Analysis: Nvidia's Growth Fails To Impress Investors

TaiwanPlus News

Nvidia saw its stock price drop despite strong earnings in Q3. To learn more about why investors aren't impressed and what a Donald Trump presidency might mean for AI, TaiwanPlus spoke to Daniel Newman, CEO of Futurum Group.

Transcript

00:00So, Daniel, NVIDIA's third quarter earnings have just been released.

00:04Their revenue is up almost double over the previous year.

00:07And they even beat their guidance, which is their predicted revenues.

00:11And yet their stock actually fell once these numbers were released.

00:14What are we to make of this?

00:16This is a situation in which perfect is the only option.

00:20And even at perfect, NVIDIA may or may not continue to see its stock rise.

00:25The company did do well.

00:26It beat earnings.

00:27It beat the guide.

00:28It actually raised its guide.

00:29But at the same time, each quarter's come out, the guide up has been the sort of litmus

00:34test for the market.

00:35How much more growth is there?

00:37How much more enthusiasm in there?

00:38This quarter, last quarter, it's starting to happen where people's exuberance is sort

00:44of conflicted with the result.

00:47And in my opinion, it's a great result.

00:51But people want more.

00:53Another big change since last quarter is the election of a new U.S. president, Donald Trump.

00:57Trump has proposed tariffs on all imports.

01:00And since NVIDIA's chips are made here in Taiwan by TSMC, that could impact NVIDIA's

01:05chip prices and by extension, the whole A.I. economy.

01:08Do you think that concerns about this are impacting the market?

01:12Yeah, I'm letting the Trump election, I'm digesting and watching right now.

01:17I do believe he has very real intent to create stricter import export, specifically export

01:23controls with China related to leading edge silicon.

01:26And I do believe there will be some modification to tariffs.

01:29Remember, we already have tariffs in place with China.

01:33As it relates to Taiwan, I believe the relationship is still critical.

01:37Having said that, I do believe more manufacturing in the U.S. could be a requirement.

01:40But these changes don't happen overnight.

01:42You can't just be like, oh, we're going to have Intel make NVIDIA's chips.

01:45This would take years at this point to make that transition.

01:49Even Intel depends on TSMC for its newest A.I.

01:52PC designs.

01:53GDP growth will be the number.

01:55If this slows growth, he's going to be very cautious in anything that will allow his presidency,

02:01the legacy of his presidency, to look like he slowed or hampered growth or harmed our

02:05ability in the U.S. to be the leader in A.I. technology.

02:09What about the A.I. sector as a whole?

02:11Should we expect that the huge investments and growth in A.I. that we've seen these last

02:16few years will continue?

02:18I don't see a situation in which the A.I. opportunity meaningfully slows because we're

02:25really only in the earliest part of it.

02:28We're really only starting to uncover the value.

02:30But having said that, the exuberance is always going to be a bit at risk if we can't show

02:34the ROI.

02:36The gold has to start to surface.

02:38But right now, these big companies with big balance sheets, lots of cash, all want to

02:42make sure that they're invested in the right areas.

02:45And A.I. is the most obvious, both for investors and for customers.

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