00:00Joshua, what are you expecting from NVIDIA after the bell today?
00:04Yeah, thank you for having me on. Here at TD Cowan, we're expecting another solid beat and raise.
00:09I think investor expectations right now are probably for NVIDIA's usual $1 to $2 billion beat and raise quarter.
00:17We think there could be some upside to that, but I think it's going to be a healthy reminder that
00:21NVIDIA's leadership and dominance in AI compute right now
00:27and also the very strong fundamentals that are going on for AI compute and infrastructure investment.
00:33I do think it's going to be an important almost factor for understanding how the stocks are positioned to react
00:40to earnings.
00:41Fundamentals have gotten better over the last three months. The stocks haven't moved.
00:45I think that could change, but it's going to be important to see how the stock reacts today to the
00:51earnings.
00:51You know, I keep looking at the stock NVIDIA over the last month or three months or six months because
00:57it feels like it may have gone down or just moved sideways.
00:59I see in six months it's up, you know, 10 percent, which for NVIDIA is like a sideways movement, right,
01:05compared to what the kind of acceleration that we're used to.
01:08What do they have to do to keep the party going, to keep the, you know, 1400 percent five-year
01:14rally on?
01:16Yeah, no, I think that's healthy perspective and a good reminder that, you know, just because it hasn't moved in
01:20three months doesn't mean the stock hasn't been one of the best performing stocks ever.
01:24But I think it's about, again, maintaining its leadership position, reminding people that AI investment is early and perhaps most
01:33importantly durable.
01:34And I think also important this quarter is going to be maintaining its gross margin trajectory.
01:39So we're seeing a lot of concerns out there in other markets because of rising input costs, most explicitly by
01:46bandwidth memory.
01:47And I think if NVIDIA is able to maintain a confident tone on hitting this low to mid 70 percent
01:54margin profile, I think that's going to serve two factors.
01:57One, it helps them show that they're able to manage these higher input costs and maintain their profitability.
02:05And two, you know, there's not really any meaningful competitive pressure yet from announced deals we've seen elsewhere in the
02:11AI compute space.
02:13Josh, only a little bit of time here left, but I mean, could we really even get any surprises today?
02:18We know what the hyperscalers are spending. We know that they've lifted CapEx.
02:21I only got a minute, but like surely what could even be a surprise in this report?
02:26I don't really disagree. I think it's going to be a very typical NVIDIA quarter with very good numbers and
02:33very bullish constructive commentary.
02:35And I would also note when you're thinking about the catalyst path, NVIDIA has its GTC investor event coming up
02:41in mid-March where they're going to probably want to hold news
02:44and spend more time on new product announcements, new partnerships, and speak more broadly to the AI ecosystem.
02:52So I don't disagree that the directional commentary shouldn't be surprising, but I think the numbers, and again, against the
02:59fact
02:59that the stock hasn't moved much over the last three months, just the sheer numbers could be good enough.
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