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Instant Reaction: Nvidia’s Upbeat Sales Forecast Shows AI Boom Remains Strong · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
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  Speaker 2: This is a breaking news update from Bloomberg, instant.
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  Speaker 1: Reaction and analysis from our three thousand journalists and analysts
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  Speaker 1: around the world.
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  Speaker 3: Let's go to actually the outlook first quarter revenue forecast
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  Speaker 3: beating estimates, the company saying for the first quarter seas
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  Speaker 3: revenue of seventy six point forty four billion to seventy
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  Speaker 3: nine point fifty six billion, that is easily above the
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  Speaker 3: street estimate of seventy two point seventy eight million. Let's
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  Speaker 3: go back to the fourth quarter data center revenue that
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  Speaker 3: coming in better than expected sixty two point three billion
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  Speaker 3: versus the street estimate of sixty point thirty six billion,
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  Speaker 3: and Vidia saying computing demand is growing exponentially. Fourth quarter
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  Speaker 3: adjusted gross margin we expected seventy five percent, We got
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  Speaker 3: seventy five point two percent. Fourth quarter revenue coming in
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  Speaker 3: overall sixty eight point one billion, better than the street
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  Speaker 3: estimate of sixty five point ninety one billion. Tim we're
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  Speaker 3: seeing that stock up now about two point two percent
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  Speaker 3: in the aftermarket.
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  Speaker 1: Yeah, just to remind everybody where we are with these numbers.
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  Speaker 1: The first the company ce's first quarter revenue coming in
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  Speaker 1: six seventy six point four four billion dollars to seventy
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  Speaker 1: nine point five six billion dollars. That beat estimates handedly
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  Speaker 1: handily of seventy two point seven eight billion dollars. As
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  Speaker 1: Carol mentioned in video, CEO Jensen Wong saying in a statement,
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  Speaker 1: computing demand is growing exponentially. We are also fourth quarter
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  Speaker 1: data center revenue worth repeating a beat there sixty two
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  Speaker 1: point three billion dollars the estimers for sixty point three
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  Speaker 1: six billion, and that gross margin coming in above estimates
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  Speaker 1: at seventy five point two percent.
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  Speaker 3: Our Sarah Friar on our live blog saying that chairs
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  Speaker 3: are growing up on that data center revenue beat. Hey,
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  Speaker 3: Ed Ludlow, come on in. I know you're looking at
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  Speaker 3: these numbers. What jumps out for you?
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  Speaker 4: Yeah, I mean, straight's the outlook. And by the way,
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  Speaker 4: I would have done the same thing. Go right there.
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  Speaker 4: You know, revenue in the fiscal first quarter seventy eight
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  Speaker 4: billion dollars plus le minus two percent, and you know,
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  Speaker 4: a consensus was really high. But like going into this,
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  Speaker 4: it's a very simple equation. There were many names from
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  Speaker 4: across sell side and buyside that said they wanted to
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  Speaker 4: see in Nvidia beat revenues overall in the current period
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  Speaker 4: in by the multiple billions of dollars, you know, against consensus,
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  Speaker 4: and so one thing I would say to confirm something
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  Speaker 4: is that the fiscal first quarter, which is the the
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  Speaker 4: April quarter, does not assume any compute revenue from China.
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  Speaker 4: In the outlook does not factor in any compute revenue
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  Speaker 4: of China. That I guess is something to check off
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  Speaker 4: the list. It was one of the questions we had.
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  Speaker 1: I want to bring in Jake Goldberg from Seaport Research
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  Speaker 1: partnering senior analysts your semiconductors and electronics. He joins us
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  Speaker 1: also from San Francisco. Anything in here that confirms your
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  Speaker 1: thesis or does it sort of go against the celerating
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  Speaker 1: that you have on in Vidia?
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  Speaker 5: Yeah, I mean it goes. I mean it's a good quarter.
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  Speaker 5: It's a good quarter on a good guide. It's above
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  Speaker 5: consensus above My expectations were good for them. Were still
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  Speaker 5: waiting to see a lot more detail.
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  Speaker 1: What do you want to see?
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  Speaker 5: I want to see, I want to hear more. I
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  Speaker 5: have to talk about gross margin for next quarter. I
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  Speaker 5: think that's going to be in the CFO commentary.
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  Speaker 1: Yeah, Ed jump in, Yeah.
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  Speaker 4: No, I don't have it yet, but it will be
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  Speaker 4: in the CFO commentary.
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  Speaker 1: Versus seventy five percent expectations, I mean, can can ed
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  Speaker 1: Can you use that as sort of a guide for
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  Speaker 1: for how the company could see first.
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  Speaker 4: Yeah, I mean on a basis point basis, Yeah, it
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  Speaker 4: looked like margins are impacted by a number of things.
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  Speaker 4: It has been a sell side question on prior calls
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  Speaker 4: the percentage of a server that Nvidia contributes to. And
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  Speaker 4: again what's changed in the period is in Nvidia starting
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  Speaker 4: to sell, for example, CPUs as standalone product, and that
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  Speaker 4: was a part of the meta deal that was included.
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  Speaker 4: They talked about core Weave being an early user of
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  Speaker 4: CPU as a standalone product. You know, how does that
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  Speaker 4: impact the margin profile going forward? But yeah, I mean
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  Speaker 4: what they do is they own more of the server
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  Speaker 4: and that has been one of the ways in which
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  Speaker 4: that they've got margins to where they are. And clearly
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  Speaker 4: being zero point two percent above you know, where where
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  Speaker 4: the hopes were is not a bad thing.
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  Speaker 3: Yeah, I'm looking at that CFO commentary. As we know,
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  Speaker 3: revenue expected to be seventy eight billion plus or minus
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  Speaker 3: two percent, and as you correctly pointed, out not assuming
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  Speaker 3: any data center compute revenue from China. In their outlook,
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  Speaker 3: gap and non gap gross margins expected to be seventy
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  Speaker 3: four point nine percent and seventy five percent, respectively, plus
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  Speaker 3: or minus fifty bases point inclusive of a one tenth
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  Speaker 3: of one percent impact from stock based compensation expense. Just
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  Speaker 3: looking at what else we have here, Operating expensive gap
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  Speaker 3: and non gap operating expenses to be approximately seven point
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  Speaker 3: seven billion seven and a half billion, respectively, including that's
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  Speaker 3: inclusive of one point nine billion of stock based compensation expense.
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  Speaker 1: A headline getting my attention is in Vidia says that
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  Speaker 1: hyper scalers were just over fifty percent of four Q
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  Speaker 1: data center revenue. Jake Goldberg, I want to repeat that
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  Speaker 1: headline for you, hyper scalers, We're just over fifty percent
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  Speaker 1: of fourth quarter data center revenue. Is that a sign
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  Speaker 1: that in Vidia is diversifying revenue? Who who made up
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  Speaker 1: the other half of data center revenue? Is it automakers?
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  Speaker 1: Like who's buying well?
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  Speaker 5: I think that's one of the most interesting things that's
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  Speaker 5: taking place with in videos is they're not just reshaping
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  Speaker 5: the semiconductor industry, They're trying to reshape the cloud computing
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  Speaker 5: industry as well. And that's why you see we see
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  Speaker 5: all these neoclouds getting investment from or support from in video.
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  Speaker 5: In Vidia would much rather have one hundred neocloud customers.
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  Speaker 1: Than three HYPERD scale customers, of.
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  Speaker 5: Course, and they're doing a really good job of creating that,
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  Speaker 5: willing that into existence.
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  Speaker 1: So those other customers had come on in here. Those
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  Speaker 1: other customers are like the core weaves and the other neoclouds.
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  Speaker 4: Yeah, I mean, what is still important in his fact
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  Speaker 4: is that obviously the vast majority has been the hyperscalers
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  Speaker 4: plus meta, right, and so they've wanted to kind of
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  Speaker 4: switch between a story what they used to call an
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  Speaker 4: AI factory. At first, an AI factory was an on
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  Speaker 4: prem data center that enterprises and maybe some of the
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  Speaker 4: neoclouds would operate themselves. Now an AI factory is what
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  Speaker 4: they you define any data center that's running AI workloads
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  Speaker 4: in so they have chopped and change between that story,
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  Speaker 4: but its origin was that they wanted to go beyond
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  Speaker 4: the hyperscalers to have people own their own infrastructure for
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  Speaker 4: AI workloads if they were say a software company or
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  Speaker 4: an enterprise of a slightly different size.
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  Speaker 2: You know, it's interesting.
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  Speaker 3: I'm looking for supply constraints and they seem to say
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  Speaker 3: in the CFO commentary, I'm seeing it in terms of gaming.
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  Speaker 3: They say, we expect supply constraints to be a headwind
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  Speaker 3: to gaming in the first quarter fiscal twenty twenty seven
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  Speaker 3: and beyond, but not so important, right ed. I mean,
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  Speaker 3: we want to really just see if that's a problem
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  Speaker 3: in the data center area.
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  Speaker 4: Sadly, you know my history within video, you know, before
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  Speaker 4: coming Silicon Valley and covering the data center thing was
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  Speaker 4: gaming and you know it's now such a small piece
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  Speaker 4: of revenue. It's I mean, Jay, you can jump in,
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  Speaker 4: but really it's not where anyone's looking right now. There
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  Speaker 4: is some discussion later on as it relates to the
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  Speaker 4: balance sheet and cash flow on things to do with supply,
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  Speaker 4: but you're right that what they're basically saying is that
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  Speaker 4: that was the gaming was the segment that was impacted,
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  Speaker 4: and I don't know that that is having any effects really.
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  Speaker 4: And how we see the stock trading in after hours, well.
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  Speaker 1: And Video shares up three point four percent right now,
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  Speaker 1: and in fact we're seeing Broadcom TSMC and Micron shares
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  Speaker 1: follow in video higher. Jake Goldberg come on in here
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  Speaker 1: and talk a little bit about the broader repercussions of
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  Speaker 1: a print like this outside of in video. What's the
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  Speaker 1: signal that it sends not just to hardware makers but
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  Speaker 1: to the entire market.
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  Speaker 5: I think there are always concerns about how long the
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  Speaker 5: spend is going to keep going, and we had certainly
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  Speaker 5: had some positive data points about that. Two weeks ago
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  Speaker 5: when the hyperscale is reported, Facebook reported they have very
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  Speaker 5: strong CAPEX numbers. This just continues that trend. And I
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  Speaker 5: don't want to say it's a rising tide that lifts
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  Speaker 5: all boats, but it's it is six seven hundred billion
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  Speaker 5: dollars in CAPEX this year, and that's going to spread
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  Speaker 5: across the entire ecosystem.
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  Speaker 3: No, and I want to go back to it, and
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  Speaker 3: I totally get like gaming non important, but I was
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  Speaker 3: like looking to see if there's any supply constraints in
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  Speaker 3: the rest of their universe, and I just thought it
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  Speaker 3: was kind of interesting that I haven't seen anything along
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  Speaker 3: those lines.
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  Speaker 2: It was just in regards to gaming.
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  Speaker 3: So is that a good sign that we haven't seen
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  Speaker 3: anything that the company has said so far in terms
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  Speaker 3: of supply constraints.
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  Speaker 2: Yeah, for the rest of the business, or I don't know,
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  Speaker 2: is it not that important?
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  Speaker 4: Well, you know, I leave it to the analyst to
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  Speaker 4: model money left on the table if there were any,
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  Speaker 4: so to speak. But given the outlook in terms of
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  Speaker 4: sales and where it came in relative to consensus, you know, Nvidia,
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  Speaker 4: it's an enviable position to be in right where demand
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  Speaker 4: exceeds your ability to supply anyway. But going back to
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  Speaker 4: that five year handbag analogy of a few moments ago,
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  Speaker 4: you know, the other argument that Jensen Wong and Video
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  Speaker 4: have made quite consistently is that if you tell your
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  Speaker 4: suppliers what you plan to do five years in advance,
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  Speaker 4: then the rest of the supply chain can help prepare
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  Speaker 4: with you and keep up. And you know recently that
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  Speaker 4: that's been most difficult in memory. But memory shows up
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  Speaker 4: in pricing, you know. And if you're Jensen Wong, I'm
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  Speaker 4: sure you can make a phone call and make sure
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  Speaker 4: that the corresponding high bandwidth memory that you need is
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  Speaker 4: there or thereabouts.
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  Speaker 3: Quick check on now ZAK one hundred many futures here
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  Speaker 3: in the aftermarket, and they're up about one point eight percent.
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  Speaker 3: So we're certainly seeing a lift to the overall market.
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  Speaker 3: Jay Gilbert, come on back in what's top of mind
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  Speaker 3: when we get to this conference call in terms of
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  Speaker 3: what you want to hear. I know we talked a
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  Speaker 3: lot about margins earlier, but what is it?
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  Speaker 5: Yeah, I mean, I think this margin stuff is important
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  Speaker 5: because what I'm sort of reading between the lines is
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  Speaker 5: they had to negotiate pricing with the memory memory makers,
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  Speaker 5: and the memory makers have the most leverage they've had
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  Speaker 5: in a decade, and we don't see any impact on
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  Speaker 5: in videous numbers. Compare that to pretty much any other
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  Speaker 5: electronics company out there today which is warning about memory.
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  Speaker 5: I'm sure they're in video is feelings some of that,
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  Speaker 5: but the fact that their gross margins are guiding to
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  Speaker 5: at least in line tells me that they're just going
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  Speaker 5: to price on those memory increases to their customers, which
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  Speaker 5: is a testament to their pricing power, to their power
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  Speaker 5: their market position.
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  Speaker 1: Jake Goldberg, Jay, we're gonna have to leave it there.
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  Speaker 1: We're going to give you time to get ready to
• 10:40
  Speaker 1: jump on that call. Jake Goldberger, Senior Analyst, Semiconductors and
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  Speaker 1: Allow Electronics for Seaport Research Partners. Once again, Jay, the
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  Speaker 1: only analyst tracked by the Bloomberg terminal who has a
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  Speaker 1: celerating on in video and want to give you the
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  Speaker 1: last word. You've spoken to Jensen Wong many many times.
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  Speaker 1: What's a question that you would have for him on
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  Speaker 1: the earnings call tonight?
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  Speaker 4: Yeah, Like, ultimately, it just always comes down to a
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  Speaker 4: projection of confidence that all of the stories we've been
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  Speaker 4: over in more than the last year is still intact.
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  Speaker 4: You know that the great buildout of AI infrastructure is early,
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  Speaker 4: that they have long horizon visibility into what's going on.
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  Speaker 4: All in video can control, I suppose, is the roadmap
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  Speaker 4: to go from one generation of compute to the next.
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  Speaker 4: And so they talk about in the CFO document margins
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  Speaker 4: being supported by the ramp up in blackwell and mix
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  Speaker 4: of new products. Well, when does that mixed change? When
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  Speaker 4: does Vera Rubin really kick in and then go beyond that?
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  Speaker 4: That's kind of how the street would look at it.
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  Speaker 2: I think, all right, we're going to live with there.
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  Speaker 6: Ed.
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  Speaker 3: We know you're busy as well. Ed Lovelo, thank you
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  Speaker 3: so much as we awaited those numbers then helping us
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  Speaker 3: break them down. Co host of Bloomberg Tech of course
• 11:50
  Speaker 3: on Bloomberg Television, Catch It at eleven am Wall Street
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  Speaker 3: time Monday through Friday. In the meantime, we've got chairs
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  Speaker 3: of Nvidia up about three point two percent. We're seeing
• 11:58
  Speaker 3: broad come up about three quarters of one percentage point.
• 12:01
  Speaker 3: Here in the aftermarket, TSM, Taiwan Semi up about one
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  Speaker 3: in a third percent, and you're seeing Micron also hire
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  Speaker 3: off its best levels.
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  Speaker 2: In the aftermarket. It's still up Tim about eight tenths
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  Speaker 2: of a percentage point.
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  Speaker 1: All right, we're keeping an eye on this. We know
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  Speaker 1: Charlie Pellett is keeping an eye on all this and more.
• 12:17
  Speaker 1: He's standing by in the Bloomberg Interactive brokers to studios
• 12:19
  Speaker 1: with a business flash.
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  Speaker 7: Hey Charlie, all right, I thank you very much. Tim
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  Speaker 7: and Carol keeping an eye as we recap and reset
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  Speaker 7: on in video. The stock hire after ours up by
• 12:28
  Speaker 7: three percent right now. It did give another bullish quarterly
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  Speaker 7: revenue forecast, signaling that the massive buildout of AI computing
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  Speaker 7: does remain on track. Chip maker said fiscal first quarter
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  Speaker 7: sale is going to be around seventy eight billion. That
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  Speaker 7: compares with an estimate of seventy two point eight billion
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  Speaker 7: in Nvidia is the world's most valuable company. Closely watched
• 12:49
  Speaker 7: shares up now by three percent, salesforce heading in the
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  Speaker 7: other direction after ours, stock down roughly five percent, out
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  Speaker 7: with a lukewarm outlook for sales growth in the new
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  Speaker 7: fiscal year, fueling while Street's worries that the software giant
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  Speaker 7: will lose out to new competitors in the age of AI.
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  Speaker 7: Other companies reporting earnings, Zoom Communications forecast adjusted EPs for
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  Speaker 7: two twenty twenty seven that guidance missing the average analyst estimate,
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  Speaker 7: shares down one point seven percent. Also reporting snowflake after Ours,
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  Speaker 7: the stock down two and a half percent. It gave
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  Speaker 7: an outlook for quarterly sales that was in line with estimates.
• 13:25
  Speaker 7: The Dow, the SMP, and Neztak all advanced today, s
• 13:29
  Speaker 7: and P up fifty six, wrapping up the Wednesday session
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  Speaker 7: at sixty nine forty six, a gain of eight tents
• 13:34
  Speaker 7: of one percent. Dow Industrial is up three oh seven
• 13:37
  Speaker 7: ups six tens, Nez Stack today up by one point
• 13:40
  Speaker 7: three percent, the Nestak one hundred index up today by
• 13:43
  Speaker 7: one point four percent, the Vics just falling below eighteen
• 13:47
  Speaker 7: with a ten year four point zero five percent spot
• 13:50
  Speaker 7: Gold up twenty six dollars, the ounce up by five
• 13:53
  Speaker 7: tens of one percent, fifty one seventy major move in
• 13:56
  Speaker 7: bitcoin today surging eight point one percent sixty nine thousand,
• 14:00
  Speaker 7: two hundred and forty five on bitcoin and finally beyond
• 14:03
  Speaker 7: Wall Street, Cuban forces killed four people today who opened
• 14:07
  Speaker 7: fire from a speedboat with Florida tags, an incident with
• 14:10
  Speaker 7: the potential to escalate an already ten standoff with the US.
• 14:15
  Speaker 7: Carolyn tim that is a Bloomberg business flash.
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  Speaker 3: All right, folks, we're watching in Vidia, Charlie, thank you
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  Speaker 3: so much for that breakdown on all of that. In
• 14:21
  Speaker 3: Vidia shares continuing to trade higher. A couple of headlines
• 14:24
  Speaker 3: also crossing that we want to bring to you, and
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  Speaker 3: Vidia says it's secured supply to.
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  Speaker 2: Meet demand for several quarters.
• 14:29
  Speaker 3: So we talk about supply constraints often when we're talking
• 14:32
  Speaker 3: about Nvidia and the AI demand. Also in Vida saying,
• 14:37
  Speaker 3: the United States granted a license to ship H two
• 14:41
  Speaker 3: hundred chips to China based clients, so they've granted a
• 14:44
  Speaker 3: license for specific China based customers. The US licenses to
• 14:49
  Speaker 3: ship small amounts of the H two hundred to China,
• 14:53
  Speaker 3: So we were looking for some clarification on its business
• 14:55
  Speaker 3: in China. Something that they've certainly been looking for.
• 14:58
  Speaker 1: We've got a great Bloomberg Intelligence roundtable, Mandeep's saying. His
• 15:00
  Speaker 1: global head of Technology Research for Bloomberg Intelligence. He joins
• 15:04
  Speaker 1: us here in the Bloomberg Interactive broker's studio. He covers
• 15:07
  Speaker 1: in Vidia, he covers Snowflake and more. Also, anurag Rana
• 15:10
  Speaker 1: is senior technology analyst for Bloomberg Intelligence. He joins us
• 15:13
  Speaker 1: from Chicago, and he covers a salesforce. So we're going
• 15:17
  Speaker 1: to talk software, We're going to talk hardware. Man, Deep,
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  Speaker 1: I want to start with your reaction to in Video.
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  Speaker 1: It was a beat it, I mean, a very good quarter.
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  Speaker 1: Your reaction to margin and what is actually holding up
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  Speaker 1: margins here because seventy five point two percent.
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  Speaker 6: Yeah, no mention of any impact related to memory costs,
• 15:35
  Speaker 6: which is surprising.
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  Speaker 1: And why is that surprising? I know memory costs have
• 15:38
  Speaker 1: gone up, but in Video is such a big company.
• 15:39
  Speaker 1: Don't they have pricing power? They do, but purchasing power.
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  Speaker 6: They clearly did a great job in terms of securing
• 15:46
  Speaker 6: that supply, and they don't have the premium. They don't
• 15:49
  Speaker 6: have to pay the premium that everyone else has to
• 15:51
  Speaker 6: pay on the hardware. Signe.
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  Speaker 1: They said, secured supply to meet the man for several quarters.
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  Speaker 1: What's several well, I mean in this case at least
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  Speaker 1: like the FED. This is like the FED.
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  Speaker 2: But they're saying that they've got it. That's a good thing.
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  Speaker 6: They have got it, and they're guiding to you know,
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  Speaker 6: mid seventy percent rose margin for next quarter as well.
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  Speaker 6: So clearly memory not you know, an impact at all
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  Speaker 6: in terms of the margins. The thing that is clear
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  Speaker 6: is they are selling you know, to existing customers, not
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  Speaker 6: just GPUs, but systems. And that's the big difference between
• 16:25
  Speaker 6: and in Vidia and AMD. AMD wants Meta to use
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  Speaker 6: their chips and integrate it right. Nvidia is actually selling
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  Speaker 6: their custom to their customers entire systems that have higher asps.
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  Speaker 6: They are helping them reduce the token costs and that's
• 16:43
  Speaker 6: where the customers don't mind paying that extra you know,
• 16:47
  Speaker 6: premium that in Vidia is charging because overall the total
• 16:51
  Speaker 6: cost of ownership is lower than if you were to
• 16:53
  Speaker 6: standardize on any other chips. And that's what's reflected in
• 16:56
  Speaker 6: their print is look, their customers see.
• 16:59
  Speaker 2: The so well done in video right by doing the whole.
• 17:02
  Speaker 6: Thing and the Blackwell architecture that's really taken off. I mean,
• 17:06
  Speaker 6: all the concerns around the migration from Harper to Blackwell.
• 17:10
  Speaker 6: I mean, they just prove that Blackwell will be probably
• 17:13
  Speaker 6: a bigger, you know product in terms of their chip architectures.
• 17:17
  Speaker 2: Does this in your mind?
• 17:18
  Speaker 3: I mean I always feel like you're like the calmvoice
• 17:22
  Speaker 3: of saying, the airspend is still happening, like everybody relaxed.
• 17:25
  Speaker 6: It's accelerating that.
• 17:26
  Speaker 2: But it's accelerate. That's what you're getting from this.
• 17:28
  Speaker 6: I mean, look at Nvidia's growth in the last fiscal quarter.
• 17:32
  Speaker 6: It was around mid sixty percent. They're pointing to seventy
• 17:36
  Speaker 6: seven percent growth in their fiscal one Q So that
• 17:40
  Speaker 6: goes to show and the proof point you can see
• 17:43
  Speaker 6: in the hyperscalar capex. The hyperscalar capex seems to be
• 17:47
  Speaker 6: going up as well. So it's underpinned by healthy fundamentals.
• 17:51
  Speaker 6: We know why. And Vidius top line is accelerating, right
• 17:54
  Speaker 6: because the kapex seems to be accelerating, and all these
• 17:57
  Speaker 6: points towards more inferencing, more for AI compute, and we
• 18:02
  Speaker 6: are hitting that phase where it's not just you know
• 18:06
  Speaker 6: about training or whether it will happen or not. It's happening.
• 18:09
  Speaker 2: So the ROI the usage right, We're seeing it.
• 18:11
  Speaker 6: The usage is happening, and companies are consuming the compute.
• 18:16
  Speaker 6: It's going to get reflected in the cloud revenue next quarter.
• 18:20
  Speaker 6: It's going to get reflected in all the possible forms
• 18:23
  Speaker 6: of where inferencing will show up.
• 18:25
  Speaker 1: We're gon we're going to bring on aurag In in a
• 18:27
  Speaker 1: second and talk Salesforce because I think that's a good
• 18:29
  Speaker 1: transition to talk about what companies are doing with AI
• 18:32
  Speaker 1: and the message at least that Salesforce trying to make
• 18:34
  Speaker 1: with agentic AI. But before we get there, maybe if
• 18:36
  Speaker 1: I do want you to weigh in on what Carol
• 18:38
  Speaker 1: mentioned earlier about the China business. H two hundred shipped
• 18:42
  Speaker 1: under a new program subject to a twenty five percent tariff.
• 18:45
  Speaker 1: Nvidia discloses US government in a ten K filing, granted
• 18:48
  Speaker 1: license by the US and February of twenty twenty six,
• 18:51
  Speaker 1: the US licenseship small amounts of H two hundred to
• 18:55
  Speaker 1: China for specific China based customers. What what is our
• 18:59
  Speaker 1: investing ADI? You need to understand about what it can
• 19:02
  Speaker 1: sell to China and the impact on that financially.
• 19:05
  Speaker 6: I mean it used to be China used to be
• 19:07
  Speaker 6: mid single digit percentage of in Vidio's overall data center revenue,
• 19:12
  Speaker 6: and Jensen has said China is about a fifty billion
• 19:14
  Speaker 6: dollars addressable market when it comes to you know, chips,
• 19:18
  Speaker 6: and so the fact that they're allowed to sell something
• 19:21
  Speaker 6: now to China doesn't mean it's going to grow at
• 19:24
  Speaker 6: the same rate as their overall top line, which is
• 19:26
  Speaker 6: you know, seventy seven percent, and that excludes the China number.
• 19:30
  Speaker 6: But it's all incremental revenue. And this print shows there
• 19:34
  Speaker 6: is just insatiable demand for Invidia's chips and whoever can
• 19:39
  Speaker 6: get it well buy it. So it's just a question
• 19:42
  Speaker 6: of whether in Vidio is willing to sell it to
• 19:44
  Speaker 6: them or not.
• 19:44
  Speaker 2: All right, so let's go to salesforce.
• 19:47
  Speaker 3: We do want to bring in our anarag Rana, senior
• 19:49
  Speaker 3: technology analyst a Bloomberg Intelligence.
• 19:50
  Speaker 2: He's in Chicago.
• 19:52
  Speaker 3: Shares of Salesforce anaragar Dad about four and a half
• 19:56
  Speaker 3: percent in the aftermarket. Some of the red headline that
• 20:00
  Speaker 3: we crossed on the Bloomberg Company in terms of the
• 20:02
  Speaker 3: outlook sees first quote a revenue.
• 20:04
  Speaker 2: Of eleven point zero three to eleven point zero eight billion.
• 20:07
  Speaker 3: That's above the street estimate of ten point ninety nine billion,
• 20:10
  Speaker 3: also increasing its share buyback authorization. Did fifty billion dollars
• 20:15
  Speaker 3: walk us through? Because this company has certainly been under
• 20:18
  Speaker 3: a lot of pressure. It's down about fifty percent since
• 20:20
  Speaker 3: late twenty twenty four.
• 20:23
  Speaker 8: So there are two things that are happening right now.
• 20:25
  Speaker 8: The first is, given so much spend going into AI,
• 20:29
  Speaker 8: the NONAI spending is the one that's under pressure, and
• 20:31
  Speaker 8: that is hurting companies like Salesforce, workday accenture, and so forth,
• 20:36
  Speaker 8: because companies have or the clients don't have that much
• 20:39
  Speaker 8: money to spend in terms of how they're allocating AI
• 20:42
  Speaker 8: spending versus NONAI. The second big piece right now is
• 20:46
  Speaker 8: the market's extremely worried about software companies getting disrupted by
• 20:50
  Speaker 8: all the model providers and all the AI native companies.
• 20:54
  Speaker 8: So Salesforce are getting hit by two different ways. But
• 20:57
  Speaker 8: the results, frankly, I mean I wouldn't say they were disappointing.
• 21:00
  Speaker 8: I would say they were stayble to inline in terms
• 21:03
  Speaker 8: of what they were saying they're going to do. So
• 21:06
  Speaker 8: from our side, you know, it is just going to
• 21:09
  Speaker 8: take some time to sort out.
• 21:10
  Speaker 1: So ANNI rog.
• 21:13
  Speaker 7: The question.
• 21:13
  Speaker 1: I think a lot of people have excuse me about
• 21:17
  Speaker 1: a company like Salesforce, and you know, we could go
• 21:19
  Speaker 1: through any other software company, not any other, but many
• 21:21
  Speaker 1: other software companies and ask you the same question is
• 21:24
  Speaker 1: about the threat from artificial intelligence. And Mark Benioff was
• 21:28
  Speaker 1: was very clear in the press release to say that
• 21:31
  Speaker 1: this is a company that has like relaunched, I don't
• 21:33
  Speaker 1: have the exact wording in front of me, but relaunched
• 21:36
  Speaker 1: as an AI and agentic AI company. Is is it
• 21:40
  Speaker 1: really under threat? And specifically like what is the threat
• 21:45
  Speaker 1: from Claude, from anthropic or from open AI that investors
• 21:49
  Speaker 1: are so worried about and is it warranted?
• 21:53
  Speaker 8: So the question is the answer to the if is
• 21:55
  Speaker 8: it warranted? I mean, I think we're going to take
• 21:57
  Speaker 8: some time to play out because if the models get
• 22:00
  Speaker 8: really smart, then why do you need a manufactured software
• 22:03
  Speaker 8: like this. That software can do a lot of what
• 22:06
  Speaker 8: you need to do in terms of managing your salesforce
• 22:08
  Speaker 8: or customer service. Now, the question is in our view,
• 22:12
  Speaker 8: when a company like Salesforce is there there are a
• 22:14
  Speaker 8: handful of their products that they have they have that
• 22:17
  Speaker 8: they sell into the enterprise, whether it's customer service, cloud
• 22:21
  Speaker 8: or sales automation cloud. Those are the ones I think
• 22:23
  Speaker 8: they have a little bit better position of not being disrupted.
• 22:27
  Speaker 8: But they have other visualization tools or some other smaller
• 22:31
  Speaker 8: products that you know, may not be the ones where
• 22:34
  Speaker 8: anybody would pay for it. So I think there is
• 22:36
  Speaker 8: a lot that needs to be done from Salesforce in
• 22:38
  Speaker 8: terms of adding more AI capabilities to its core product
• 22:42
  Speaker 8: and not be you know, change the narrative around it.
• 22:45
  Speaker 3: You know, the narratives have been so interesting on AI
• 22:49
  Speaker 3: as you really well know, looking at names like Snowflake
• 22:52
  Speaker 3: down about one point three percent here in the aftermarket,
• 22:54
  Speaker 3: we're talking about Salesforce and that stock just a real
• 22:58
  Speaker 3: quick rehash here on the Bloomberg seeing that stock still
• 23:01
  Speaker 3: down about four and a half percent here in the aftermarket,
• 23:03
  Speaker 3: and then of course you've got Nvidia up about two
• 23:05
  Speaker 3: point three percent.
• 23:06
  Speaker 2: You put out some great research.
• 23:08
  Speaker 3: This week, Anaog, you and the team about the haves
• 23:11
  Speaker 3: and have nots and AI disruption. What do we need
• 23:14
  Speaker 3: to know at this point, especially when everyone says, folks,
• 23:17
  Speaker 3: we're still early in on this.
• 23:18
  Speaker 2: We don't really know how it all plays out.
• 23:23
  Speaker 6: You know.
• 23:23
  Speaker 8: I think that's the most important thing is we are
• 23:25
  Speaker 8: very early in the inning. But at the same time,
• 23:27
  Speaker 8: you know, when people are worded daily entirely sell the
• 23:29
  Speaker 8: entire sector. We have seen that numerous times. So when
• 23:32
  Speaker 8: we looked at this thing, I mean the entire team
• 23:34
  Speaker 8: worked on creating a framework of you know, when we
• 23:37
  Speaker 8: see a company, does it have high market share? Does
• 23:40
  Speaker 8: it sell to very large companies versus smaller companies? Is
• 23:43
  Speaker 8: it a platform, is it a system of record? All
• 23:46
  Speaker 8: those things takes into account, you know, kind of the
• 23:49
  Speaker 8: history of a company. So let's say a company like
• 23:51
  Speaker 8: I SAIP that's been around for fifty years, you you know,
• 23:54
  Speaker 8: use it for your code, accounting, reason, supply chain. I
• 23:57
  Speaker 8: think something like that is better entrenched than a very
• 24:01
  Speaker 8: small company that's probably doing one particular function or selling
• 24:05
  Speaker 8: only to the small and medium customers.
• 24:08
  Speaker 3: Hey, final question here on Salesforce. Just going back as
• 24:11
  Speaker 3: we watch this stock down four point six percent, top
• 24:13
  Speaker 3: of mine. I know I always ask you guys this,
• 24:14
  Speaker 3: but when the call starts with the company and the
• 24:17
  Speaker 3: C suite and analyst and investors, what must be asked?
• 24:22
  Speaker 8: I think the biggest thing is going to be like,
• 24:24
  Speaker 8: how what are you doing to change the narrative around
• 24:27
  Speaker 8: them being disrupted by AI? And how are they adding
• 24:30
  Speaker 8: more AI capabilities across the entire suite?
• 24:34
  Speaker 2: All right, love it, Anirog, thank you so much, Anirog.
• 24:36
  Speaker 3: Grana his research certainly on the AI world and also
• 24:40
  Speaker 3: on salesforce.
• 24:41
  Speaker 2: We'll be looking for that later on today.
• 24:43
  Speaker 3: Anirag Grana, senior technology analyst at Bloomberg Intelligence out there
• 24:46
  Speaker 3: in Chicago,