Nvidia Shows AI Trade Is Still On, Defiance ETFs CEO Says

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Watch Nvidia Shows AI Trade Is Still On, Defiance ETFs CEO Says - Bloomberg on Dailymotion

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00:00I just want to point out, too, I mean, we know the weighting of NVIDIA and just keep an eye on futures.

00:04We're getting a modest bump here, I think, at NASDAQ Futures,

00:07indicating we'll be about maybe three-tenths of a percent higher than where we closed out the session.

00:11But there's going to be a ripple effect, whatever direction NVIDIA goes in the cash session tomorrow,

00:16through all of the indices, and I would assume dang near every ETF out there,

00:21which probably has some piece of NVIDIA in it.

00:23Yeah, absolutely. I mean, this was very much the market event that we've been waiting for,

00:27with the market having pulled back the last couple of days.

00:30I think that all eyes were on this read right now,

00:32and it was kind of going to be the thing that resurrected the market

00:35and got it going back upward into its bullish momentum.

00:39And I think the earnings outlook is great, right, because the doubt that investors have had,

00:43which I think has led to the pullbacks, is AI tangible.

00:47Is it worth what companies are paying for it? Is it worth the capex?

00:50Is it worth the valuations?

00:51And here's Jensen-Wang and NVIDIA delivering this great earnings result,

00:56a great outlook for Q4.

00:58The demand is still there. The compute is still there.

01:00The AI trade is very much on.

01:02I'm going to ask you a very loaded and cynical question,

01:05and it's really about the importance of NVIDIA to the market.

01:08And I know this is a silly question, given that it's 8% market weighting.

01:11But I was kind of surprised, looking back, at the stock's underperformance,

01:16relatively speaking, to the rest of the market over the past few months.

01:19It's not necessarily been the barn burner that it once was.

01:22And I wonder if that is almost a healthy sign that the market is finding a way to move on from NVIDIA,

01:28not necessarily away from it, but the idea that there is a bigger AI trade than just NVIDIA

01:33and Microsoft and Alphabet and whoever else you want to throw in there.

01:35Yeah, I mean, Ramin, you make a great point.

01:37I think that NVIDIA was AI, right?

01:39It was the AI trade, post-the-chat GPT moment.

01:41It's what everybody piled into.

01:43You got that triple-digit performance on this stock, and it continues to do well.

01:47Now it's settling in.

01:47And there's only so much higher that you can keep raising the bar to have these blowout expectations.

01:52I mean, they've blown it out of the water for the last two years or so and continue to do so.

01:56But I think that the shift now is on the next generation, the next derivative of AI,

02:00which is AI-powered infrastructure.

02:02And you hear a lot of talk about that.

02:04And if you look at some of those companies, like Constellation today got a little bit of a bid

02:08talking about the reinvigoration of Three Mile Island and things like this.

02:12So I think it's going to be a lot of what powers and builds the infrastructure.

02:15And NVIDIA will surely play a part of that.

02:18But I do think that it's going to expand to some of the picks and shovels in that space as well.

02:22So broadening out, perhaps.

02:24I do want to ask an existential question, because I was reading a colleague from

02:27our Bloomberg Opinion colleague, Dave Lee.

02:30And he recalled these comments from Peter Thiel, who told the New York Times earlier this year

02:35that when it comes to AI, it's more than a nothing burger,

02:38but less than the total transformation of our society.

02:42So maybe it's not the Internet.

02:43Maybe it's important still, but maybe it's not going to absolutely change everything.

02:48And when you think about this AI trade overall, how important it's become to not only our stock

02:53market, but our economy, how big is the risk that maybe it's not going to be as big as everyone

02:58seems to think it is?

02:59I mean, I think that the potential for AI is actually quite large.

03:04You know, if you look at what's happening now and what's actually there intangible,

03:08if you think about, for example, unmanned drones,

03:11it's changing the way that we think about aerospace and defense, right?

03:14It's changing the outcome of drug trials.

03:17It's changing essentially the way that we live and work with some of the AI tools that

03:21we have at our fingertips already.

03:23Now, imagine when it actually starts to feed into earnings and feed into the bottom line

03:26of some of the sectors outside of just tech and semiconductors.

03:30I think you'll really start to see that play out in GDP, and it'll be one of the forces

03:33behind GDP growth.

03:34So I do think that we are in the infancy of AI, and I think that this is just the beginning.

03:39And then it keeps going, right?

03:40You have super computing, quantum computing.

03:42This is just stage one.

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