The Six Five team discusses NVIDIA Q1 FY25 earnings.
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Transcript:
Patrick Moorhead: Break down NVIDIA Q1 FY’25 earnings for us.
Dan Ives: I mean, it’s essentially… That’s a masterpiece that they should hang that in the room. Because everywhere you look, 6 to 10 to 15% ahead of buy-side risk expectations. And if you look from a chip perspective, it’s not slowing down, it’s accelerating. I would almost say, they had to do the split, otherwise you’d be looking at $40 of EPS earning in ’25, ’26. I mean, it could get almost Twilight Zone types of numbers. And I think the reality is that, look, we just had our Taiwan checks, we just came back in terms of our Asia checks, it’s showing, basically, through the end of next year, we’re essentially sold out. And I think there were some fears about double ordering and things like that. As the godfather of AI, Jensen, talked about, none of that, right?
Patrick Moorhead: Yeah.
Dan Ives: And you guys see it first hand, but if you don’t get these chips, you’re in the back of the line.
Patrick Moorhead: Yeah. Yeah, that’s right. So, hey, Dan, what do you think about this? So if I look at the print from July of last year, they’re beat by 30% on EPS, 22% on revenue. And here we are, NVIDIA only beat 10% on EPS, and only 6% on revenue, so the beats are declining. Is that because Wall Street analysts, folks like yourself, are getting better at the expectations or something different?
Dan Ives: Numbers came up 15% during the quarter. So essentially now what’s happening is, every week, as everyone does their trips, numbers go up. You could be like buy-side risk expectations are ramping further and further up, but we’re not even there. In other words, I think… Investors that I talked to, you’re now starting to do some scenarios to be like, “Okay, I don’t think that we see any sort of slowdown for another 4 to 6 quarters.” And under that assumption, that’s why it goes back… When people are like, “Oh, it’s expensive, and the stock…” Look, I think so many investors that have missed every transformational growth theme from Amazon, to Microsoft, to Tesla, Meta and many others, it’s getting too caught up in just the street evaluation on next year. I think you’ve got to look out next three years. And I think next three years, we’re talking NVIDIA, we’re talking three trillion and four trillion, is not…
Daniel Newman: So Kelly Evans asked me that when I went on, like, “Could it be four?” And I said, “At this point it could probably get to five.” I mean, realistically, at the run rate, it could happen. And the interesting thing is though, Dan, and I’d love to get your take on this though, is it feels like it’s all clear. Literally, they’re flying at 48,000 feet, there’s no… Do you see any of the people that kind of claim to be competition as actually meaningfully being able to compete anytime soon?
Dan Ives: I mean, that won’t happen until mid ’26 at the earliest. So to your point, Jensen’s flying that plane, and investors, they’re sitting in 3A drinking a Cabernet, watching Netflix, doing really good about where that’s going. That’s why and also betting against it, you’re betting against a force that we haven’t seen since the mid-90s start of the internet. The only difference is, look at the actual profitability in those margins. And I think the bigger story here, and you guys do a great job always talking about it, and obviously see it for your clients, if someone told you Dell was an AI play six months ago, you guys were there, but others, they’d be like, “What?” So now, look at ServiceNow, Oracle, start to go down the list, it’s not just Microsoft and NVIDIA. So I think we’re really going to start to see a rereading, as well as numbers go higher across the rest of tech.
Patrick Moorhead: Totally agree on that. And Dan, on the competitive front, let’s just say that over two and a half years, you’re looking at a $400 billion market, and it is possible for NVIDIA to have stratospheric growth, and by the way, Intel and AMD can grow at the same time, in addition to some of the competition from AWS, Azure, and Google doing their own accelerators. Is that the way you’re kind looking at this, “Hey, there’s going to be competition”? ‘Cause AMD is getting traction, Intel next year will have its own GPU, but it doesn’t even mean that it would take NVIDIA off track.
Dan Ives: It’s not going to take them off track. We’re talking about demand they can fill. Now, look, if I’m betting on someone, it’s Lisa Su and AMD, that’s going to… If there’s another player I’m betting on, I have confidence that they will get some of that overdraft, but it’s essentially overflow.
Patrick Moorhead: Yeah.
Dan Ives: And the reality is-
Daniel Newman: No, I was just going to say, there’s a market to be had though by being the overflow. It’s funny, Dan, I use the analogy of, NVIDIA sits right now where Intel sat at its peak for computers, meaning-
Dan Ives: Yep that’s true.
Daniel Newman: … at its peak, where it has a multi-decade lead, it could literally screw up for the next 12 years and still have 70% of the market. ‘Cause I mean, look, that’s what’s happened with… In a really broad brush, Intel has had a really tough decade, and still has majority share of certain architectures. The problem is now the architecture’s changing.
Dan Ives: And the problem right now, the godfather of AI, Jensen, sitting in his office, the dark office with his black weather jacket, and people were coming in, “Jensen, can I get just a little piece?” He’s like, “Eh, we’ll see you in a year and a half.” So by being the godfather of a fourth industrial revolution, betting against that on valuation with your 10 spreadsheets, tough bet.
Daniel Newman: Well, the only thing I guess that’s interesting for folks like us, Dan, is we have to try to see the things that happened a little bit before everyone else sees them, that’s what makes us any good at what we do. I think we all have our claim to fame wins. I always point back to July, ’22, I went on, and Becky Quick was hitting me on why I was still saying NVIDIA when it was at 150, and it was burning, and I go, “Look, do you believe in AI or you don’t?” I said, “I believe in AI. They’re the only company right now that’s got the whole stack. It’s going to run.”
Dan Ives: Also, you guys, I actually… When you say that’s your cream, I actually think, in my view, where you and Patrick have been so ahead, it’s not just on that, it’s names like Dell, the IBM rereading, if you look, ServiceNow in some… See, I feel like you’re some of the only ones else out there that you were three steps ahead, and that’s starting to come through. ‘Cause it’s not just about NVIDIA, it’s about the ripple effect. ‘Cause I think what’s fascinating now is the second, third, fourth derivatives playing out. You guys have just been road warriors, I feel like… Every set, I’m like, “How could they be at another user conference?”
Patrick Moorhead: Yeah. Hey, Dan. I just want to thank you. It’s funny, Dan and I love to talk about ourselves, and pat each other on the back, but coming from you, that means a lot. I mean, listen, the thesis we threw out almost 18 months ago, it’s going to start in the hyperscaler data center, it’s going to move to enterprise IT, which also pulls with it enterprise SAS AI. And then, by the way, it’s going to the AI PC, look at Qualcomm’s numbers-
Dan Ives: I know.
Patrick Moorhead: … all-time high. And we’re going to see… By the way, the next step-
Daniel Newman: It was an all-time high too, by the way, Pat.
Patrick Moorhead: Exactly.
Dan Ives: Yeah.
Patrick Moorhead: And then, Dan, after this, it’s going to be the AI smartphone.
Dan Ives: No, exactly. That’s it.
Patrick Moorhead: Yeah. Apple.
Dan Ives: Exactly.
Patrick Moorhead: Yeah.
Dan Ives: Just so you know, from our perspective, 18 months ago, where you feel like you’re like a lone wolf just with a thesis, I actually… All the work that your team does, as someone that I super respect, I would look at the stuff you’re talking about to triangulate what I’m doing, because I think it’s important, where… And we’ve all been there, when you’re in markets where everyone’s saying, “You’re a clown, You’re crazy.” But I’d be like, “Okay, look, if I’m in Asia on a two-week trip, and I’m seeing it throughout the supply chain, you could see that from the 10th floor of your office building. I’ll go with my data. You go with your data.”
Patrick Moorhead: Exactly. No, that’s great stuff.
Daniel Newman: Oh, hey-
Patrick Moorhead: Yeah, go ahead, Dan.
Daniel Newman: Oh, no, we’ve got maybe a minute or two, Pat, then we’ve got to roll, and Dan, thanks so much. You’re heading to the studio, or are you heading to the office?
Dan Ives: I just came back, in between then a podcast and stuff.
Daniel Newman: Oh.
Dan Ives: No, but I was super excited to… All the work that you guys are doing, it’s phenomenal. ‘Cause when I think AI revolution, we’re all going to be a part, and to be a part of this journey with you guys is going to be awesome.
Daniel Newman: So next week, we sit down… Our big event, the summit, love for you to give it a shout, Dan, if you ever get the chance, or Six Five. We’ve got Bill McDermott as our main keynote, we’re going to be sitting down with him in the office next week. What should I ask him? What should I tell him? That, “Dan Ives wanted me to ask you…” What should we ask him?
Dan Ives: When you have to go there, ask McDermott, be like, “Look, you’ve seen everything the last 30 years, where does this compare, whether it was mid-’90s, early…” I mean, the guy’s seen everything, from Oracle days, to the cloud shift, to PC. I think it’s for him to separate how real is this versus hype. And I think when it comes from his mouth, the credibility there… It’s a drop the mic when McDermott talks. ‘Cause I think, in my opinion, in that Mount Rushmore of tech CEOs, of course, Godfather of AI, Jensen, Nadella, Cook, team McDermott’s up there, man, they’re starting to etch it.
Daniel Newman: Well, I don’t know, Pat. I mean, look, we should do this again. We should have you back. What’s the next… Apple? Is that-
Dan Ives: WWDC. Yeah.
Daniel Newman: So maybe we can get you to chime back in for WWDC.
Dan Ives: Yeah.
Daniel Newman: No, Pat and I, we pick on Apple more than others. We even can come in and kick our ass for it, because we’ve been a little harder on them than… You just came out and basically said they’re going to get this next trend right, so I guess-
Dan Ives: But they deserve that. Now, you have 2.2 billion reasons in terms, come out and now have the renaissance of growth. And I view Apple as where I viewed Meta ET months ago.
Patrick Moorhead: And listen, Apple is going to be amazing if they can leverage their platform for the AI iPhone. And they’re going to do that, I mean, they’re not going to lose share. I mean, their biggest thing is reducing the replacement cycle for your phone. And imagine if they would do that by a year. Run those numbers, Dan.
Dan Ives: And right now, the New York City cab driver that I just… They’re bearish on Apple.
Patrick Moorhead: Right. I love it. Hey, Dan. Thank you for joining us. This is great. By the way, keep your eye on Taiwan next week at Computex. Dan’s going to be there, but there’s going to be a lot of announcement. Qualcomm, Intel, AMD are all bringing out new stuff there. By the way, all three CEOs will be there, including your AI godfather, Jensen Huang.
Dan Ives: And now Moorhead’s going to start wearing the sunglasses these user conferences.
Patrick Moorhead: But you’ve got to take-
Dan Ives: I’ve got to give me credit. When you start wearing the sunglasses, and you start wearing the sunglasses indoors…
Patrick Moorhead: Buddy, I’ve got to tell you-
Daniel Newman: Nobody does it like McDermott.
Patrick Moorhead: Dan, the future is so bright-
Dan Ives: McDermott’s the G.O.A.T. He’s top of there, come on-
Patrick Moorhead: The future is so bright, Dan, I’ve got to wear these non-Stop. Anyways, Dan Ives, thanks buddy. And you take care.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
