Latest / Best of Business / Sam Dickie: Fisher Funds expert on Nvidia's third-quarter earnings surpassing expectations

Transcript

Sam Dickie: Fisher Funds expert on Nvidia's third-quarter earnings surpassing expectations · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. There'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on
• 0:15
  Speaker 1: iHeartRadio seven Heller Duper see Allen.
• 0:18
  Speaker 2: So the chip macon Vidio has announced. The age of
• 0:21
  Speaker 2: AI is in full steam. The companies announced its third
• 0:24
  Speaker 2: quarter earnings today, beating expectations for sales and earnings, and
• 0:27
  Speaker 2: Sam Dickey from Fisher Funds is with us on that. Hey,
• 0:29
  Speaker 2: Sam good ebbed right, So tell me about the result.
• 0:33
  Speaker 3: Another astonishing result on the face of it. So they
• 0:36
  Speaker 3: almost doubled revenue to thirty five billion in profits more
• 0:40
  Speaker 3: than doubled, and importantly, as you said, it was more
• 0:42
  Speaker 3: than five percent better than already lofty expectations that analysts
• 0:46
  Speaker 3: had and their key data center business, where by they're
• 0:49
  Speaker 3: selling their accelerated computer chips into data centers like Google Cloud,
• 0:53
  Speaker 3: for example. That grew one hundred and twenty two percent.
• 0:56
  Speaker 3: So all well on.
• 0:57
  Speaker 2: The face of it, and the stock price did what.
• 1:01
  Speaker 3: Not fabulously It closed about two and a half percent
• 1:03
  Speaker 3: after hours despite the strong results. So it is a
• 1:05
  Speaker 3: reminder that the bar for this company is punishingly high.
• 1:10
  Speaker 3: In other words, there's a lot of good news in
• 1:12
  Speaker 3: the share price.
• 1:13
  Speaker 2: Okay, Now, obviously everybody's looking at this not just about
• 1:15
  Speaker 2: the performance of one company, but what this means for
• 1:18
  Speaker 2: the tech sector and what it means for AI. So
• 1:20
  Speaker 2: what are you taking from it?
• 1:23
  Speaker 1: Yeah, there's no dore.
• 1:24
  Speaker 3: There's a huge amount of money pouring into AI, and
• 1:27
  Speaker 3: in fact, a huge amount more than was expected just
• 1:30
  Speaker 3: a few weeks ago. But what is super interesting is
• 1:33
  Speaker 3: you've got to remember the vast majority of these in
• 1:35
  Speaker 3: vidio chips have been sold to companies like Microsoft and
• 1:37
  Speaker 3: Google and Amazon, who are re renting out those chips
• 1:40
  Speaker 3: to thousands of smaller companies who are racing to find
• 1:43
  Speaker 3: the next big AI use case and the one that
• 1:46
  Speaker 3: we will all pay for, as we've talked about before.
• 1:48
  Speaker 3: So to that end, in video seeing most excited about
• 1:50
  Speaker 3: AI agents. So AI agents to replace call centers and
• 1:55
  Speaker 3: cour center people, AI agents to automate everyday work streams,
• 1:58
  Speaker 3: and Video is talking about billions of agents over the
• 2:01
  Speaker 3: next few years. And the other thing that's taking off
• 2:04
  Speaker 3: again right now is industrial robotics and a growth theory.
• 2:09
  Speaker 3: But the potential for the robots and factories and surgical
• 2:12
  Speaker 3: robots to learn and get better and more precise is
• 2:14
  Speaker 3: increasingly is increasing exponentially. And if you're taking Chuit of
• 2:18
  Speaker 3: Surgical for example, they've got near one hundred percent markets
• 2:22
  Speaker 3: here in soft to robotic surgery. Their new robotic system
• 2:26
  Speaker 3: is learning so fast and in time it's going to
• 2:28
  Speaker 3: be able to perform simple operations like stitching up the
• 2:31
  Speaker 3: wound after a gall bladder operational by itself.
• 2:34
  Speaker 2: Now, I mean the thing is it's been it's been
• 2:36
  Speaker 2: somewhat disappointing, you know, the our adoption, consumer's adoption of AI.
• 2:40
  Speaker 2: So do you think it's going to pick up from here?
• 2:42
  Speaker 3: Yeah, the consumer adoption has been poor and we talked
• 2:45
  Speaker 3: about this last time. So was it going to be
• 2:48
  Speaker 3: the an upgrade cycle on iPhones because of the new
• 2:52
  Speaker 3: Apple intelligence? And that doesn't look like people are prepared
• 2:54
  Speaker 3: to pay extra two or three hundred bucks a phone
• 2:56
  Speaker 3: just for a smartest sery. And then of course the
• 3:00
  Speaker 3: large language models themselves, and there are people that pay,
• 3:02
  Speaker 3: you know, twenty bucks a month for Perplexity or Chatchiti
• 3:05
  Speaker 3: or whatever. But I don't think that's going to kind
• 3:09
  Speaker 3: of fill that yawning gap between the amount of these
• 3:12
  Speaker 3: accelerated compute chips that are being sold by in video.
• 3:15
  Speaker 3: So it looks like corporate. So the new big buyers
• 3:19
  Speaker 3: of AI and this is this is this AI agent
• 3:22
  Speaker 3: story I'm talking about. So if you can sadly replace
• 3:26
  Speaker 3: lots of people with an AI agent and a call
• 3:28
  Speaker 3: center that's as good, if not better, then that makes
• 3:32
  Speaker 3: sense for a corporate Okay, so.
• 3:33
  Speaker 2: What do you tell me what you're making of the
• 3:34
  Speaker 2: sport investors, Sam.
• 3:37
  Speaker 3: It seems like the AI bonanza continues unchecked, and there
• 3:41
  Speaker 3: are a few things to keep an eye on those.
• 3:43
  Speaker 3: So the revenue guidance for next quarter, and that was
• 3:46
  Speaker 3: one of the reasons why the stock was a bit weak,
• 3:49
  Speaker 3: was only kind of in line with the expectations, so
• 3:50
  Speaker 3: not a bar as we've become accustomed to. And the
• 3:53
  Speaker 3: other thing that in Nvidia talked about was the profit
• 3:56
  Speaker 3: margin guidance. So the margin they're making on this incredibly
• 3:59
  Speaker 3: big revenue number is just a bit soggy. So they're
• 4:02
  Speaker 3: ramping a new a new generation of chip called the
• 4:05
  Speaker 3: Black World chip, which has got exceptional performance, but it's
• 4:08
  Speaker 3: just not quite as profitable in the early days as
• 4:11
  Speaker 3: the previous chips. So a couple of things going on there.
• 4:13
  Speaker 3: And then of course these AI use cases. Let's keep
• 4:16
  Speaker 3: our bad eyes peeled on the next killer AI use
• 4:19
  Speaker 3: case to fill that yawning gap between you know, three
• 4:23
  Speaker 3: point seven trillion dollar valuation of Nvidia and the much
• 4:27
  Speaker 3: less lower number of the amount of dollars were prepared
• 4:31
  Speaker 3: to pay for AI.
• 4:32
  Speaker 2: Your very very good point there, Sam, Hey, Thank you
• 4:34
  Speaker 2: appreciated that. Sam Dickey Official.
• 4:36
  Speaker 1: Funds For more from News Talks at b Listen live
• 4:39
  Speaker 1: on air or online, and keep our shows with you
• 4:42
  Speaker 1: wherever you go with our podcasts on iHeartRadio