00:00Let's stay with that story and talk to Joshua Mahoney, he's Chief Market Analyst at financial services company Scope Markets.
00:06Good to see you again, Joshua.
00:07So, looking at NVIDIA, earnings, revenue and sales figures all positive, if not perhaps as much as expected.
00:15Are investors right to be concerned about NVIDIA?
00:20I mean, look, clearly this stock was priced to perfection.
00:23It's interesting because we often talk about the idea of market expectations and do we beat them, do we miss them?
00:30And for a company like this that has run up so much in terms of its share price and we have such experience of them outperforming expectations,
00:39it's almost a case of, yes, they've beat on revenues, yes, they've beat on earnings,
00:43but they have to do so by such a wide margin to really embolden the markets because they're used to them beating each time.
00:49This time around, really, people were picking the bones through the numbers, a tiny miss in terms of data center revenues.
00:56And then, of course, a big focus on the China business.
00:59But by and large, the numbers were good.
01:01They continue to grow.
01:03And so that's why the initial 5% decline has now turned into something like 1.8% downside.
01:09Well, let's talk about that China business.
01:11Obviously, the country is a huge market for NVIDIA.
01:13NVIDIA already creating a new product to continue exporting there despite restrictions.
01:18How far could it go to carry on exporting its products there?
01:21I mean, look, they took roughly 13% of their business from China previously.
01:28That figure is now zero.
01:30And the worrying sign is that they're not necessarily putting a number on it for the future quarter.
01:35That clearly is a headwind for the company to be able to attain their targets when it comes to growth.
01:42But it can become a tailwind if they get Donald Trump on side and if they manage to get the Chinese to agree to take the chip.
01:48The H20 chip was blocked by Donald Trump's administration.
01:52And then by the time he allowed it to pass through and he took a 15% cut, the Chinese said, well, in actual fact, we don't want it anyway.
01:58So there's talk in the aftermath of today's earnings that actually NVIDIA are in talks with Trump's administration to be able to allow the Blackwell chip to be sent to China.
02:08That would be a big deal.
02:10Certainly, it seems like they want to talk money.
02:11And they're saying if the likes of Donald Trump can agree to send it, we'll give you a percentage of those sales.
02:18Whether Trump's going to say yes to that or not remains to be seen.
02:22So this is already a $4 trillion company, isn't it?
02:25How big can it get?
02:26I mean, it's difficult to put a number on it, quite frankly.
02:31You know, that number was $1 trillion just two years ago.
02:34And unfortunately, the law of sort of big numbers means that it's easier to get a 30% return when you're a, say, $1 trillion company than when you are a $4 trillion company.
02:46It's got to slow down in terms of the pace of growth at some point.
02:49And we are seeing that.
02:51And so certainly people then question the valuations and the multiples attached to the company as a result.
02:57But certainly each time around, it continues to grow.
03:00It continues to outperform expectations.
03:02And until we see that stop, I think markets are, despite the blips like we're seeing today, markets are likely to continue to buy this stock.
03:11Joshua, thank you very much for coming on the program.
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