Latest / Felix Nikolas Prehn's Podcast / Felix Prehn - How Nvidia Just Flipped the Market | DON’T SAY YOU DIDN’T KNOW + Stock Market News 12 September 2024

Transcript

Felix Prehn - How Nvidia Just Flipped the Market | DON’T SAY YOU DIDN’T KNOW + Stock Market News 12 September 2024 · Felix Nikolas Prehn's Podcast

• 0:00
  Speaker 1: on a glorious post-NVIDIA rally day, and I'm going to walk you through exactly what happened, what NVIDIA said from the horse's mouth at Goldman Sachs, because they were at a Goldman Sachs conference where the news broke.
• 0:15
  Speaker 1: We're going to look at that.
• 0:16
  Speaker 1: We're also going to, of course, look at jobs data out today, inflation data out today and yesterday and everything else driving the market and making my collar crooked.
• 0:24
  Speaker 1: I also want to say a big thank you to all of you for your very kind messages these last two days.
• 0:30
  Speaker 1: If you didn't know, one of my kittens sadly passed away, which is heart-wrenching, really, and continues to be, but I'm very happy to be distracted.
• 0:40
  Speaker 1: So I appreciate you today more than ever for giving me an opportunity to think about something else.
• 0:47
  Speaker 1: So here is the Goldman Sachs report from yesterday, which was the conference on communucopia I've never seen that word before, I think they made that up and tech conference.
• 1:07
  Speaker 1: They just wanted to sound smart and we've got the key quotes not just from Jensen Huang, but also from the likes of Peter Thiel and everybody else out there who really matters in this space.
• 1:21
  Speaker 1: So I'm going to walk you through that and that'll make you better informed.
• 1:24
  Speaker 1: Help you understand what's going'll make you better informed, help you understand what's going on here better and therefore hopefully help you make better decisions in the market, which is always my intention here.
• 1:32
  Speaker 1: So let me get a little highlighter here.
• 1:33
  Speaker 1: So Huang highlighted the long held view that Moore's law is no longer delivering blah, blah, blah.
• 1:40
  Speaker 1: You noted that the acceleration of the $1 trillion data center infrastructure installed would drive growth over the next 10 years as it would deliver material performance improvements and a cost savings.
• 1:54
  Speaker 1: So basically, he's got a trillion dollars of NVIDIA chips or something like that out there not just chips, but data center expenditure and these guys are going to have to keep updating that to keep up with the latest and greatest in terms of energy saving and power saving and everything else.
• 2:15
  Speaker 1: And guys appreciate all the kind messages there Chad, bernard, peter, fred, eileen Ridge, beata, mike.
• 2:21
  Speaker 1: Appreciate that.
• 2:22
  Speaker 1: Lost to BKK.
• 2:24
  Speaker 1: You're not getting an email today.
• 2:26
  Speaker 1: Strange, strangest things have happened, though.
• 2:30
  Speaker 1: Drop a message to support on Trade Vision and I'm sure we'll sort you out.
• 2:36
  Speaker 1: Aruna, thanks very much as well.
• 2:38
  Speaker 1: I'm lucky I've still got two kittens, and Winston.
• 2:43
  Speaker 1: Winston's sad as well.
• 2:44
  Speaker 1: They're all sad.
• 2:45
  Speaker 1: Winston didn't want to play with his friends this morning, which never happens, and they're all kind of walking around and sniffing all the places she used to sit and stuff.
• 2:52
  Speaker 1: Yeah, it's horrible, but you do get so much love from them it is worth it.
• 2:59
  Speaker 1: It's just in the moment really.
• 3:00
  Speaker 1: Yeah, some of you know what I'm talking about.
• 3:03
  Speaker 1: So customer ROI, he's saying that this is actually.
• 3:04
  Speaker 1: This is you know what I'm talking about?
• 3:05
  Speaker 1: So customer ROI, he's saying that this is actually.
• 3:08
  Speaker 1: This is kind of what made the market really rally yesterday.
• 3:10
  Speaker 1: He said that even though buying a GPU so graphics processing units compared to an Intel CPU, will increase costs by about two times, it's more expensive to buy because NVIDIA makes insane margins.
• 3:24
  Speaker 1: But in the case here of a Spark system, which is a big data analytics engine, essentially the net cost benefit could be as large as 10x for an application like Spark, given the speed, and up to 20x.
• 3:41
  Speaker 1: So basically, if you're running any kind of data system, you will save 10 to 20 times your money if you use an NVIDIA GPU versus a CPU, which is why Intel is digging a grave, so insane.
• 3:57
  Speaker 1: And also he's saying hyperscalers your Microsofts, your Googles, your Amazons and so on.
• 4:02
  Speaker 1: They can generate $5 in rental revenue for their cloud services for every $1 spent on NVIDIA's infrastructure.
• 4:09
  Speaker 1: So there you have it Case closed, right.
• 4:13
  Speaker 1: Close the book, walk away.
• 4:14
  Speaker 1: The math is done.
• 4:15
  Speaker 1: People are going to keep buying NVIDIA GPUs.
• 4:17
  Speaker 1: Why the heck wouldn't they?
• 4:18
  Speaker 1: Because the cost saving is insane.
• 4:22
  Speaker 1: The return on investment is 5x.
• 4:27
  Speaker 1: What's there to argue about?
• 4:27
  Speaker 1: Pilar and Lin-Min Tong there, appreciate that.
• 4:40
  Speaker 1: Clap my dog and Chris and guys, you're very kind, I appreciate that and yeah, thanks for the distraction today.
• 4:44
  Speaker 1: Today's been a bit of a challenge really, but yesterday was the bigger challenge.
• 4:48
  Speaker 1: And and then next, last but not least, actually not last at all.
• 4:54
  Speaker 1: I don't know why I said that.
• 4:55
  Speaker 1: You know what a motus right?
• 4:57
  Speaker 1: How hard is it for the um, the heathens, to break into the nvidia castle?
• 5:03
  Speaker 1: So how hard is it for amd or intel or arm to scale up the castle walls and steal the princess?
• 5:13
  Speaker 1: Well, he says that the large installed base of GPUs across multiple platforms, with their software compatibility, the ability to augment the hardware with software and the ability to build let me scroll down, I've got the second page of those too rack-label systems and innovate across various chips just means people are not going to want to screw up their entire system and replace it with something, because they'll just buy the new NVIDIA chip which will be more efficient.
• 5:45
  Speaker 1: It'll save you more money on energy or performance or whatever.
• 5:49
  Speaker 1: It is.
• 5:49
  Speaker 1: So quite powerful, what he's saying there.
• 5:54
  Speaker 1: And then on supply chain, he's saying he's sort of being kind to TSMC.
• 5:59
  Speaker 1: We wouldn't have been able to do it without.
• 6:00
  Speaker 1: But he does say and this is important NVIDIA has adequate in-house intellectual property to shift manufacturing without material disruption, should they be required to do so.
• 6:12
  Speaker 1: So he's basically saying if you need us to move all manufacturing, say, to the US, because a certain orange creature requires that, then you could do that or for whatever other reason.
• 6:24
  Speaker 1: So that's quite powerful.
• 6:26
  Speaker 1: Again, that he basically says we've got the tech, we've got the knowledge.
• 6:29
  Speaker 1: We could do it somewhere else.
• 6:31
  Speaker 1: We could do it without TSMC if we had to.
• 6:33
  Speaker 1: Wouldn't want to, but we could.
• 6:35
  Speaker 1: That's important.
• 6:37
  Speaker 1: And then the Blackwell schedule, which is the next generation of chips.
• 6:40
  Speaker 1: He's saying we are shipping them and their financial quarters in Taiwan are bizarre, don't get me started on that.
• 6:50
  Speaker 1: They're shipping it in the fourth quarter of this year Really weird.
• 6:54
  Speaker 1: And they'll scale those into their financial year 2026, which is our 2025.
• 6:59
  Speaker 1: I don't know why Taiwan is upside down and demand is strong and it gets better than that actually in terms of quotes, and then here's just a valuation from those guys.
• 7:10
  Speaker 1: But let me show you the there's a bit more to it and, yeah, we continue to make money.
• 7:16
  Speaker 1: I haven't actually traded the last few days, although I've probably only one trade open or something like that right now, which is sometimes what you need to do, but you see that little rally there.
• 7:24
  Speaker 1: That was the market the week.
• 7:26
  Speaker 1: The market crashed last week.
• 7:27
  Speaker 1: So why do we make money?
• 7:29
  Speaker 1: Because we actually close out trades that are profitable in those moments.
• 7:33
  Speaker 1: So so far, our system this year has delivered.
• 7:37
  Speaker 1: If I had a pen I'd write it out.
• 7:39
  Speaker 1: I don't, but here I do.
• 7:40
  Speaker 1: So far, our system has delivered a $28,000 profit on a $30,000 portfolio, which I think is pretty good.
• 7:50
  Speaker 1: So if you want to learn how we do that, I'll teach it to you completely for free.
• 7:54
  Speaker 1: It's coming.
• 7:55
  Speaker 1: I want to say Tuesday the link's down below felixfrensorg slash bootcamp.
• 7:59
  Speaker 1: It'll take 90 minutes of your life and you'll see, you'll walk away with that whole knowledge base because, well, you deserve to understand how it actually works, and so you're no longer gambling out there.
• 8:09
  Speaker 1: So come and join me.
• 8:10
  Speaker 1: So let's have a look at an NVIDIA chart then and draw on a couple of important lines.
• 8:14
  Speaker 1: So first of all, let me zoom in a little bit here.
• 8:19
  Speaker 1: We had a very nice bounce off the 150-day moving average line, and that is a line that traders like me watch.
• 8:27
  Speaker 1: Then we have up there that yellow line.
• 8:29
  Speaker 1: That's the 50-day moving average line, and that is a line that traders like me watch.
• 8:29
  Speaker 1: Then we have up there that yellow line.
• 8:30
  Speaker 1: That's the 50 day moving average line.
• 8:32
  Speaker 1: We're at the cusp of that.
• 8:34
  Speaker 1: We're sort of, you know, making out with it.
• 8:36
  Speaker 1: We want to break through that.
• 8:37
  Speaker 1: And then there is a little bit more to it, because we have one, two, three highs and if you simply draw a line through those highs, something like that, that's your downward trend and you're going to want to break through that.
• 8:57
  Speaker 1: So in reality you're probably looking at $125 plus before the traders go all right, we're in.
• 9:08
  Speaker 1: Some people will be a little bit more cautious.
• 9:10
  Speaker 1: They'll wait for that high here, which will be 130.
• 9:12
  Speaker 1: So you break through those levels and the party's back on, and then, yeah, okay, you have a little bit of resistance here and there, but that's kind of less of a big deal.
• 9:20
  Speaker 1: So very, very nice move there from NVIDIA, which helps keep the whole AI party alive.
• 9:40
  Speaker 1: Alex, you're very kind.
• 9:41
  Speaker 1: Um, garfield, no, not garfield.
• 9:43
  Speaker 1: I was also thinking of a cat.
• 9:44
  Speaker 1: Um, yeah, my, my, my little cat she had.
• 9:47
  Speaker 1: She had a lovely life, it's true, but um, it's never.
• 9:51
  Speaker 1: You know, when you spend 18 years with a creature every single day, and I, I, you know I work from home, if you call this work and, um, so I'm here all the time, so I wake up at breakfast with her, she's there in the day and she naps and she bosses around the staff in the kitchen and she's kind of running the house really.
• 10:07
  Speaker 1: So it's, yeah, it's just a big like gap really that, you know, isn't there.
• 10:15
  Speaker 1: But then we have Sergey Brin, man who'll always cheer you up.
• 10:19
  Speaker 1: He says AI is the most exciting technology he's worked on in his career.
• 10:24
  Speaker 1: Mr Google, all right.
• 10:28
  Speaker 1: Benioff at Salesforce is going all in on agents, so sort of co-pilots.
• 10:33
  Speaker 1: He's spending all of his time working on agent force another strong signal that AI is really going to change the world.
• 10:39
  Speaker 1: And Peter Thiel, paypal mafia sort of godfather.
• 10:44
  Speaker 1: He's fairly close with Elon Sam Altman and Zuckerberg venture capital chap, and he said that clearly all of the economics so far have gone to Nvidia.
• 10:56
  Speaker 1: But who's going to be the next major winner, and I've been saying this now for about a year that I think the next major winner is software.
• 11:05
  Speaker 1: So you really going to want to look at what software is out there that's actually AI driven, that's actually good, that's really delivering value.
• 11:13
  Speaker 1: Is it Microsoft?
• 11:14
  Speaker 1: Is it meta with their ads?
• 11:16
  Speaker 1: Who is it?
• 11:17
  Speaker 1: Who's really there first making money out of it?
• 11:20
  Speaker 1: So Peter Thiel says they asked him who's going to be the major winner.
• 11:23
  Speaker 1: He said they're first making money out of it.
• 11:24
  Speaker 1: So Peter Thiel says they asked him who's going to be the major winner.
• 11:26
  Speaker 1: He said whoever I spoke to out of Zook, elon and Sam last.
• 11:31
  Speaker 1: They're all very convincing and I think he's probably right there.
• 11:35
  Speaker 1: It's probably all three of them in reality.
• 11:39
  Speaker 1: Facebook, because it's the biggest publisher in the world, biggest advertiser company in the world, and advertising is all about showing you, the consumer, the most relevant ad.
• 11:51
  Speaker 1: If I know everything about you and I can process all that data, which is an insane amount of data Facebook basically has a Facebook pixel on pretty much every website in the world, so they pretty much track your movements through the World Wide Web perfectly.
• 12:05
  Speaker 1: So they haven't been able to use all that data because it's just too much freaking data.
• 12:09
  Speaker 1: But if they know that, I don't know.
• 12:12
  Speaker 1: You went online and you tried to buy tennis shoes on that website on Amazon, and then you went to another shop.
• 12:17
  Speaker 1: What if they could then show you that relevant ad on that page, right, Like a little bit what PayPal is talking about and I'll put a video on that in the next few days and Elon, of course, autonomous driving robots, everything else.
• 12:29
  Speaker 1: And then you know Sam Altman, okay, openai, microsoft, sort of by extension.