Nvidia results: "They are in the right place in the right time"
Head of Research and Partner at Manhattan Venture Partners Santosh Rao speaks to CGTN Europe about the tech company's astronomic success.
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00:00 Let's bring in Santosh Rao, who's head of research at Manhattan Venture Partners.
00:03 Good to see you again, Santosh.
00:05 So as we were hearing, NVIDIA again has beaten expectations.
00:09 Why is it doing so well both in itself and compared to its competitors?
00:14 Yeah, thank you for having me.
00:17 Great to be here.
00:19 Let me throw in my share of superlatives.
00:21 I mean, knock the cover off the ball.
00:23 Fantastic superlative everything.
00:25 So this was a great quarter by any respects.
00:29 I think that the thing going for them is they are in the right place at the right time.
00:34 They have a lead on the other companies.
00:36 They have they dominate the GPU space, the chip space.
00:40 So I think their execution was expected.
00:44 Their outperformance was expected.
00:45 And for them, the market expected at this at this level,
00:50 they needed to not only beat the estimates and raise raise the guidance as well.
00:55 And that's what they're doing.
00:57 So 24 is expected to be good.
00:59 Twenty five is expected to be good.
01:01 So for analysts like me, the big question is, how can how far and how long can they go on?
01:07 And I believe they can continue to go on.
01:09 They still have a good lead.
01:11 Tipping point. I agree with him.
01:13 There's a lot more to go.
01:14 It's opening up new avenues.
01:15 It's a lot more to go.
01:16 So this is just the beginning.
01:18 Great execution. Great performance.
01:20 Great report.
01:21 So as you said, their forecast for for twenty, twenty four, twenty five still positive.
01:25 But but can this continue?
01:27 Are we looking here at a bubble that will perhaps end up bursting?
01:31 Yeah. So let me kind of moderate what I just said.
01:35 It's not a bubble.
01:37 It's definitely a nice secular tailwind behind it.
01:41 The whole space is growing.
01:43 The AI is expected to really change a lot of things.
01:46 I think they're doing very well.
01:47 They'll continue to do well.
01:50 It's it's a long.
01:51 So it's not a bubble.
01:52 It's got at least five year run.
01:55 They have a lead on other companies.
01:57 Yes. There's some cautionary notes.
01:59 The percentage of beats is getting lesser and lesser.
02:02 Competition is coming.
02:05 A lot of other the demand is spreading out and getting more wider.
02:09 So that's helpful.
02:10 But overall, things will slow down at one point.
02:13 But at this point, there's tremendous demand.
02:16 There's pent up demand.
02:17 New people still coming in.
02:18 But they will continue to execute.
02:20 There's still some more runway ahead of them.
02:22 So we heard that the CEO was talking about artificial intelligence
02:26 being at a tipping point, bearing in mind that perhaps
02:28 that's not the first time he said it.
02:29 What do you think the near future holds for AI?
02:32 Where will it go next?
02:33 Well, it's still a long way to go, right?
02:37 So at some point, everyone will have the chips that they need.
02:40 Everyone will have what it takes.
02:41 But the infrastructure right now, we are at the infrastructure stage
02:45 and they are dominating that space, the chip space.
02:48 Then we go into the software, the applications.
02:50 And that's the next phase of the development.
02:53 And NVIDIA is well positioned for that as well.
02:56 And that's the beauty of NVIDIA.
02:57 They have a full stack.
02:59 Not only do they have the hardware, they're also well positioned in the software.
03:02 And that's where the next growth is.
03:04 The enterprise software business, it's going to be a huge,
03:07 multi trillion dollar opportunity.
03:09 And they're right well positioned for that.
03:11 So it's not just a hardware play.
03:13 It's a software play as well.
03:15 And they have a competitive lead on that.
03:17 They have a moat around that.
03:18 So I think they will maintain that.
03:19 So they will continue.
03:20 Yes, competition will come on like it always does.
03:23 But it'll take some time.
03:25 And China will come on at some point.
03:27 A lot of restrictions.
03:28 They're introducing new chips.
03:30 So that'll come back.
03:31 It was like mid single digit this time.
03:33 It used to be 20 percent.
03:34 So they need to get back there.
03:36 But it's going to take a lot of time.
03:37 But that's incremental to what they need.
03:39 They don't need it right now.
03:41 The other stuff, there's so much demand out there
03:43 that they can continue to execute on this at this pace.
03:47 No surprise, perhaps the shares were up on the back of these numbers.
03:51 Worldwide indices responded to them as well,
03:54 particularly the Nikkei as we're hearing from John there.
03:56 How much was that record level down to tech stocks?
04:00 Absolutely. A lot of it.
04:03 It's one of those cases of rising tide lifting a lot of boats,
04:06 not only in Japan, but in Asia and in Europe.
04:09 So it's a huge fundamental shift and a driver of every space.
04:15 So technology is definitely a big factor in Nikkei's rise.
04:18 But also, there's a lot of other things going on.
04:21 The whole set up, the environment, the investment climate is improving.
04:25 The government is incentivizing people to come to the stock market.
04:30 They introduced, made some legislative changes,
04:33 put in some stimulus packages.
04:36 So they're kind of pulling people, the trillions of trillion
04:38 sitting in savings accounts.
04:40 They want to encourage people to come into the stock market.
04:42 So all those things are also supporting underlying fundamentals,
04:47 the demand for the market.
04:48 So tech is definitely leading the charge.
04:51 But there's all the right.
04:52 The whole sentiment about investments and getting into the stock market
04:56 is really helping. And that's what's driving Nikkei up.
04:58 Santos, great to talk to you, as always.
05:00 Thank you for joining us.
05:01 That's Santos Rao from Manhattan Venture Partners.