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00:00> > NVIDIA OF THE WORLD'S MOST VALUABLE COMPANY UNDERWHELM'S ON EARNINGS AS INVESTORS DIGEST DECELERATING GROWTH. THIS AS IT CFO WEIGHS IN ON THE TRUMP ADMINISTRATION'S 15% COMMISSION ON SHIP SAILS TELLING US THE PLAN NEEDS TO BE CODIFIED FIRST. WE BREAK DOWN OF THEIR FROM THE TECH WORLD. SNOWFLAKE HP GAINING AFTER THE BELL BUT FIRST WE CHECK IN ON THIS MARKET WHICH IS DRAGGED TO LOWER BY ONE PIECE. LOOKING AT NVIDIA OFF 9/10 OF A PERCENT. AFTER-HOURS TRADE YESTERDAY MORE THAN 3% LOWER AS PEOPLE DIGEST THE COMPANY THAT'S NOW BRING IN REVENUE IN AT 50%. I AM INTERESTED IN THE FOCUS ON CHINA IN PARTICULAR. THIS IS A COMPANY THAT HAS NO H20 SKATE -- SALES FOR THE THIRD QUARTER. AND THERE IS AN OPPORTUNITY THERE JUST LISTEN TO WHAT JENSEN HUANG SAID. > > THE OPPORTUNITY FOR US TO MOVE BLACKWELL TO THE CHINA MARKET IS A REAL POSSIBILITY. WE HAVE TO KEEP ADVOCATING THE SENSIBILITY AND THE IMPORTANCE OF AMERICAN TECH COMPANIES TO LEAD AND WIN THE AI RACE. CAROLINE: IAN KING CONDUCT -- WAS UP LATE LAST NIGHT, CHINA IS THE BIGGEST OVERHANG AND WHY SOME THINK PERHAPS THE NUMBERS WERE A LITTLE LIGHT LARGELY BECAUSE WE DIDN'T KNOW WHETHER TO FACTOR IN CHINESE REVENUE. IAN: THEY SAID THAT IN THE RELEASE, THERE WAS NOTHING CHINA RELATED IN THERE IN TERMS OF THE DATA CENTER STUFF. THEN ON THE CALL THEY GAVE A SLIGHTLY EXTENDED SAYING IF EVERYTHING GOES OK IT GETS SORTED OUT WE MIGHT HAVE UP TO $5 BILLION WORTH OF CHINESE REVENUE AND IF YOU ADD THAT BACK INTO THE FORECAST THIS IS AN AMAZING QUARTER SO THERE'S A LOT OF MOVING PARTS. CAROLINE: IT FEELS AS THOUGH A KNEE-JERK TO SEND THE SHARES LOWER THE ANALYST COMMUNITY OUT THERE SAYING STRIP THIS OUT THIS WAS QUITE A RICH BEAT. BUT YOU GOT EVEN MORE DETAIL FROM THE CFO IN PARTICULAR. WALK US THROUGH WHAT SHE SAID ABOUT THAT 15% STAKE TAKING THE GOVERNMENT WANTS A FUTURE H20 SALES. IAN: IT'S IMPORTANT TO FRAME THIS APPROPRIATELY. THIS IS IN SOME KIND OF POLITICAL STAND OR DISPUTE WITH THE TRUMP ADMINISTRATION. WHAT SHE WAS DOING WAS WHAT INVESTORS WOULD LIKE HER TO DO WHICH IS TO SHOW HER DUTY WHICH IS NO MECHANISM BY WHICH I CAN GIVE 15% OF THIS CHINA RELATED REVENUE TO THE GOVERNMENT AS STATUTES CURRENTLY EXIST. SOMETHING WILL HAVE TO HAPPEN BEFORE I DO THAT. SHE WAS JUST MAKING A POINT RE-ENSURING -- REASSURING INVESTORS THEY MOVING PROPERLY. CAROLINE: THE -- AND WHETHER OR NOT THAT TWO TO $5 BILLION WORTH FOR THE QUARTER COMING TO BECOME THE REALITY. IAN: AGAIN THEY WERE VERY CLEAR TO SAY WE HAVE A FEW LICENSES THERE. BUT THERE ARE SO MANY GEOPOLITICAL VARIABLES IN THE MIX, WHAT IS BEIJING WANT, WILL THERE BE MORE LICENSES, WILL THEY BE GIVEN QUICKLY. ALL OF THESE TO BE FAIR TO NVIDIA ARE NOT KNOWABLE RIGHT NOW BECAUSE THINGS CHANGE ON A DAILY BASIS WITH THE SOCIAL MEDIA POST THE WHOLE WORLD CHANGES. WHEN PEOPLE COME DOWN AND LOOK AT WHAT WAS SAID THEY MAY REALIZE THIS WAS SOMETHING TAKING A CONSERVATIVE PERHAPS MEASURED APPROACH TO IT AND COLLECT HOLDERS. WE ARE NOT SAYING THIS IS ALL GONE AWAY BUT WE JUST DON'T KNOW WHEN AND HOW MUCH. > > ALWAYS CAREFUL WITH THOSE WORDS, WE APPRECIATE IT. LET'S GET AN INVESTOR TAKES ON WHO'S DUG DEEP. CEO AND CIO, WE'VE BEEN TAKING SOME MONEY OFF THE TABLE WITH NVIDIA WE STILL HAVE SIGNIFICANT EXPOSURE. WITH SO INTERESTING IS THIS QUESTION ON CHINA. WHAT IS YOUR READ BECAUSE AGAIN AND AGAIN JENSEN HUANG SAYING THERE'S A $50 BILLION OPPORTUNITY. > > THANKS FOR HAVING ME CAROLINE AND I AGREE WITH IAN ON JUST ABOUT EVERYTHING HE SAID. CHINA IS CRITICAL BUT THEY TOOK THE CHARGE LAST QUARTER AND SO THE BIG DISAPPOINTMENT OVERNIGHT WAS THEY CAME IN BELOW THE WHISPER NUMBER BUT THEIR GUIDANCE DID NOT INCLUDE CHINA AT 54 BILLION AND THE WHISPER NUMBER WAS AT 55 SO IF YOU BACK OUT CHINA FROM THE WHISPER NUMBER THEY BEAT NOT ONLY THE STREET BUT THE WHISPER NUMBER ON GUIDANCE SO I'M GIVING IT A BEAT AND RAISE. BUT I THINK IF THIS WAS A DISASTROUS REPORT THE STOCK WOULD BE OFF SIGNIFICANT ME MORE THAN IT IS. WE TRIMMED SOME AT 179, WE PUT IT TO WORK IN SOME OTHER NAMES LIKE PALANTIR AND CROWDSTRIKE AND GOT SOME GOOD EXECUTION BUT IT IS STILL 4% OF OUR PORTFOLIOS AND A CANDIDATE FOR OUR BEST IDEAS PORTFOLIO. I THINK THE REPORT IS EXCELLENT. DECELERATING GROWTH IS SOMETHING MICROSOFT DEALT WITH WITH AZURE IN THE EARLY DAYS. I DON'T THINK NVIDIA'S VALUATION IS AS EXPENSIVE AS MICROSOFT IF YOU LOOK ON THE PRICE EARNINGS GROWTH BASIS. I THINK THIS IS AN OPPORTUNITY. CAROLINE: WHEN A $4.4 TRILLION COMPANY IS STILL DELIVERING IN EXCESS OF 50% REVENUE AND EARNINGS PER SHARE GROWTH IT IS EXTRAORDINARY. THE OPPORTUNITY IS SO EXTRAORDINARY I THINK JENSEN HUANG DID A GREAT JOB OF REMINDING US $4 TRILLION IS A BIG INFRASTRUCTURE SPEND COULD BE ALONE. HE WOULDN'T GIVE US AN AMOUNT OF HOW MUCH HIS TAKE IS OF THAT MARKET. CAN YOU DO THE MATH ON THAT A LITTLE BIT. NANCY: IF YOU LOOK AT EARNINGS GROWTH EXPECTATIONS FOR FISCAL YEAR 2025 IT'S 113% GROWTH. FOR 26 IT'S 50% GROWTH. IF YOU FACTOR THAT IN TO THE TOTAL NUMBERS THIS COULD BE A $100 BILLION IN REVENUE OVER THE NEXT 12 MONTHS. DON'T FORGET, SOVEREIGN IS STARTING TO PICK UP. THAT WAS ABOUT 20 BILLION EURO IN EXPECTATIONS AND YOU'VE GOT THE BUYBACK PUTTING US MORE INTO THE STOCK. SO THE MARKET SHARE -- SHARED TAKE CONTINUES TO REMAIN OR GROW AND WHAT WAS INTERESTING MEDIA DAY YOU'RE SEEING AMD AND BROADCOM UP ON THE NEWS BUT NVIDIA DOWN SLIGHTLY. CAROLINE: THE CHINESE NAMES ARE UP ON THE NEWS AS WELL. OTHER KEY PLAYERS BUILDING OUT AI ACCELERATORS FOR CHINA. IT REALLY REMINDS ME OF AMD THEY BEAT AND IT OTHER WAYS THEY RAISE BUT THEY COULD NOT GIVE CLARITY ON THE FUTURE OF CHINA AND WERE PUNISHED BECAUSE OF THAT. DO INVESTORS NEED TO UNDERSTAND IT'S VERY DIFFICULT TO GET REAL CLARITY ON CHINA? NANCY: AND REMEMBER THERE ARE INVESTORS AND HEDGE FUNDS AT THE ALGORITHMS. THE LATTER TEND TO DRIVE THE VOLATILITY. INVESTORS LIKE ME LOOK AT OPPORTUNITIES LIKE THIS AND SAY I WANT TO BE IN THIS FOR THE LONG TERM. SO LAST SUMMER WE PICKED OFF NVIDIA AT $100 A SHARE. LAST SUMMER PEOPLE WERE SAYING THE STORY IS OVER. THE HYPERSCALERS CAN CONTINUE TO SPEND CAPEX AT THIS LEVEL AND NOT ONLY DID THEY DO THAT BUT MANY INCREASED THEIR BUDGETS. IF YOU THINK ABOUT DATA CENTER IT'S 29% GROWTH. CHINA HE IS SAYING COULD GROW IT 50% SO TO ANSWER THE PREVIOUS QUESTION CHINA IS GROWING FASTER THAN THE REST OF THE WORLD BUT 29% IS UNLIKELY TO BE THE GROWTH NUMBER. LIKELY CLOSER TO 30 TO 40% FOR DATA CENTER AND INDIA AND THE COMING YEAR OR TWO. AS I'VE SAID YOU WANT TO TAKE ADVANTAGE OF THESE PERIODS OF CONFUSION OR YOU KNOW, MELANCHOLY AROUND THE STOCK'S FUTURE PERFORMANCE AND ADD TO YOUR HOLDINGS IF YOU OWN IT AND INITIATE IF YOU DO NOT. > > THE REAL OPPORTUNITY IS THE FACT THE CADENCE OF INNOVATION KEEPS ON COMING. ALREADY SUPPORTING TO THE CFO IS THE RUBIN SHIP AND ARCHITECTURE. WHERE DOES THAT TAKE US? NANCY: I THINK IT TAKES US TO QUANTUM AND THEN SOME. ROBOTICS, WE'VE LAUNCHED A NEW FUND WE ARE INCUBATING AT THE FIRM AND 80'S ALL OF THE ABOVE SO IT IS NOT JUST NUCLEAR IT IS QUANTUM IT IS ROBOTICS, SO THIS IS AN AREA THAT INVESTORS NEED TO MAKE SURE THEY ARE NOT UNDERESTIMATING. I HEARD THE NAYSAYERS OVERNIGHT, IT'S DECELERATING THE AI TRAIT IS OVER, IT IS NOT EVEN CLOSE TO OVER. WE ARE IN THE EARLY STAGES AND YOU WANT TO CONTINUE TO BE LOOKING AROUND AND LOOK FOR THOSE THAT WILL BET LEFT BEHIND AND THERE WILL BE COMPANIES LIKE ADOBE THAT WILL PROBABLY GET LEFT BEHIND. BUT THEN YOU WANT TO FOCUS ON THE WINNERS AND YOU DON'T WANT TO SHY AWAY FROM THEM TOO EARLY AND THIS IS I THINK RUBIN IS THE NEXT STAGE. WE HAVEN'T EVEN REALIZED THE STAGGERING DEMAND FOR BLACKWELL THE JENSEN HUANG SPOKE ABOUT. STRAP IN, IT IS GOING TO BE VOLATILE BUT VOLATILE TO THE UPSIDE. CAROLINE: YESTERDAY WE HAD JAMIE OF IBM TALKING ABOUT THEIR DEAL WITH AMD TWINNING WITH THE FUTURE OF QUANTUM AS WELL. WHERE ARE THESE COMPANIES THOUGH MANAGING TO PICK AWAY AT NVIDIA'S CHANCE WITH INFLUENCE. BECAUSE YES THEY ARE THE CHIP OF CHOICE, THE ARCHITECTURE OF CHOICE WHEN IT COMES TO TRAINING MODELS. ARE THE ONLY GAME IN TOWN WHEN IT COMES TO INFERENCE? NANCY: I THINK NOT BUT MAYBE YOU COULD ARGUE MICROSOFT SORT OF PIONEERED CLOUD COMPUTING, LARRY ELLISON MIGHT DISAGREE FROM ORACLE BUT YOU KNOW YOU SEE EVENTUALLY THAT THERE GROWTH SLOWED BUT THEY ARE STILL A DOMINANT PROVIDER AND AWS OBVIOUSLY AS WELL. I THINK YOU HAVE TO STEP BACK AND LOOK AT WHERE THE MARGINAL EROSION IS COMING FROM. WE KNOW APPLE AND MICROSOFT ARE DEVELOPING THEIR OWN CHIPS, I DON'T THINK THAT WILL CHANGE THE DYNAMIC. SO WHEN WE HAD THE DEEPSEEK NEWS, EVERYBODY SOLD THE STOCKS. I HAPPENED TO BE ON AIR THAT DAY AND SAID THIS WAS AN OPPORTUNITY BECAUSE MORE BEGETS MORE. THAT'S REALLY THE STORY THAT THEY CAN LOSE SHARE AND STILL BE GROWING AT A RAPID PACE AND THE MARGINS WE TALKED ABOUT MARGINS AT 70%. I DON'T KNOW WHAT THERE IS TO COMPLAIN ABOUT. > > AT A $60 BILLION STOCK BUYBACK AND STILL THE STOCK. NANCY IT'S ALWAYS GOOD TO HAVE YOU ON THE SHOW. THANK YOU VERY MUCH INDEED. MORE ON NVIDIA'S CHINA TRADE TENSIONS WEIGHING ON EARNINGS. WE SPEAK WITH THE FORT ALICE SOLUTIONS CEO ON THE CHINA AI LANDSCAPE. THIS IS "BLOOMBERG TECH." > > CHECK IN ON NVIDIA SHARES OFF BY 9/10 OF A PERCENT FOR MORE THAN $4 TRILLION STOCK THAT'S 38 BILLION YOU WIPED OUT IN TERMS OF MARKET CAPITALIZATION. NVIDIA'S BUSINESS THE OVERHANG HAS BEEN CHINA CLOUDING THE AREA BECAUSE OF TRADE TENSIONS IN THE COMPANY NOW SAYING THE UNCONVENTIONAL PLAN BY THE TRUMP ADMINISTRATION TO CHARGE 15% COMMISSION ON AI CHIP SALES TO CHINA HASN'T PROGRESSED BEYOND ITS EARLY STAGES. LET'S CHECK IN ON WHAT THE CFO TOLD US EARLIER SAYING I DON'T HAVE TO DO THIS 15% UNTIL I SEE SOMETHING THAT IS A TRUE REGULATORY DOCUMENT. LET'S GET MORE FROM BLOOMBERG'S EXECUTIVE EDITOR. YOU SIT AT THE INTERSECTION OF POLITICS AND TECHNOLOGY. THEY'VE TOLD US THEY WILL HAVE THAT BUT WHERE'S THE REGULATORY APPROVAL? > > IN SILICON VALLEY AND ON WALL STREET WHEN ARE WE GOING TO SEE THE FINE PRINT ON THIS AND AS IAN NOTED AT THE TOP OF THE HOUR THE COMPANY IS PROCEEDING VERY CAREFULLY ON THIS FRONT. IT DOES NOT WANT TO COMMIT WITHOUT SEEING SOMETHING IN WRITING BECAUSE THE TERMS COULD EVEN CHANGE ESPECIALLY WITH THIS ADMINISTRATION HALFWAY THROUGH. THEY WANT TO MAKE SURE THEY SEE THIS IN PRINT AND THEY UNDERSTAND THE LEGAL AND REGULATORY MECHANISM AT WHICH THEY MAKE THESE PAYMENTS TO THE U.S. TREASURY. IT'S NOT QUITE A TAX OR IMPORT FEE IT IS HARD TO FIGURE OUT HOW THEY WOULD DEFINE IT. AND IN A WAY IT IS HOLDING THE COMPANY UP A LITTLE BIT IN TERMS OF MAKING THOSE SALES ONCE AGAIN OF THE H 20 AI CHIP TO CHINESE CUSTOMERS. THEY DON'T WANT TO PROCEED TOO FAST, THEY HAVE SOME OF THE EXPORT LICENSES IN HAND BUT IF THEY PROCEED WITHOUT ACTUALLY GIVING THE GOVERNMENT A CUT, THAT DOES RISK ANGERING THE ADMINISTRATION AND THIS IS A GOVERNMENT THE JENSEN HUANG THE CEO OF NVIDIA HAS TRIED VERY HARD TO CULTIVATE GOOD TERMS WITH. HE'S VISITED WITH PRESIDENT TRUMP A NUMBER OF TIMES AND SO THEY WANT TO MAKE SURE THEY ARE TREADING CAREFULLY HERE BECAUSE THEY ARE PLAYING THE LONG GAME. LOOKING AHEAD TO HOW TRUMP CAN HELP THEM IN CHINA. CAROLINE: JENSEN AND THE CFO ARE TRYING TO REMIND THE ADMINISTRATION HOW MUCH MONEY IS LEFT ON THE TABLE. THEY ARE TALKING ABOUT $50 BILLION OPPORTUNITY OF CHINA SALES IF THEY CAN GET A MODIFIED BLACKWELL ARCHITECTURE INTO THE COUNTRY AND THAT'S WHAT HE WAS TALKING ABOUT HIS HOPES TO TALK TO TRUMP ABOUT THAT. THE ADMINISTRATION IN FACT PRESIDENT TRUMP PUT MESSAGES OUT, POSTED ON HIS TRUE SOCIAL ABOUT THE FACT HE EXPECTS SOME SORT OF REQUEST. MICHAEL: HE IS SIGNALING HIS OPENNESS TO GRANTING THAT PERMISSION TO THE COMPANY TO SELL A SCALED-BACK VERSION OF THE MARKET BLACKWELL CHIP TO CHINESE CUSTOMERS. AGAIN WE WOULD EXPECT PRESIDENT TO INSIST GETTING HIS CUT WOULD BE 15%, MORE? WHAT ARE THE DEMANDS? THIS WOULD BE VERY MUCH IN LINE AT NOT ONLY WITH NVIDIA BUT ALSO TRYING TO RESTORE SOME OF THOSE ECONOMIC POLITICAL TIES WITH CHINA WE'VE SEEN BRUISED OVER THE YEARS. CAROLINE: THERESA PAYTON IS WITH US. FORMER WHITE HOUSE CHIEF INFORMATION OFFICER. AT THE MOMENT WE ARE SEEING CHINESE RIVALS GAIN ON THE BACK OF THIS LACK OF NVIDIA COMPETITION RIGHT NOW. WHAT DO YOU MAKE OF IT? THERESA: ALL I KNOW IS WE WILL HAVE TO FIGURE OUT THERE'S A LONG RACE HERE AND A SHORT RACE HERE AND WE HAVE TO SECURE NOT ONLY OUR GLOBAL LEADERSHIP, BUT ALSO OUR INTELLECTUAL PROPERTY AND THAT'S SOME OF THE UNDERPINNING OF THE DISCUSSIONS HERE IS THERE A 15% IS THERE NOT, WHAT DOES THIS MEAN FROM AN EXPORT CONTROL SO A LOT MORE TO COME ON THIS BUT OBVIOUSLY CHINA IS AN UP THEIR PART IN THE RACE TRYING TO WIN THE GLOBAL WAR ON WHO IS GOING TO DOMINATE AI. CAROLINE: WHAT IS THE IP RISK? THERESA: EVEN THOUGH WE ARE TALKING ABOUT SENDING A MODIFIED SHIP OVER TO CHINA, IN MY OPINION BASED ON MY YEARS OF EXPERIENCE IT'S LIKE HANDING OVER THE KEYS TO YOUR R & D LAB AND SAYING JUST BE IN THE SMALL QA LAB AND NOT THE BIGGER LAB, DON'T LOOK AROUND. YOU WOULD NOT HAND THE KEYS TO A COMPETITOR AND CHINA IS OUR GLOBAL COMPETITOR HERE FOR THIS TECHNOLOGY. SO REALLY WHAT WE ARE THINKING ABOUT IS HOW COULD THEY GET ACCESS TO THESE CHIPS AND PERHAPS REVERSE ENGINEER EVERYTHING FROM PERFORMANCE TO HOW THINGS BEHAVE, REALLY YOU JUST DO NOT KNOW WHAT THEY WILL BE ABLE TO DO ONCE THEY HAVE THEIR HANDS ON ALL OF THESE CHIPS. CAROLINE: LET'S AT YOUR ARE BACK AS CHIEF INFORMATION OFFICER WHAT YOU ADVISING PRESIDENT TRUMP AS TWO WHETHER JENSEN SHOULD HAVE ACCESS TO THE CHINESE MARKET? THERESA: THIS IS A TOUGH ONE BECAUSE THE PRIVATE SECTOR DOES HAVE THE RIGHT, COMPANIES DO HAVE THE RIGHT TO SELL THEIR GOODS AND SERVICES ALL AROUND THE GLOBE, WE DO NOT HAVE A BLOCKADE ON SELLING OTHER GOODS AND SERVICES TO CHINA. SO THIS IS A VERY DELEGATE BALANCE HERE BETWEEN A WHITE HOUSE ADMINISTRATION AND A PRIVATE SECTOR ORGANIZATION. WHAT YOU HAVE TO DO IS LOOK AT THE LAWS WE HAVE ON THE BOOKS AND SAY WHAT KIND OF SAFEGUARDS IS THIS U.S. BASED COMPANY GOING TO FOLLOW BASED ON THE LAWS ON THE BOOKS. WHAT TYPES OF INSPECTION PROCESSES, THERE IS A PLAYBOOK FOR DOING THIS. EVEN THOUGH THIS TECHNOLOGY WE HAVE TO LOOK AT THIS PLAYBOOK THE QUESTION IS WHETHER NEW RULES OR REGULATIONS WILL BE CODIFIED. NVIDIA IS HAVING TO DEAL WITH THIS QUESTION. CAROLINE: NVIDIA PUT IN ITS 10 THAT IT COULD BE EXPOSED TO POTENTIAL LEGAL IMPLICATIONS BECAUSE OF THIS 15% ISSUE. WHAT WOULD IT FACE IN TERMS OF LEGAL ISSUES? THERESA: IF WE END UP CODIFYING A NEW BARRIER TO THE MARKET IN CHINA OR IN FORCING ONE OF THE EXISTING REGULATIONS IN A WAY THAT HAS NOT BEEN ENFORCED BEFORE THEN NVIDIA WOULD HAVE TO MAKE THE DECISION OF MY NOW BLOCKADED FROM SELLING TO CHINA OR DO I HAVE BURDENS ON ME THAT MAYBE DON'T EXIST FOR OTHER COMPANIES WHO ARE SELLING TECHNOLOGY TO CHINA. YOU HAVE BIG TECH IN CHINA, SOCIAL MEDIA IN CHINA. IT IS NOT JUST NVIDIA. THEY MAY DECIDE THIS IS AN UNDUE BURDEN PLACED ON US SO THEY MAY DECIDE TO TAKE ON A LAWSUIT OR FIND THEMSELVES ANSWERING TO FOR EXAMPLE SIFY US, TIKTOK USA HAS HAD A LOT OF LEGAL CHALLENGES AS IT RELATES TO HOW THEY OPERATE SO I THINK THEY ARE JUST KIND OF LOOKING AT PAST CASES PRECEDENT AND THE PRESIDENT'S REMARKS AS A FUTURE PRECEDENT AND DECIDING THERE COULD BE A RISK FOR A LONG PROTRACTED LEGAL BATTLE. CAROLINE: JENSEN HUANG SINGH THERE'S A $50 BILLION OPPORTUNITY. IN THIS YEAR ALONE IN CHINA. PUSH OUT FIVE YEARS DOES THAT EXIST AT THE RATE THE CHINESE GOVERNMENT TRY TO PUSH THEIR OWN GOVERNMENT -- COMPANIES AWAY FROM THE U.S. TECH SECTOR. THERESA: IT MAY NOT EXIST IN THE FUTURE, THAT IS A TOUGH ONE. ALL I CAN TELL YOU IS FROM THE FRONT LINES OF WORKING WITH COMPANIES WHO HAVE DONE BUSINESS WITH CHINA IT IS A TRICKY PROPOSITION, ESPECIALLY AS IT RELATES TO CUTTING-EDGE TECHNOLOGIES WHETHER IT'S CLEAN ENERGY, COMPUTER TECHNOLOGY, IT IS VERY DIFFICULT AND CHALLENGING TO UNDERSTAND WHAT THE REGULATORY ENVIRONMENT WILL BE IN THE PROTECTION FOR YOUR INTELLECTUAL PROPERTY. THE BIG ELEPHANT WE ARE NOT DISCUSSING IN HAVING ALL OF THESE CONVERSATIONS IS WE HAVE A NEW MORE DETAILED REPORT FROM THE FBI ON SAUL TYPHOON AND THE FINDINGS FROM THAT REPORT ARE STUNNING, 80 COUNTRIES WERE IMPACTED AND THE ACCESS TO METADATA, PHONE CALLS AND OTHER INFORMATION THIS IS ONE OF THOSE THINGS CHINA DENIES THEY HAVE ANY PART OF THIS BUT THIS IS A THING WHERE WE ARE SEEING THIS VACUUM CLEANER AFFECTIVE CHINA BASICALLY VACUUMING UP INTELLECTUAL PROPERTY DATA INFORMATION TO USE IT FOR ESPIONAGE. CAROLINE: THAT WAS A BREACH THAT HIT THE U.S. CARRIERS IN PARTICULAR VERIZON AND AT & T MOBILE. THANK YOU FOR REMINDING US OF IT. THREE PEOPLE BEING CHARGED FOR ALLEGEDLY STEALING TSMC TRADE SECRETS. THIS IS "BLOOMBERG TECH." CAROLINE: DD GLOBAL PLATE -- WILL PAY MILLIONS TO SETTLE A LAWSUIT CONSIDERING ITS U.S. IPO. AN OFFERING THAT ALSO PRECEDED THE COMPANY'S DELISTING. THE RIDE-HAILING CHINA ANNOUNCED THE DEAL ASIDE SECOND QUARTER RESULTS. ALLEGING THE PROPRIETARY TECH WAS STOLEN TO HELP IMPROVE TOKYO ELECTRON. THEY ARE SEEKING JAIL TERMS FOR THE TRIO SETTING THREATS TO THE ISLANDS NATIONAL SECURITY. CURB CUT ITS EARNINGS GUIDANCE FOR THE FULL YEAR AFTER A WEAK DOLLAR AND SOUTH KOREAN IN THE COMPANY'S OUR REVENUE RISE NEARLY $8.4 MILLION BUT FACED INCREASED COMPETITION IN ASIA AND THE MIDDLE EAST. MORE ON NVIDIA COMING UP. LET'S LOOK AT THE STOCK AND OTHER GLOBAL TRIP EXPOSED NAMES. SHINE A LIGHT ON ASML. THIS IS THE UPSTART IN CHINA TRYING TO EAT IN ON AI ACCELERATORS IN THE COUNTRY. RECORD HIGH IT'S DOUBLED ITS MARKET CAP IN THIS MONTH ALONE. THIS IS "BLOOMBERG TECH. ♪ CAROLINE: WE TAKE A LOOK AT THE EARNINGS STORY BECAUSE BENCHMARKS RELATIVELY FLAT WE ARE HIGHER JUST ON THE LIKES OF THE NASDAQ 100. I'M LOOKING AT WAS HAPPENING WITH SNOWFLAKE, THE BEST DAY SINCE NOVEMBER 2024. SHOWING THE DESIRE IS WORKING IN THEIR BUSINESS RIGHT NOW. REVENUE GREW 32%, THEY BEAT AND THEY RAISED IN TERMS OF FORWARD-LOOKING GUIDANCE. ANALYSTS ACROSS THE STREET LIKING THIS SOFTWARE COMPANY THAT MANY HAD ANXIETY PERHAPS NEW AI STARTUPS WOULD START TO EAT INTO THE BUSINESS MODEL. WE ARE MANAGING TO SHOW GROWTH AND RETENTION. WE ARE ALL A LITTLE BIT LACKLUSTER ABOUT NVIDIA LAST NIGHT. ACCOMPANY THE DELIVERED 56% REVENUE GROWTH, AND THAT'S NOT INCLUDING ANY CHINESE REVENUE THAT'S ONLY UPSIDE BUT THIS IS A COMPANY THAT WAS VERY CLOSE TO ITS RECORD HIGHS. OFF OF THOSE LOWS IN THE PREMARKET TRADE. HERE IS THE REACTION AND THE RESULTS FROM A FEW ANALYSTS ON BLOOMBERG TV ON NVIDIA. > > WHEN WE HAVE A BEAT AND STOCKS DON'T GO UP OR HOT STOCK LIKE NVIDIA DOESN'T GO UP OR IT STARTS TO GO OVER A LITTLE BIT, THAT IS A -- EVERYONE WHO MIGHT OWN THE STOCK ALREADY DOES BUT WE ARE NOWHERE NEAR THERE YET. > > THE STOCK HAS RECOUPED SOME OF THOSE LOSSES AND I THINK WILL RETAIN STRENGTH IS BECAUSE OF THAT GUIDE FROM Q3. IT WAS VERY STRONG. IT'S ALL ABOUT Q3 AND IT'S BECAUSE BLACKWELL AND BLACKWELL ULTRA STARTING TO SHOW. IF YOU KNOW THAT STORY YOU ARE NOT SELLING THE STOCK RIGHT NOW. > > THAT HAS ABOUT A $5 BILLION IMPACT IN THE NEXT QUARTER'S NUMBERS. HAVING SAID THAT 54 BILLION REPRESENTS A STRONG SHARE WHICH MEANS THEY EXPECT HYPERSCALERS IN PARTS OF THE WORLD TO PICK UP THAT SLACK. CAROLINE: SANDS CAPITAL PORTFOLIO MANAGERS WITH US. > > THE STOCK HAD A GOOD RUN AND IT PROBABLY SLIGHTLY MISSED THE EXPECTATIONS AND WAS MAINLY AROUND I THINK CHINA AND BLACKWELL IS STILL A LITTLE BIT, -- SUPPLY CONSTRAINED. I WOULD SAY TO US THOSE WERE PRETTY STRONG RESULTS AND ONE INTERESTING FACT TO LOOK AT, IF YOU TAKE UP THE CHINA REVENUES COMPLETELY OUT OF THE DATA CENTER, THAN THE REST OF THE WORLD ACCELERATED FROM ABOUT 60-ISH PERCENT GROWTH IN Q1 TO 80% GROWTH IN Q3 OF THIS YEAR. SO NVIDIA X CHINA HAS BEEN ACCELERATING. CAROLINE: TALKING ABOUT HOW EUROPE IS STOP START IN CERTAIN COUNTRIES. YOU OF DENMARK REALLY GOING HARD ON SOVEREIGN AI. OTHER COUNTRIES LESS SO. WE GOT TOLD $20 BILLION FOR SAW -- SOVEREIGN AI. DANIEL: I THINK IT'S A GREAT NUMBER BUT THE TRUTH OF THE GAME IS STILL WITHIN HYPERSCALERS AND AI STARTUPS. I THINK THAT IS WHERE THE REAL ACTION IS FOR NOW. I THINK THE INTERESTING ASPECTS THERE AS JENSEN NOTED THE REASON AI IS SO MUCH MORE INTENSIVE. ON THE OTHER INSIDES ALSO MUCH BETTER. IT REDUCES HALLUCINATIONS AND MENTIONED THE RETURN ON INVESTMENT CAPITAL YOU RECEIVE FROM BUYING THESE CHIPS IS PHENOMENAL. YOU INVEST 3 MILLION TODAY YOU CAN INVEST -- SO THAT'S WHERE THE REAL ACTION IS. > > IS THAT WHERE IT IS TALKING ABOUT WHERE RUBEN TAKES US, THE CADENCE OF INNOVATION. DANIEL: I THINK THE MOST IMPORTANT THING NVIDIA IS DOING IS THEY ARE INCREASING THE PERFORMANCE PER WATT AND THEY NOTICED -- RUBEN WILL PERFORM -- IMPROVE THAT PERFORMANCE WHICH MEANS NVIDIA'S COMPETITIVE SITUATION IMPROVES ON ONE SIDE. YOU CAN BUILD BETTER MODELS WHICH MEANS IT'S A SELF-FULFILLING PROPHECY BECAUSE WHATEVER COMES OUT OF THESE MODELS CAN EFFECTIVELY HAVE BIGGER AND BETTER APPS. CAROLINE: YOU ARE NOT WORRIED ABOUT AMAZON'S TRAINING, THE FACT THE CUSTOMERS ARE INNOVATING THEMSELVES. DANIEL: I THINK IT'S OUR JOB TO WORRY SOMETIMES BUT WE LOOKED AT THIS IN DETAIL AND THE IDEA TO SAY HERE IS NVIDIA BUILDING A GIANT SYSTEM OF COMPANY YOU HAVE NETWORKING CPUS GP USE, HUNDREDS OF DIFFERENT SUPPLIERS AND TO PUT THE SOFTWARE ON TOP THEY SAY THEY ARE THE BEST PERFORMANCE FROM ONE SUPPLIER IN THE INDUSTRY AND AS LONG AS THAT IS TRUE THEY CANNOT COMPETE SIMPLY BECAUSE THEY DON'T HAVE THE SCALE OR SYSTEM AND THEY DON'T HAVE THE SOFTWARE SO NVIDIA TO US REMAINS THE WINNER IN THAT SENSE. CAROLINE: THAT'S WHAT'S INTERESTING ABOUT JENSEN HUANG TRYING TO SAY WE ARE MORE THAN JUST HARDWARE, WE ARE ONE STOP SHOP LEANING MORE INTO THAT. DID THEY LEAN INTO THE FUTURE OPPORTUNITIES ENOUGH FOR YOU, AUTOMOTIVE REMAINS A BIT OF AN OVERHANG WHEN IT COMES TO CHINA BUT THINKING ABOUT THE QUANTUM AND REAL FUTURE HERE. > > I THINK NVIDIA IS PROBABLY THE COMPANY IN THE WORLD GROWS THE FASTEST I'VE EVER SEEN. WHAT THEY ARE TRYING TO DO IS ALIGN HUNDREDS OF DIFFERENT SUPPLIERS ON AN ANNUAL CADENCE AND TRYING TO UPDATE THEIR SYSTEMS ON A CADENCE WHICH IS UNHEARD OF AND AT THE SAME TIME THEY ARE FOCUSING ON QUANTUM ROBOTICS, SO I THINK NVIDIA IS RUNNING AS FAST AS ANYTHING ELSE I'VE EVER SEEN I THINK QUANTUM IS PROBABLY GOING TO SLOT IN TO THE NVIDIA ECOSYSTEM BY SAYING THEY HAVE CPUS AND GP USE AND AT SOME POINT THEY WILL HAVE QUANTUM AND SWITCH BETWEEN THOSE BARRIERS OF COMPUTE LAYERS. CAROLINE: THAT WAS INTERESTING WITH IBM AND AMD'S PARTNERSHIP. THINKING OF GPT FIVE HOW IT PUSHES YOU TOWARDS THE BEST POSSIBLE MODEL. WE'LL HAVE THE BEST POSSIBLE COMPUTING STANDARD FOR YOUR GENERAL TASK. DANIEL: I FULLY AGREE, THE BEST POSSIBLE AS WELL AS THE CHEAPEST AND FASTEST. AS WE THINK THROUGH THE NEXT FEW YEARS THE QUESTION IS HOW MUCH MORE COMPLETE -- COMPUTER CAN NVIDIA CELL AND CONTINUES TO BE A QUESTION OF THE SCALING LAWS. THE COMPUTE STILL PROVIDES BETTER AND BIGGER MODELS. AND HOPEFULLY WE WILL BE SEEING THE RESULTS COMING OUT OF WHATEVER COMES OUT AFTER CHATGPT FIVE AND THAT'S WHAT'S ULTIMATELY GOING TO DRIVE THAT IN TERMS OF DEMAND AND REVENUE OUTLOOK. CAROLINE: WE SHOULD THINK MORE ABOUT COLOSSUS, WHAT MEDA IS DOING IN TERMS OF ITS SCALING IN LOUISIANA. SHOULD WE FIGURE CHINA OUT ENTIRELY CONSIDERING THE GOVERNMENT WANTS TO PUSH ITS HOMEGROWN DOMESTIC TALENT. DANIEL: I THINK WE SHOULD. I WOULD ARGUE IT CHINA SEEMS TO BE DOING IS RATIONAL. TRY TO SELL US A CHIP BASED ON ARCHITECTURE THAT THREE AND A HALF YEARS OLD AND THEN SECONDLY WE ALSO HAVE A LOCAL AI ARCHITECTURE THAT HAS CAUGHT UP SOMEWHAT TO THE OLD CHIP SO UNLESS YOU START SELLING US A NEW DERIVATIVE OF BLACKWELL WE DON'T REALLY MAYBE NEED YOU AS MUCH AS WE NEEDED YOU THREE YEARS AGO. THAT ALL SEEMS TO MAKE SENSE. I DON'T KNOW WHAT THE LICENSING WILL WORK OUT, BUT THE INTERESTING PIECE IS IF IT DOES THAT'S BIG FOR NVIDIA. THEY NOTICE TO $50 BILLION MARKET AND IF THEY'RE ALLOWED TO SHIP A DERIVATIVE OF THAT CHIP THEIR MARKET SHARE SHOULD BE ENORMOUS BECAUSE THERE IS NOTHING IN CHINA THAT CAN REMOTELY OUTDO WHAT NVIDIA HAS. CAROLINE: $54 BILLION FORECAST FOR THE FISCAL THIRD QUARTER NOT EVEN FACTORING IN CHINA. GREAT TO HAVE YOU ON DANIEL. WE WILL TALK ABOUT SOME OF THE OTHER EARNINGS THAT ARE COMING OUT. WE HAVE CHINESE CARMAKER BYD AND OTHERS. ♪ ALL ABOUT NVIDIA BUT THERE ARE SEVERAL OF CHINA'S BIG TECH NAMES REPORTING EARNINGS INCLUDING ALIBABA. THE COMPANY'S BEEN STEPPING UP EFFORTS SINCE DEEPSEEK RELEASED ITS OWN MODEL. ISABEL LEE JOINS US NOW. IT'S UP 42%. WHAT MORE CAN A GIVEN TERMS WHERE IT IS ON AIN CLOUD. ISABEL: FOR ALIBABA THEY ARE SLATED TO REPORT ON FRIDAY AND ARE LIKELY TO HIGHLIGHT THEIR AI STRATEGY. IF YOU LOOK AT THEIR PEERS THEY ARE LIKELY TO KIND OF DISAPPOINT BECAUSE IT'S REALLY GOING TO OR MAY STRUGGLE TO SHOW ITS BIG ADVANCEMENTS IN AI WILL BE PAYING OFF AND WITH THESE COMPANIES EVER SINCE CHATGPT CAME IN THE PICTURE THEY'VE INVESTED BILLIONS IN AI ROLLING OUT THE LLM'S, BUT MAKING MONEY HAS BEEN HARD BECAUSE ANALYSTS ARE SAYING CHINESE USERS UNLIKE WESTERN COUNTERPARTS ARE RELUCTANT TO SPEND ON PREMIUM PAID SUBSCRIPTION MODELS. CAROLINE: THEY ALL WANT TO BE THE MEGA APPS TO A CERTAIN EXTENT. YOU HAVE A SUPER APP, THE FIERCE COMPETITION IN FOOD DELIVERY. ISABEL: IF YOU LOOK FOR INSTANCE THE TENCENT EARNINGS THEY SHOULD REVENUE FROM THAT BUSINESS INCLUDING SERVICE GOING MORE SLOWLY. BUT I DO WHEN IT COMES TO THE CLOUD BUSINESS. I FEEL LIKE HOW WELL YOU IMPROVE TO YOUR POINT AND IF YOU LOOK AT THE CONTRIBUTION OF AI IT'S GOING TO DAMPEN THE OUTLOOK OF ALIBABA. IT COMES AT A TIME WHEN THEIR E-COMMERCE BUSINESS IS STRUGGLING, CONSUMPTION IN CHINA REMAINS WEAK EVEN AS THE ECONOMY SLIGHTLY IMPROVES. THERE ARE A LOT OF MOVING PARTS FOR ALIBABA. BUT IN RELATION YESTERDAY WE HAVE BLOOMBERG INTELLIGENCE SAYING DESPITE ITS ABILITY, ALL THREE OF THESE ARE STILL WELL-POSITIONED IN THE MEDIUM TERM. CAROLINE: BREAKING IT DOWN, THANK YOU. LET'S STICK WITH CHINESE FIRMS AND SHIFT GEARS TO THE AUTOMOTIVE INDUSTRY. BYD FELL YESTERDAY ON CONCERNS ABOUT POSSIBLE DECREASES OF EXPORTS AFTER MEXICO ANNOUNCED PLANS TO TARIFF CHINA. LET'S BRING IN CRAIG TRUDELL. THE OTHER DAY SOME ISSUES AROUND ACCESSING MEXICO BUT BOY ARE THERE SALES IN EUROPE GOING WELL. THEY WERE UP THREE FOLD WHILE TESLA SAW SALES DROP. CRAIG: WE HAVE SEEN BYD PUT IN IN THE EUROPEAN CAR MARKET AND TAKE ADVANTAGE OF THE SOFTNESS FOR TESLA MAY BE BE A FACTOR IN THAT SOFTNESS WHERE YOU KNOW IT'S NOT BEEN UNCOMMON NOW FOR BYD TO OUTSELL TESLA IN THE REGION WHICH WOULD'VE BEEN UNTHINKABLE JUST A YEAR AGO. THIS WAS A COMPANY THAT WAS REALLY SORT OF TAKING OFF IN ITS HOME MARKET AND YET OVERSEE SALES HAD A LONG WAY TO GO. WE HAVE SEEN SOME PROGRESS ON THE EXPORT BUSINESS. WE HAVE SEEN MAY BE A SLOWDOWN IN SOME SOFTNESS AT HOME AND THAT'S BEEN THE REAL STORY THIS YEAR WHERE FOR ALL THE SORT OF CONTINUED GROWTH WE HAVE SEEN THERE IS SOME REAL QUESTIONS ARE STARTING TO EMERGE ABOUT CAN THEY HIT THE 4 -- FULL-YEAR SALES FIGURES THEY WERE EXPECTING. CAROLINE: THEY'VE ALREADY SOLD 2.1 5 MILLION IN THE FIRST HALF OF THE YEAR BUT THAT'S LESS THAN 40% OF WHAT THEY'RE AIMING TO FOR THE FULL YEAR. HAVING TO DISCOUNT IN SOME WAYS. CRAIG: I THINK IT IS REALLY AN IRONIC STORY IN CHINA WHERE YOU HAVE SEEN SO MUCH STATE SUPPORT FOR THIS INDUSTRY, SO MANY ATTEMPTS TO FOSTER THIS COMPETITIVE AUTO INDUSTRY AND YET MAYBE WE HAVE SEEN SOME OVERDOING OF IT AND THAT WE HAVE CHINESE COMPANIES WITH BYD MAY BE FRONT AND CENTER DISCOUNTING THEIR LINEUP IN A REALLY AGGRESSIVE FASHION, CONCERNS ABOUT SUPPLIERS NOT GETTING PAID IN A TIMELY MANNER AND MAY SOME CONCERNS ABOUT HOW LONG THIS CAN CONTINUE IF WE JUST SEE MANUFACTURERS AGGRESSIVELY DISCOUNTING IT, AT WHAT POINT IS ENOUGH ENOUGH AND DO WE SEE SOME COMPANIES GO OUT OF BUSINESS. YOU HAVE SEEN THIS CAMPAIGN IN CHINA ON THE PART OF THE GOVERNMENT TO DO AWAY WITH WHAT PEOPLE REFER TO AS A PRICE WAR AND YOU HAVE SOME REAL RELUCTANCE ON THE COMPANIES TO TAKE HEED THERE. CAROLINE: THANK YOU. COMING UP WE WILL DISCUSS WHAT INVESTORS ARE HOPING TO LEARN FROM DELL'S EARNINGS LATER. THE STOCK CLIMBING AS IT'S VERY MUCH WRAPPED INTO THE NVIDIA TRADE. CAROLINE: WE ARE ALSO KEEPING AN EYE ON DELLA TODAY. INVESTORS LOOKING FOR SIGNS THE COMPANY WILL BOOST ITS AI SERVER SHIPMENTS, LET'S BRING IN -- IT'S INTERESTING IT'S HIGHER ON THE DAY OFF AND THEY MOVE IN SYMPATHY WITH EACH OTHER BUT WE ARE EXPECTING DIFFERENT THINGS. > > THERE ARE A COUPLE OF THINGS GOING ON WITH DELL RELATIVE NOT ONLY FOR AI BUT ALSO FOR PCS. NVIDIA WAS MORE CHINA RELATED. LOW CHINA EXPOSURE AS IT RELATES TO AI SERVERS AND I DO EXPECT THEM TO HAVE $7 BILLION IN AI SERVER REVENUES. SOME OF THE BULL CASE ON THE STREET HAS THE POTENTIAL HE DIED 20 BILLION SO THAT'S WHAT THE STREET IS LOOKING FOR. CAROLINE: HP IS AN INTERESTING READ INKING ABOUT PCS. THEY HAD REALLY RESILIENT PC STRENGTH. IN THE COMMERCIAL ADOPTION OF THAT SEEMS TO BE HOLDING THINGS UP AS WELL AS MICROSOFT UPGRADE. IS THAT HOW WE READ ACROSS FROM PERHAPS HP TO DELL. WOO JIN: THAT'S EXACTLY IT. THAT'S THE SECOND TAILWIND FOR DELL. LET'S KEEP IN MIND WINDOWS 11 UPGRADE CYCLE IS GOING STRONG AND WHAT WE HEARD FROM THE HP EARNINGS CALL IS ONLY 50% OF ACTUALLY UPGRADED TO WINDOWS 11 WHICH MEANS WE HAVE WINDOWS 11 CYCLE. COME FROM COMMERCIAL PCS AND THOSE OF THE CUSTOMERS WHO NEED TO UPGRADE FROM THAT UPGRADE CYCLE. IT HAS BEEN MORE RESILIENT SO MAYBE RESULTS ESSENTIALLY TELL US OUTSIDE RISK ON THE PC MIGHT BE LIMITED FOR THE NEAR TERM. CAROLINE: WE GOT 22 BUYS ACROSS THE ANALYST, ZERO CELLS AND THE PRICE IS PRETTY CLOSE TO OVERALL CONSENSUS PRICE TARGETS. HOW MUCH IS BAKED IN TO THOSE SET OF NUMBERS. WOO JIN: LET ME TELL YOU HOW MUCH IS BAKED IN. FROM A VALUATION PERSPECTIVE 14 TIMES FORWARD EARNINGS IF YOU LOOK AT HPE WHICH IS ANOTHER ENTERPRISE I.T. COMPANY THEY ARE TRADING AROUND 11 TIMES. SALES UPSIDE IS EXPECTED. I WILL WANT TO CAUTION SOME PEOPLE HEADING INTO THE PRINT THERE ARE A COUPLE OF RED FLAGS. OTHER ENTERPRISE I.T. COMPANIES BENEFITED FROM AN UPTICK IN SPENDING, NET REPORTED LAST NIGHT. CISCO A COUPLE WEEKS BACK, THEY ALL CAUTIONED U.S. FEDERAL SPENDING AS BEING WEAKER THAN ANTICIPATED. KEEP IN MIND THAT DELL HAS ROUGHLY 3% SALES EXPOSURE TO THE U.S. FED SO IF THERE IS A POCKET OF WEAKNESS THAT COULD BE ONE AND A YELLOW FLAG CAROLINE: TO RAISE TO INVESTORS. CAROLINE:SO THOROUGH, THANK YOU. APPRECIATE HAVING YOU ON. LET'S GET BACK TO THE KEY STORY OF THE DAY, OTHER COMPANIES AROUND NVIDIA TELL THE HARDWARE VERSUS SOFTWARE STORY. WHEN WE ARE ANTICIPATING DELL TO GROW ON AI SERVERS THIS JUST SPEAKS TO THE STRENGTH OF AI ADOPTION THE SUMMER PERHAPS SLEEPING ON A BIT TODAY WHEN IT COMES TO THESE NUMBERS. MANDEEP: WHEN YOU LOOK AT THE OVERALL ECOSYSTEM, WE SAW MICROSOFT AZURE GROWTH ACCELERATING TO 39%. SNOWFLAKE OUTPERFORMING. YOU CAN SEE OF MICROSOFT'S AI CONSUMPTION IS GOING UP AND REFLECTING IN THEIR CLOUD NUMBERS, WHO IS THE USER OF THAT CLOUD CONSUMPTION? IT IS PURE SNOWFLAKE. FROM THAT PERSPECTIVE DELL DOING WELL, MICROSOFT DEPLOYING THAT ON THEIR CLOUD, SNOWFLAKE ACTUALLY SEEING AN INCREMENT IN THEIR PRODUCT BECAUSE COMPANIES ARE DEPLOYING MORE AI AGENTS. YOU CAN SEE HOW THE ROI QUESTION IS GETTING ANSWERED. > > YOU GOT THE PICKS AND SHOVELS WITH THE NVIDIA THEN MICROSOFT GOING INTO THE SNOWFLAKE NUMBERS. TALK US THROUGH THOSE BECAUSE THE SHARES ARE UP 20%. THERE WAS CLEARLY SOME ANXIETY BUILT INTO THESE NUMBERS THAT WE WOULD SEE COMPETITORS TAKE A BIT OF AN EDGE ON THE AGENDA. > > TRADITIONALLY DATABASED BUSINESSES ARE VERY STICKY. RIGHT NOW EVERYONE IS TRYING TO FIGURE OUT WHAT GETS THIS INTERMEDIATED BY LLM'S AND AI AGENTS. ALL THE SOFTWARE COMPANIES GET BEATEN OUT BECAUSE THEY WERE TAUGHT LLM'S CAN DO EVERYTHING THE SOFTWARE PRODUCTS DO. IF YOU TRY TO DEPLOY IN AI AGENT LLM'S DON'T HAVE THE DATA YOU WANT TO CUSTOMIZE YOUR CHATBOT, SNOWFLAKE DOES OR DATA BRICKS DOES. ALL OF THESE DATABASE COMPANIES ARE WHAT YOU NEED TO CUSTOMIZE YOUR JACKPOT EXPERIENCE THROUGH NO PARTICULAR USE CASE. I THINK THAT'S WHAT YOU'RE SEEING IN THE NUMBERS, SEEING THEM SEQUENTIALLY OUTPERFORM. CAROLINE: 80'S UP ALMOST 50%, IT'S THE BEST TWO DAY RUN FOR THE COMPANY ON RECORD. SO THE REALLY MANAGED TO PUSH BACK ON THAT M.I.T. NARRATIVE THAT PERHAPS PEOPLE AREN'T GETTING THERE FOR THEIR BUCK WHEN IT COMES TO USING AI PILOTS AS WELL. MANDEEP: WHAT WE HAVE SEEN TRADITIONALLY AS COMPANIES THAT GROW AT 30% WILL TRADE AT 20 TIMES THE GAELS. ONCE THAT GROWTH COMES DOWN BELOW 20% THAT MULTIPLE GOES FROM 20 TIMES TO FIVE TIMES. SO THE MULTIPLE COMPRESSION IS ALWAYS HUGE IN SOFTWARE AND THAT'S WHY THE TOPLINE GROWTH IS SO IMPORTANT. SNOWFLAKE GOING BACK AGAIN TO 30% PLUS GROWTH. YOU'LL SEE A MULTIPLE EXPANSION. IT'S NOT LIKE THE STORY CHANGED COMPLETELY. JUST A MULTIPLE THEY PUT ON THESE COMPANIES IS HUGE. CAROLINE: LET'S GO TO A MULTIPLE ON NVIDIA. IT IS NOT THAT HIGH IF YOU'RE THINKING ABOUT THE FORWARD VERSION OF PRICE TO EARNINGS ESTIMATED PRICE TO EARNINGS. IT'S MORE LIKE 33 TIMES. MANDEEP: NVIDIA THE BIGGEST CONCERN IS IT'S NOT A RECURRING BUSINESS. THEY ARE PROVING THEY CAN KEEP RELEASING AND IT BECOMES A RECURRING CYCLE WHEN IT COMES TO THEIR DATA CENTER CHIPS. BUT THAT'S THE BIGGEST I WOULD SAY RISK IS RIGHT NOW THEY'RE GOING OVER 50%. THEY SAID HYPERSCALERS WILL IMPACT -- INCREASE OF THAT TRANSLATES INTO SIMILAR GROWTH FOR NEXT YEAR, BUT IT'S VERY HARD TO SUSTAIN THAT. DO YOU THINK CAPEX WILL KEEP 50% IN PERPETUITY. NO. IF YOUR LARGEST CUSTOMERS ARE FOUR HYPERSCALERS THAT'S A BIG RISK AND WHAT YOU HAVE TO MODEL FOR TWO YEARS FROM NOW. CAROLINE: THANK YOU. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECH. DO NOT FORGET TO CHECK OUT OUR PODCAST ON THE TERMINAL AND ONLINE. THIS IS BLOOMBERG TECH. ♪

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Nvidia Investors Digest Decelerating Growth Forecast | Bloomberg Tech 8/28/2025

Bloomberg’s Caroline Hyde discusses how markets are reacting to Nvidia’s decelerating growth. Plus, the Nvidia CFO tells Bloomberg News that the company needs a codified plan before it can pay the Trump administration's 15% commission on chip sales. And shares of Snowflake and HP rise on the back of their earnings reports. (Source: Bloomberg)

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