WEBVTT - Nvidia Gives Solid Forecast, Even as China Slump Mars Growth 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:08.920 --> 0:00:13.240 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.240 --> 0:00:17.880 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.920 --> 0:00:22.800 and trends shaping today's complex economy. Plus global business finance 0:00:22.840 --> 0:00:26.520 and tech news as it happens. The Bloomberg Business Weekdaily 0:00:26.640 --> 0:00:31.760 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.360 --> 0:00:34.879 I want to go to Nvidio though, because we are 0:00:34.880 --> 0:00:38.280 going to see their numbers drop probably any moment now, 0:00:38.320 --> 0:00:40.240 and we are seeing the stock up about eight tenths 0:00:40.280 --> 0:00:44.199 of a percent here in the after market. Obviously a 0:00:44.240 --> 0:00:48.239 big deal, biggest semiconductor company. What they have to say 0:00:48.240 --> 0:00:50.680 about the AI trade, and it's not just the hyperscalers 0:00:50.680 --> 0:00:53.959 but beyond as we heard from Kunjohn Sabania Bloomberg Intelligence, 0:00:53.960 --> 0:00:57.800 So second tier companies are they also biding buying into 0:00:58.240 --> 0:00:59.680 and video chips. So we'll have to see what they 0:00:59.720 --> 0:01:01.880 have to say say. And Vidia is app folks, let's 0:01:01.880 --> 0:01:04.200 get to it. First quarter just to DPS eighty one 0:01:04.240 --> 0:01:04.840 cents a share. 0:01:05.000 --> 0:01:07.280 That's a miss. Street was looking. 0:01:07.040 --> 0:01:10.400 For ninety three cents, so twelve cents shy what the 0:01:10.400 --> 0:01:15.000 street was expected expecting revenue is expected to be forty 0:01:15.040 --> 0:01:19.679 five billion plus or minus two percent. First quarter revenue 0:01:19.720 --> 0:01:23.120 forty four point one billion, that was a beat the 0:01:23.160 --> 0:01:26.720 street expectations was forty three point twenty nine billion. First 0:01:26.800 --> 0:01:30.360 quarter adjusted gross margin that was a miss sixty one 0:01:30.360 --> 0:01:34.479 percent versus an estimate of seventy one percent. Company, though 0:01:34.560 --> 0:01:35.880 saying that the second. 0:01:35.720 --> 0:01:39.040 Quarter outlook reflects a loss in H twenty revenue of 0:01:39.080 --> 0:01:40.040 about eight billion. 0:01:40.160 --> 0:01:42.520 Keep in mind that when that ban came from the 0:01:42.560 --> 0:01:45.360 administration and vide did do a write down of about 0:01:45.400 --> 0:01:48.480 five and a half billion dollars, and Kunjan said it 0:01:48.520 --> 0:01:51.360 was a little noisy because not all of the estimates 0:01:51.400 --> 0:01:54.720 on the street had incorporated that full H twenty ban. 0:01:55.040 --> 0:01:57.760 Yeah, shares bouncing around right now of about eight tenths 0:01:57.760 --> 0:02:00.560 of one percent in the after hours. They were down earlier. 0:02:00.800 --> 0:02:03.680 The company said that global demand for AI infrastructure is 0:02:03.760 --> 0:02:08.680 quote incredibly strong, also saying that Blackwell's NVL seventy two 0:02:08.760 --> 0:02:13.160 AI supercomputer is in full scale production. The company also 0:02:13.160 --> 0:02:16.040 said the second quarter outlook reflects a loss in H 0:02:16.160 --> 0:02:19.480 twenty revenue of about eight billion dollars. So I wonder 0:02:19.520 --> 0:02:23.040 if that charge, Carol that they took was relatively conservative, 0:02:23.080 --> 0:02:24.720 The company also saying it was unable to ship and 0:02:24.760 --> 0:02:27.720 add a two point five billion dollars of H twenty 0:02:27.760 --> 0:02:30.960 revenue in the first quarter. The company also saying it 0:02:31.000 --> 0:02:33.560 will pay a quarterly dividend of one cent per share 0:02:33.800 --> 0:02:37.120 that will happen on July third. Shares right now in 0:02:37.160 --> 0:02:40.760 the after hours are moving higher, up about two point 0:02:40.840 --> 0:02:41.440 five percent. 0:02:41.600 --> 0:02:43.560 Yeah, up about two yeah, exactly. 0:02:43.919 --> 0:02:46.280 The CEO, Jensen Wong, who we're going to hear from 0:02:46.280 --> 0:02:47.840 our Ed Ludlow's going to talk with him at six 0:02:47.960 --> 0:02:50.440 thirty pm Wall Street time on Bloomberg TV and radio. 0:02:50.840 --> 0:02:53.519 The CEO saying the company stands at the center of transformation. 0:02:53.720 --> 0:02:56.320 Go back to what he said about global demand for 0:02:56.400 --> 0:03:01.160 AI infrastructure, incredibly strong adjectives, and so we're going to 0:03:01.240 --> 0:03:04.880 want some more numbers around that. We're getting more on 0:03:04.919 --> 0:03:08.359 the first quarter at comput revenue thirty four point sixteen billion, 0:03:08.400 --> 0:03:10.359 a little light. Street was looking for thirty five point 0:03:10.480 --> 0:03:14.280 forty seven billion. First quarter networking revenue four point ninety 0:03:14.400 --> 0:03:17.760 six billion. Street estimate was three point forty five billion, 0:03:17.800 --> 0:03:19.520 So that's a bit of a big beat. But again, 0:03:20.200 --> 0:03:22.280 the key headlines seem to be what it says about 0:03:22.320 --> 0:03:26.720 second quarter revenue forty five billion plus or minus two percent. 0:03:26.919 --> 0:03:29.880 The estimate on the street is forty five point five billion, 0:03:29.960 --> 0:03:32.080 So we could have some upside. 0:03:31.680 --> 0:03:34.000 Tim from it, or we could see some downside from it. 0:03:34.080 --> 0:03:36.440 We're seeing shares right now hire about about three point 0:03:36.480 --> 0:03:39.280 two percent in the after hours. Want to bring in 0:03:39.400 --> 0:03:43.920 Jay Goldberg, senior analyst Semiconductors and Electronics at Seaport Research Partners. 0:03:44.200 --> 0:03:46.560 Jay joins us from San Francisco. Jay, I want to 0:03:46.560 --> 0:03:48.880 get your reaction to earnings in just a minute. I 0:03:48.880 --> 0:03:51.040 should note that you are the only analyst listed on 0:03:51.040 --> 0:03:55.720 the Bloomberg terminal with a cell rating for Nvidia. Does 0:03:55.840 --> 0:03:58.960 today's result keep you at a cell rating? 0:03:59.320 --> 0:04:01.160 So I have to go through numbers first, but I 0:04:01.200 --> 0:04:02.000 would say yes. 0:04:02.080 --> 0:04:05.520 I mean, my take is that in video, the most 0:04:05.560 --> 0:04:07.640 scrutinized company in the planet, we all have a pretty 0:04:07.640 --> 0:04:10.040 good sense of what their numbers should look like this year, 0:04:10.080 --> 0:04:12.920 what their capacity is working backwards from that, there's not 0:04:12.960 --> 0:04:13.640 a lot of room. 0:04:13.560 --> 0:04:15.120 Left for upside. Right. 0:04:15.120 --> 0:04:17.240 There's a few things here and there, but there's not 0:04:17.360 --> 0:04:20.000 much upside possible. But on the downside, there's still a 0:04:20.040 --> 0:04:21.240 lot of risks. There are a lot of things that 0:04:21.279 --> 0:04:24.440 could go wrong. There's lots of problems with the supply chain, 0:04:25.040 --> 0:04:27.640 the fact that they keeper mentioning that Blackwell is ramping. 0:04:27.680 --> 0:04:30.000 That was in doubt for a while. There's just a 0:04:30.080 --> 0:04:32.520 lot of questions the companies. It's a good company, it's 0:04:32.520 --> 0:04:35.080 well run, it's just gotten so big so quickly. 0:04:35.120 --> 0:04:36.720 I don't think they can keep this. 0:04:37.160 --> 0:04:40.800 The level of expectations beating that they've had for the 0:04:40.839 --> 0:04:42.680 last three years, that just can't keep going. 0:04:42.720 --> 0:04:45.559 And I think the headwinds are continuing to mount. 0:04:45.720 --> 0:04:49.200 In the earning statement, in video, CEO Jensen Wong saying 0:04:49.240 --> 0:04:53.200 global demand for Nvidia's AI infrastructure is incredibly strong. AI 0:04:53.760 --> 0:04:57.520 inferenced token generation has surged tenfold in just one year, 0:04:57.640 --> 0:05:01.240 and as AI agents become mainstream demand for AI computing, 0:05:01.600 --> 0:05:05.480 we'll accelerate. Jay obviously sounds upbeat, but again, you know, 0:05:05.480 --> 0:05:08.200 this is where we want to have some numbers around things. 0:05:08.839 --> 0:05:12.800 The CFO saying sales of their H twenty products four 0:05:12.839 --> 0:05:16.120 point six billion for the first quarter of twenty twenty six. 0:05:17.160 --> 0:05:18.920 It continues to cross. 0:05:19.880 --> 0:05:21.760 You know, is there anything that could kind of make 0:05:21.800 --> 0:05:23.760 you say, well, wait a minute, maybe I need to 0:05:23.800 --> 0:05:27.159 say it's not a sell maybe there is something interesting here. 0:05:28.200 --> 0:05:30.760 So I think the underlying question is what are we 0:05:30.800 --> 0:05:32.320 going to do with AI? Like there's a lot of 0:05:32.400 --> 0:05:35.680 excitement around AI, but it's still in very early stages, 0:05:35.839 --> 0:05:37.240 you know. I like to think of this as the 0:05:37.279 --> 0:05:40.560 Internet in the nineteen seventies. We knew it was something, 0:05:40.600 --> 0:05:42.600 but we didn't know what it would become. I think 0:05:42.600 --> 0:05:44.960 that's where we are with AI now, and I think 0:05:45.000 --> 0:05:47.000 it's going to take a few years for us to 0:05:47.040 --> 0:05:50.240 really as an industry figure out what the actual consumer 0:05:50.400 --> 0:05:54.280 use cases and applications are. And in that process there's 0:05:54.320 --> 0:05:56.279 going to be some fits and starts, and don't I 0:05:56.320 --> 0:05:58.279 just don't think we can keep this momentum going forever. 0:05:58.320 --> 0:06:01.000 I know demand is good now, but we start to 0:06:01.000 --> 0:06:03.280 look in the next year. I think people are starting 0:06:03.279 --> 0:06:06.039 to ask good questions about what is the ROI and 0:06:06.080 --> 0:06:09.200 these massive GPU investments all the hyperscalers and the enterprises 0:06:09.200 --> 0:06:11.880 have made, and I don't think we've seen those yet. 0:06:12.240 --> 0:06:15.200 I think what would sort of alter my belief is 0:06:15.240 --> 0:06:19.440 if somebody invents some incredible consumer application for AI that 0:06:19.480 --> 0:06:21.720 would radically accelerate things. 0:06:21.880 --> 0:06:25.360 Hey, I just want to point out first quarter adjusted 0:06:25.400 --> 0:06:29.400 EPs ninety six cents a share. That was three pennies 0:06:29.440 --> 0:06:31.440 better than what the street was expecting. I think we 0:06:31.480 --> 0:06:35.400 had a number that crossed earlier that was not accurate, 0:06:35.520 --> 0:06:38.400 So again they did be in terms of first quarter 0:06:38.400 --> 0:06:43.040 adjusted EPs. The second quarter forecast, just to rehash, second 0:06:43.120 --> 0:06:46.200 quarter revenue forty five billion plus or minus two percent. 0:06:46.279 --> 0:06:49.040 The estimate on the street is forty five point five billion. 0:06:49.680 --> 0:06:52.760 Second quarter forecast also reflects eight billion dollars in loss 0:06:52.760 --> 0:06:55.160 sales to China, and we know that that ban that 0:06:55.200 --> 0:06:58.040 went into effect in April, and just continuing to check 0:06:58.320 --> 0:07:00.600 and Video shares right now up about two point nine 0:07:00.640 --> 0:07:01.760 percent in the aftermarket. 0:07:01.839 --> 0:07:04.480 There's also another correction crossing right now in video. First 0:07:04.560 --> 0:07:07.800 quarter adjusted gross margin coming in at seventy one point 0:07:07.920 --> 0:07:11.680 three percent versus estimates of seventy one percent, so I 0:07:11.680 --> 0:07:15.400 want to make sure that gets there. In Vidia says 0:07:15.440 --> 0:07:18.440 the charge relates to H twenty excess inventory and by 0:07:18.560 --> 0:07:21.640 obligations in first quarter auto revenues driven by self driving 0:07:21.880 --> 0:07:24.400 platform sales. I want to get back to Jay Goldberg. Jay, 0:07:24.440 --> 0:07:26.360 you made an interesting comment that this is like you know, 0:07:26.400 --> 0:07:28.600 AI is like the Internet in the nineteen seventies. I 0:07:28.680 --> 0:07:31.320 got to tell you playing around with chat GPT and 0:07:31.440 --> 0:07:35.200 anthropics Claude, it blows my mind every single day getting 0:07:35.200 --> 0:07:37.560 in a way MO blows my mind. I mean, I 0:07:37.600 --> 0:07:39.880 mean to me, this feels like, certainly the new frontier. 0:07:39.880 --> 0:07:43.400 What's the vision that you have if we're in the 0:07:43.440 --> 0:07:46.800 early stages, if we're in the early innings of this game, 0:07:46.880 --> 0:07:48.920 like what is the impact going to be? And where 0:07:48.920 --> 0:07:50.000 will Nvidia be in that? 0:07:52.000 --> 0:07:54.920 I think those are two separate questions, right. 0:07:54.920 --> 0:07:57.080 I think in terms of where in Vidio is going 0:07:57.160 --> 0:08:00.800 to be ultimately will depend on what we end up 0:08:01.440 --> 0:08:04.760 using AI for right, And I, like I said, chat 0:08:04.840 --> 0:08:07.920 GPT is incredible technological achievement, but in terms of like 0:08:08.240 --> 0:08:11.240 changing everybody's day to day life, it's it's not quite 0:08:11.240 --> 0:08:14.160 there yet. It's very useful for some people. It's it's 0:08:14.280 --> 0:08:16.880 very useful if you're if you're writing web content or 0:08:16.920 --> 0:08:19.440 if you're coding, but for sort of average day to 0:08:19.520 --> 0:08:21.720 day use. I think of my my my nine year 0:08:21.760 --> 0:08:25.360 old father or my twenty five year old niece, they 0:08:25.360 --> 0:08:26.520 don't they don't use chat GIPT. 0:08:26.600 --> 0:08:29.360 It's just not that useful for what Really the twenty 0:08:29.360 --> 0:08:33.400 five year old is not using chat GPT. No, that's shocking. 0:08:33.600 --> 0:08:35.240 No, I'm basic. I'm using it. 0:08:35.520 --> 0:08:37.920 I'm using it more than I not more than I 0:08:37.960 --> 0:08:39.800 use Google. But like I'll go there first. 0:08:40.240 --> 0:08:41.679 I got to say my house, I think all of 0:08:41.720 --> 0:08:43.280 a sudden has kind of amped up and you've got 0:08:43.440 --> 0:08:46.760 a range of ages and using it for different things 0:08:46.840 --> 0:08:50.000 and things like even grock and you know, yeah, it's happening. 0:08:51.120 --> 0:08:52.920 It's I think it is happening. I think we have 0:08:52.920 --> 0:08:54.520 a long way to go though. Forward. 0:08:54.960 --> 0:08:57.240 The utility is really really clear, Like if you look 0:08:57.320 --> 0:08:59.480 at if you look at search even it's not clear 0:08:59.520 --> 0:09:00.559 how that's going to anetize. 0:09:01.160 --> 0:09:03.640 Are we going to start adds there? What impact will 0:09:03.640 --> 0:09:05.920 that have when we start seeing ads and jat GPT search. 0:09:07.120 --> 0:09:08.400 I'm just making of that example. 0:09:08.400 --> 0:09:09.720 I have no idea they're actually going to do that, 0:09:10.040 --> 0:09:12.000 but that's going to I think that will have an impact. 0:09:12.000 --> 0:09:16.079 I actually think I'm a big optimist about it. I 0:09:16.120 --> 0:09:18.280 think it can be much much more than what it 0:09:18.360 --> 0:09:20.920 is today. And I don't think it's really exciting until 0:09:20.920 --> 0:09:23.280 we get something along those lines. 0:09:23.720 --> 0:09:25.960 All right, We are talking with Jay Goldberg, Senior analyst 0:09:26.080 --> 0:09:29.439 of Semiconductors and Electronics Effort Support Research Partners from San 0:09:29.480 --> 0:09:32.680 Francisco and Video earnings. They have crossed, folks, and we 0:09:32.720 --> 0:09:35.360 continue to see the stock up about two point nine 0:09:35.400 --> 0:09:38.000 percent in the aftermarket. Ian King, with a write through 0:09:38.040 --> 0:09:41.640 on the Bloomberg terminal, and Video forecast revenue of about 0:09:41.640 --> 0:09:44.520 forty five billion in the fiscal second quarter, despite losing 0:09:44.640 --> 0:09:48.040 eight billion in revenue from China due to export controls 0:09:48.440 --> 0:09:51.440 imposed by the Trump administration. The company is ramping up 0:09:51.440 --> 0:09:56.200 production of its latest semiconductor design, Blackwell, and expect strong 0:09:56.280 --> 0:09:59.800 demand for its AI infrastructure, which the company believes will 0:09:59.800 --> 0:10:01.079 tran form the economy. 0:10:01.360 --> 0:10:03.439 And Video's growth is driven by its. 0:10:03.280 --> 0:10:06.040 Dominance as you know, in the AI market or in 0:10:06.080 --> 0:10:09.600 the market for AI accelerator chips. Companies increasingly offering its 0:10:09.679 --> 0:10:12.760 chips as part of whole computer systems to speed up 0:10:12.760 --> 0:10:14.880 the deployment of complex technology. 0:10:15.000 --> 0:10:16.800 So Jay got a little bit of an update there 0:10:16.840 --> 0:10:19.400 from Carol and from our OWNI and King about the 0:10:19.440 --> 0:10:22.280 write through when it comes to Invidia results. Going back 0:10:22.280 --> 0:10:24.280 to remind everybody, you're the only analyst listed on the 0:10:24.320 --> 0:10:27.200 Bloomberg terminal with accelerating on in Video. What would you 0:10:27.240 --> 0:10:29.680 need to see from the company today to have you 0:10:29.720 --> 0:10:31.120 reverse course with that decision? 0:10:32.080 --> 0:10:33.720 So I think one of the things sort of stands 0:10:33.760 --> 0:10:35.920 out for me is a year ago there was a 0:10:35.960 --> 0:10:38.160 line out the door for in video products. Everybody was 0:10:38.360 --> 0:10:41.200 buying everything they could, right and if one company couldn't 0:10:41.240 --> 0:10:43.839 take its allocation, there was somebody else who was more 0:10:43.840 --> 0:10:46.080 than willing to step in. I think the same is 0:10:46.080 --> 0:10:49.160 true of this eight twenty product. The company wrote it 0:10:49.200 --> 0:10:52.640 down a couple months ago. I kind of wonder why 0:10:52.760 --> 0:10:55.800 no one else bought that product. It's different, you know, 0:10:55.960 --> 0:10:59.240 there's all kinds of technical things there, but still it's 0:10:59.280 --> 0:11:02.400 compute at the right price, it would have been attractive 0:11:02.440 --> 0:11:02.920 to somebody. 0:11:03.640 --> 0:11:05.920 Hey what and so yeah, Oh I'm sorry, please continue. 0:11:06.840 --> 0:11:07.040 Yeah. 0:11:07.040 --> 0:11:09.760 So I'm just wondering how much more demand there is 0:11:09.800 --> 0:11:12.320 right now. Again, I think AI long term is important. 0:11:12.840 --> 0:11:15.240 In the near term, though, I think we're sort of 0:11:15.440 --> 0:11:17.320 running out of steam as people are taking a pause 0:11:17.360 --> 0:11:18.760 to assess what they want to do with it. 0:11:19.240 --> 0:11:20.800 One thing I want to ask you, is it tough 0:11:20.840 --> 0:11:24.680 to have a cell rating Considering the stock Nvidia has 0:11:24.960 --> 0:11:29.360 rallied about twenty four percent since you initiated coverage on 0:11:29.440 --> 0:11:30.319 April thirtieth. 0:11:31.240 --> 0:11:34.040 Oh, it's fantastic having being the only celerated analyst on 0:11:34.040 --> 0:11:35.880 a stock I like being the sober contrarian. 0:11:36.200 --> 0:11:38.200 But even with the stock, you know, rallying as much 0:11:38.240 --> 0:11:40.040 as it did, I understand it's a bounce from being 0:11:40.360 --> 0:11:43.600 perhaps you know, taking quite a beating like many names did, 0:11:45.360 --> 0:11:47.880 courtesy of some of the news coming out of the administration. 0:11:48.000 --> 0:11:50.360 But I mean you still kind of conviction you're going 0:11:50.400 --> 0:11:51.000 to hold to it. 0:11:51.760 --> 0:11:53.280 Oh, absolutely absolutely. 0:11:53.559 --> 0:11:54.920 I mean I have a good sense of you know, 0:11:55.000 --> 0:11:56.360 Jensen is going to get on the call and it 0:11:56.400 --> 0:11:58.960 can drive the stock price higher because he's a fabulous, 0:11:59.000 --> 0:12:01.280 fabulous marketer. He really knows how to sell this company, 0:12:01.360 --> 0:12:03.240 does a great job of that. But I think the 0:12:03.240 --> 0:12:05.600 substance there is still I have lots of questions about it, 0:12:05.880 --> 0:12:08.000 and I'll I'll say in you know, in the two 0:12:08.120 --> 0:12:10.800 three months i've had this celerating out there, I haven't 0:12:10.800 --> 0:12:12.040 got a lot push back from the street. 0:12:12.080 --> 0:12:14.800 I haven't had investors and clients telling me that I'm crazy. 0:12:15.320 --> 0:12:17.040 I've had a few people say I'm too too soon. 0:12:17.040 --> 0:12:19.160 I've had a few people say I'm too late, but 0:12:19.240 --> 0:12:20.920 nobody is sort of questioning my thesis. 0:12:21.640 --> 0:12:24.680 We're getting some additional details about challenges in China and 0:12:24.760 --> 0:12:27.000 China restrictions are any in King writing on the live 0:12:27.120 --> 0:12:29.040 blog that Nvidia missed out on two and a half 0:12:29.480 --> 0:12:32.440 billion dollars of sales in the fiscal first quarter and 0:12:32.480 --> 0:12:35.199 will not getting projected eight billion dollars in the fiscal 0:12:35.280 --> 0:12:37.679 second quarter. It's an amount per quarter roughly equal to 0:12:37.720 --> 0:12:42.680 its nearest rival, AMD's total sales. You mentioned demand of 0:12:42.720 --> 0:12:46.560 the H twenty specifically. Is that what you see as 0:12:46.559 --> 0:12:50.600 the biggest risk? China and a lack of demand from China, Jay. 0:12:51.480 --> 0:12:54.280 I think China is a big X factor, just because 0:12:54.559 --> 0:12:58.280 the US government's China policy is, let's call it dynamic 0:12:58.360 --> 0:12:59.880 and rapidly changing day to day. 0:13:01.160 --> 0:13:02.679 I don't think that's the biggest risk. I think the 0:13:03.720 --> 0:13:04.640 biggest question. 0:13:04.440 --> 0:13:07.079 I have about in Nvidia is long term demand for AI, 0:13:07.240 --> 0:13:09.800 where it's going, what it's going to be like in 0:13:09.840 --> 0:13:13.599 the near term. I think when I speak to corporate CIOs, 0:13:14.280 --> 0:13:17.719 they've all tested AI pilots, they've all demoed it, and 0:13:17.800 --> 0:13:19.439 what they're finding is that they get sort of ten 0:13:19.520 --> 0:13:22.680 twenty percent cost reductions around their AI deployments. It helps 0:13:22.720 --> 0:13:26.760 them reduce call center costs, things like that, which is good, 0:13:27.040 --> 0:13:30.439 but it's not necessarily enough to justify the massive investments 0:13:30.480 --> 0:13:32.480 needed to keep in video growing the way it has 0:13:32.520 --> 0:13:33.000 been growing. 0:13:33.440 --> 0:13:37.319 Okay, Jay, I want to go to a story I'm 0:13:37.400 --> 0:13:40.160 just going through. I was exchanging some texts with some 0:13:40.240 --> 0:13:43.439 friends earlier because it doesn't sound like I have a 0:13:43.480 --> 0:13:45.360 group of friends and like some of them are very 0:13:45.400 --> 0:13:48.480 concerned about AI and about impacts on jobs, and we're 0:13:48.520 --> 0:13:52.679 watching this really closely. Dario Amidae, the CEO of Anthropic, 0:13:52.679 --> 0:13:56.520 I've interviewed him before. Axios out this morning with a 0:13:56.559 --> 0:14:01.760 story that he basically said that AI could wipe out 0:14:01.960 --> 0:14:05.280 about half about all entry level white collar jobs I'm 0:14:05.280 --> 0:14:08.360 reading from Axios right now, and spike unemployment to ten 0:14:08.400 --> 0:14:11.880 to twenty percent in the next one to five years. 0:14:11.880 --> 0:14:14.239 He said this in an interview to Axio in San Francisco. 0:14:14.559 --> 0:14:16.920 Axios in San Francisco, do you disagree with that? It 0:14:16.920 --> 0:14:19.400 sounds like you're not as bullish when it comes to 0:14:19.440 --> 0:14:22.600 the actual effect of AI on the workforce. 0:14:24.040 --> 0:14:27.760 I think that again, I'm a techno optimist, if anything, 0:14:28.360 --> 0:14:31.320 I think there will be absolutely there will be disruptions 0:14:31.320 --> 0:14:34.160 to the labor force, but there will also be new 0:14:34.160 --> 0:14:39.760 opportunities over the long term. So you know, I think 0:14:39.840 --> 0:14:42.560 certain low level coding jobs, certain low level copy eating jobs, 0:14:42.600 --> 0:14:44.920 Those will start to get pretty tough. Anyone who does 0:14:45.200 --> 0:14:47.840 image creation, they're going to be challenged for a while 0:14:48.240 --> 0:14:50.720 until we find new ways to make use of these tools. 0:14:51.360 --> 0:14:55.320 So absolutely, you know, in the nineteen hundreds, all the 0:14:55.360 --> 0:14:59.600 buggy whip and you know carriage, you know, carriage makers 0:14:59.600 --> 0:15:02.920 and horse trainers, they were very disrupted, and we're going 0:15:02.920 --> 0:15:05.120 to see something similar. But the economy will still continue 0:15:05.200 --> 0:15:08.720 to grow and hopefully we'll find ways to use those 0:15:08.720 --> 0:15:10.720 people to do new things with the tools we get. 0:15:10.800 --> 0:15:13.240 I mean hopefully, or else we're in for a real 0:15:13.280 --> 0:15:15.000 reckoning when it comes to the labor force. 0:15:16.000 --> 0:15:18.120 Yeah, and again I think it's I think it's very 0:15:18.160 --> 0:15:20.960 premature to talk about these sort of massive, big term 0:15:21.160 --> 0:15:25.960 impacts of AI because the things. 0:15:25.720 --> 0:15:27.720 We actually use day to day aren't aren't quite there yet. 0:15:27.760 --> 0:15:30.320 You know, again, a few small categories where there is disruption, 0:15:30.400 --> 0:15:33.320 but in a broader sense, we haven't really grasped the 0:15:33.360 --> 0:15:35.480 full potential for AI and what it's going to do. 0:15:35.760 --> 0:15:36.680 So then it's ways to. 0:15:36.680 --> 0:15:39.120 Go if okay, So then it raises the question about 0:15:39.160 --> 0:15:43.280 other companies than your view that could be beneficiaries of 0:15:43.800 --> 0:15:46.240 the way that technology is moving. If in video in 0:15:46.280 --> 0:15:50.320 your view has limited upside. Right now, where in your 0:15:50.360 --> 0:15:53.760 view should investors be putting their money Broadcom? 0:15:54.080 --> 0:15:54.240 Right? 0:15:54.280 --> 0:15:57.040 I think today, anytime in video loses share, it's to 0:15:57.080 --> 0:16:00.640 one of its big customers, the hyperscalers, Intel, micros off Google, 0:16:00.960 --> 0:16:04.280 not Intel, So our Google, Microsoft, Amazon, those companies are 0:16:04.280 --> 0:16:07.880 all in various stages of designing their own GPU alternatives, 0:16:08.640 --> 0:16:10.600 and Broadcom is going to make a lot of money 0:16:10.600 --> 0:16:12.280 helping those those chips come to market. 0:16:12.320 --> 0:16:14.200 When do you think those chips will be able to 0:16:14.240 --> 0:16:16.480 hold a candle to what Nvidia has developed. 0:16:17.480 --> 0:16:18.600 I think we're already there today. 0:16:18.640 --> 0:16:21.520 I think Google Google has the TPU, their tensor processing unit. 0:16:21.520 --> 0:16:24.120 They're on their fifth or sixth generation of those. Those 0:16:24.160 --> 0:16:26.960 are incredibly performative. They work very well for Google and 0:16:27.000 --> 0:16:30.440 what Google needs to do, and I think other Google's 0:16:30.440 --> 0:16:31.960 peers are going to start to see the benefits of 0:16:32.000 --> 0:16:34.320 that and move down that path as well. 0:16:34.400 --> 0:16:36.720 All Right, you are listening and watching Bloomberg Business Week 0:16:36.760 --> 0:16:38.760 Daily Carol Master along with Tim Stanevik live in our 0:16:38.760 --> 0:16:41.840 Bloomberg Interactive Broker Studio. We're talking to Jay Goldberg, Senior 0:16:41.840 --> 0:16:46.040 analyst of Sevenconductors and Electronics over at Seaport Research Partners. 0:16:46.080 --> 0:16:48.720 As we said, he's the only analyst listed on the 0:16:48.760 --> 0:16:51.560 Bloomberg with a cell rating on Nvidia, and yet here 0:16:51.600 --> 0:16:54.200 in the after market, we are definitely not seeing investors 0:16:54.920 --> 0:16:57.400 sell shares of Nvidia stock is up about three point 0:16:57.480 --> 0:16:58.320 three percent. 0:16:59.360 --> 0:17:02.360 This as the company did come out and post. 0:17:02.160 --> 0:17:05.600 Its latest quarterly update as well as outlook, and as 0:17:05.600 --> 0:17:09.400 our ian King rights, the company it's the world's largest 0:17:09.520 --> 0:17:14.040 semiconductor company, giving an upbeat forecast even as China slowed 0:17:14.080 --> 0:17:17.280 down Mars some of the growth slow down in China 0:17:17.320 --> 0:17:19.920 weight on results, but sales will be about forty five 0:17:19.960 --> 0:17:23.200 billion dollars in the fiscal second quarter that runs through July. 0:17:23.920 --> 0:17:26.880 That included the loss of roughly. 0:17:26.640 --> 0:17:29.280 Eight billion dollars in revenue from China because of export 0:17:29.320 --> 0:17:31.399 controls from the United States. 0:17:31.440 --> 0:17:34.360 The forecast was in line with the analyst estimates according 0:17:34.440 --> 0:17:35.000 to our data. 0:17:35.000 --> 0:17:37.840 So what's interesting is that even with that loss we're 0:17:37.880 --> 0:17:41.639 talking about, sales will be about forty five billion dollars. 0:17:41.720 --> 0:17:44.520 And as our ian King rights on our live blog, 0:17:44.560 --> 0:17:46.959 how many companies could frontload their earnings release with details 0:17:47.000 --> 0:17:48.720 of what they're missing out on and still get a 0:17:48.760 --> 0:17:50.520 positive reaction from investors. 0:17:50.880 --> 0:17:53.160 So the stock as we said, still. 0:17:52.840 --> 0:17:55.119 Holding on to about a three and a half percent 0:17:55.240 --> 0:17:56.760 gain here in the aftermarket. 0:17:56.760 --> 0:17:59.080 Our colleague Carmen Ryanikey writing on our live blog that 0:17:59.119 --> 0:18:01.840 it seems traders are acting to the company's revenue forecast, 0:18:01.840 --> 0:18:04.560 which is still basically in line even with an expected 0:18:04.600 --> 0:18:07.200 eight billion dollar loss. When it comes to H twenty revenue, 0:18:07.480 --> 0:18:10.640 that signals in Vidia is making up for the loss elsewhere. Jay, 0:18:10.680 --> 0:18:12.960 I want to bring you back in with the caveat 0:18:13.000 --> 0:18:15.720 that you haven't necessarily had the time to comb through 0:18:15.800 --> 0:18:18.080 these results. But in your view, where do you think 0:18:18.080 --> 0:18:20.159 in Nvidia could be making up for the loss in 0:18:20.320 --> 0:18:21.160 H twenty revenue. 0:18:22.600 --> 0:18:24.879 I think there's still a lot of demand from the hyperscalers. 0:18:24.920 --> 0:18:28.240 We have a bunch of massive data center buildouts taking place. 0:18:28.400 --> 0:18:31.119 We had, you know, big announcements in Salary, Rabia last week, 0:18:31.720 --> 0:18:35.879 Stargate earlier this year, UAE, ku Wait, lots of big 0:18:36.720 --> 0:18:39.600 Gulf nations are building out data center capacity. 0:18:40.119 --> 0:18:40.960 The hyperscalers. 0:18:41.080 --> 0:18:45.160 You know have you know, building these plans these data 0:18:45.160 --> 0:18:47.520 centers takes multiple years and so they've had commitments and 0:18:47.560 --> 0:18:50.160 plans in place for a long time now. So those 0:18:50.160 --> 0:18:53.239 are going to continue, right I think the question is 0:18:53.680 --> 0:18:56.560 next year, can the capex continue to be at these levels? 0:18:56.600 --> 0:18:57.480 What happens there? 0:18:57.880 --> 0:18:59.680 But a lot of what we're seeing today is stuff 0:18:59.720 --> 0:19:02.040 that was planned on and committed to months ago. 0:19:03.240 --> 0:19:07.360 So I guess it also raises the question about demand 0:19:07.400 --> 0:19:12.080