you know, ish in after hours. 0:04:30.160 --> 0:04:32.480 Yeah, you know, we had a we were talking earlier 0:04:32.520 --> 0:04:35.640 about if things came in in line with expectations, because 0:04:35.720 --> 0:04:39.760 expectations were so high, you might not see a huge reaction, Carol, Right, 0:04:39.800 --> 0:04:42.680 even with a fifty billion dollars share buyback, we're barely 0:04:42.680 --> 0:04:44.359 seeing stock move in the after hours. 0:04:44.480 --> 0:04:46.800 Yeah, just up about one percent. Hey, dig it into 0:04:46.839 --> 0:04:48.760 the press release. You're going to talk with Jensen Wong, 0:04:48.800 --> 0:04:51.320 founder and CEO n Vidia later on. He says hyper 0:04:51.320 --> 0:04:55.800 demand remains strong and the anticipation for a blackwell is incredible. 0:04:56.160 --> 0:04:59.160 He said the company rechieve record revenues as global data 0:04:59.160 --> 0:05:03.120 centers are in full throttle to modernize the entire computing 0:05:03.160 --> 0:05:06.440 stack with accelerated computing and generative AI. Like, we know 0:05:06.520 --> 0:05:10.839 this guy knows how to speak and talk about his company, 0:05:10.920 --> 0:05:14.279 his market, his industry. But what are you looking for 0:05:14.760 --> 0:05:16.400 as you go through this press release and what are 0:05:16.440 --> 0:05:18.720 you thinking about that conversation you're going to have with it? 0:05:19.160 --> 0:05:22.039 Yeah, my eyes went straight to the Blackwell commentary and 0:05:22.080 --> 0:05:28.320 the anticipation being high. Excitement, anticipation are interesting words, but 0:05:28.440 --> 0:05:32.600 they are not a granular explanation of what's happening with Blackwell. 0:05:32.920 --> 0:05:36.039 The reporting was that due to the complexity of its design, 0:05:36.480 --> 0:05:39.880 it has two compute dies basically think about two triangles 0:05:40.120 --> 0:05:42.599 with a split between them, because it's so big. 0:05:42.640 --> 0:05:43.760 It's so much bigger. 0:05:43.480 --> 0:05:46.040 Than any other high performance GPU that's gone before it. 0:05:46.400 --> 0:05:49.640 And the reporting was that this presented a production challenge 0:05:50.040 --> 0:05:53.080 and so we want some specific detail on that. But 0:05:53.200 --> 0:05:56.240 again this is classic Jensen Wang that everything is intact, 0:05:56.480 --> 0:05:59.680 the AI investment cycle is there, and clearly he's bullish 0:05:59.720 --> 0:06:02.680 because in video is ninety nine percent of the market 0:06:03.240 --> 0:06:05.440 for this range of AI accelerators. 0:06:05.720 --> 0:06:07.600 Shares bouncing around a little bit, but they are now 0:06:07.640 --> 0:06:10.520 lower by about two point two percent in after hours 0:06:10.560 --> 0:06:14.440 trading AD I do wonder what the demand story is 0:06:14.480 --> 0:06:19.719 from customers, and now that we're seeing the latest results 0:06:19.720 --> 0:06:22.080 from in video, what's the story that you're seeing? I 0:06:22.120 --> 0:06:24.640 should say shares continue to move lower, down about three 0:06:24.640 --> 0:06:25.800 percent and after hours. 0:06:25.920 --> 0:06:28.479 So this is why we go straight to the guide 0:06:28.560 --> 0:06:31.400 or outlook for the current period or the fiscal third quarter. 0:06:31.480 --> 0:06:34.640 Because of the timing of Nvidia's earnings today August twenty eighth, 0:06:34.920 --> 0:06:36.960 it comes at the end of earning season where the 0:06:37.000 --> 0:06:42.240 capital expenditures guidance from the biggest Nvidia customers has been 0:06:42.279 --> 0:06:44.599 and gone. So if you look at the capital expenditures 0:06:44.600 --> 0:06:47.280 guidance of a Microsoft I think Carol pointed out very 0:06:47.320 --> 0:06:50.200 smartly that about forty five percent of Microsoft capex goes 0:06:50.240 --> 0:06:53.400 directly to Nvidia. We knew that they were committed to spending, 0:06:53.839 --> 0:06:57.400 but how confident is in video in that trend continuing 0:06:57.480 --> 0:06:59.960 over a longer time horizon. You look at the stop 0:07:00.200 --> 0:07:03.359 after hours down now almost five percent. One has to 0:07:03.440 --> 0:07:05.440 keep their feet on the ground and ask is that 0:07:05.600 --> 0:07:10.720 so severe? Is it so surprising given how high a 0:07:10.760 --> 0:07:13.520 bar this quarter was and how lofty expectations were. 0:07:13.600 --> 0:07:16.320 One hundred and fifty percent higher so far this year 0:07:16.360 --> 0:07:20.880 at five percent decline after earnings that beat estimates but 0:07:20.920 --> 0:07:22.400 didn't blow estimates out of the water. 0:07:22.520 --> 0:07:24.160 Well, I think you go to the outlook, like you 0:07:24.240 --> 0:07:26.960 keep you know, emphasizing ed this high idea and I 0:07:27.000 --> 0:07:29.480 know you put it out on the on the blog 0:07:29.960 --> 0:07:33.480 of what came in all right, better than what the 0:07:33.560 --> 0:07:36.520 average estimate was. But when you think about the high 0:07:36.640 --> 0:07:39.000 numbers that some were expecting almost as much as thirty 0:07:39.040 --> 0:07:42.120 eight billion dollars for that third corent revenue, like that 0:07:42.320 --> 0:07:45.520 is going to color how investors, you know, react to 0:07:45.520 --> 0:07:47.920 this number. They were expecting more, a lot more. 0:07:48.880 --> 0:07:51.840 Yeah, And like I know that this is something that 0:07:51.840 --> 0:07:54.640 Bloomberg people always say, but you also just have to 0:07:54.680 --> 0:07:57.960 give some sort of context of where the stock trades. Right, 0:07:58.000 --> 0:08:00.280 it is a stock that trades at thirty eight times 0:08:00.440 --> 0:08:04.560 forward twelve month earnings. Again, I always look at Relative 0:08:04.560 --> 0:08:08.120 Strength Index RSI and the terminal, but one data set 0:08:08.160 --> 0:08:11.119 that I've tracked is that retail investors have absolutely piled 0:08:11.160 --> 0:08:11.560 into this. 0:08:11.520 --> 0:08:12.240 Stock of late. 0:08:12.560 --> 0:08:14.640 It had all of the hallmarks of something that was 0:08:14.720 --> 0:08:17.760 set to swing in. I have direction based on options 0:08:17.800 --> 0:08:20.239 market trading, and I think the point that I'm making 0:08:20.280 --> 0:08:22.520 without telling our audience about how the sausage is made 0:08:22.520 --> 0:08:25.400 too much. One very wise editor said on our planning 0:08:25.400 --> 0:08:28.760 call that even if it beats expectations or street or 0:08:28.800 --> 0:08:32.040 consensus estimates, this is a likely outcome because of where 0:08:32.040 --> 0:08:35.319 we've positioned ourselves in the market going into the print. 0:08:35.480 --> 0:08:40.360 Meaning that expectations are just so high for this company. 0:08:40.400 --> 0:08:40.840 Correct. 0:08:40.960 --> 0:08:44.880 Yeah, Directs, I think, Tim, that's probably the understatement of 0:08:44.920 --> 0:08:45.480 the century. 0:08:46.200 --> 0:08:48.559 Well, you know, you're also dealing with base effects. As 0:08:48.559 --> 0:08:51.520 we mentioned, the comps are really tough given where this 0:08:51.840 --> 0:08:54.960 was a year ago and where investors expected to go 0:08:55.040 --> 0:08:57.319 in terms of growth rate. I mean, as Abigail do 0:08:57.320 --> 0:08:59.240 a little pointed out on our cair you know they 0:08:59.280 --> 0:09:02.760 were seeing what north of two hundred percent growth some quarters. 0:09:02.840 --> 0:09:04.560 Well, you know, this is something I used to think 0:09:04.559 --> 0:09:08.120 about with Apple, like when it didn't live up to expectations, 0:09:08.160 --> 0:09:11.319 it got harder and harder to move the needle on that. 0:09:11.400 --> 0:09:14.760 And yet when you look at the numbers and I 0:09:14.880 --> 0:09:16.600 understand it's all relative, and you've got to give the 0:09:16.600 --> 0:09:18.600 context in terms of growth and so on and so forth. 0:09:19.240 --> 0:09:21.160 And video is still selling a lot of stuff, right, 0:09:21.200 --> 0:09:23.960 and it is the game in town if you want 0:09:24.000 --> 0:09:25.440 those advanced AI chips. 0:09:26.360 --> 0:09:28.679 Okay, guys, I'm really sorry to go on attendent. These 0:09:28.720 --> 0:09:32.400 headlines are super important in videos saying it expects several 0:09:32.440 --> 0:09:35.880 billion dollars in Blackwell revenues in the fourth quarter. I 0:09:36.080 --> 0:09:37.959 King's just hit the button on the red headline. I'm 0:09:38.000 --> 0:09:42.360 not surprised. Yeah, that this was the question that in 0:09:42.440 --> 0:09:45.080 video makes a commitment to bring a new generation of 0:09:45.120 --> 0:09:48.320 its AI accelerator to market annually, and there have been 0:09:48.360 --> 0:09:51.719 the reporting on the design challenges about Blackwell. What in 0:09:51.800 --> 0:09:55.280 Vidia's confirming is that they will book really really significant 0:09:55.320 --> 0:09:58.080 revenue on that product in the early stage of its ramp, 0:09:58.120 --> 0:10:00.440 in the final three months of the calendar year or 0:10:00.480 --> 0:10:03.680 its fiscal fourth quarter. But they do make a concession 0:10:04.000 --> 0:10:07.360 that they had to change the Blackwell mask production step. 0:10:07.440 --> 0:10:09.480 I have to plead ignorance on the technicalities of that. 0:10:09.520 --> 0:10:11.320 I'm going to run to Ian's desk and ask him, 0:10:11.679 --> 0:10:13.280 but they are at least talking about it. 0:10:13.280 --> 0:10:14.000 I think that this. 0:10:13.960 --> 0:10:17.840 Commentary comes from not the earnings released necessarily, but the 0:10:17.840 --> 0:10:20.440 CFO commentary that comes as an appendix to it. 0:10:21.000 --> 0:10:22.280 So we'll dig into that as we go. 0:10:22.920 --> 0:10:25.520 Is several billion dollars not sufficient? 0:10:26.120 --> 0:10:29.080 Ed, what is several billion dollars? 0:10:30.000 --> 0:10:33.640 I mean the relatively significant after hours decline is now 0:10:33.760 --> 0:10:35.920 sort of less significant. That might give you a sense 0:10:35.960 --> 0:10:38.160 of how investors feel about that. But I think the 0:10:38.240 --> 0:10:42.000 idea was that, you know, this is a product that 0:10:42.520 --> 0:10:44.000 we're not talking I've said this to you guys so 0:10:44.040 --> 0:10:46.800 many times, and I almost don't apologize for it. When 0:10:46.840 --> 0:10:49.520 we talk about an AI chip, we're not talking about 0:10:49.559 --> 0:10:51.760 this little thing you can hold in your hand. The 0:10:51.760 --> 0:10:55.560 core technology, yes, is probably about the size of a sandwich, 0:10:55.880 --> 0:10:59.000 but it goes into a rack that goes into a server, 0:10:59.120 --> 0:11:02.200 a big three hundreundred pounds server box in rows and 0:11:02.280 --> 0:11:04.280 rows that fill out a data center. And that's the 0:11:04.280 --> 0:11:07.440 scale that we're talking about. So when you produce it 0:11:07.480 --> 0:11:10.360 at scale, it presents a challenge. And to me that 0:11:10.440 --> 0:11:15.120 the shipment of several billion dollars seems substantive in this instance. 0:11:16.240 --> 0:11:18.240 Yeah, it's interesting. I feel like, you know, we're going 0:11:18.280 --> 0:11:20.280 to want a little bit more in terms of specifics 0:11:20.280 --> 0:11:23.599 about Blackwell and what those shipments in terms of the 0:11:23.600 --> 0:11:26.520 fourth quarter what exactly means, because that's outlook fourth quarter 0:11:26.600 --> 0:11:28.640 not so far away, and you do wonder if that's 0:11:28.880 --> 0:11:31.280 something that moves the needle significantly. This is everything that 0:11:31.360 --> 0:11:32.520 you know people have been talking about. 0:11:32.679 --> 0:11:35.000 Hey, Ed, before we let you go, you have a 0:11:35.000 --> 0:11:37.920 conversation with Jensen coming up a little later, a special 0:11:38.040 --> 0:11:42.040 edition of Bloomberg Technology, an exclusive interview with Jensen Wong. 0:11:42.440 --> 0:11:44.640 Just the last forty five seconds we have with you, 0:11:45.080 --> 0:11:47.160 give us how without giving away the questions, tell us 0:11:47.200 --> 0:11:48.040 how you're thinking about this. 0:11:49.000 --> 0:11:51.439 Yeah, I think that you know me. I love details. 0:11:51.480 --> 0:11:53.920 So I'm going to ask about Blackwell, although it's Bloomberg 0:11:54.200 --> 0:11:56.480 policy not to give questions in advance of interview, and 0:11:56.480 --> 0:11:59.360 I'm sure somebody from Nvidia is listening, but that's the question. 0:11:59.480 --> 0:12:01.920 And then I heard you talking to remain boss Stick 0:12:01.960 --> 0:12:05.559 about his surprise that revenue comes from just five players. 0:12:06.000 --> 0:12:08.280 I thought I'd been saying that on our network every 0:12:08.320 --> 0:12:09.600 week the last two years. 0:12:09.960 --> 0:12:11.920 But that is the question. 0:12:11.960 --> 0:12:14.400 When do you move beyond that, you want to sell 0:12:14.440 --> 0:12:18.640 to smaller and medium sized enterprises, governments and other public institutions. 0:12:18.960 --> 0:12:20.920 Do you have some evidence that that's already happening. 0:12:21.000 --> 0:12:22.640 That's a point that Ian King brought up at the 0:12:22.640 --> 0:12:24.800 top of our two o'clock hour right here on Bloomberg 0:12:24.880 --> 0:12:27.000 TV in Bloomberg Radio. I'm going to tell Romaine to 0:12:27.000 --> 0:12:30.360 listen to you more, Ed, so he's not surprised in 0:12:30.400 --> 0:12:30.880 the future. 0:12:31.000 --> 0:12:32.840 Sy A lot going on, all. 0:12:32.760 --> 0:12:34.600 Right, Good luck, kiddo. With that, we'll be listening to 0:12:34.800 --> 0:12:37.760 that interview Ed La La, co host of Bloomberg Technology 0:12:37.760 --> 0:12:42.000 at Bloomberg TV and again Bloomberg Technology, we'll have that 0:12:42.080 --> 0:12:44.840 half hour special at six thirty pm Wall Street Time, 0:12:45.360 --> 0:12:48.960 highlighted by that exclusive interview that Ed will have with 0:12:49.000 --> 0:12:51.480 the CEO of Nvidio, Jensen Wog. And right now we've 0:12:51.480 --> 0:12:54.440 got Sure's of Nvidia down about five point one percent 0:12:54.520 --> 0:12:56.679 here in the aftermarket. 0:12:56.240 --> 0:12:59.880 Happening quickly. The reaction has been big. It was nothing 0:13:00.440 --> 0:13:02.400 and then it was more than it was eight percent. 0:13:02.760 --> 0:13:03.840 It was like three percent. 0:13:03.960 --> 0:13:05.320 Did you go down as much as eight percent at 0:13:05.320 --> 0:13:09.439 one point. It's been bouncing around and we've seen, yeah, 0:13:09.520 --> 0:13:12.840 some interesting moves here. And we are seeing as I mentioned, 0:13:12.920 --> 0:13:16.400 Naszak one undred many futures there down about two percent here, 0:13:16.400 --> 0:13:19.320 So we're seeing some drag. Not coming and done completely, 0:13:19.360 --> 0:13:23.400 but it's interesting. Let's see what Bloomberg Intelligence Senior Semiconductor 0:13:23.440 --> 0:13:26.040 Alice kun John Sabani has to say about that, he 0:13:26.120 --> 0:13:28.440 joins us. He's out there in our San Francisco bureau. 0:13:28.520 --> 0:13:31.839 All right, top of mind for you, cun John, tell 0:13:31.880 --> 0:13:35.520 us about the quarter? Do they do Okay? How's the outlook? 0:13:35.559 --> 0:13:37.440 It seems like there's a little bit of disappointment here. 0:13:38.559 --> 0:13:40.920 Yeah, I mean, I think they did really good as 0:13:40.960 --> 0:13:45.440 part of our expectations. I'm sure the Nvidia obsesses and 0:13:46.120 --> 0:13:49.400 might be disappointed given the magnitude of the beat, which 0:13:49.400 --> 0:13:52.640 we had called out to be in the single digit range, 0:13:53.360 --> 0:13:58.280 and especially against the lofty, unsustainable expectations that some of 0:13:58.320 --> 0:14:01.800 the again Nvidia opssis have been forming. But fundamentally in 0:14:01.880 --> 0:14:04.760 terms of long term, in terms of the competitive landscape, 0:14:05.160 --> 0:14:08.319 everything remains intact. We don't see any big risks out 0:14:08.360 --> 0:14:09.360 of this earning so far. 0:14:09.800 --> 0:14:14.320 Do you see any softness when it comes to the outlook? 0:14:14.520 --> 0:14:18.240 Even though it did it exceeded some expectations, it didn't 0:14:18.280 --> 0:14:22.160 exceed the loftiest expectations. Are you seeing signs of softness 0:14:21.800 --> 0:14:23.920 with its customers? 0:14:24.520 --> 0:14:27.000 I wouldn't call it a softness in terms of demand. 0:14:27.040 --> 0:14:29.720 I would rather call it more of a timing. I mean, 0:14:30.400 --> 0:14:32.520 in the given last thirty days, we have come to 0:14:32.560 --> 0:14:35.440 know about the black Well delays, right, But as we 0:14:35.480 --> 0:14:38.680 had called out in our preview, there's enough demand for 0:14:38.760 --> 0:14:42.840 the Hopper series and the supply for that has come along, 0:14:42.920 --> 0:14:45.480 so they have the ability to ship more and more 0:14:45.520 --> 0:14:48.960 to this demand, which kept them intact and the guidance 0:14:49.000 --> 0:14:51.360 still came to a bait. Of course, I think you know, 0:14:51.400 --> 0:14:54.840 the DLA might actually push out the magnitude of beat 0:14:54.920 --> 0:14:57.920 which we would have expected into twenty five calendar twenty five, 0:14:58.120 --> 0:15:01.600 which might actually drive increased to the upside of twenty 0:15:01.600 --> 0:15:03.920 five numbers. As we get more details on it. 0:15:03.880 --> 0:15:07.400 Help can textualize this for us in Video expects to 0:15:07.440 --> 0:15:11.800 ship several billion dollars of Blackwell revenue in the fourth 0:15:11.880 --> 0:15:14.480 quarter of the year. I feel like Carol, I'm parsing 0:15:14.520 --> 0:15:15.440 a fed statement here. 0:15:15.640 --> 0:15:16.720 It will kind of vague. 0:15:16.800 --> 0:15:20.560 What does several mean? Kun John? Is that a lot? 0:15:20.680 --> 0:15:23.000 Or is that disappointing to investors? 0:15:23.600 --> 0:15:26.840 I wouldn't call it completely disappointing. Again, given what we 0:15:26.960 --> 0:15:29.880 came to know over the last four weeks. When we 0:15:29.920 --> 0:15:32.080 were working on the previous two weeks ago, we thought 0:15:32.440 --> 0:15:35.120 it will be very little volume. So the several billion 0:15:35.200 --> 0:15:38.680 actually is good in a way and comforting that Okay, 0:15:38.760 --> 0:15:41.880 there will be some shipment, and it's not completely delayed 0:15:42.000 --> 0:15:45.280 until the first Q fiscal quarter, so I wouldn't call 0:15:45.320 --> 0:15:46.480 it completely disappointing. 0:15:46.760 --> 0:15:52.200 So we are watching big tech falling after Nvidia their results, 0:15:52.200 --> 0:15:54.800 as I mentioned, the Nasdaq one under many futures in 0:15:54.840 --> 0:15:59.120 the aftermarket down one point six percent. Uh, it's you know, 0:15:59.200 --> 0:16:02.080 I'm looking at the q Q that also we see 0:16:02.120 --> 0:16:04.400 it down about half a percent. I mean, when it 0:16:04.400 --> 0:16:07.040 comes to the AI story and the build out and 0:16:07.080 --> 0:16:10.720 the spend, you sound really comfortable with what we've got 0:16:10.760 --> 0:16:14.600 from Nvidia, that that narrative, that story, that actuality is 0:16:14.600 --> 0:16:18.440 still intact. Is that a fair assessment of how you 0:16:18.480 --> 0:16:18.880 see this? 0:16:19.960 --> 0:16:23.120 It is and given we look at the fundamentals, especially 0:16:23.160 --> 0:16:25.680 from a long term perspective, and not the magnitude of 0:16:25.720 --> 0:16:28.160 beat and race quarter to quarter. When you look at 0:16:28.280 --> 0:16:31.520 the disc earning season, almost all of the hyperscalers, the 0:16:31.560 --> 0:16:35.480 big internet companies, the big cloud players actually announced a 0:16:35.520 --> 0:16:38.560 beat to their capex and almost across the board to 0:16:38.640 --> 0:16:42.000 their revenues. Right, So that again validates like the demand 0:16:42.200 --> 0:16:45.240 is not slowing. Nothing has changed in the last two weeks, 0:16:45.280 --> 0:16:48.120 just given the Nvidia results. So I agree with your 0:16:48.200 --> 0:16:52.280 comment that we do feel comfortable around the broader dynamics 0:16:52.360 --> 0:16:54.400 and the demand tailwinds for the AI chips. 0:16:54.480 --> 0:16:55.960 So one of the things we just talked about with 0:16:56.040 --> 0:16:58.400 ur Ed Ludlow too, is when you look at the 0:16:58.440 --> 0:17:03.440 supply chain function on Nvidia their top customers, it's kind 0:17:03.440 --> 0:17:07.160 of a who's who of big megacap tech companies. Microsoft 0:17:07.760 --> 0:17:10.360 is their number one customer. Forty five percent of their 0:17:10.359 --> 0:17:16.080 cap X goes to Nvidia Meta number two customer, forty 0:17:16.119 --> 0:17:19.080 one percent of their CAPEX spend already goes to Nvidia 0:17:19.200 --> 0:17:21.560 Super micro Computer, which we've been talking about a lot 0:17:21.560 --> 0:17:26.080 in its woes or alleged woes that one about, I 0:17:26.080 --> 0:17:29.320 don't know. A big chunk of what they spend also 0:17:29.400 --> 0:17:32.680 goes to Nvidia. Alphabet is another one, almost fifty percent 0:17:32.840 --> 0:17:37.679 fifteen of their CAPEX goes to Nvideo. So you have 0:17:37.800 --> 0:17:40.439 enough confidence that those companies will continue to spend. They 0:17:40.440 --> 0:17:43.840 are so important right to the Nvidia growth story. So 0:17:43.880 --> 0:17:46.240 as long as you hear from them that they are spending, 0:17:46.480 --> 0:17:47.400 you're pretty confident. 0:17:48.600 --> 0:17:51.720 Exactly as long as we don't see any negative feedback 0:17:51.720 --> 0:17:55.480 from them publicly. The confidence that demains. One more point 0:17:55.520 --> 0:17:59.920 to highlight from the CFO commentary letter. This quarter there 0:18:00.080 --> 0:18:03.560 percentage of data center revenues from the cloud actually came 0:18:03.600 --> 0:18:06.359 down to forty five percent. It had been running over 0:18:06.400 --> 0:18:09.400 fifty percent over the last year. So this is even 0:18:09.440 --> 0:18:12.640 though on a magnetude terms, a small victory, I still 0:18:12.680 --> 0:18:17.119 see it as a positive direction that they're diversifying slightly 0:18:17.280 --> 0:18:21.119 slowly but away from the big cloud customers, and the 0:18:21.440 --> 0:18:24.919 enterprise and vertical segment is growing significantly faster. 0:18:25.920 --> 0:18:31.000 Okay, we got yeah. We heard from Ian King earlier 0:18:31.080 --> 0:18:36.000 and also from Ed Ludlow earlier about diversification of revenue 0:18:36.080 --> 0:18:41.280 Konjohn and the idea that the company is looking to 0:18:41.320 --> 0:18:48.080 get business from governments, smaller companies offloading work that usually 0:18:48.200 --> 0:18:50.720 would take place in the cloud to stuff that's on 0:18:50.800 --> 0:18:56.239 prem what's that business from your view look like? Are 0:18:56.280 --> 0:18:57.240 they making headway there? 0:18:58.800 --> 0:19:01.800 They are, definitely. And again the one clear sign is 0:19:01.840 --> 0:19:04.560 when you parse out the data center into sort of 0:19:04.560 --> 0:19:07.560 three buckets. One is the cloud customers, right, one is 0:19:07.560 --> 0:19:10.840 the enterprise, which is a much much more diverse but 0:19:10.960 --> 0:19:13.800 smaller pockets compared to the cloud, and the other one 0:19:13.840 --> 0:19:18.080 being the internet and vertical companies. We want to continue 0:19:18.119 --> 0:19:21.520 seeing the combination of these Internet vertical companies combined with 0:19:21.680 --> 0:19:24.760 enterprise continue to grow much faster than the cloud. Look, 0:19:24.880 --> 0:19:27.520 the cloud guys have the biggest wallets, so they are 0:19:27.520 --> 0:19:30.119 definitely going to drive a majority of the growth. But 0:19:30.200 --> 0:19:32.840 we want that percentage that moved from fifty to forty 0:19:32.840 --> 0:19:35.960 five to continue moving slower. At the same time, in 0:19:36.040 --> 0:19:38.320 media revenues continue to grow as well. 0:19:38.520 --> 0:19:41.320 Just to reset everybody, because nvideo results they are out. 0:19:41.320 --> 0:19:43.280 They've been out now for I don't know about fifteen 0:19:43.320 --> 0:19:48.159 minutes or so. Our headline story written by Bloomberg's Ian King, 0:19:48.200 --> 0:19:50.320 who we talked to at two o'clock ahead of this. 0:19:50.960 --> 0:19:53.399