Can you talk about that? What does it mean for NVIDIA in particular, which up 6% last week?

Yeah.

I mean, it seems to me it means more compute, right? Just more.

And this has been the story the whole way along, right? I mean, there's been a lot of angst about who's winning or losing in this kind of environment.

And I've said this probably on the show before, but my general view has been, is the opportunity big or is it not? And if it's big, I actually think there's room for plenty of folks to thrive and I mean, that's what we're seeing.

You've got NVIDIA thriving and Broadcom and I mean, even guys like Marvell and MediaTek and AMD.

And I mean, even Qualcomm, you talked about Qualcomm a little bit earlier.

Is the money already made?

So what part of last night did you find most compelling?

I mean, clearly it was the raise to next year.

I mean, it was a pretty strong beat and raise in the near term.

People expected that.

But I mean, they're guiding 70% revenue growth for next year.

For some context, I think at least the sell side estimates were up 44% off of a lower base.

So just a massive raise relative to prior expectations.

That's $10 trillion market cap.

So do you think that that last thing that you talked about, this credit issue, is bigger than the actual earnings or what the gross margin is? How much of the story is, is really resting on that?

Yeah, I, I don't think the story's resting on it, but, but I mean, the, the dollars that are looking to get spent are large.

Um, and there becomes this question of, of, of, of how to pay for it.

And I, I think all the questions of the returns and things that they can drive that in, in my mind are starting to get more and more settled in the favor of, of the idea that there is a return.

But some of the customers that are potentially looking to do this, they, they're, they're startups, even big startups, but, but they're startups.

And they don't have the kind of track record.

And, and so the fact that there is a backstop of, of the leases and other things I think can help that get going, I, I think is okay.

Why the underperformance? And even if they have another stellar quarter, what makes me believe that my money should be put into that stock that's underperformed drastically its peers?

Can the Helios stack actually chip away at, at Nvidia and its position in the market?

Well, be, be careful about chip away.

Like, are, are they taking share? Are they growing? Sure.

I mean, they're going from not very much to hopefully a lot.

At the same time, I mean, it's not like Nvidia and frankly, like, everybody is, isn't growing.

I mean, I mean, and I think I've said this here a number of times, but I still feel like the, the right question is not so much who's winning or losing.

It is the opportunity still big or is it not? I, I think if it's big, everybody should be doing great, and frankly, that's what we've been seeing right now.

What's your first question on the conference call?

And, and, you know, everybody-

everybody-You know, gets concerned.

We're down, I think the SOXX is down 25% or so off of its peak, but it- it's up well over 50%, almost 60% year to date, up almost 100% year over year.

And I almost feel like if we'd gotten here like monotonically, like smoothly, like everybody would feel fine, but that's wishful thinking.

It never happens like that.

We always overshoot and undershoot.

Where I still get a little bit of comfort though is, is the fundamentals I, I think still look fine.

And, and what about KLA Corp? That also has, uh, earnings to come.

Is that just because it's had such a big year or something else?

Yeah, and it's maybe a little of both.

And you have to remember, it's not just that it's down.

It, it was up, you know, 10% or so i- in the after market at one point, so it's like a 15 point swing off of where it was.

And, and it was up that much at first because you're, you're right, like the numbers were really good.

It was actually a fantastic, uh, quarter on a reported basis.

Um, I actually think it, it's, it's two things that are causing this.

Do you like the new quieter, a little more humble Intel under the helm of Lip-Bu Tan?

I mean, i- is that just investors speculating, having a lot of fun with these more obscure names? I mean, why are they so excited about a random name in, in, in a, in a bottlenecked up, uh, sector versus like, you know, NVIDIA?

You know, it really has been about earnings.

And, and frankly, even with the space up 100% year to date, if you sort of like de- decompile it into the drivers, you know, probably 70% plus of that performance has actually been earnings growth.

So like mul- multiples in the space are up, and I won't say that like the space overall is expensive, but it's not egregious.

And by far and away the earnings so far year to date have grown much more than the valuations have.

And some of these bottlenecks we've just seen massive revisions.

I mean, take, take memory for example.

It seems like one of the most important question for semis and therefore for the entire market, because they make up a fifth of the [laughs] entire market, is will this last? Specifically these incredible, uh, uh, earnings, which are largely a result of huge demand leading to huge prices, and the question then becomes, is this a one-off? Is this cyclical, which is a big question in the semis business, or has something fundamentally changed and are earnings just going to skyrocket or at least be at this level forever? What do you think?

What do you think?

Yeah, I don't think it's a question of demand, but I mean, we're looking at things like the memory guys, you know, memory prices are just going through the roof and people are looking at, for example, what percentage of that is going to be taken up by the hyperscale capex and people worry that things like that are going to hit returns and does it slow spending down and all of that.

I think you also have others.

I think OpenAI came out.

There were some rumors that maybe they're looking to push the IPO out and like all of a sudden.

So there's a lot of concerns about peak spending and AI demand and AI return and all of that.

So I think that's part of it.

Yes.

I mean, Stacey, what does the if the president is right and he's going to turn it around and make this happen? What does it mean for Intel and for the prospects of building chips in the United States?

A few things.

So I should say that this Apple rumor has been around for a while.

It's been reported multiple times.

So it's not an incredible surprise.

Although I said if Trump is going to tweet it out or truth it out, I guess that's as close to official confirmation as we're probably going to get.

So fine.

How much more room is there to run and how much of it will be driven by headlines like what could be coming down the pike?

Yeah.

I'm bullish on the, on the GPU and the ASIC side.

Um, I figure ASICs probably will take share.

You're coming from a lower base, but they're not universally used.

ASICs tend to, or custom chips tend to be used for what I would call large, stable, internally developed workloads.

So large because it's expensive, so you need to have a lot of workload volume to amortize that, that over in order to make it cost effective.

Stable, because like, like that's the trade-off.

Right.

Please do.

[laughs] You can think about, um, CPUs as doing computations sort of serially, like one after the other, right? Um, you can think about a GPU as doing computations in parallel.

So for example, a, a lot of these, um, compute chips have compute different ... a, a certain number of compute cores on them.

Like, they've got different-Pockets of transistors on the chip that can handle logical operations.

And a CPU might have anywhere from, you know, a few cores to a few hundred cores on it, depending on what that thing is y- is, is being used for.

A, a laptop chip or a server chip or whatever.

GPUs would typically have thousands of cores on them.

Yes.

Uh, your take on the numbers.

Yeah, no.

So the reason it's down, I, I don't think it's the quarter, whi- which was fine.

It was, like, uh, in line and maybe margins a little better.

Um, and the guidance, the revenue guide overall is a little above the Street.

They guided 29, 4.

Street was at 28, 6.

Within your coverage universe, where does Broadcom stack up?

W- what did you see that led you to do it, albeit 15 bucks, 315 from 300?

300?I, I mean our, our earnings went up.

Uh, it was a, it was actually a great print, right? I mean, so it was a really solid beat and raise.

I know the stock's, it's down a little bit, but it's, it's basically doing, you know, most of nothing in, in, in the trading today.

But I mean it, I think the, the guidance sort of met or, you know, maybe even exceeded a little bit the whispers.

People wanted to see a 90 billion plus guide.

They guided 91.

... that people are taking all of this in- thi- this incredibleness for granted?

Um, and you also don't wanna be wearing it if the company turns in a dud, and nobody believes that that's gonna happen, correct?

Uh, uh, I, I think the numbers should be fine.

Um, and I, I think some of the, the whisper numbers you put up earlier were, were correct.

This is a stock people typically wanna see it, you know, it's beat by two to three, raised by two, three, maybe four.

Um, that would take us to an 81 to 82 kind of for the quarter and a 90 billion-plus, uh, uh, for the guide, and I, I think that's where expectations are.

Um, I think you need to also remember, you, you, you talked about this 1 trillion, you know, Blackwell Rubin, uh, for '25 through '27.

If you just do the math, that suggests, you know, a data center number just for Blackwell and Rubin next year of something close to $500 billion.

Isn't, isn't that a, a risk in, in any way?

They do, might do things like autos and all up and down the value chain, but it's created a pull across the whole ecosystem.

To, to be fair, every- everything in semis almost looks like it's part of the AI trade.

And frankly, AI I would say is, is, has gotten s- so big it's sort of dragging everything along with it.

You know, AI needs, needs accelerators and GPUs, but it needs lots of other things as well, and sort of one at a time they've been getting dragged into the fold.

You know, we, we went from accelerators and then we went to semi cap and then we went to memory and then we went to optical and then we went to power semis and, and, and now it's like, more recently it's CPUs.

Um, so almost everything in, in s- In fact, if you look at the group, semis as a group are up almost 70% year to date.

They're up almost 50% since March.Since earnings started.

You know, when does that earnings momentum begin to slow?

Um

UmFirst, there's been a real appetite to play other names, I think, in the AI supply chain.

And frankly, AI is now getting so big that it's dragging everything along with it, right? You know, it started with the GPUs and the accelerators, you know, a year or two years ago or whatever.

And then one at a time, different other end markets that are more peripheral to it but important for it, um, have come into focus.

I mean, we went from the GPUs and accelerators, and then we went to memory, and then semi-cap, and then optical, and then power semiconductors, and, and, and more recently, CPUs.

And so one at a time, um, as demand has grown and grown and grown, it, it's sucked a lot of these other things into it and driven unexpected upside.

These, these were not, uh, areas that investors broadly were looking at for upside from the AI trade.

I mean, people talked about GPUs, and then suddenly CPUs are hot, and now memory chips are hot, and suddenly everyone decides, "Oh, we're very excited." But to your point, I mean, if the fundamentals are there, if the earnings growth is there, and if on an earnings multiple it's actually gone down for a lot of these names, then maybe it's, it's, it's not too much of a concern, and maybe that means that there actually is still more room to run despite the fact that we've seen these ridiculous charts.

What was your takeaway here?

You have to remember also, you know, it was up 40% into the print over the last three weeks as, as well.

So this thing has had a pretty big move.

And, and, and look, as, as you said, we, we've admitted this, we, we're, we're late.

We, we tend to be late to the party on, on this stock in general.

It, it is what it is.

What, what really got me is, you know, we've been warming to it.

So at what point do investors and traders reconcile the massive valuation gains we've seen against what the potential could be to realize those gains?

But what are your expectations after Christina set us up pretty well?

Yeah.

I mean, those are the things that we're, that everybody's looking for.

And, uh, look, I think the numbers should be pretty good, um, especially given after Intel's report and what we're seeing in the market around server CPUs in particular.

I think the big question is really gonna be around capacity.

Does AMD actually have enough capacity secure at their foundry partners to drive material upside to numbers that are already, like, fairly aggressive, at least in the near term, on servers? The other thing we'll be watching is the trajectory of, of the, uh, the A- the AI business, especially the MI450, uh, ramp into the end of the year.

My own opinion is at least on the sell side, the consensus numbers do not really seem to have incorporated Meta all that much.

... parabolic charts?

But after earnings, have you changed your mind at all?

I think so, look, I th- I think the, the, the bull narrative has, has the run right now for sure.

And, and it, and it's a few things.

You know, the, the CPU, the server CPU story has, has really been pushing, as well as some of their competitors.

It's sort of been this rising tide now.

And, and, and that demand for, for traditional server chips on the back of agentic AI and other things does, does look real, and they are benefiting from that.

Um, given where, where it's trading, it, it's, it's even hard, you know, even giving a lot of upside for that, I think it's hard to justify where it is.

it doesn't appear that out of whack, but I'm just curious to get your more, your historical perspective here on this group.

... how big its market cap can get?

Well, I, I mean, like, uh, so part of the reason the stock has been, you know, somewhat stagnating is, is investor expectations have kind of already been there.

But, but even that being said, you know, I'm at, I count, 12 bucks or something next year.

Um, and so the stock's 15 times on, on, on my calendar 27 number.

Um, y- you gotta really wonder, like, how much more can the multiple compress, especially since they re- are really showing no signs of slowing down.

They are still accelerating.

At, at some point, just on the earnings growth, I, I think this thing has to, has, has, has to work.

Are they a real player conceivably in the future in that?

Did that guidance, did it wow you in any way?

Uh, no, the, the guidance is great.

So, like, so the, the, the quarter was, was a, a modest beat and actually it had a couple of hundred million dollars upside.

It's all coming from, from the AI business.

The guide was, was very strong.

So they guided 22 billion.

It's, you know, a billion and a half, two billion above the street, and it looks like it, it's all coming from, from AI.

Uh, how is it being viewed?

... hear from Jensen tonight?

Yeah, y- you bet.

So you're, you're right.

We do, we do expect the numbers to be fine.

He's not walking around, you know, like a CEO who's worried about his quarter, and clearly all the supply chain checks su- suggest, like, massive demand.

I think the worry is you, you, you look at where Nvidia's trading versus, like, some of the other names in memory or semi cap or whatever, and there's, there's a pretty big divergence there.

People do seem to be worried that we're approaching, you know, call it like a local peak in spending given the magnitude of the hyperscale, you know, the, the, the dollars and everything that are getting spent this year.

Mm

What were your big takeaways from your time that was spent there just now? I mean, as an investor, what does it make you think?

Yeah, you bet.

So, look, at least Nvidia has zeroed out China from the numbers.

And so anything they get is upside.

And if there's demand and they get purchase orders, I think they can secure supply and ship that.

But I do think, at least as an investor, over the long term, I think you have to discount, you know, like the long term viability of China for all of these guys.

That's not new, right? That was already, I think, the view before.

Are they delaying, you know, bringing capacity online or what have you because there's not enough supply, which is incredibly bullish or because there's not enough demand, right?

Yeah.

... th- th- it pushed out a little, but it's still there.

Um, again, the storage guys are ripping because the memory prices are going through the roof because there, there's so much, um, uh, uh, there's a s- a lack of supply relative to demand.

Um, all we've seen from the hyperscalers is, is cap ex numbers going up and up and up and up.

Like, nobody can get enough compute right now.

Yeah.

... at one point? I, I mean, it, it's a lot, right? And so, you already are wondering, can he actually deliver on that or, or, or not? And, and those are valid questions.

And, and I, by the way, I wouldn't, I wouldn't count Altman out.