The Six Five team discusses NVIDIA Q2FY25 Earnings with Special Guest Dan Ives
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Transcript:
Patrick Moorhead: Dan Ives, let’s start off with you. Talk to me about earnings. What are your thoughts?
Dan Ives: Look, I get in terms of people who will pick about whisper numbers for the October quarter, and to me, it’s a masterpiece. In other words, there’s no way that you could deny this revolutions happening. And I think it’s not just about the numbers that they put up in terms of $30 billion, $32.5, that’s probably going to be closer to $34 billion. Blackwell, Dewey’s, all the sort of noise. Put that to rest, my stock takes a little breather, it gets hit a bit. I think it goes higher. I think it goes into all-time highs and this thing gains steam because the most important thing, and I think you guys have talked about it, it’s derivative. Second, third, fourth, what does it say for Salesforce, ServiceNow, Palantir, Microsoft, Oracle, hyperscalers? It’s a trillion dollars of CapEx. It’s the fourth industrial revolution. You come off that call, I think it’s more of a, you get the popcorn ready and now it’s waiting for the second, third, fourth derivatives.
Daniel Newman: Yeah, and I’ll double down on that. I’ve talked about network effects. I’ve said we’ve seen net zeros, net one, so all the designers, chip manufacturers, everybody involved in the semiconductor supply chain should be doing well. The ones that are going to do well are doing well. And then, you’ve got this flow out, the OEMs, we’ve seen some boom bust. They’ve got to figure out how to add more value, make more money, but they’re getting the opportunity by being attached. The Dells and HPs, it’s up to them to figure out how to attach the services. The layering of the cake with the devices we just talked about with the applications, talked about ServiceNow, Raptor, the Now Platform, Salesforce, Benioff came out this week really ambitious. But look, the other thing, and I know we only have a few minutes, I want to make sure, Pat, you get to talk before Dan has to leave, but I’m really get frustrated with this whole people looking at a digestion. This is not the internet cycle. We are not going to see this thing implode the way the internet imploded. It’s a different cycle. There is a digestion period.
When you spend $100 to $200 billion in CapEx, you cannot stand that up, offer services instantaneously, show revenue and Satya, Zoc, Sundar, they’re all basically sitting there. They’re saying, “We will not let this cause our demise by not investing enough.” They all understand it. And so, when all the bears are like, “Oh, there’s no one using it.” First of all, Pat, you gave a bunch of great instances who they are, and that’s just BS. They are using it. But we do need to understand there is digestion between the CapEx in and the OpEx out.
Patrick Moorhead: No, this is good stuff. Listen, I net it out like this. There’s nothing stopping this train for 12 to 18 months. Downstream does not matter for 12 to 18 months. You’ve got hyperscaler FOMO. Nobody, whether it’s Meta, Microsoft, Google, Amazon, it’s pedal to the metal on CapEx. And until we see investors, their investors demanding reduced CapEx, the beat really goes on. And I want to hit the growth areas really quickly that I don’t think people are fully comprehending. The first one is the first build out was with the hyperscalers. The next build out is in tier two CSPs. And we heard Dell talk about this last night and let’s put Supermicro aside for a second, but Supermicro and Dell are the two tier two CSP drivers. The third element is the enterprise.
And we saw a little bit of that outlined. And right now, as Dell’s Jeff Clarke said, the enterprise is really in phase zero moving into phase one POCs. Third growth area is content. They’re not just selling GPU chips, they’re selling racks, they’re selling trays, they’re selling GPU chips, they’re selling multiple networking chips. And oh by the way, they’re selling cables. And let’s not forget software. Every new generation, including Blackwell, we have seen NVIDIA sell more software. And that software started off 15 years ago as low level drivers. And here we are with Blackwell generation called NIMs, and these are actually microservices applications and you’re seeing them be spit out or cranked out by multiple ISVs. And this is essentially the easy button for driving this forward.
Yes, there’s competition, but it’s not going to matter because the market is growing so heavily. Biggest competitor are hyperscaler, their own custom ASICs, AMD is the closest direct competitor and they will likely end the year, I believe at 10% market share, not for the whole year, but ending their calendar year. We will see Intel likely making an impact in ’25 and ’26. They’re making a small impact with current Gaudi today, but it’s only at $500 million. And compare that to AMD, who’s at $4.5 billion forecast. All right guys, Dan, we got to get you out here to go on more TV shows, talk to all of your clients.
Dan Ives: I’m going to Asia again this week. So, again, it comes down to that’s where… Like I always say, you can find AI revolutions in the 10th floor of your office building Metro North for Jersey Transit. And that’s why I think many of the bears, they continue to focus on their spreadsheets and try to find AI in their spreadsheets.
Daniel Newman: Hey, Dan, just as you run off, two things. One is I’ll be running to Berlin for… I’ll be at IFA checking out what they’re doing on these devices. But Pat, I think we need to give Pat a shout. I need to commend this nerd. We were GenAIing what differentiates each of us as analysts. We’re having a little fun. And Pat is the deep technical guy. Did you see this guy call out the mask change on fork? He called out the mask change in real time.
Patrick Moorhead: I appreciate that.
Dan Ives: But look, Patrick is like here, hold my rose, let me deal with this.
Patrick Moorhead: Well, it was funny. Now, I felt a little bad because I literally brought this out live on CNBC, nobody was talking about it stock dips and I’m reading CFO, and then it’s like, what’s a mask set? And it was funny. I was like I’ve never really had to explain a mask set. I tripped a little bit. And then, about a minute later-
Dan Ives: You were talking deep diver.
Patrick Moorhead: Listen, I really do try to simplify it, man.
Daniel Newman: You said Bloomberg’s headline said that they had a mass change. They didn’t-
Patrick Moorhead: Mass.
Daniel Newman: Jensen said… I know, but the headline was Mass Change, M-A-S-S Change.
Dan Ives: All right, guys, thank you so much for having me. Awesome. Thank you for everyone watching.
Patrick Moorhead: Thanks. Take care, buddy. There we go, Dan Ives. That was fun. Now it’s back to us. This is good. No, I appreciate, by the way, Bloomberg deleted that tweet.
Daniel Newman: Did they?
Patrick Moorhead: Yeah.
Daniel Newman: Yes, that was a mass change. That was actually not just the tweet though, Pat. That was actually the name of the article. There was an article headline and then it was the whole thing. So, look, I actually will tell you I listened to him. And if you’re not a real techie and you’re not familiar with what a mask change is, and I mean I know more about it now than I ever did. I’d heard the term. That was as far as I’d really ever spent. And you listened to Jensen, you might not have heard that clearly on the first listen.
Patrick Moorhead: Yeah. So, every chip change that you make that I’ll call it a metal spin as opposed to a poly spin, needs a new mask. And a mask is what is created to go into a foundry like TSMC, Samsung Foundry and IFS.
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.
