Nvidia Beats Estimates, Expects Supply Constraints For Several Quarters 11/20/24
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That belt Marks the end of regulation outfront. We're going to posing belt and new yg staff exchange and E S, R doing the honors athas that and it's a mixed s as the major average belts well off their lows with attention. Now turning to the crucial earnings results from yes, in video coming in just minutes this hour, that is the score card on wall sty. But winter, stay late to close over time. John ford at cnbc headquarters .

and I am working brennan joining today from washington. Buckle up for one of the most important hours of earning season. John just mentioned that in videos, report is due out in just a few minutes, and IT could set the tone for the markets next action.

And of course, you ve got a great lineup of experts to help break down those results, including da David's and analyze loria and while use dinan evaluation oswell to modern and many others. And as we awaited those results, we got even more politika of the spoke investment group, Christina hoper of investor and past more head, more insights and strategy guys. Welcome, pat.

On the video, you think they probably deliver a modest beat here. I'm curious about gross margins and whether these black well over heating rumors affect the guidance. What do you think?

yes. So I think as we've seen the last four quarters, the streets getting Better at calling top line in bottom line. So I think you're going to look going to have a beat beat, but it's going to be smaller.

And and regarding the corner blackwell overheating issues, and I I used to be in products. I did products and specifications change. And what happens is people put a little bit of give in expecting this.

And when I did my channel checks with OEM, oo EMS and cloud providers, this had been expected. Their is smoke, but no fire here. Yeah maybe literally .

sometimes we're talking about overheating, Christina. We're in the broader markets, in the broader in in this middle space, specifically in the S M. P, between six thousand and fifty seven hundred. So how much doesn't video and all of the stocks, maybe just as important that is influences has a factor into we break out of that either higher or lower.

I think, in video and certainly has the potential to have a material impact, especially in the shorter term. I ultimately think that it's gonna fed policy and what we get from the fed in december that dictate tes how we end this year. But for right now, for the next week or so, I do think it's about invidia. I am optimistic that we will see good results and that will power the stock market forward.

So paul IT looks like investors have basically position themselves from an option same point for an eight percent move in either direction within video, which perhaps is similar to what we've seen in past earnings. IT does IT does appear in videos. So big three and a half trillion dollar market cap that s goes in videos, so goes the market. So what should we be watching as we do get these results?

So I took that an important point morning. You know pending on how your position if you're an index ponds and you're just exposed to the market, obviously, you want a strong report from in video to drive the market at seven half for some of the S P five hundred. But he keep in playing the broadening trend.

And you for some of the smaller cap smaller large cap companies, you may not necessarily be rooting for a strong reaction from in video because it's so large. Like you said, IT generally sucks the capital out of the pool for hother stocks here. So when you look this year, some of the strongest times of the year for NVIDIA have been periods when the russia two thousand and smaller capstar ks.

Have lag. And then in july, when you saw that big surge in the russia two thousand IT was also turned a period when in video was seen weakness. So in that respect of what you want to see from the video is depends on how your position as far as the markets concerned and how we're in react.

Uh, Patrick Christina were talking about IT. We're expecting a strong report, uh, but they've reported seven triple plays in a row. But for a company this large, practically unheard of. So you they're not just going to need to beat here to get a positive reaction. You're going to need to see you know pretty sizeable beat, let's say you two billion ahead of revenues for the quarter and two billion ahead of expectations for the guide guidance for you. Four, in order for the stock to basically stay flat to have a modestly positive reaction, I think anything short of that could pose trouble in the short term for the stack.

Patrick, it's important to note that in videos is not the only A I read. We're gonna get this hour when IT comes to earnings. We're going to get results from snowflake as well. We also get pooled to, but snowflake in particular, potentially one to a watch because we've seen this tug of war in the market with software stocks as they themselves transition, reinvent themselves or I guess, uh, just sort of regift themselves for this new AI ero. So how important is that report going to be given what we ve heard from some of the other software players in recent weeks?

So still, flake isn't a bell weather, but they certainly are. They have the capability to take advantage of a eye there, a cloud based data management platform. On the plus side, the markets growing on the negative, they are getting a lot of competition, a lot of fierce competence from data brakes. And every single one of the cloud giants has set up its own data management platform, and snowflake still has not addressed where all the data is sitting, and that's on premise inside of enterprise database.

okay. I want to mention both polito networks and snowflakes are out. We are going through the numbers, will bring them to you as soon as we get them poo out, heading lower to the tune of about seven percent at the moment.

And snowflake the opposite direction, heading higher and looks like more than ten percent again at the moment. Of course, we ve got the earnings calls there, but really curious to see what's driving that, paul, especially in light of what we were talking about just yesterday at microsoft ignite. With so much of the focus being on data in air, do we have.

Okay, paleo networks earnings are out. Steve. Quebec has the number. Steve.

Hey, they are john t. yet. And shares are down here despite beats on the top of bottom line. We're looking at E, P, S, here of a dollar.

Fifty six adjusted street was looking for a dollar forty eight, adjust the revenues also just a slight beat here. At two point one four billion dollars, street was looking for two point one two billion. We still see the shares falling here. Looks like guidance is waiting down a bit. Will will be digg through these and get back to with more job.

All right.

Steve.

thank you. Don't miss, by the way, jim crammer's exclusive interview with paletots CEO that's coming up at six pm on mad money, a reaction here, paul, to these results out of power. Altera.

yeah. So I mean, just those headline numbers that the revenues weren't very strong relative to expectations. So that could be an issue. Were really looking to see for paleo is how this platform zing strategy is playing out. Member back and the stock was killed, uh, warning of short term pain because of their long term goal of to get more customers on the platform. That results last quarter were strong, so rebounded. So I mean, we need to see more of what the report showed, but that's going to be the key focus in in the earning to report anything and down two percent, uh, you know the stock typically moves you know seven or eight percent on earnings. So I mean, that's that's nothing for a stock like pile.

okay. Karina, I wanted get thoughts in the other news of the day and the other thing that's been driving markets which has really been fed speak and IT looks like we've got Susan Collins, boston president su san Collins headline starting to hit the tea pair where he is talking about any further slowing and hiring would be undesired, sir, able. And let's see some additional policy easing needed, but unclear how much. Given the fact that markets have been repricing pretty aggressively for the growing possibility that we see the fed pause in december and the fact that we have seen some more hawkish leaning, maybe not this, but some further more hawkish, hawkish leaning comments from fed officials, how important is that to the market here? Especially think about the back up and rates and especially when you think about on the equity side, the growth picture for some of the companies were talking about today, some of these text tucks.

I think it's important. Of course, we're getting contradictory statements from different feed members as we always do, but the reality is that her sentiment is shared by jay power, and that's important. He said over and over again that he doesn't want to see any further weakening in the labor market. And I think that if the data supports the view that the labor market is weakening further than we will see a rate cut in december, think the fed is going to true to its word, it's going to be data dependent. I think we could easily see four rate cuts over the next twelve months.

okay. Paul, Patrick, see you in a bit. Christina. Thank you for joining us. Snowflake earnings out as well. Do we have those? We do see a mode has some sima.

Snowflake shares are surging over time, john, as the company beat on its bottom line and top line of five cent, beat on earnings with revenues coming at nine hundred and forty two million dollars. Estimate was for eight hundred and ninety seven million. I would point out product revenues up, up thirty percent nearly year over year.

Some bullish commentary from the new CEO SHE with rama suomi, who says our obsessive drive to produce product hessian and ease of use has built snow flake into the easiest and most cost effective enterprise data platform. He also discusses that they are displacing competition over and over. And going into this earnings report, one of the key concerns was that there is heightened competition in the cloud data analytics space from the hyper scale like amazon and microsoft that are spending a lot of money to be a winner in this space. Clearly, results here coming in much Better than expected, but shares up about thirteen percent in over time. Let's any back to guys.

All right, see memo. Thank you. Uh, and I will be speaking with snowflake CEO shooter on a swami later right after the earnings call and to bring you those comments first on cnbc tomorrow. Morgan can't .

wait for that. We're just getting started on over time after the break, an analyst first take on snowboard growing and what those result signal for the broader enterprise software and cloud industries. And we are just moments away from the main event.

T we will bring you in videos quarterly results as soon as they cross. We're going to break down the impact on the stock and the whole market. Stay with us. We ve got a big show ahead over time back. Our goal is to .

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Welcome back to over time, some big movers already on earnings results this hours we await in video. Let's get back to see to go back for more on palo alto network, Steve.

Hey, the Morgan. Yeah, there's going to be a two for one stock split t at palter networks. This is just announced the board here.

This is going to start at the end of trading on december thirteen th, and we'll start trading on that split adjusted Price on december sixteen, fifteen time. We see shares down about five percent on QQ guidance. That was like coming in a hair light. General sensitivity of Steve.

thanks. Meantime, as we mention shares of snowflake sharply higher after reporting beats on the top and bottom lines, giving strong guidance for q four product revenues, snowflake also just announcing its teaming up with anthropi C2Bring lau d mod els to the AI dat a clo ud. And joining us now is Jeffery's analyst brand fill brand, which is a bigger deal here. The strong product revenue or these remaining performance obligations at five point seven billion given the consumption .

model is on R, P O, accelerating the biggest beat we've seen in the model for a long time, uh, accelerating uh, the the actual guidance more than the beat. H, this is one of the best course we've seen a long time from snowflake software starting to get light back into IT. We've said for for the last record, we wish we are some connected analysts. I think we're going to be back as software analysis softs come back and really good to see the momentum here and stuff like brand.

how meaningful is IT that snowflake is confirming this multiyear strategic partnership with anthropic?

I think it's important. I don't think it's the N L B L, uh, their companies are that we work with that are a embracing ten large language models in two IT mention ten, others have two, some have five h anthropic is always see a leader. Uh, snowflake has been behind the A I and trade art CEO came for google had said they were nowhere really a year ago to now getting on the the right page in A I.

So they have uh a long way to go, but they're on the right track. They're improving, which is the most important thing. And we think of our street at our leadership.

Um he has work in seven days a week to ensure that they get this right. So anthropic said one of the key leaders are out there. And so it's a good partner ship to habit.

I'm scared to go on a lot of these partnerships. We um you know they tend did not go anywhere and everyone is analysing a relationship with the date every other venture in the industry. So you got to be a little get to hold out .

the relationships brand seems like a big quarter for sheet, are giving what the stock has done so far this year and know a lot of a lot of this dowdall ft before he took over. How much does this matter why they have this momentum right now? And how much valuation upside potential is there? Given his technology background, there is the Operational background of the previous you yeah .

I think it's important a snowy expending one of the worst performing software sox of two thousand and twenty four. So I think everyone was a pretty critical that you know to change out when you're talking about flute man to shed art. You he did a great job and server now was IT was did a great job at snowflake.

They really need to bring in more reported LED uh organization uh in in his technical experience is really helping out uh data. Ks was really taking a lot of mansion growth rate. They've done phenomenally well and accelleration that growth and hear that reaches accelerating and still like decelerating service scratch in the head, they're both in the data game is happening, so they need to make a quick pitstop.

We've said the analogy for snowflake shear as they went into the pit stop, the new window, uh, a new radio and new tires. And we think it's coming back on the road as the Better car. So we think it's going to move faster. We thinks this is a Better set up now and and again, a lot of this is LED LED by trees. Technical expertise rather than, you know, to go to market case.

we leave with their brand fill. Thank you. Got this the call, of course. Well, we've got breaking news now on a major fraud and diamond mod has that.

john. This involves indian billionaire ta a di. And seven other senior executives are invited by the justice department in connection with a scheme to pay hundreds of millions of dollars and drives to indian government officials to access solar energy contracts and efforts to conceal bribery schemes from U.

S. investors. Now keep in mind, these fraud accusations were first came to light from short seller hindon burg. Research would send the stock a in a free false and senate IT has rebound or watching prize and a doni enterprises ah here in overtime but clearly a stock were watching closely back to you .

alright see mo dy, thank you in video earnings just a few moments away here let's bring back to spoke but spoke investment group code pocket and more insights and strategy C O Patrick more head along with bcc or markets commentator mike sand toy as we do await these results are mike I want to I want to bring into this conversation. Get your thoughts because, yes, we saw on video sell off into the close today.

But in general, in the midst of geopolitical concerns earlier this week in video bounce, I looked to yesterday and video bounce five percent and took the market with IT. So IT speaks to how important in video is to the AI secular grow story, but also to the market more broadly. So how does that position us here where hopes are very, very high for this report.

for sure? Yes, in video, certainly the short term, just because of its half and because of its the way in Crystalized, the. Is very important. That being said, you know when IT really cracked after earnings in August, the S P hung in there for a few days.

So i'm not saying it's eyes or or what I find fascinating about the set up is in video first traded as highs one forty exactly four months ago, june twenty, and IT traded down from their consulted for four months just about mates and new highs recently, but really is in that same zone. IT should be pretty tightly coiled here to react one way at the other. Obviously, everyone's expectations have come in a little bit.

now. I don't mean for the actual results, but the idea is not going to be blasting through estimates and guidance the way they were before. So you know, we roll forward the calender, the P. E.

Does that look as crazy as I did before? So it's it's a fascine set up and it's three to have trillion dollar company. So you know it's not it's not gna necessarily tolerate out right misses.

Patrick, what is going to be the most important metric that you're going to be watching in real time as we get these results is that the data center numbers? Is that something else?

Data center is all that matters. I mean, they have a lot of other meaningful business like gaming and work stations and cars, but IT all rides on data center and specifically on the guide. I think what investors need to keep in mind is there are so many new ways that in video, a can make money with the black world generation. Not just on the chip, you're looking at advantage in networking, you're charging for software. So all that comes along with black well and I recognized that later for the rap but uh we have seen science uh as Stacy ras can talk about, we saw dell shipping black well, i'm at the microsoft event right now and a black well is in preview so that .

mention while you're talking in there, Patrick, in in video results, how cross we're going through an initial movies down about four percent. The pole we heard earlier maybe was from you that there would need to be a two billion dollar revenue beat in order for this thing to move higher. How much though is that important to get the full context of these numbers are, especially because there are all these concerns about in coming quarters, how big is the pipeline if they see some positive things about that, that can have an impact on the continuing reaction?

Yeah, and you're exactly right. When I was talking about the the guide, I was, you know more of a short term like in the next couple of days but later the all got we got the details ready.

Got to stop you there. Paul Christinia parts levels has an ever Christina.

Yeah, we're just getting the top and bottom lines uh right now numbers you we are getting E P S of eighty one cents per share that is higher than the seventy five cents estimates on revenues of thirty five point zero eight or thirty five point one billion dollars, which is also higher. Ah and i'm going to come back with more of the data center numbers and guidance in just a moment, right.

guys? yeah. Thank you, Christina.

Let to finish. yes. So I think you know in the call you know hopefully will be more clarity on good looking ahead to next year.

What's the black well production going to be? We know domain and is there whatever they whatever they can make, the will be bored, but it's a matter of production and how much they can they can get out the door. So that will be that a more of a longer term.

But for the short term, it's the revenues. And I think that was just slight of a two billion dollar beat that. No, that's for what the stock is reported. Reality of expectations that's not really that impressive compared to what theyve done.

yeah. And I know you said you were looking for a beat on the guide as well, and we're going to get that info from Christina parts and level is hopefully momentarily. But I got a sense for looking at IT that this guide on the revenue side, on the top line might not be quite as strong as some we're hoping for patron more head filling in here. The the data center revenue came in a dar strong here data set of revenue, thirty point eight billion dollars. You mention that, that really most of what you're concerned about here.

right IT, is it's the number that matters for investors and it's where the stratosphere red growth is coming from. And you know, like I said, that they came in and they beat but narrow than they typically did. And now everything rides on this guide.

And if there's any chAllenges with the guide, then there needs to be some explanation on the age series to the blackwell series and the market will react. Uh, I agree completely uh, with the speaker is talking about if they didn't beat by a mile, then the stocks is going to go down, right? And that we saw very similar characteristics. There was a little bit of spooking on the blackwell silicon issue. But once the market should through that and got through the call, a everything went up into the right.

Patrick, we've got more we've got more metrics to bring our viewers. Christina, what you have for us in this report from the video.

let's start with the guidance because that's what everybody was looking for. A Q for revenue, thirty seven point five billion higher than what the street was anticipating, but still lower than the whispers numbers I ve seen anywhere between thirty eight point five h to thirty nine billion dollars. The CFO also saying demand for the hopper architecture stronger, each two hundred offering a grew significantly in the quarter.

Blackwell production shipments are scheduled again to begin in the fourth quarter of fiscal twenty twenty five and will continue to rap in fiscal twenty twenty six. So again, that was a lot a lot of this was writing on the black while shipments, uh, a lot of people were on in the street was anticipating shipments uh, to really ramp up in the end of next year, their fiscal years. So that's exactly what she's returning again.

Black world production shipments are scheduled to begin in the fourth quarter of fiscal twenty twenty five and will continue to rap in twenty twenty six. So you can see a soc did drop initially but still ah almost one percent lower er at the moment. I slightly below the whispers number, but the guidance was a beat for india a the january quarter.

Christina, thank you, Patrick. A I know I just entrapped you. I'm going to go back to to finish your thought and also react to some of the guidance numbers who got we also got q for non gap. Gross margin looks like seventy three point five percent, which is basically in line slightly Better then h street expectations as well. But the black well shipment guidance, what do you make of that?

I mean, it's positive. But I also want to reinforce that it's small, that the clear majority of what the company is shipping now and in the next quarter, uh, is hopper and you're going to see A A gradual ramp from hopper to black well. And you know the company had had a couple things that needed to show and needed to show the gross margins weren't impacted.

Essentially, you have a different architecture that they could have weight on that. But then again, I could have been made up by market expansion, the entry into networking. What i'm seeing from my industry animal perspective is is all positive, all expected.

Every hyper scale that I talk, you cannot get enough of of these chips quickly enough. T, S, M, C is sold out for the next year and a half. That gives pricing pressure. Sorry, that gives pricing power. A to in video, I just don't see how they lose mike and .

totally want to get you back in here. The gross margin guide for the fiscal fourth quarter from invidia seventy three point two five plus or minus fifty basis points ensure the top line guide the modest be kind of in line.

But I can help a couple that with this snowflake report and the ambition behind IT, right? Because all of that data flowing into the transformed data center, part of what ends up feeding AI, so that in a way, that is positive pipeline indication, demand indication for the likes of video. no.

I mean, obviously, directionally IT is I think it's kind of remarkable that we're slicing is so thin in terms of you know what's been guided in a quarter that the early a few weeks old and just shows you again how how the tight tolerances of how this stock is has come into this number. I do find that interesting. Pretty minor movements.

The initially on the reflects are the cellars of all those jeos options that were implying in eight percent move that could change you. No doubt on the on the call, there's going to be a lot of big picture bullishness. The mission is not yet complete.

We're going up and away. I do fight IT. Interesting that that initial little cell off attempt was bought. So a lot of joking and a lot of people really it's the machines fighting each other over small increments of near term guides. I'm interested to see if you get IT fleshed out in terms you know through next year and what they're seeing um so that somebody can make a more coherent fundamental case OK want to get .

back to Christina parts and evs from more from this report.

Yeah the C F, O. Commentary is on the website right now. There's a line that really stood up. Both hopper and black well systems.

Also the two international of the G, P, S, have certain supply constrains and the demand for black, well, that's the latest situation, is expected to exceed supply for several quarters in fiscal twenty twenty six. So that's a warning right there that supply is still gonna constrained for several quarters. We still don't know if that's going to mean a push out on any delays. But to me, that sounds like a warning possible to why you're seeing this movement, uh, downwards for the stock guys.

All right, Christina, thank you. Showers are down about three percent right now, but bouncing around, as you can see right there on your screen. Pol, want to get your action to everything we've just heard in this report, including the fact that, uh, demand is our pasting supply. We we knew that was a dynamic and that sounds like IT continues.

Yeah I mean, it's it's pretty that the company is raised guidance by you know half a billion dollars, and that's disappointing. But IT just goes to show you how strong the stock has been. I mean, they're retta ly raised guide inspired closer to two billion or a billion.

So this is IT is short. And I think to what mice saying earlier, maybe the reason the stock isn't down more on that marginal revenue guide, higher the fact that IT hasn't done anything in five months, basically right where IT was five months ago. So IT has had some time to, you know rest. So to speak. And you know let let the market catch up with IT and gotto.

Keep in mind, of course, we're also expecting a new platform from them pretty much every year. So there is that a paul Patrick, thanks for joining us. Might see in a bit up next much more reaction to invidia a quarterly results.

D A. Davids and gill Lori a, who is one of a few analysts on wall street without by rating on the name, is going to join us with his first take on the numbers and later. And why use dinner valuation? Oswaya motoring explains why he loves in video, but not as an investment at current levels.

You're right back in power of cnbc. The best deal of B, C, I comes lash prob friday terms and restrictions apply. Welcome back to over time, shares of an video lower by about three percent ahead of the earnings call but off the worst levels of overtime and joining us now on set to break down the results day, David's and managing director or Gloria got a whole rating on in video that special go welcome.

So IT looks like to me in video could be getting gradually less expensive here, given that the stock hasn't gone up, but they did, even though maybe slightly outperform on some key metrics. S hyper scales are are continuing to buy these chips and then snowflake plus anthropic and snowflakes strength here in its results. Doesn't that present a demand creation moment? Foreign video?

absolutely. IT does. I mean, these are remarkable results as they have been reporting for the last six or seven quarters. I think the reaction in the aftermarket is, hey, they need to do this at least five or six more times to justify the current valuation.

If you think about the bull case here, and you've heard that many times today, it's that they can do five dollars of earning two thousand twenty six and trade of thirty five times that. That's one hundred and thirty five thousand. That's the bullet case. If they miss on any of those massive hurdle raises that they have for the next five or six quarters, the stock could be half of that. That's the chAllenging investors have to baLance is that there's a lot of things that can go wrong right now though the demand is fantastic .

when we play jenson's advocate here, the likelihood of them missing seems pretty low. When you look at the one looks like stability of hyper scale demand. And the overall software demand pouring in microsoft ignited is just making the argument that people do want its A I offerings that continuing to spend on this stuff. So five or six quarter from out might be too late to get up off a hold rating. When did you do IT .

well consents? Estimates are that in video is going to grow fifty percent next year. That means all those hyper scales need to increase.

They're already very high levels of capex by fifty percent or more. And they've been talking about a snarbi I talked about over investment. Thought in adult to you yesterday talked about bringing a catching up on investment.

Those are not terms you use when you intend to continue to invest like that forever. Those are terms you use when there's a point where you're going to push the breaks. And if that happens next year, an in video has to guide to down results at any point next year. That's something investors need to be aware of.

OK.

We're looking at data center revenue that's up one hundred and twelve percent year on year. This it's another record. And right there in the release, you have jenson wong talking about, you know the basically is jack about about about what this is going to mean for compute.

Uh, we know inferences ing is a big part of the story here. Software partnerships. It's more than just the picks and shells themselves in terms of the long term trajectory for in video. So how much does that need to factor in?

Well.

so i'm glad you brought up the picks and shovels analogy because in video is selling picks and shovels. Microsoft, amazon, google are renting them out, but people actually need to find gold. They are not finding nearly enough gold to justify the levels of investment the hyper scales are currently making.

By our calculation, by the end of this year, microsoft will have invested eighty billion dollars in A I. Now they're have a ten billion dollar AI business from that, but it's still probably a money losing business. And if microsoft continues to increase spend, especially if IT increases spend another fifty percent next year, it's going to be that much harder to get a return on investment unless their customers start finding a whole lot more gold.

So so if you have a hold on in video and whose finding goal is sort of up for grabs right now, where do you invest, especially when we talk about all of this spending that's happening from the hyper scale ers and others and then the halo effect of an video through that process? When you think about supply chain and and this demand versus supply picture.

well, there is some gold being fun. I don't want to say they're in any and and again, you mentioned snowflake earlier. They're finding some gold that's encouraging.

We wanted see more of that. But the company that's really finding the most gold is meta. Meta is buying these massive data centers with NVIDIA GPS, and they're turning IT into a way to sell more ads to sell ads for more money. And they're growing their core business faster based on this. They're the ones that are finding gold and that makes them the best investment of the mega apps in the growth .

of A I while card here, another OpenAI moment, right, either from OpenAI or somebody else that juices investors ideas about what valuation should be.

That's exactly right. If OpenAI comes in the next few months with the model that exponentially Better than the last model and shows that computer is still scaling, that these models are still scaling with compute, that's a game changer. IT will be a game changer for everybody, and we hope that happens if IT doesn't.

And there's some signs that you've been talking about that you might not, there's gonna be a let down and all that capacity that same altman is asking for from microsoft and others. They may not give IT to him because if he doesn't show results towards super intelligence, towards A G I, towards this unneutered tool, he may not get more capacity. That's when you may see some hyper scale putting the brakes on.

Well, i'm glad I don't have to put ratings on these things. Gloria, brave man being an thanks for being with the song over time.

Thank you, joe. Well, up next anywhere you finance professor also walked to motorola ways in on the valuation of invidia and other big tech names right now. And another check here on two other key movers this hour snowflake jumping after beating on E P S revenue and giving strong guidance, those shares are now more sixteen percent and palo to moving in the other direction that's lower despite beating on the top and bottom lines. Also announcing you two for one stocks split that's effective december six teeth, those shares down five percent.

Stay with us. Welcome back. Shares of the video trading lower .

after reporting a beat for the third quarter, which inning us now after motor. And he is pressure finance and he's not as the dining evaluation at the N. Y.

U. Stern school of business. He is also an invidia shareholder or professor. It's great to have you on. Do you want to get your initial reaction to these results and what that means for the valuation of invidia? Even as revenue has almost doubled since a year ago.

IT does is scary thought right them in need to deliver ninety four percent growth in revenue, seventy five percent growth margins, sixty two percent Operating margin? That's an amazing company. And just you you lose four percent of your market value tells you how much the expectations came in, in area has been ramping up.

If they don't just have to beat her an analysese ment, they got to beat them by ten percent. And I think investors are also increasingly focused on the guidance that in video is offering. And the negative reaction, I think, is coming from the sobering of that guidance, which is, I think, in various trying to bring investors down for a soft landing, bringing expectation stand. But it's going to be painful. Every earnings report, you going to see more of this phenomenon in player than beating the numbers but still seeing the stock Price go down.

How much of this phenomenon around NVIDIA stock is company specific with investors vers, uh, a reflection of more risk on appetite in the market, more liquidity coming into the market and investors just being more excited about big grow stories in general.

it's not in order. It's both at the fact that, that investors are feeling good about stocks that recorded risk premium is down, that they feel that they can buy stocks at a higher Prices helping. But I think that a great deal of this is company specific.

I mean, there are two point two trillion dollars in market cap over the course we are. I mean, that's that's mind blowing in terms of the the additional market cap created. I do think though that there's a disconnect emerging here between what companies are spending on the architecture. A I I think your previous guys mention that and the revenues are actually generating from AI products and services, and that's going increasingly come into focus on future waters as well.

Here's my push back on this because, you know, it's my job. Somebody got to this reminds me in a way of the argument against buying apple in eighteen, all of their samsung out there. Well, how many more people can you sell a phone? This expensive margins have to eventually come down, but it's up something like four x above the high levels of that year. At what point can you and I mean, you specifically buy a stock like NVIDIA after it's been on the run that it's been on under the idea that it's just so unique, I can go much higher still.

Now I think that IT is unique. IT is in a market where IT controls the market. The problem is the market itself might be heading a stress point because if you don't get the man ultimately in various revenues are caused to some other. So those cause have to be covered products and services that those companies sell. And right now, at least from what i'm hearing from those companies, delivering on air products and services is running out to be more difficult than they thought, and that's going to eventually have to show up in their buying fewer checks.

So my question that was, what would IT take, what kinds of evidence in the market would IT take for you to believe, despite all of that, and the idea that there are cheaper, AI players out there, this one is so special, even though he looks expensive. Based on what's expected in the next couple quarters, that is still worth buying. Even though you bought so much of IT.

when was a lot cheaper? I think at this Price, if you're buying, you're are expecting the age product in service market to be much bigger than people are anticipating IT to be. And you got to be clear that, that's what you're buying based on.

I mean, even if you give in video dominance of the air chip market, which I think they have right now and maintaining the sky margins, you can get two hundred and forty four without something additional happening. So it's almost like you're buying into another market out there that in video can find and dominate. And that's that's a tough call. Do you think this .

speaks to the conversation we're having right now, all the hype we've seen going into A I, is this helping to propel this broader rotation that we're seeing into other parts of market like locals, like small caps? Keep talking about IT as a trump trade. But but is IT also just the fact that the A I trade needs to take a breather?

No, I think IT does have to take us a pause because I think we were reached on the eye IT because I I think we still need to see whether IT can be monitise. Ed, I see I almost everything I buy now i'm not paying for any of the stuff that i'm getting a free air. The test will be when, you know, my e mail starts charging the three dollars extra per month, use an AI feature.

Am I willing to pay those extra three dollars? That's going to be the test for the air product in service market is whether people are willing to pay. And for that to happen, he has got to do something you can do right now that is unique and special as what about you.

what about microsoft charging thirty bucks extra for for three sixty five with A I building and arguing this week that people are reaping and buy more.

that be the first test. I think microsoft is the company among the big tech that's closest to monetizing ai. And I think you'll be interesting to see how much money they make from that subscription model. I'll be interested to see what percent i've off office, three sixty five, have no desire to pay an extra thirty dollars. I but i'm trying to other people .

who will all right as well, the modern thank you so much. Well, up next, much more on in videos results when mike and totally looks at how that red hot stock compares to some of this year's hottest, the place and Williams sonoma, the in video of cookware having its best day ever closing at a new high, the high and kitchen wear and home furnishing retailer beating earnings estimates, raising its full year guidance. The company, C, E, O, is going to discuss those earnings exclusively. Coming up six pm on that money will be right back.

Welcome back, mike and toy is back with another look at in video. And I compares to big coins break out to record highs, mike?

Yeah, more than not too many major assets. You can't compare with the magnet to the run that in video has had. But for a while, and I pointed this out of the time, that was really tracking with bitcoin actually from the little of the last year until about the spring of this year, really in lockstep.

And then invidia just took flight from there. The the earnings estimates, the revenue guides were just ramping so fast from there for a video a Carried higher. Bitcoin was capped kind of around its old highs from a couple years before until the sheets of break.

So in this context, IT looks like bitcoin is making some kind of a catch up move. There's no inherent reason these things out to move together except that they kind of feed off of the related polls of people are very kind of creating the future minded and also a little bit of a hot money aspect do IT momentum as well. Now take a look at microstrip.

Gy shares wrote up to in video on a five year scale because, of course, IT was not even a contest until recently. Now microstrip gy naturally is trading as a level version of bitcoin because basically what IT is raising money from the capital markets, putting IT in bick in. But at this point, microsoft now exceeds one hundred billion dollar market cap multiples of the out the value of the bitcoin on its baller cheese. So obviously, it's kind of taken on a bit of of a life of its own. Yes, there's a rational to IT, but I get nervous when I see vertical charts.

IT is a vertical chart in minutes. It's doubled, almost doubled months to date. It's up six hundred fifty percent since the start of the year.

It's up more than eight hundred percent microstrip over the past twelve months, and it's worth highlighting. And as we have seen this break out in bitcoin, it's yes, it's considered it's considered a trump trade, but it's more than that. It's also a microstrip gy trade in of itself because IT, we're talking about a record forty two billion dollars self offering. We're talking about a company that's going to market joined us on overtime last week and said basically, they're going to gobble up three percent of the available supply of bitcoin and that itself is repelling the crypto currency is but .

but IT also means that if they state that intend of being a bitter for that quantity and the Price of bit coin keeps going up, know you kind of buying higher the cost spaces of the bitcoin owner on the book. I realized they believe they're playing this multi year decade game. Uh, but IT is fascinating how very suddenly IT got spring loaded in terms of the public wanting this this stock is a way to play. And then other companies that even hint to trying to follow a similar strategy, lot of them trading for single digits, starting in to join the party as well.

all right, mix, sine told. Thank you as always. Well, mind the gap up next, all tomorrow's earn that needs to be on your radar, including gc and several other big retailers. And don't forget, you can catch us on the goal by following the closing bell over time. Podcast on your favorite podcast, p, we will .

be right back.

Welcome back to over time tomorrow, another big day for earnings, dear. By do v jays wholesale shoe carnival and Warner music group all report before the bell and in over time, we will break down results from gap raw stores that up into IT and elastic here from the ceos are both into an analytic before they died into their animals calls, and will also hear from the CEO snowflake as that stock rockets. Higher near the higher the overtime session, up about twenty percent on strong results and guidance. Morgan.

yeah, it's going to be another busy hour in the meantime, very focused on A I in the comments we're gna get from jenson, hang gg and others on that call. One of other pieces of this and and we don't know the answer yet, obviously is, is going to be what a trump administration is going to mean for a company like in video.

On the one hand, if you see more tariff s more trade constrains for china concerned is concerned how is that going to impact invidia other semiconductors? On the other side of that, especially long in the release, is talking about, among other things, sob N I. Whether this is an administration that could potentially Green, light and lift those export restrictions of the most highly technical, highly capable, AI related chips and products to places like the middle east will .

have to see that is true. I can't help though, but want to tell investors, remind investors we can't have to think beyond any individual administration when IT comes to longer term technology trends. I A met with brian on strong CEO of coin base about nine years ago in safran ces go.

He was shown me, how is upward? He gave me a dollar worth a bit coin. I like to look at that to gage how far it's come, since that dollars now were three hundred twenty five dollars, right? And so you think A I M is IT worth IT.

Is bitcoin worth IT? actually? Well, there are some possibilities there. What do you believe, Morgan, about where this goes?

We're going to have to see we also got to see what we hear on the call. Um within video, we have seen some semi stocks trading slightly lower and sympathy but not some of the big moves we've been in the past.

So yes, that's going to do IT for overtime. First power of C, N, B, C prose, best deal of the year. Track your portfolio from every angle on one, optimize.