What to Expect From Nvidia Earnings

Published: Aug 25, 2024 Duration: 00:04:22 Category: News & Politics

Tags : Technology Consumer Goods; Retail Artificial Intelligence Jonathan Ferro Computer Chips NVIDIA Corp. Pierre Ferragu earnings magnificent 7 tech stocks

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All eyes on video earnings on Wednesday, the last of the Magnificent Seven to report shares this month, up more than 10%. Atmospheric street research recently raised its price target on the air to 148, expecting reassuring signals in the earnings results. Their stock is up by about a half of 1% this morning after a decent rally on friday. PFI tycoon and new st joins us now for more. Can just go through sort of base case expectations for you in a team coming on Wednesday. Yes. On Wednesday, you know, investors got choked up a bit by all this noise about the Blackwell family of sheep. The next generation ship is being delayed. And so that created some kind of like nervousness around the stock. And to us, the reality that Nvidia is still in the same situation. All buyers are increasing CapEx. The supply chain is increasing capacity very, very steadily. So it's very reasonable to expect NVIDIA to do better than what they guided and three months ago and to guide for the next three months in the same vein, like above, it was current expectations. So we think the numbers are going to do to do fine. And then the second thing is all investors are going to ask on the conference call about the black hole delays. What does that mean? That means that growth is going to slow down. And our view here is kind of like counter intuitive. The reality is that when you launch a new chip like Black, where it's consuming more of your supply capacity, you need more HBM ships per GPU, you need more like coerced packaging capacity. And so even as a new chip is ramping slower, it's actually easing capacity constraints. And so what we think is that management is going to explain on Wednesday that why Blackwell might be delayed by 6 to 8, maybe 12 weeks Hope as a previous generation of chips, he's actually going to continue to sell very well because we're still in a world in which many, many, many people, many teams wants to have as many GPUs a.S.A.P. And so if the next generation is not ready yet, just keep buying a lot as much as they can of the previous generation. I wanted to ask you a few questions that I don't think will be answered on the call on Wednesday, and it's what's happening further downstream. I had this conversation last week with Bloomberg's Mandeep Singh and he built things out for us a little bit as well. And I'd love your thoughts to when you hear from their biggest customers, they are still bulled up on investing in this cycle big time. Without a doubt. You just get the sense, though, that investors just don't around the edges might be losing patience with the story that they actually want to start to see that investment turn into real bottom line profit growth to identify any kinds of investor restlessness further downstream with the end use case for I. Yeah, I think your photo and that's becoming like the key questions that he concerned for her for investors and that's the right way to look at it. So we're doing our best tracking down, you know, who's doing what with their eyes. And so far we think the signals are extremely positive. Like you can get what Facebook can produce in terms of numbers, efficiency gains driven by the migration, migration of their recommending recommendation engines on the on our systems. When you hear like companies like Wal-Mart telling about how much efficiency gains are gained from a from AI, I think we are still in a phase where people are getting excited about it and we are in that kind of like almost like contradictory situation where today if you don't invest in the AI, whether you are like a Wal Mart using it or like an Amazon and Google deploying the infrastructure, you're taking big risks because AI is very, very powerful and evolving very, very, very fast. So I think we are fairly safe in terms of the news flow coming in. But there is another reality which is that we we are getting into 2025, into a world that is going to spend like $150 billion on A.I. chips. And the key question is going to become again, well, what's next? You know, can envious business grow significantly from there again? But we're not going to have any visibility on that for at least, you know, the next 6 to 9 months.

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