00:00I'd say the biggest takeaway, obviously, is kind of the revenue numbers that you guys had just alluded to in
00:05terms of expectations for 70 percent growth next year from mid 40s.
00:10And, you know, I think what's happening right now is a number of factors.
00:13One, hyperscalers are planning to spend much more than maybe we previously anticipated.
00:18You know, I think Nvidia pointed to about $1.3 trillion next year, and that was about $200 billion above
00:24our expectations or forecast for next year.
00:26So I think that's kind of a big driver.
00:29And also, you know, what you're actually seeing away from the hyperscalers, those neoclouds plus Musk is kind of the
00:36bucket I would throw it in.
00:37And that's actually growing faster than the hyperscalers.
00:39And I think it's helping to really kind of diversify Nvidia's broader business.
00:44And then, you know, what I would also say is the content growth story.
00:49And that's the biggest reason why we have been bullish here over the last couple of years continues to exceed
00:55our expectations.
00:56So we see no signs of that letting up as we kind of look here over the next couple of
01:00iterations.
01:01And then, of course, I mean, I'd say the one blemish was the margin issue out there.
01:07But that being said, they are going to increase pricing as we go into, you know, calendar 2027.
01:13And that, you know, clearly is supporting that 70% growth trajectory and helping to kind of maybe ease some
01:19of those pressures and stabilize the margins going into next year.
01:22But, Angela, let's talk about some of the possible hurdles for Nvidia and for growth going forward.
01:27I mean, are they too dependent on a small group of tech giants like the hyperscalers as customers?
01:33And then also remember, some of these customers are increasingly developing in-house chips that could potentially take business away
01:40from Nvidia.
01:42Yeah, no, absolutely.
01:43You're absolutely right.
01:44And I'd say the competitive pressures are out there.
01:47And, you know, we used to look at Nvidia even after the monster move today.
01:51You know, I would say that the multiple remains compressed based on some of those concerns, some of the competitive
01:56pressures out there.
01:57Maybe some of the circular financing concerns that are out there as well.
02:02But as far as the competitive dynamics and the customer base is concerned, the good thing is we are starting
02:08to see and there are signs that that customer base will diversify going into next year.
02:14Essentially, you know, Nvidia pointing towards more of a 50-50 split as we go into next year.
02:20And that kind of helps alleviate maybe some of the concerns from a customer concentration perspective.
02:26But that will remain for the foreseeable future.
02:30But in the same respect, listen, when you think about Nvidia's ecosystem supporting about 6 million developers or so, those
02:38hyperscalers will need to continue to spend.
02:40I will just say this.
02:41Maybe the growth rate from the hyperscalers going into next year, let's call it closer to 50%.
02:46Whereas maybe for some of the non-hyperscalers, those neoclouds, you'll see significantly higher growth, let's call it closer to
02:5590% to 100%.
02:56Angela, one of the concerns out there for Nvidia specifically, but I think just for the AI space in general,
03:03is some of the circular funding structures that are being created out there where maybe Nvidia is funding some of
03:11its customers in various formats.
03:14What does the company say about that?
03:16Did they address that last night?
03:18They did.
03:20You know, they actually, I think for them, it's an area of strength.
03:23And in many respects, it is, right?
03:25I mean, historically, when you kind of look at the competitive advantage that Nvidia has had, it has been that
03:30CUDA software, right?
03:31And now it's not just CUDA.
03:33It's also the fact that they've got some massive scale.
03:36They're generating massive free cash flow.
03:38You're looking now at a $200 billion run rate.
03:40This time next year, it'll probably be closer to a $300 billion free cash flow run rate.
03:44And they're pumping a lot of that right back into the ecosystem.
03:47Essentially, what they're trying to do is build out, be a supporter and growing out that AI infrastructure,
03:54because without them, it's going to be nearly impossible to do for them to kind of go out there and
04:00support the ecosystem.
04:01They're helping to kind of lower the cost of capital.
04:03And they're actually allowing these these neoclouds to succeed.
04:08So in many respects, they're they're going to participate in terms they're going to benefit in the sense that they're
04:14going to get that hardware revenue.
04:15They're also going to potentially get revenue in terms of and enjoy the upside from the actual sales within those
04:24data centers.
04:25But it is a risk.
04:26It is absolutely a risk if we get to a point where we overbuild and Nvidia is sitting there with,
04:33you know, having built too much capacity as well.
04:36So there are pluses and minuses to all this.
04:39Angelo, how much is Nvidia doing all of this and just wowing us with their numbers without China?
04:45Because there still are restrictions on Nvidia doing business there, right?
04:49How important is gaining more access to the Chinese market for Nvidia's growth?
04:54Yeah, I mean, you would have thought it would have hurt them by now.
04:57I mean, to be honest with you, yeah, right.
04:59It was, I think, 1% of their revenue in terms on the data center side or less than 1%.
05:04So virtually no revenue coming from China at this point in time is all upside.
05:10But at some point in time, listen, it's going to be an issue for them as the growth rates here
05:16in the U.S. eventually have to slow down.
05:18And we'll see how successful, you know, we kind of get this open source versus closed, you know, model debate.
05:24But as you kind of see more and more token growth and success from the Chinese market, I think you're
05:31going to see greater, you know, maybe greater concern or motivation from Nvidia to try to get the U.S.
05:39government to get some of their, you know, more of their chips into China.
05:42But at this point in time, they're going to have to do it without China because there's no way, you
05:48know, we think the U.S. government is going to allow that to happen.
05:51Angelo, from a competitive perspective, what is the biggest threat or challenge to Nvidia?
05:56Is it the other chip makers, the Broadcoms, the AMDs of the world, or is it some of their customers,
06:00as Alexis was suggesting earlier, that may be developing their own chips internally?
06:06I think it has to be some of their customers at this point in time in the sense that they're
06:12going to have to continue to purchase Nvidia's servers.
06:16That's not going to stop.
06:17But what it can do in terms of, you know, some of these hyperscalers developing more of their own internal
06:23chips is it will slow eventually and get to the point where, you know, Nvidia's growth rate will start to
06:30level off and really mature.
06:31So I think that is the biggest risk at this point in time.
06:34But keep an eye out.
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