WEBVTT - Instant Reaction: Nvidia’s Upbeat Sales Forecast Shows AI Boom Remains Strong 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, podcasts, radio News. 0:00:09.160 --> 0:00:13.760 This is a breaking news update from Bloomberg, instant. 0:00:13.360 --> 0:00:17.440 Reaction and analysis from our three thousand journalists and analysts 0:00:17.520 --> 0:00:18.439 around the world. 0:00:19.079 --> 0:00:22.000 Let's go to actually the outlook first quarter revenue forecast 0:00:22.040 --> 0:00:25.960 beating estimates, the company saying for the first quarter seas 0:00:25.960 --> 0:00:28.280 revenue of seventy six point forty four billion to seventy 0:00:28.360 --> 0:00:31.160 nine point fifty six billion, that is easily above the 0:00:31.160 --> 0:00:34.840 street estimate of seventy two point seventy eight million. Let's 0:00:34.880 --> 0:00:38.159 go back to the fourth quarter data center revenue that 0:00:38.320 --> 0:00:40.960 coming in better than expected sixty two point three billion 0:00:41.040 --> 0:00:43.800 versus the street estimate of sixty point thirty six billion, 0:00:44.479 --> 0:00:48.800 and Vidia saying computing demand is growing exponentially. Fourth quarter 0:00:48.800 --> 0:00:51.920 adjusted gross margin we expected seventy five percent, We got 0:00:51.920 --> 0:00:56.120 seventy five point two percent. Fourth quarter revenue coming in 0:00:56.200 --> 0:00:59.080 overall sixty eight point one billion, better than the street 0:00:59.160 --> 0:01:01.920 estimate of sixty five point ninety one billion. Tim we're 0:01:01.920 --> 0:01:04.200 seeing that stock up now about two point two percent 0:01:04.200 --> 0:01:05.040 in the aftermarket. 0:01:05.120 --> 0:01:07.840 Yeah, just to remind everybody where we are with these numbers. 0:01:07.880 --> 0:01:10.120 The first the company ce's first quarter revenue coming in 0:01:10.640 --> 0:01:14.600 six seventy six point four four billion dollars to seventy 0:01:14.680 --> 0:01:18.120 nine point five six billion dollars. That beat estimates handedly 0:01:18.560 --> 0:01:22.199 handily of seventy two point seven eight billion dollars. As 0:01:22.240 --> 0:01:25.000 Carol mentioned in video, CEO Jensen Wong saying in a statement, 0:01:25.040 --> 0:01:30.160 computing demand is growing exponentially. We are also fourth quarter 0:01:30.240 --> 0:01:32.840 data center revenue worth repeating a beat there sixty two 0:01:32.880 --> 0:01:35.720 point three billion dollars the estimers for sixty point three 0:01:35.800 --> 0:01:39.200 six billion, and that gross margin coming in above estimates 0:01:39.200 --> 0:01:41.160 at seventy five point two percent. 0:01:41.280 --> 0:01:43.520 Our Sarah Friar on our live blog saying that chairs 0:01:43.520 --> 0:01:45.679 are growing up on that data center revenue beat. Hey, 0:01:45.800 --> 0:01:48.160 Ed Ludlow, come on in. I know you're looking at 0:01:48.560 --> 0:01:50.240 these numbers. What jumps out for you? 0:01:51.160 --> 0:01:53.600 Yeah, I mean, straight's the outlook. And by the way, 0:01:53.680 --> 0:01:55.440 I would have done the same thing. Go right there. 0:01:55.800 --> 0:01:58.040 You know, revenue in the fiscal first quarter seventy eight 0:01:58.040 --> 0:02:01.280 billion dollars plus le minus two percent, and you know, 0:02:01.400 --> 0:02:04.640 a consensus was really high. But like going into this, 0:02:05.520 --> 0:02:08.000 it's a very simple equation. There were many names from 0:02:08.240 --> 0:02:10.480 across sell side and buyside that said they wanted to 0:02:10.520 --> 0:02:14.520 see in Nvidia beat revenues overall in the current period 0:02:14.880 --> 0:02:18.600 in by the multiple billions of dollars, you know, against consensus, 0:02:18.639 --> 0:02:22.400 and so one thing I would say to confirm something 0:02:22.520 --> 0:02:25.640 is that the fiscal first quarter, which is the the 0:02:25.680 --> 0:02:30.560 April quarter, does not assume any compute revenue from China. 0:02:30.800 --> 0:02:34.240 In the outlook does not factor in any compute revenue 0:02:34.240 --> 0:02:36.240 of China. That I guess is something to check off 0:02:36.240 --> 0:02:37.919 the list. It was one of the questions we had. 0:02:38.600 --> 0:02:41.600 I want to bring in Jake Goldberg from Seaport Research 0:02:41.600 --> 0:02:45.200 partnering senior analysts your semiconductors and electronics. He joins us 0:02:45.200 --> 0:02:50.320 also from San Francisco. Anything in here that confirms your 0:02:50.360 --> 0:02:53.519 thesis or does it sort of go against the celerating 0:02:53.560 --> 0:02:54.520 that you have on in Vidia? 0:02:55.200 --> 0:02:57.240 Yeah, I mean it goes. I mean it's a good quarter. 0:02:57.360 --> 0:02:59.680 It's a good quarter on a good guide. It's above 0:03:00.320 --> 0:03:04.440 consensus above My expectations were good for them. Were still 0:03:04.440 --> 0:03:05.680 waiting to see a lot more detail. 0:03:05.760 --> 0:03:06.600 What do you want to see? 0:03:07.240 --> 0:03:08.560 I want to see, I want to hear more. I 0:03:08.560 --> 0:03:10.359 have to talk about gross margin for next quarter. I 0:03:10.360 --> 0:03:12.240 think that's going to be in the CFO commentary. 0:03:12.880 --> 0:03:16.560 Yeah, Ed jump in, Yeah. 0:03:16.160 --> 0:03:17.600 No, I don't have it yet, but it will be 0:03:17.639 --> 0:03:20.120 in the CFO commentary. 0:03:20.520 --> 0:03:23.679 Versus seventy five percent expectations, I mean, can can ed 0:03:23.760 --> 0:03:25.560 Can you use that as sort of a guide for 0:03:25.560 --> 0:03:27.720 for how the company could see first. 0:03:27.520 --> 0:03:31.239 Yeah, I mean on a basis point basis, Yeah, it 0:03:31.280 --> 0:03:35.480 looked like margins are impacted by a number of things. 0:03:35.800 --> 0:03:38.280 It has been a sell side question on prior calls 0:03:38.640 --> 0:03:42.240 the percentage of a server that Nvidia contributes to. And 0:03:42.320 --> 0:03:47.480 again what's changed in the period is in Nvidia starting 0:03:47.560 --> 0:03:51.480 to sell, for example, CPUs as standalone product, and that 0:03:51.680 --> 0:03:54.360 was a part of the meta deal that was included. 0:03:54.360 --> 0:03:57.760 They talked about core Weave being an early user of 0:03:57.880 --> 0:04:00.400 CPU as a standalone product. You know, how does that 0:04:00.440 --> 0:04:04.800 impact the margin profile going forward? But yeah, I mean 0:04:05.400 --> 0:04:07.360 what they do is they own more of the server 0:04:07.440 --> 0:04:10.440 and that has been one of the ways in which 0:04:10.480 --> 0:04:12.680 that they've got margins to where they are. And clearly 0:04:12.760 --> 0:04:15.840 being zero point two percent above you know, where where 0:04:15.840 --> 0:04:17.720 the hopes were is not a bad thing. 0:04:18.040 --> 0:04:21.479 Yeah, I'm looking at that CFO commentary. As we know, 0:04:21.600 --> 0:04:24.559 revenue expected to be seventy eight billion plus or minus 0:04:24.560 --> 0:04:27.800 two percent, and as you correctly pointed, out not assuming 0:04:27.839 --> 0:04:31.320 any data center compute revenue from China. In their outlook, 0:04:31.360 --> 0:04:34.159 gap and non gap gross margins expected to be seventy 0:04:34.160 --> 0:04:37.359 four point nine percent and seventy five percent, respectively, plus 0:04:37.440 --> 0:04:41.760 or minus fifty bases point inclusive of a one tenth 0:04:41.800 --> 0:04:46.160 of one percent impact from stock based compensation expense. Just 0:04:46.240 --> 0:04:49.000 looking at what else we have here, Operating expensive gap 0:04:49.040 --> 0:04:52.680 and non gap operating expenses to be approximately seven point 0:04:52.720 --> 0:04:56.400 seven billion seven and a half billion, respectively, including that's 0:04:56.440 --> 0:05:00.000 inclusive of one point nine billion of stock based compensation expense. 0:05:00.160 --> 0:05:02.880 A headline getting my attention is in Vidia says that 0:05:02.960 --> 0:05:05.640 hyper scalers were just over fifty percent of four Q 0:05:06.240 --> 0:05:09.359 data center revenue. Jake Goldberg, I want to repeat that 0:05:09.400 --> 0:05:11.839 headline for you, hyper scalers, We're just over fifty percent 0:05:11.839 --> 0:05:14.599 of fourth quarter data center revenue. Is that a sign 0:05:14.640 --> 0:05:19.560 that in Vidia is diversifying revenue? Who who made up 0:05:19.600 --> 0:05:23.400 the other half of data center revenue? Is it automakers? 0:05:23.400 --> 0:05:24.880 Like who's buying well? 0:05:24.920 --> 0:05:26.560 I think that's one of the most interesting things that's 0:05:26.600 --> 0:05:29.279 taking place with in videos is they're not just reshaping 0:05:29.320 --> 0:05:32.480 the semiconductor industry, They're trying to reshape the cloud computing 0:05:32.600 --> 0:05:34.600 industry as well. And that's why you see we see 0:05:34.600 --> 0:05:37.640 all these neoclouds getting investment from or support from in video. 0:05:38.240 --> 0:05:41.560 In Vidia would much rather have one hundred neocloud customers. 0:05:41.040 --> 0:05:42.359 Than three HYPERD scale customers, of. 0:05:42.360 --> 0:05:46.360 Course, and they're doing a really good job of creating that, 0:05:46.960 --> 0:05:48.120 willing that into existence. 0:05:48.160 --> 0:05:50.840 So those other customers had come on in here. Those 0:05:50.880 --> 0:05:54.920 other customers are like the core weaves and the other neoclouds. 0:05:55.560 --> 0:05:59.400 Yeah, I mean, what is still important in his fact 0:05:59.560 --> 0:06:03.719 is that obviously the vast majority has been the hyperscalers 0:06:03.880 --> 0:06:08.280 plus meta, right, and so they've wanted to kind of 0:06:08.920 --> 0:06:11.400 switch between a story what they used to call an 0:06:11.400 --> 0:06:14.680 AI factory. At first, an AI factory was an on 0:06:14.839 --> 0:06:17.960 prem data center that enterprises and maybe some of the 0:06:18.000 --> 0:06:21.640 neoclouds would operate themselves. Now an AI factory is what 0:06:21.720 --> 0:06:25.800 they you define any data center that's running AI workloads 0:06:25.839 --> 0:06:28.520 in so they have chopped and change between that story, 0:06:28.760 --> 0:06:31.679 but its origin was that they wanted to go beyond 0:06:31.680 --> 0:06:34.960 the hyperscalers to have people own their own infrastructure for 0:06:35.040 --> 0:06:38.120 AI workloads if they were say a software company or 0:06:38.120 --> 0:06:40.720 an enterprise of a slightly different size. 0:06:40.640 --> 0:06:41.360 You know, it's interesting. 0:06:41.400 --> 0:06:44.200 I'm looking for supply constraints and they seem to say 0:06:44.240 --> 0:06:47.120 in the CFO commentary, I'm seeing it in terms of gaming. 0:06:47.600 --> 0:06:49.919 They say, we expect supply constraints to be a headwind 0:06:49.920 --> 0:06:52.120 to gaming in the first quarter fiscal twenty twenty seven 0:06:52.120 --> 0:06:54.839 and beyond, but not so important, right ed. I mean, 0:06:54.880 --> 0:06:56.520 we want to really just see if that's a problem 0:06:56.560 --> 0:06:58.159 in the data center area. 0:07:00.360 --> 0:07:04.680 Sadly, you know my history within video, you know, before 0:07:04.760 --> 0:07:07.240 coming Silicon Valley and covering the data center thing was 0:07:07.279 --> 0:07:09.760 gaming and you know it's now such a small piece 0:07:09.800 --> 0:07:12.400 of revenue. It's I mean, Jay, you can jump in, 0:07:12.480 --> 0:07:15.720 but really it's not where anyone's looking right now. There 0:07:15.800 --> 0:07:19.200 is some discussion later on as it relates to the 0:07:19.240 --> 0:07:25.040 balance sheet and cash flow on things to do with supply, 0:07:25.160 --> 0:07:28.240 but you're right that what they're basically saying is that 0:07:28.240 --> 0:07:31.760 that was the gaming was the segment that was impacted, 0:07:31.800 --> 0:07:34.720 and I don't know that that is having any effects really. 0:07:34.760 --> 0:07:37.000 And how we see the stock trading in after hours, well. 0:07:36.880 --> 0:07:39.400 And Video shares up three point four percent right now, 0:07:39.400 --> 0:07:43.600 and in fact we're seeing Broadcom TSMC and Micron shares 0:07:43.680 --> 0:07:46.720 follow in video higher. Jake Goldberg come on in here 0:07:46.880 --> 0:07:49.400 and talk a little bit about the broader repercussions of 0:07:49.440 --> 0:07:52.000 a print like this outside of in video. What's the 0:07:52.040 --> 0:07:54.720 signal that it sends not just to hardware makers but 0:07:54.800 --> 0:07:56.240 to the entire market. 0:07:56.920 --> 0:07:59.600 I think there are always concerns about how long the 0:07:59.640 --> 0:08:01.600 spend is going to keep going, and we had certainly 0:08:01.600 --> 0:08:03.880 had some positive data points about that. Two weeks ago 0:08:03.880 --> 0:08:07.400 when the hyperscale is reported, Facebook reported they have very 0:08:07.400 --> 0:08:12.040 strong CAPEX numbers. This just continues that trend. And I 0:08:12.040 --> 0:08:13.680 don't want to say it's a rising tide that lifts 0:08:13.680 --> 0:08:16.240 all boats, but it's it is six seven hundred billion 0:08:16.280 --> 0:08:18.520 dollars in CAPEX this year, and that's going to spread 0:08:18.560 --> 0:08:20.320 across the entire ecosystem. 0:08:21.000 --> 0:08:22.360 No, and I want to go back to it, and 0:08:22.520 --> 0:08:24.680 I totally get like gaming non important, but I was 0:08:24.680 --> 0:08:27.320 like looking to see if there's any supply constraints in 0:08:27.360 --> 0:08:29.120 the rest of their universe, and I just thought it 0:08:29.120 --> 0:08:31.440 was kind of interesting that I haven't seen anything along 0:08:31.480 --> 0:08:32.080 those lines. 0:08:32.480 --> 0:08:34.280 It was just in regards to gaming. 0:08:34.320 --> 0:08:36.080 So is that a good sign that we haven't seen 0:08:36.120 --> 0:08:38.840 anything that the company has said so far in terms 0:08:38.880 --> 0:08:40.240 of supply constraints. 0:08:40.360 --> 0:08:42.600 Yeah, for the rest of the business, or I don't know, 0:08:42.720 --> 0:08:43.680 is it not that important? 0:08:44.280 --> 0:08:47.840 Well, you know, I leave it to the analyst to 0:08:48.000 --> 0:08:51.360 model money left on the table if there were any, 0:08:51.400 --> 0:08:54.320 so to speak. But given the outlook in terms of 0:08:54.400 --> 0:08:59.239 sales and where it came in relative to consensus, you know, Nvidia, 0:09:00.320 --> 0:09:03.120 it's an enviable position to be in right where demand 0:09:03.160 --> 0:09:06.200 exceeds your ability to supply anyway. But going back to 0:09:06.280 --> 0:09:09.000 that five year handbag analogy of a few moments ago, 0:09:09.400 --> 0:09:11.720 you know, the other argument that Jensen Wong and Video 0:09:11.760 --> 0:09:14.400 have made quite consistently is that if you tell your 0:09:14.440 --> 0:09:17.000 suppliers what you plan to do five years in advance, 0:09:17.480 --> 0:09:20.120 then the rest of the supply chain can help prepare 0:09:20.160 --> 0:09:23.520 with you and keep up. And you know recently that 0:09:23.520 --> 0:09:26.600 that's been most difficult in memory. But memory shows up 0:09:26.640 --> 0:09:29.280 in pricing, you know. And if you're Jensen Wong, I'm 0:09:29.320 --> 0:09:32.400 sure you can make a phone call and make sure 0:09:32.400 --> 0:09:35.920 that the corresponding high bandwidth memory that you need is 0:09:35.960 --> 0:09:36.880 there or thereabouts. 0:09:37.000 --> 0:09:40.679 Quick check on now ZAK one hundred many futures here 0:09:40.720 --> 0:09:43.480 in the aftermarket, and they're up about one point eight percent. 0:09:43.520 --> 0:09:46.240 So we're certainly seeing a lift to the overall market. 0:09:46.320 --> 0:09:49.120 Jay Gilbert, come on back in what's top of mind 0:09:49.200 --> 0:09:51.960 when we get to this conference call in terms of 0:09:51.960 --> 0:09:53.120 what you want to hear. I know we talked a 0:09:53.160 --> 0:09:56.320 lot about margins earlier, but what is it? 0:09:57.800 --> 0:09:59.960 Yeah, I mean, I think this margin stuff is important 0:10:00.120 --> 0:10:02.400 because what I'm sort of reading between the lines is 0:10:03.320 --> 0:10:06.800 they had to negotiate pricing with the memory memory makers, 0:10:06.800 --> 0:10:09.840 and the memory makers have the most leverage they've had 0:10:09.840 --> 0:10:12.640 in a decade, and we don't see any impact on 0:10:12.679 --> 0:10:14.920 in videous numbers. Compare that to pretty much any other 0:10:15.160 --> 0:10:17.840 electronics company out there today which is warning about memory. 0:10:18.559 --> 0:10:20.600 I'm sure they're in video is feelings some of that, 0:10:21.040 --> 0:10:24.079 but the fact that their gross margins are guiding to 0:10:24.200 --> 0:10:26.600 at least in line tells me that they're just going 0:10:26.640 --> 0:10:29.880 to price on those memory increases to their customers, which 0:10:29.920 --> 0:10:34.520 is a testament to their pricing power, to their power 0:10:34.640 --> 0:10:35.440 their market position. 0:10:36.160 --> 0:10:38.400 Jake Goldberg, Jay, we're gonna have to leave it there. 0:10:38.440 --> 0:10:40.080 We're going to give you time to get ready to 0:10:40.120 --> 0:10:42.640 jump on that call. Jake Goldberger, Senior Analyst, Semiconductors and 0:10:42.679 --> 0:10:46.719 Allow Electronics for Seaport Research Partners. Once again, Jay, the 0:10:46.760 --> 0:10:50.880 only analyst tracked by the Bloomberg terminal who has a 0:10:51.000 --> 0:10:53.360 celerating on in video and want to give you the 0:10:53.440 --> 0:10:57.480 last word. You've spoken to Jensen Wong many many times. 0:10:57.480 --> 0:10:59.040 What's a question that you would have for him on 0:10:59.080 --> 0:10:59.959 the earnings call tonight? 0:11:01.120 --> 0:11:03.960 Yeah, Like, ultimately, it just always comes down to a 0:11:04.000 --> 0:11:06.679 projection of confidence that all of the stories we've been 0:11:06.720 --> 0:11:10.120 over in more than the last year is still intact. 0:11:10.400 --> 0:11:14.000 You know that the great buildout of AI infrastructure is early, 0:11:14.600 --> 0:11:18.480 that they have long horizon visibility into what's going on. 0:11:19.160 --> 0:11:22.240 All in video can control, I suppose, is the roadmap 0:11:22.280 --> 0:11:24.760 to go from one generation of compute to the next. 0:11:24.800 --> 0:11:28.080 And so they talk about in the CFO document margins 0:11:28.120 --> 0:11:31.360 being supported by the ramp up in blackwell and mix 0:11:31.440 --> 0:11:34.680 of new products. Well, when does that mixed change? When 0:11:34.720 --> 0:11:38.360 does Vera Rubin really kick in and then go beyond that? 0:11:38.360 --> 0:11:39.960 That's kind of how the street would look at it. 0:11:39.960 --> 0:11:41.880 I think, all right, we're going to live with there. 0:11:41.960 --> 0:11:42.040 Ed. 0:11:42.080 --> 0:11:44.240 We know you're busy as well. Ed Lovelo, thank you 0:11:44.360 --> 0:11:47.120 so much as we awaited those numbers then helping us 0:11:47.120 --> 0:11:49.960 break them down. Co host of Bloomberg Tech of course 0:11:50.000 --> 0:11:53.000 on Bloomberg Television, Catch It at eleven am Wall Street 0:11:53.040 --> 0:11:55.560 time Monday through Friday. In the meantime, we've got chairs 0:11:55.559 --> 0:11:58.560 of Nvidia up about three point two percent. We're seeing 0:11:58.600 --> 0:12:01.640 broad come up about three quarters of one percentage point. 0:12:01.640 --> 0:12:04.959 Here in the aftermarket, TSM, Taiwan Semi up about one 0:12:04.960 --> 0:12:08.440 in a third percent, and you're seeing Micron also hire 0:12:08.800 --> 0:12:09.760 off its best levels. 0:12:10.000 --> 0:12:11.920 In the aftermarket. It's still up Tim about eight tenths 0:12:11.960 --> 0:12:12.840 of a percentage point. 0:12:13.000 --> 0:12:14.880 All right, we're keeping an eye on this. We know 0:12:14.960 --> 0:12:17.000 Charlie Pellett is keeping an eye on all this and more. 0:12:17.040 --> 0:12:19.520 He's standing by in the Bloomberg Interactive brokers to studios 0:12:19.520 --> 0:12:20.480 with a business flash. 0:12:20.520 --> 0:12:22.720 Hey Charlie, all right, I thank you very much. Tim 0:12:22.720 --> 0:12:25.400 and Carol keeping an eye as we recap and reset 0:12:25.480 --> 0:12:28.280 on in video. The stock hire after ours up by 0:12:28.400 --> 0:12:31.720 three percent right now. It did give another bullish quarterly 0:12:31.760 --> 0:12:35.800 revenue forecast, signaling that the massive buildout of AI computing 0:12:35.840 --> 0:12:39.439 does remain on track. Chip maker said fiscal first quarter 0:12:39.480 --> 0:12:42.040 sale is going to be around seventy eight billion. That 0:12:42.080 --> 0:12:45.560 compares with an estimate of seventy two point eight billion 0:12:45.880 --> 0:12:49.120 in Nvidia is the world's most valuable company. Closely watched 0:12:49.200 --> 0:12:52.560 shares up now by three percent, salesforce heading in the 0:12:52.600 --> 0:12:55.600 other direction after ours, stock down roughly five percent, out 0:12:55.640 --> 0:12:58.160 with a lukewarm outlook for sales growth in the new 0:12:58.160 --> 0:13:01.840 fiscal year, fueling while Street's worries that the software giant 0:13:01.880 --> 0:13:05.800 will lose out to new competitors in the age of AI. 0:13:06.400 --> 0:13:11.400 Other companies reporting earnings, Zoom Communications forecast adjusted EPs for 0:13:11.440 --> 0:13:15.600 two twenty twenty seven that guidance missing the average analyst estimate, 0:13:15.840 --> 0:13:20.120 shares down one point seven percent. Also reporting snowflake after Ours, 0:13:20.160 --> 0:13:22.240 the stock down two and a half percent. It gave 0:13:22.240 --> 0:13:25.679 an outlook for quarterly sales that was in line with estimates. 0:13:25.920 --> 0:13:29.240 The Dow, the SMP, and Neztak all advanced today, s 0:13:29.280 --> 0:13:32.240 and P up fifty six, wrapping up the Wednesday session 0:13:32.240 --> 0:13:34.760 at sixty nine forty six, a gain of eight tents 0:13:34.760 --> 0:13:37.560 of one percent. Dow Industrial is up three oh seven 0:13:37.679 --> 0:13:40.360 ups six tens, Nez Stack today up by one point 0:13:40.400 --> 0:13:43.559 three percent, the Nestak one hundred index up today by 0:13:43.679 --> 0:13:47.360 one point four percent, the Vics just falling below eighteen 0:13:47.480 --> 0:13:50.120 with a ten year four point zero five percent spot 0:13:50.160 --> 0:13:53.280 Gold up twenty six dollars, the ounce up by five 0:13:53.320 --> 0:13:56.400 tens of one percent, fifty one seventy major move in 0:13:56.520 --> 0:13:59.920 bitcoin today surging eight point one percent sixty nine thousand, 0:14:00.400 --> 0:14:03.679 two hundred and forty five on bitcoin and finally beyond 0:14:03.679 --> 0:14:07.280 Wall Street, Cuban forces killed four people today who opened 0:14:07.320 --> 0:14:10.360 fire from a speedboat with Florida tags, an incident with 0:14:10.480 --> 0:14:14.760 the potential to escalate an already ten standoff with the US. 0:14:15.040 --> 0:14:17.480 Carolyn tim that is a Bloomberg business flash. 0:14:17.480 --> 0:14:19.480 All right, folks, we're watching in Vidia, Charlie, thank you 0:14:19.560 --> 0:14:21.200 so much for that breakdown on all of that. In 0:14:21.280 --> 0:14:24.040 Vidia shares continuing to trade higher. A couple of headlines 0:14:24.080 --> 0:14:26.000 also crossing that we want to bring to you, and 0:14:26.120 --> 0:14:28.000 Vidia says it's secured supply to. 0:14:28.000 --> 0:14:29.560 Meet demand for several quarters. 0:14:29.880 --> 0:14:32.600 So we talk about supply constraints often when we're talking 0:14:32.640 --> 0:14:36.080 about Nvidia and the AI demand. Also in Vida saying, 0:14:37.040 --> 0:14:41.000 the United States granted a license to ship H two 0:14:41.080 --> 0:14:44.520 hundred chips to China based clients, so they've granted a 0:14:44.560 --> 0:14:49.280 license for specific China based customers. The US licenses to 0:14:49.360 --> 0:14:53.080 ship small amounts of the H two hundred to China, 0:14:53.160 --> 0:14:55.840 So we were looking for some clarification on its business 0:14:55.840 --> 0:14:57.920 in China. Something that they've certainly been looking for. 0:14:58.040 --> 0:15:00.760 We've got a great Bloomberg Intelligence roundtable, Mandeep's saying. His 0:15:00.800 --> 0:15:04.240 global head of Technology Research for Bloomberg Intelligence. He joins 0:15:04.280 --> 0:15:07.160 us here in the Bloomberg Interactive broker's studio. He covers 0:15:07.160 --> 0:15:10.280 in Vidia, he covers Snowflake and more. Also, anurag Rana 0:15:10.320 --> 0:15:13.360 is senior technology analyst for Bloomberg Intelligence. He joins us 0:15:13.440 --> 0:15:17.600 from Chicago, and he covers a salesforce. So we're going 0:15:17.680 --> 0:15:19.840 to talk software, We're going to talk hardware. Man, Deep, 0:15:19.880 --> 0:15:22.680 I want to start with your reaction to in Video. 0:15:22.800 --> 0:15:25.280 It was a beat it, I mean, a very good quarter. 0:15:26.240 --> 0:15:29.040 Your reaction to margin and what is actually holding up 0:15:29.040 --> 0:15:31.080 margins here because seventy five point two percent. 0:15:31.400 --> 0:15:35.200 Yeah, no mention of any impact related to memory costs, 0:15:35.240 --> 0:15:36.200 which is surprising. 0:15:36.280 --> 0:15:38.360 And why is that surprising? I know memory costs have 0:15:38.400 --> 0:15:39.920 gone up, but in Video is such a big company. 0:15:39.920 --> 0:15:42.800 Don't they have pricing power? They do, but purchasing power. 0:15:43.120 --> 0:15:46.160 They clearly did a great job in terms of securing 0:15:46.200 --> 0:15:49.040 that supply, and they don't have the premium. They don't 0:15:49.080 --> 0:15:51.400 have to pay the premium that everyone else has to 0:15:51.440 --> 0:15:52.640 pay on the hardware. Signe. 0:15:52.680 --> 0:15:55.320 They said, secured supply to meet the man for several quarters. 0:15:55.360 --> 0:15:58.480 What's several well, I mean in this case at least 0:15:58.520 --> 0:15:59.960 like the FED. This is like the FED. 0:16:00.080 --> 0:16:02.360 But they're saying that they've got it. That's a good thing. 0:16:02.440 --> 0:16:05.880 They have got it, and they're guiding to you know, 0:16:06.000 --> 0:16:08.680 mid seventy percent rose margin for next quarter as well. 0:16:08.720 --> 0:16:13.720 So clearly memory not you know, an impact at all 0:16:13.760 --> 0:16:16.720 in terms of the margins. The thing that is clear 0:16:16.880 --> 0:16:20.440 is they are selling you know, to existing customers, not 0:16:20.520 --> 0:16:25.160 just GPUs, but systems. And that's the big difference between 0:16:25.160 --> 0:16:29.120 and in Vidia and AMD. AMD wants Meta to use 0:16:29.160 --> 0:16:34.080 their chips and integrate it right. Nvidia is actually selling 0:16:34.120 --> 0:16:39.320 their custom to their customers entire systems that have higher asps. 0:16:39.920 --> 0:16:43.360 They are helping them reduce the token costs and that's 0:16:43.400 --> 0:16:47.040 where the customers don't mind paying that extra you know, 0:16:47.120 --> 0:16:51.040 premium that in Vidia is charging because overall the total 0:16:51.080 --> 0:16:53.360 cost of ownership is lower than if you were to 0:16:53.400 --> 0:16:56.680 standardize on any other chips. And that's what's reflected in 0:16:56.760 --> 0:17:00.040 their print is look, their customers see. 0:16:59.800 --> 0:17:02.800 The so well done in video right by doing the whole. 0:17:02.600 --> 0:17:06.320 Thing and the Blackwell architecture that's really taken off. I mean, 0:17:06.400 --> 0:17:09.800 all the concerns around the migration from Harper to Blackwell. 0:17:10.000 --> 0:17:13.040 I mean, they just prove that Blackwell will be probably 0:17:13.119 --> 0:17:17.000 a bigger, you know product in terms of their chip architectures. 0:17:17.520 --> 0:17:18.400 Does this in your mind? 0:17:18.440 --> 0:17:22.280 I mean I always feel like you're like the calmvoice 0:17:22.320 --> 0:17:25.359 of saying, the airspend is still happening, like everybody relaxed. 0:17:25.480 --> 0:17:26.359 It's accelerating that. 0:17:26.440 --> 0:17:28.600 But it's accelerate. That's what you're getting from this. 0:17:28.800 --> 0:17:32.120 I mean, look at Nvidia's growth in the last fiscal quarter. 0:17:32.200 --> 0:17:36.080 It was around mid sixty percent. They're pointing to seventy 0:17:36.080 --> 0:17:39.800 seven percent growth in their fiscal one Q So that 0:17:40.000 --> 0:17:43.320 goes to show and the proof point you can see 0:17:43.320 --> 0:17:47.040 in the hyperscalar capex. The hyperscalar capex seems to be 0:17:47.080 --> 0:17:51.720 going up as well. So it's underpinned by healthy fundamentals. 0:17:51.760 --> 0:17:54.760 We know why. And Vidius top line is accelerating, right 0:17:54.800 --> 0:17:57.480 because the kapex seems to be accelerating, and all these 0:17:57.480 --> 0:18:01.960 points towards more inferencing, more for AI compute, and we 0:18:02.080 --> 0:18:05.879 are hitting that phase where it's not just you know 0:18:06.000 --> 0:18:09.119 about training or whether it will happen or not. It's happening. 0:18:09.200 --> 0:18:11.560 So the ROI the usage right, We're seeing it. 0:18:11.680 --> 0:18:16.360 The usage is happening, and companies are consuming the compute. 0:18:16.440 --> 0:18:19.919 It's going to get reflected in the cloud revenue next quarter. 0:18:20.280 --> 0:18:23.639 It's going to get reflected in all the possible forms 0:18:23.680 --> 0:18:25.359 of where inferencing will show up. 0:18:25.520 --> 0:18:27.320 We're gon we're going to bring on aurag In in a 0:18:27.359 --> 0:18:29.640 second and talk Salesforce because I think that's a good 0:18:29.680 --> 0:18:32.200 transition to talk about what companies are doing with AI 0:18:32.280 --> 0:18:34.640 and the message at least that Salesforce trying to make 0:18:34.640 --> 0:18:36.919 with agentic AI. But before we get there, maybe if 0:18:36.920 --> 0:18:38.280 I do want you to weigh in on what Carol 0:18:38.280 --> 0:18:41.960 mentioned earlier about the China business. H two hundred shipped 0:18:42.000 --> 0:18:44.800 under a new program subject to a twenty five percent tariff. 0:18:45.200 --> 0:18:48.400 Nvidia discloses US government in a ten K filing, granted 0:18:48.440 --> 0:18:51.480 license by the US and February of twenty twenty six, 0:18:51.560 --> 0:18:54.879 the US licenseship small amounts of H two hundred to 0:18:55.000 --> 0:18:59.439 China for specific China based customers. What what is our 0:18:59.440 --> 0:19:02.400 investing ADI? You need to understand about what it can 0:19:02.480 --> 0:19:04.800 sell to China and the impact on that financially. 0:19:05.080 --> 0:19:07.040 I mean it used to be China used to be 0:19:07.160 --> 0:19:11.800 mid single digit percentage of in Vidio's overall data center revenue, 0:19:12.160 --> 0:19:14.919 and Jensen has said China is about a fifty billion 0:19:14.960 --> 0:19:18.200 dollars addressable market when it comes to you know, chips, 0:19:18.920 --> 0:19:21.560 and so the fact that they're allowed to sell something 0:19:21.600 --> 0:19:24.320 now to China doesn't mean it's going to grow at 0:19:24.359 --> 0:19:26.720 the same rate as their overall top line, which is 0:19:26.760 --> 0:19:29.919 you know, seventy seven percent, and that excludes the China number. 0:19:30.119 --> 0:19:34.160 But it's all incremental revenue. And this print shows there 0:19:34.200 --> 0:19:39.000 is just insatiable demand for Invidia's chips and whoever can 0:19:39.040 --> 0:19:41.879 get it well buy it. So it's just a question 0:19:42.000 --> 0:19:44.080 of whether in Vidio is willing to sell it to 0:19:44.119 --> 0:19:44.560 them or not. 0:19:44.640 --> 0:19:47.080 All right, so let's go to salesforce. 0:19:47.119 --> 0:19:49.000 We do want to bring in our anarag Rana, senior 0:19:49.040 --> 0:19:50.760 technology analyst a Bloomberg Intelligence. 0:19:50.760 --> 0:19:52.600 He's in Chicago. 0:19:52.880 --> 0:19:55.920 Shares of Salesforce anaragar Dad about four and a half 0:19:56.000 --> 0:20:00.199 percent in the aftermarket. Some of the red headline that 0:20:00.240 --> 0:20:02.520 we crossed on the Bloomberg Company in terms of the 0:20:02.520 --> 0:20:04.639 outlook sees first quote a revenue. 0:20:04.280 --> 0:20:07.600 Of eleven point zero three to eleven point zero eight billion. 0:20:07.640 --> 0:20:10.240