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Greg Smith: Devon Funds Management expert on Nvidia's record sales · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZEDB. Follow this
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  Speaker 2: Right now, the most valuable company in the world has
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  Speaker 2: reported its results today. Its market cap is more than
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  Speaker 2: three trillion dollars. It's California based computer chip manufacturer in
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  Speaker 2: Nvidiat reporting sixty nine billion New Zealand dollars in revenue
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  Speaker 2: for the first three months to January twenty six. That
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  Speaker 2: is a record number for the company, which means it's
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  Speaker 2: probably a record number for the world and better than
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  Speaker 2: forecast we're predicting. Greg Smith is with Devin Funds. He's
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  Speaker 2: the head of retail Greg Good Evening.
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  Speaker 3: Good Earning Ron.
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  Speaker 2: So what are they doing. Well, there this new chip
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  Speaker 2: that they've got high uptake for that.
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  Speaker 3: Yeah, that's right, these high performance high tech chips. So
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  Speaker 3: they say it's all about AI. Demand sells up nearly
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  Speaker 3: eighty percent, as you said, and this the growth has
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  Speaker 3: slowed down if you go over the past yet was
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  Speaker 3: sixty five percent goeck a year ago as two one
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  Speaker 3: hundred and sixty percent is slowing down a bit, but yeah,
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  Speaker 3: it's there's certainly sort of kicking goals in terms of
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  Speaker 3: the demand for their chips. There's no denying that, and
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  Speaker 3: that's really been reflecting the ship. I should look at that.
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  Speaker 3: It's up nine since early twenty twenty three and the
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  Speaker 3: only company worth more in the world of Apple, and
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  Speaker 3: it's worth thirty times more than the entire value about
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  Speaker 3: stock market. So not bad for a company that was
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  Speaker 3: founded in ninety ninety three over a coffee at a Denny's.
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  Speaker 2: Is Apple back ahead of it? Because the video was
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  Speaker 2: ahead of Apple? Is Apple back out in front now
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  Speaker 2: are they?
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  Speaker 3: Yeah? That's right. This would have been sort of jostling
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  Speaker 3: for position a bit. But Apple, of course is also
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  Speaker 3: on the AI trainers are all the big tech they're
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  Speaker 3: hoping that that sort of drives the next round of
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  Speaker 3: upgrades in their in their iPhones. But in the video,
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  Speaker 3: that controls around about eighty percent of the AI market,
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  Speaker 3: So you're seeing the likes of Amazon, Meta, Microsoft, Google,
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  Speaker 3: they are all customers. It's all about this exponential growth
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  Speaker 3: of the cloud as well. Yeah, you think chat, GPT
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  Speaker 3: and those sort of AI models. They require these high
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  Speaker 3: performance So look, there's no denying demander seeing and you
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  Speaker 3: can actually argue that even at three point two trillion
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  Speaker 3: US dollars. It's not expensive, so it's trading on evaluation
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  Speaker 3: of around thirty times, and so give you an idea.
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  Speaker 3: Fridg and Plogal healthcare in New Zealand is very nearly
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  Speaker 3: fifty times and it's growing at a slower rate. But
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  Speaker 3: I guess the key thing to arts rhyme will be
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  Speaker 3: are they going to have it their own way and
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  Speaker 3: in fin item, which is possibly not the case. And
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  Speaker 3: one real interesting thing that people might have heard off
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  Speaker 3: of this new Chinese startup deep Sea and are basically
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  Speaker 3: claiming that you don't need these high performance chips that
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  Speaker 3: in video producers to run their AI model. So that's
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  Speaker 3: not proven yet, but yeah, if that does prove to
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  Speaker 3: be the cation, and it could be really have really
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  Speaker 3: strong implications for in video.
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  Speaker 2: People are still a bit skeptical about that claim at
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  Speaker 2: this point, and I think it's fair to say investors,
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  Speaker 2: but what about the fact that they're now making more
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  Speaker 2: off their data centers than anything else?
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  Speaker 3: Oh? Absolutely, and yes it's ninety one percent. Look said,
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  Speaker 3: in video have been around a long time. You know,
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  Speaker 3: they've been around since the early nineteen nineties, so you
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  Speaker 3: know it's really only the last few years that they've
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  Speaker 3: been seeing some explosion and growth from data centers and
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  Speaker 3: in fact it's risen tenfold over the past two years.
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  Speaker 3: So that's that's where really where all the growth is
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  Speaker 3: coming from. You know, these the data centers that used
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  Speaker 3: to sort of have and company buildings are sort of
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  Speaker 3: now moving away from that, and that's sort of what
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  Speaker 3: it's all about. And you know, we're seeing the likes
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  Speaker 3: of big tech. You know, obviously we've seen them in
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  Speaker 3: New Zealand as well. There's been a real proliferation of them.
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  Speaker 3: So that's you know, in Vidio's writing it, and you
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  Speaker 3: can't argue that they're seeing the demand. I guess the
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  Speaker 3: thing will be on the other side and how these
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  Speaker 3: big tech companies actually monetize this. So that's probably going
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  Speaker 3: to be the next interesting thing. And you know, some
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  Speaker 3: are perhaps rightly comparing this to what happened in the
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  Speaker 3: dot com boom. And yeah, some of the old enough
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  Speaker 3: to may remember that the biggest company in the world
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  Speaker 3: was Cisco. You go back that time is actually we'll
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  Speaker 3: get double micro Soft now that's still around, and they
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  Speaker 3: used to they produced routers, and that was going to
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  Speaker 3: be the next big thing there currently valued that a
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  Speaker 3: couple of hundred billion news stallars. So yeah, things can change.
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  Speaker 3: You can go from being a darling to a not
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  Speaker 3: so darling. So but for now and video is simply
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  Speaker 3: riding away.
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  Speaker 2: Yeah, interesting and we'll see what the Chinese have got
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  Speaker 2: to say about it. Thanks Greg, Greg Smith, Devin Funds,
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  Speaker 2: head of Retail.
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