00:00Let me bring in now Matt Maley, Chief Market Strategist for Trading and Financial Services
00:05firm Militaback & Co. Hi there, and thanks so much for joining us.
00:10$96 billion in revenue just for one quarter. It's an eye-watering amount.
00:15Does it cement the dominance of NVIDIA?
00:20Hi, Sally. Yes, it certainly does.
00:23Because the question is, is this going to be something where they'll lose some sort of dominance in the future?
00:34With them providing the first time, really the first time ever, giving forward full-year guidance
00:41and it being as strong as it is, it certainly shows that their dominance isn't going to be tested anytime
00:46soon.
00:47But at the same time, we do have to be careful about what's going on with the rest of the
00:51group.
00:52Because, you know, I just noticed that the SOX Semiconductor Index is only up about a percent and a half.
00:58And that even though, as you guys just mentioned, that Taiwan Semiconductor and Broadcom are doing better today,
01:08most of the rest of the group isn't doing all that much.
01:10So, you know, if you start to worry about this, if NVIDIA has too much dominance
01:15and what kind of an impact that will have on other firms.
01:19You know, it is a question how long NVIDIA can hold on to its dominance
01:23because some of its largest customers are increasingly designing their own chips.
01:28Do you think that one day will actually threaten NVIDIA?
01:32It certainly, I think it will, yes, to answer the question.
01:35You know, the question is when.
01:37And, you know, there's this problem, you know, where they're the vendor, the financier, the investor.
01:44Not only that, they're the guarantor of a lot of the debt that's involved in this area.
01:49So that's a big concern.
01:51Now, you know, they keep talking about, well, they're very complicated
01:55and it will take a lot of money for these vendors, you know, the hyperscalers,
02:01to equal what NVIDIA can provide.
02:04But they have a lot of money at their hands.
02:06They also have a lot of ability to raise more debt because they're AAA or AA rated.
02:12So the fact that I think that they'll play catch-up a lot faster than NVIDIA is saying right now,
02:16but we'll have to see.
02:17I want to raise another issue.
02:20It's another concern, and that is around potential circular financing.
02:24Some investors call NVIDIA the central bank of AI because it's supporting so many startups,
02:32which are also its customers.
02:34Jensen Wang says this is not a problem.
02:36We've got to support these startups.
02:37They need tons of money to get going.
02:40Do you see it as a problem?
02:43Well, you know, again, having lived through the dot-com bubble and the aftermath,
02:48I do worry about it.
02:49And there certainly are some similarities to what, you know, Cisco was doing at that time.
02:53Now, I do believe that NVIDIA is in much better condition than Cisco was back then.
02:59However, it does raise questions about how, you know, how much demand do they really have out there?
03:05How inflated are these circular programs making the, you know, how much are they inflating these demand numbers?
03:14And, you know, so it's definitely something that we need to worry about because, you know,
03:19they aren't picking up demand from anywhere new.
03:23It's still, yes, these hyperscalers keep adding to their, raising their demand forecast,
03:29but the problem is they're not making any money from it, at least not making much.
03:35So until they get that ROI up, at some point they're going to have to pull back on that demand.
03:39And so that does concern me with NVIDIA.
03:42All right.
03:42Thank you so much for chatting to us today.
03:44That's Matt Maley, Chief Market Strategist for Trading and Financial Services for Miller Tobacco & Co.
