00:00Investors can breathe a sigh of relief that the China revenue impact is now known a bit better, and it's not as severe.
00:09Meanwhile, the Blackwell products and the transition to the newer Blackwell architecture is in full swing, better than anticipated, and there's still plenty of demand in developed markets and elsewhere.
00:18So NVIDIA is still in a tremendously strong position in AI in the markets it's allowed to serve.
00:25And China, we'll see. Again, we're not necessarily betting on a China comeback, but that's pure upside if there is.
00:32The restrictions right now are really just enabling NVIDIA's competitors, and that might not be the best thing for the United States of America.
00:39We'll see how that plays out.
00:40But as of now, they were pretty clear that the restrictions are quite strict.
00:44It won't allow NVIDIA to sell anything decent into China, which is what we expected.
00:50They say they're working on trying to get around it even further, but the restrictions are very strict.
00:55And so we're not holding our breath and waiting for NVIDIA to start selling more into China.
00:59We think they are effectively blocked from selling anything decent in terms of data center products unless these restrictions get lifted.
01:07If you're looking for upside in NVIDIA, it is more deals like this, more government sovereign deals for countries that can clearly afford it.
01:16When you think about companies, a lot of this AI growth, whether it's the Microsofts or Metas of the world, they're doing it with free cash flow.
01:23So that's always reassuring to investors that they have the cash to fund this AI buildout.
01:28So now when you get to selling into countries like this, of course, they can raise the debt to fund these buildouts as well.
01:33So that's highly encouraging for the progress of these data centers.
01:36The UAE deal is absolutely massive.
01:39The Saudi Arabia one is important.
01:41And on the call, we heard Jensen say that basically every country is coming to him wanting to build out AI.
01:47So we think that's going to continue.
01:49That will probably drive upside.
01:50And that's the bull case on this stock.
01:53If you're bullish on AI at this point, you need more and more deals like Saudi and UAE to get going.
01:58And it seems quite possible that could occur.
02:01It was an impressive quarter without China in the mix or China being cut off in early April, which did have a headwind of $2.5 billion of revenue missed on the first quarter.
02:12So absent that, NVIDIA's quarter was quite strong.
02:15And then when we look at the July quarter, even though they expect to miss out on $8 billion of revenue from China for the same restrictions, they still put up pretty good guidance.
02:26They're calling for 50% year-over-year growth.
02:28So overall, I think the market reaction is a bit of a sigh of relief that China is not that significant of a headwind.
02:35Also, an underrated disclosure, we hear whispers about revenue from Singapore and whether that's being funneled into China, et cetera.
02:44And NVIDIA made its clearest statement today to us that 99% of that revenue is basically just shipped to U.S. customers that like to bill out of Singapore.
02:54So that was another encouraging sign.
02:58When you think about perhaps the risk of China revenue actually coming from other countries and being elsewhere, I'm sure there's some.
03:06There's going to be examples of smuggling, but it doesn't seem to be nearly to the extent of what is feared at this point.
03:41You
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