Nvidia (NVDA) is Selling the Best Shovel in the A.I. Gold Rush

welcome back to fast Market Kevin hins and Kevin green back here now it's time for our likefolio segment for that I want to bring in the co-founder of like folio.com Mr Andy Swan to the show he's going to take us through the stock of the day the stock of the week the stock of the month Andy Nvidia what is the likefolio data saying about this boy we were talking Andy about how this is going to affect a large group of stocks when when some in different directions what does likefolio data say about Nvidia yeah well we're going to say Nvidia is priced to Perfection and it will likely deliver better than per Perfection this is a company that is um you know in the Gold Rush days the the people that got rich a lot of times were those that sold the picks and shovels well we're in the AI Gold Rush and Nvidia sells by far the best shovel in town and there's just no other way to look at it when you look at the spending of Amazon alphabet uh Google Facebook you look at that capex spending uh over time completely up and to the right exponential growth over the last uh few quarters continuing to grow they've continued to commit more and more resources uh to these projects and almost all of that money or majority of that money is flowing into the hands of Nvidia so you can see exactly where their revenue is coming from it's coming from the largest companies uh in the world they have uh extreme uh insight into and visibility into future quarters Revenue so when they raise guidance they're not doing so thinking things will just continue to be uh you know really good they're they're doing so knowing things are going to continue to be really good they're probably sandbagging the number a little bit as they move out into the future but they have extraordinary visibility into the revenues into the future unlike uh pretty much any company that we've ever seen on this type of growth curve so I think uh Nvidia is in the driver's seat uh when you look at them versus AMD or Intel uh it's essentially a one horse race we do like uh AMD as a as a nice second place stalker but uh look this Market belongs to Nvidia and all of the Tailwinds are still very much there so Andy uh that a nice uh graphic that you have when it comes to capex bin for some of those larger names uh we have seen for this earning season uh maybe a little bit of a deceleration when it comes to that cap expin how can Nvidia kind of backfill that for the future uh if we start seeing maybe those mag 7even or mag 10 names start to slow down just a little bit when it comes to the spending and start putting up their own infrastructure yeah I think it really comes down to Innovation and staying you know ahead of the curve Nvidia is in a really cool place uh or really strategic place because when they come out with the Next Generation chip like the Blackwell platform that they're they're pushing out uh four four times faster training 30 times faster inference real-time generative AI they essentially pit these massive tech companies against each other and so the moment one of them raises their capex spending and says we're going for the new Nvidia chips or data center processing Solutions the rest of them almost have to follow suit just to keep up and so table Stakes continue to rise and Nvidia is there to take the rake and I think uh that's that's the strategy of the company going forward I don't think that they're sitting back thinking we're just going to count our money and and stop innovating I think that they're reinvesting this windfall in a really strategic really smart way to to continue to expand the uh the lead that they have over all of their competitors and force their customers to continue buying from them and continue accelerating their upgrade cycle you know it's interesting Andy your graph showing the spending or the the the expenditures from Amazon alphabet Microsoft and meta those are three companies that aren't hurting for money and all of them came out and said it's more spending not less the risk is to underspend now so they're backing up everything that Nvidia is putting out there the only real risk is can they get enough chips to these companies that they want to buy or like Microsoft talked about having to go to AMD for chips because they couldn't get some of the chips is that a risk to this business or these are these companies with unlimited capx budgets just going to keep this train rolling yeah I think keep the demand rolling the biggest risk uh to Nvidia is you know that that Wall Street or valuation gets so far ahead that it becomes impossible to catch up to eventually that will happen I don't think that it's this quarter but eventually I think that's what pops this or they have a you know a a supply or manufacturing disruption that does not allow them to fulfill uh these backlogged orders and you know you think about I believe it was within the last three months certainly this year that and Tesla's not even on the chart that we shared you know Tesla wanted Nvidia chips so badly that when inedia was ready to deliver them uh Tesla was not ready to receive them in terms of their physical location being prepared to receive them so Elon Musk diverted the order to his AI Project X aai so that Tesla could stay in the good graces of Nvidia that's how powerful nvidia's position is that its customers will find ways to buy things they don't need just so that they can just so that they can stay on nvidia's uh Nice List instead of the naughty list yeah we haven't seen this kind of rush for a product since Cabbage Patch Kids back in the 90s right it's it's a Cabbage Patch Kids on a bigger scale and so Christmas shopping going on here with Nvidia chips Andy Swan thanks for coming on as always spending time with us on a very important day for NVIDIA and important day for a large group of stocks have a great day Andy