Cramer & AMD CEO Today On AMD, NVIDIA, Jensen Huang - NVDA Update

Cramer & AMD CEO AMG reporting a strong no super strong quarter uh sending shares much higher it's course when it was first announced the stock was actually down a lot of this is around AI adoption we're also going have to PC CEO Lisa Sue joins us now first on cmbc to discuss the quarter hey leis it's great to see you hey good morning it's great to see you guys okay so Lis on page five of your uh conference using the fact said you you say something that I think was kind of jaw-dropping I don't know if people understood that you said as a result we are now expect data center GPU data center D that's important okay that's the AI there uh Revenue to exceed 4.5 billion up from 4 billion that you guided in April you just guided up $500 million in one quarter well first of all uh we had a very strong second quarter very excited about the traction that we're seeing uh it is all about AI you know I know that you guys were talking about AI in the earlier segment uh there's no question that AI is like the biggest Tech technology Advance over the last 50 years and we're very excited to be helping power that foundation so yes we were able to had a very strong data center quarter uh you know we more than doubled our data center Revenue in the second quarter and we see strong growth into the second half of the year so part of that is uh you know acceleration in our AI growth and that's what allowed us to uh increase our guidance from greater than 4 billion um you know 90 days ago to greater than 4.5 billion for the year extraordinary guide up now one of of the things that has bothered people ever since the uh alphabet call was the notion of like well we better build it cuz they might come and if not we're going to fall behind when I W listen to your call and I listen to you I feel it's the opposite I think customers are desperate for compute power whether it be from you or Nvidia they got to have it uh which of course you're taking share when it comes to some parts uh is it not true that the real issue is can you meet compute demand it is absolutely true that compute is really the foundation for what unlocks all of this you know AI capability um it is true that the supply chain is very tight right now and frankly people need more compute uh you know we're in a very very strong position in the sense that we're continuing uh to ramp up our mi30 which is our our AI compute chip but we also see actually you know broader demand trends that say um even in traditional compute that had taken um you know a little bit of a a slower start for the year has actually now seen some very positive signals so we see that on the traditional data center uh CPU side as well so overall um you the when I talk to CEOs and cios um across the Enterprise I think this is an opportunity to invest it's an opportunity to invest to really capture um you know all of the capability of you know Ai and it's also opportunity to refresh uh you know data centers that have been Aging for some time so these are some of the trends that we're excited about going into the second half or so Le maybe it's because you're a plain spoken person like my friend David Faber both from Queens I might add uh can you please explain to people that even though AI is not necessarily curing cancer or putting a man on Jupiter right now it is integral to many of the organizations that you deal with and talk to every day absolutely first of all it's great to see uh you know David and Carl as well you know when I look at AI I really look at AI as trying to um really help every Enterprise you know every company uh every um sector really become more productive um and we see it in many different ways uh from simple things you know you'll hear people talk about call centers and customer response and I call those you know a you know very loow hanging fruit to much more complex things like you know designing better chips that's something that you know we do and our semiconductor peers do or designing better factories or actually even uh helping um discover the next big drug discoveries and you know the healthcare things that uh that you mentioned I do think this is a long-term Arc so people are always expecting you know things that happen overnight this won't happen overnight but the time to invest is now so that we see the payoff in the 1 2 3 4 5 year time frame and that's what companies are doing because we see the huge potential uh for using AI in all of our businesses uh Lisa it is David uh you know back to the uh the m1300 and the guide to 4 and A5 billion that Jim pointed out that I think is being embraced by investors I've had a couple this morning actually ask why it isn't even higher given if you annualize the quarter and you add in a growth rate it would seemingly get you perhaps as High 5 billion are you being conservative well David you know the way we look at these things is you know we call it like it is today and what we see is um it was very important when we started the year uh to pass some important customer Milestones uh we have some great Partnerships out there uh you know we've talked about Microsoft being a very strong partner for us across the data center and especially in AI we've talked about meta we've talked about Oracle we've talked about um you know a lot of the um the OEM Partners as well uh that have adopted mi30 and we wanted to go through some of the key Milestones so the fact that you know we're sitting here at the middle of the year and and calling you know over 4.5 billion for the full year I think is a great place to be thinking about you know just where we are in this trajectory and we'll continue to you know call it like it is as we see every quarter um this came up something about a high bandwidth memory problem that had you losing some yield it was not you it was related to a supplier was that an issue that's been resolved or is there anything you can comment on or clarify you know David I would say that um there's a lot of noise in the system and I would really not pay attention to those kinds of things these are extremely complex products I mean Mi 300 is like over 150 billion transistors of course we're always working things um real time but um as far as you know we look at this this is a very very successful production ramp we're very excited we're seeing mi30 now in our customers data centers in volume running production traffic giving great results and that's what give us gives us the confidence for the uh the growth trajectory in the second half of the Year hey Lisa you might have heard me and Jim talking about PCS a moment ago where are you right now in terms of whether or not uh AI empowered PCS will drive consumer demand yeah absolutely Carl you know I'm bullish on aips you know I view aip's as uh really a a category changer for the PC market where you know we see an opportunity not just to do the things that we normally do with PCS like you know gaming as well as um Enterprise productivity type applications but AI will give us yet another capability with the PC that allows us to do things locally and a lot of people actually you know although we like working in the cloud uh you know it is there is some latency involved with that and the idea that you can do things on your PC with your personal data I think is a positive now again the way to think about this is um we're very excited about aips we just launched a bunch over the weekend um will take some time to go fully through the PC ecosystem so I see you know second half um as a positive uh for PCs and then as we go into 2025 even more excitement around aip's all right Lisa let's talk share both high and when it comes to what I would regard as being accelerated Computing and also lower end that we just talked about with PC I see you can tell me if I'm wrong that there's so much business that I'm not concerned about you in Nvidia I think that everybody is completely overwhelmed where when it comes to compute power both you and Nvidia on the lower end when intel was at five when you were at five and intel was at 40 you schooled me in a way that made me think that one day you'll be at 40 and Intel would be at 5 the lad hasn't happened yet but are you taking a lot of share from Intel on the lower end and you're taking uh whatever you can do to meet the demand on the high end yeah I mean the best way to think about it Jim is you know I think about Computing as end to-end comput you need the most powerful stuff in the cloud and we certainly you know love the work that we do with all of the hyperscalers and you also need the right compute at the edge and in the client and we have an end to-end Computing portfolio that allows us to really service all those needs uh certainly um I'm very excited about the market you know we called the AI Market um you know last year at um you know upwards of 400 billion over the next 5 years and we see that we see that there is just tremendous need for more compute uh for high-end AI but we also see need for compute across um the uh The Edge as well as the client so these are all great opportunities uh yes um I love the large Market I also love the fact that I think we have a very competitive product portfolio which gives us the opportunity to gain share uh we have seen a pullback in some of the hyperscalers lately in the stock market and part because of this continuing question lease as to whether all of this enormous spend will actually get a significant return on what's being invested and the worry is at some point you hit a wall and the spending slows so how do you think about that from the larger perspective I I will say David from you know the conversations that I have with uh you know our our customer set and sort of the broader industry um we can see that AI is a multi-year um you know I would call it a super cycle frankly uh there's tremendous need for more compute now you know how it goes on a quarter by quarter basis you know obviously you guys are hyper sensitive to a percent there I wouldn't be hyper sensitive uh in those areas I would say are more customers using it are is every Enterprise asking for it do are we seeing more applications on a you know daily weekly monthly basis the answer to that is absolutely yes everywhere I go everybody wants to talk about how can we incorporate AI into our businesses faster and more efficiently and we're all learning along the way so that's the beauty of Technology this early in the cycle there's a lot of learning and experimentation but definitely there will be the return on the investment um on the other side of it okay so we know that Jensen W say the internal investment CEO of Nvidia is almost instant I believe that you would say that a employee may be double e productive with AI and yet we still don't hear from any executive you know what I I we have ai and we've been able to trim staff we've been able to become much more uh productive and we've been able to boost earnings per share when will an executive come on and say listen our numbers are going higher because of a I believe that you will see overall AI will increase productivity will help us get more productive and most importantly help us get better products out faster so I think all of that is there now I don't believe that things are instantaneous you know technology takes time to adopt that's just the way technology Cycles are we're investing today for the return in a couple of years and I think that's absolutely the right thing to do that is you know that's the way we think about these investment Cycles so not quite instantaneous but there definitely coming Jim well Lisa Su thank you and the guide up was amazing even though of course David wanted double the guide up but we're we're going to let you have just the guide up as you did since is the biggest one I've ever seen from your company Lisa Sue CEO of AMD thank you so much and but uh I again I think we're MSFT (NVIDIA's Largest Customer) talking again as we've said they they miss by inches but the company's still ahead by Miles as we call it what what number are you using for full year capex and were you convinced about their argument about the durability of their Investments capex goes to $83 billion which is effec the GDP of Luxembourg for my perplexity search this morning uh you know you think about that number it's insane and it's uh higher than most of the other uh uh Cloud uh providers and as they said on the call they can't keep up with demand AI uh demand is higher than what they can actually provide and so everyone is saying well how do you know this is going to work and and I we've said look at what they did with with Windows look what they did in gaming look at what they did with Azure uh nadell and Amy Hood have been so far ahead of this and everything they've invested in has paid off and the fact that they actually improved bargin in the year of AI tells you they're going to make money uh I mean it's incredible what they're able to do on the bottom line in the face of all the spend and so everyone ask well what's gives you conviction the conviction is 25 years of covering Microsoft every dollar they put in they've got a lot more out so I think this will be the same again it's really early we're like mile one of the marathon uh and it's hard to see but based on their track record you know all all read all roads lead back to this is going to pay off well yeah Invidia Shares are showing at least a result of that capex number as well up over 10 and a half percent right now you know Brent what is what does it mean for the rest of your coverage Universe when you see Microsoft spending this kind of money and you're a Believer obviously that they will see significant return and generate great margins on it as well as a software analyst I I've said this I want to be a semi an internet analyst right now I mean software is not place to be because when you have capex numbers going up another 10 billion dollars plus on top of our forecast it's going into AMD it's going into Nvidia it's going into the anet and in Arista for networking it's still going into AI infrastructure is we've said you know the the foundation of this house has to be built the plumbing the the F all the concrete the wood that is not our vendors all the software vendors are like the artwork they get hung at the at the end of this so we're admitting that software is the tail end of this it is not going to be the first place that monetizes so it it's not great for software short term I think over time it will be good uh and it's more of a 2526 event so as I've said software and the rest of tech are going to lead the way software is going to lag but it should be good as we go into 526 and valuations aren't crazy multiples have re been reset and so we we don't think again the backdrop of demand is is coming but investors have to be patient in in the software FinVid industry all right let's recap what's happened over the last 24 hours or so with Nvidia AMD and Microsoft keep in mind that Microsoft is nvidia's largest customer yesterday Microsoft reported earnings and the stock got hit hard initially and after hours trading pulling Nvidia down with it Microsoft actually beat on revenue and PS but they had a slight and I emphasize slight Miss on consensus estimates for Azure and cloud services revenue and intelligent Cloud Revenue I think Brent Put It Best in the clip you just watched Microsoft is ahead by Miles they just missed by inches in reality Microsoft saw substantial growth in revenue from Ai and cloud services this quarter shortly after Microsoft reported AMD reported solid earnings beating on both revenue and EPs and what really sent the stock higher is that they upped their guidance both for revenue and for data center GPU Revenue increasing the ladder by more than 10% as AMD rallied in after hours it provided some relief to Nvidia stock and then we got Microsoft's earnings conference call I was very pleased with Microsoft's earnings call it was very good for both Microsoft and Nvidia Microsoft said they are seeing accelerating demand for AI services and they intend to increase capex as needed in order to meet that growing demand remember that Microsoft is Invidia largest customer and greater capex means more money going to Nvidia I loved what Microsoft CEO said I'm paraphrasing but essentially he said that they will only increase capex spending as they see increase demand and well they are increasing capex spending by about $10 billion which means they are definitely seeing demand they are seeing demand that is both massive and accelerating this is very good news for NVIDIA you may remember alphabet's earnings report recently and how semiconductor stocks like Nvidia pulled back hard following that earnings report why did this happen well alphabet did indicate that they intend to invest in AI but they essentially said that they were investing into AI just in case so that they can meet demand in the future if keyword if they see demand in the future Market participants did not like that because they are wondering if or when these companies will see a return on their massive investments into AI infrastructure and that's where Microsoft comes in Microsoft said something completely different from what alphabet said Microsoft said that they are seeing demand they are seeing a return on their investments into Ai and they are increasing their capex spending on building out AI infrastructure that's why early in today's trading session much of the market was trading higher Market participants were so anxious going into these Mega cap Tech earnings because they were worried that these companies would not be seeing a substantial return yet on their AI Investments and they were worried about demand for AI Services Microsoft basically came out and said yeah we're seeing massive demand we're seeing a return on our investments and we're going to increase our investments into AI infrastructure in order to meet that demand this caused the entire Market to breathe a sigh of relief because Microsoft is now a shining example of a mega cap tech company that is both investing into Ai and seeing a substantial return on that investment I am very bullish on the long-term future of both Nvidia and AMD in the shortterm I'm expecting volatility because there is still a lot happening this week of course we have the Market's reaction to fomc in the days following today we have meta earnings today after market close and then we have Amazon apple and Intel all reporting earnings on Thursday so this week is not over yet be careful out there because the market could change rapidly one way or the other as for fomc I was very excited to hear pow teing up for a potential rate cut in September as I listen to the question and answer portion of the fomc press conference we got bullish after bullish after bullish comment from Powell so that is very encouraging for the markets as a whole so for now I am very happy with both Microsoft and amd's earnings and their forward-looking guidance and I'm happy with fomc today now let's see how the market reacts following the remainder of the mega cap Tech earnings this week if the market reacts positively to those earnings reports after the news we got from Microsoft AMD and fomc then I think a pre- anticipatory runup in Nvidia in August leading up to earnings is more probable than not with all of that being said I hope you're all having a great day and I'm curious to know your thoughts on Nvidia in the comments below please leave a like on this video so more people will see it and while you're down there please consider subscribing it's free and you can always change your mind thanks for watching and hopefully I'll see you in the next video