CNBC & Fox On NVIDIA Stock, $500B Partnership, Micron Stock, SK Hynix Stock - NVDA Update

The thing that I'm pretty confident is compute's in short supply right now and they're bringing on a ton of it and they should be able to monetize it at very strong ROIC's. >> I wanted to broaden it out a little bit because you say that the earning season was an unabashed endorsement of AI return on invested capital which has been one of the sort of nagging questions around all of this spending. What where where do you look at that measure? Is it just revenue growth from the big hyperscalers or or are you looking at something else? Well, I think revenue growth is a great place to start, right? But so AWS 37% growth in the quarter. Microsoft Azure 43% going to 45% next quarter and Google GCP 82%. Now the piece that really matters though is that Amazon and Google both put up those staggering growth rates at 50% plus incremental operating margins, right? So it's not just accelerating revenue growth, but it's even margin expansion as well. And then not to mention just management commentary, right? Satcha obviously shared that Morgan Stanley piece where it was close to 30% ROIC's and then uh Jasse talked about on the shortest term investment stuff, you know, the compute, the services, the servers, the networking that they're seeing, you know, three two to three years to break even and then another two to three years of cash flow. So I think the ROIC is there to continue investment. And why is that? It's because I I I I think for frontier and near frontier intelligence, there's almost unlimited appetite from from the enterprises of America and and you know, Ben Harwood said maybe we're 3% penetrated in in AI intelligence. I I I think that may be right. >> Yeah. >> How about Nvidia? Okay. Coming off a monster week, up 11%. That was its best week since May of 25. Reiterated today by top sector pick at BFA. Um what do we think of this after that week that this stock woke up big time last week? >> It woke up. It is tracing out a similar pattern to which I identified in Apple several months ago. I think the stock is in the midst of a breakout. I think we are in a period right now because we have such favorable fundamental conditions. It is a good marketplace that you see investors and characterize investors however you want. are they are investors like Jimmy who are looking at fundamentals and PE and PEG ratios or like myself they're looking at quantitative strategies the the Jane streets the citadels of the world everyone's hunting for alpha and new alpha opportunities and what's interesting about technology is you're seeing new momentum building in Nvidia while the momentum is waning in Apple >> Alphabet what about so the the momentum is actually waning in Alphabet since the announcement last week >> about losing the chief a science officer. >> You know, it was the only one last week that was down. >> Yes. Yes. >> Right. So, so Adam Parker the other day was with me and said Micron's probably going to double from here. >> So, he's super bullish. That reiterated outperformed. By the way, Missouo 1375 is the target. So, I mean, that's not so far off of, you know, the way AP's thinking about it. How about UBS? 1625. So, that's that's right in that ballpark. Jimmy uh as well he says he does not think that the associated stocks in the semis related to uh this whole trade uh are even close to peaking. >> Yeah. Well, that's the question is where are we in the cycle? I bought micronscott as you know in two tranches uh not that long ago uh at the last earnings report and just after average price a,000 you see the stock at 877 right now. I got a lot of client clients saying, "Hey, why did you buy it at that price?" And the answer is because if the cycle is going to be elongated by years, which is what I think, then buying this stock at six times earnings, forward earnings, which is roughly what it is right now with those earnings growing through the roof and with the company about to anniversary the chips act after which it can start buying back shares at six times earnings. It's a great setup. Now, the bare case is that the AI trade is a bubble. the data centers are going to stop being built. The demand for Micron's chips and everybody's chips is going to plummet. I just don't believe that. I don't believe that when we see all the hyperscaler reports over the last two weeks that showed nothing but growth and growth increasing. So I agree with Adam on Micron. >> Last comment on chips Anastasia. >> I think the runway for them is not over but I do think the risks are building and eventually these bottlenecks will get resolved and I think the ultimate beneficiaries are actually those software stocks. So that's where I would be looking to rotate to. By the way, fundamentals of software are still intact today. Loans have rebounded and looking at earnings growth. It is running about 22%. So I would be slowly pivoting to software. >> Okay, let's get a news alert on Nvidia. Leslie Picker has that for us. Hey Les. >> Hey Scott. This is a headline coming from the Financial Times uh saying that the biggest some of the biggest Wall Street giants including Apollo, Blackstone, Black Rockck's global infrastructure partners unit uh Brookfield, Goldman, and KKR are entering a partnership with Nvidia to provide $500 billion worth of financing. They cite that to five people briefed on the talks and they say this deal could be announced as soon as Monday. uh they don't really give us much detail about kind of where that money would come from debt equity and what specifically it would be invested in other than just to say uh it will be part of a big AI financing deal comprising about $500 billion. You can see Nvidia moving slightly lower on those headlines down about 2.6% right now. Also, as part of the article, it said all of the major players, including the financers as well as Nvidia declining to comment. We have not independently verified this story. We do have calls out. Uh, and we will get back to you as soon as we learn more Scott. >> All right, good stuff at the headline for us. Thank you, Leslie Picker. >> Beat goes on, right? The AI beat goes on. >> These are numbers. Oh, sorry. Sorry. >> Yeah, real quick. Then >> these are just numbers. 500 billion of additional financing. And you go, really? I mean, let's think about that. And in terms of size, wow. >> Yeah, it's a gargantuan undertaking that we have to build out the AI ecosystem and it's going to take years and it's going to take debt capital, equity capital. It's certainly going to take private markets as well. Um, but again, I think we have to scrutinize some of the valuations at this point because it is not a new development. It is a well-known trade at this point. >> Hey, I got less than a minute to go. I want to circle back because the first chart I talked about how optics significantly outperform memory. Memor is under some pressure here. Uh I don't know if it's because Nvidia is trying to find a way to use less of it in the new rack system. What do you feel about memory stocks here? Uh we like memory. I I do think that it's a little bit different because you've got a lot of um a lot more sort of competition in that area. I still would be an owner of memory, but you've got to be, you know, I think strategic and be prepared for volatility. Same thing in in photonix and all the things, but I'm okay owning memory. I like Nvidia. I really again these hardware makers sort of we'll call it the best and breed hardware makers is a place I think you kind of want to be but again you're going to have to withstand a little bit of volatility probably here over the next 6 months to a year as things shake out and as that supply chain evens out and cleans up. I >> I think anyone who's been in them this year probably understands the volatility part but the reward at the end of is is has been worth it so far. Jared, thanks a lot. Now my next guest is using weakness in memory actually to add to key positions. I want to bring in Brian Malberry, VP and client portfolio manager at Zach. And you know, I just wanted to I kept this chart up here because it's not looking great right now. It's in a series making lower lows, lower highs. Um, but this is this is what you say. You know, why first of all, why do you think it's so weak right now? This the memory trade. Well, I think that there was a lot of leverage that got washed out of the system in that line below your blue arc there. And that was part of the leverage that got washed out from a hedge fund that went over. But also in South Korea, there was so much leverage in that market. And so we just needed a blowout from all of that extra volatility that was baked into it. Now that that's away, we can start to establish a real value of where this is going to go. >> And there are some key memory names. I'm going to bring it up now. Some names that you are buying. You like Micron, you like Western Digital and AMD. Western Digital to me had the the harshest reaction to earnings last week, one of them. And I just I you know, the the mixing the the product mix. It had nothing to do with the fundamentals and we were talking this is what you take advantage of when stocks are sold off but it's not because of the fundamentals. >> Yeah. Down 45 47% peaked the trough in the recent month or so. This is a real opportunity to put into a good name future assets and that's exactly what we're doing. We're adding into this name not just because the earnings growth is great 80% plus earnings growth in the next year but their operating margins are including so or increasing. That means that they're actually getting better at running their business at the same time their earnings are growing. That's the commonality between all three of these names. >> Micron, Western Digital, AMD, what's not on the list is SanDisk. Uh what's going on there? >> SanDisk is in that same, you know, parsing out the the finer details. Their operating margins are static. They actually lost 9% in their consumer segment where it could be a little bit of seasonality there for components and things of that nature. >> Well, isn't there an irony? because the money they make from the average selling price of chips hurts their consumer business a little bit. >> It does. And so that's showing up in the operating margin as well. So when we see 10 plus% operating margin growth in these other names, but not at SanDisk, we own it. We're just not adding to it in this pullback. >> All right, let's talk about risk then overall because I was writing your note risk building up. Uh and then today there was this headline, Wall Street giants partner with Nvidia, 500 billion. I've lost track, you know, but a lot of folks are complaining about the circular financing. How concerned are you about that? >> I think it's a growing risk and Nvidia plays a bigger and bigger part of it. Before today, we already knew that Nvidia had massive holdings. They had roughly 3940 billion worth of publicly traded stock, but they also had 66 private holdings totaling about 40 to 42 billion. And then we get this news today that they're, you know, being a part of a cohort of even more investments. That makes them more or less the key back stop to AI and its future value. As long as the demand for AI remains as strong as it is, it seems like it's okay. But in the future, if the cost of these components drives adoption rates down, then you could be caught in a trap. >> So now people are calling it the new GE Financial or some are even saying the new Enron. That's obviously gone too far. >> Yes, there's I don't think there's anything wrong with the accounting at Nvidia like there was at Enron, but GE obviously provided this window of finance for people to buy GE products and that's exactly what Nvidia is doing. So the parable there I think makes sense. >> That's right. You know, the last few times I think we've been together, we talked about the reality that it felt like the market needed a breather. The AI trade in particular needed a breather. That's exactly what we got through the month of July. And now I think it is time to start to return to the AI trade. I think it can be uh a great time to be more constructive on names. We've been adding to some positions uh Intelligent Alpha and Deep Water. We've been trading them today. uh and we've also been exiting some positions that we think have sort of played their their AI momentum out. But I think if you think about now to the end of the year now is the time where I think people will start to re-evaluate how much demand there is for AI which is still significant and what are the valuations? How how do they sort of justify the ongoing growth that we will see as data centers continue to be built? >> Where's money been going into and where's it been coming out of? And if you can't tell me the specific names of the stocks, I respect that. But what kinds of areas? >> Money going into semis and specifically coming out of Google. That is one where we've exited the position at Deep Water. It's a position we've held for more than a year. >> Wow. Uh and then you said money going into semis, I think you you told me. So, do you think that the momentum reset, if you want to characterize it as such, is over? >> I think it's mostly over. I wouldn't be surprised if we still are sort of choppy through the next month or so and get out of the summer. And I think maybe things might get a little bit more stable, but we do think the momentum reset is over. And one sort of parallel I will give you Scott if if you look back at the dot era in 1998 there was the long-term capital management wash out about a 30% draw down in the NASDAQ during the dotcom bubble there's some parallels that feels a little bit uh reminiscent of what we just went through in July with a large fund sort of being liquidated in the AI trade and if you think about what happened with the SMH right the semicap index 30% % draw down really I think complete wash out at this point and now can we get back to maybe a phase that we did see in the dotcom era where sentiment was reset and the stocks could start working again and this time I think they're much more bound in fundamentals versus just hype in the do >> interesting where does this bring you in terms of investment implications is this an accelerant is this just sort of okay now we have part of the nut covered in terms of what we thought we were going to have to spend from I mean the big picture is that it is an accelerant. is an indication of how early we are and there's a dynamic that is a little bit concerning in terms of the significance of this development which I think just reinforces that we are in the second or third inning of the infrastructure buildout that just overwhelming uh endorsement that this 500 billion suggests to that that piece and then the market reaction to a lot of these Nvidia trading off a couple percent uh we own a lot of these smaller AI infrastructure companies coherent down 15% today. I mean what you have seen is basically the market saying either I don't believe it or if it does happen it just keeps building this law of large numbers. So um I mean those are the two kind of orbits that that have kind of jump to top of mind. But if you just look at the substance of this and taking the conversation that you've just had and and kind of putting my perspective on it is that we're just still so early. This is not about Nvidia trying to juice their sales in the future. This is about Nvidia hearing from their customers that they just simply want more and don't have access to capital to buy those chips. And I think it all plays into this simple theme is even though we obsess, we being uh tech investors about where AI is at, I don't think we fully appreciate how early we are and the significance of how long that this kind of spending can go on. It's interesting because there have been times when when you say we're early or when you know Sundar Pai says we're early from Alphabet and the market says great we have a lot of runway. Uh but the the other there are other times when the market says oh no that means the bill is going to keep growing and that the spenders are going to have to spend more heavily. And I really am interested in the destination here wherever it is however far it is in the future. Gene. Uh, and by that I mean when Jensen talks about, hey, this is the new electricity. Why am I excited about that? Electricity is a commodity thing. It's a base load thing. It's kind of a regulated market. Your electricity is the same as anybody else's. Why is it exciting long term to be the landlord, the provider of that? >> Well, I think the electricity analogy similar to the kind of it's the petroleum of the future. It's the it's the oil of the future. And I have long kind of disagreed with that view. I think what we see when it comes to intelligence is yes some of it is like electricity some of it this intelligence is commoditized but there is a top end of this a 10% end of the knowledge uh these AI models that I think are extremely valuable and some of those pricing even though they've come down we see the jevans effect kick in and the usage goes up exponentially and so my response to that is I don't think it's like electricity not all AI inference is created equal number one and number two this whole concept as price does go down and there'll still be higher tiers. I think you're just going to see an explosion in in the use of these tools. Keep in mind is that when we uh again the tech investing community looks at the use cases around AI, there's still relatively limited a lot of testing, but it's very hard to point to some very definitive beyond Google search or cloud growth or maybe Meta's advertising business. And why that's so important is that ultimately is that if we are that early, I think it speaks to or if those are the only the cases, I think it speaks to how early we are and that what I think is going to be a spread in terms of uh the the value of these tokens. >> Jean, when Becky and her team convenes a group like that, which is historic in a word, that's making a statement. Tim called it an arms race. That's right. There are people in China that watch that. So, what are your thoughts in terms of what it means for this sort of global back and forth? I mean don't overthink it like I understand that uh there is the private uh the private markets the private debt markets do have a negative uh stigma associated with it but the big picture is this these are very sophisticated investors and we work with these type of investors and I promise you they're not doing this to try to play along in a hype theme and something that they think is short-lived they're doing it for something bigger some of the stuff that Becky talked about around kind of nationalism what's going on between the US and China, the use of AI. I think all of this I still stand by. We're going to be early. I'll put a prediction out there. Over the last 3 weeks, the expectations for hyperscaler capex growth for has gone from 24% for calendar 27 to 36%. I bet it's going to be above 50. And for calendar 28, it's at 15% now. It's probably above 25. We're just still early for all the reasons you talked about Guy. >> All right. Well, we'll see, Gene, if uh if in fact the market likes that message that we are still early. I don't know what I'm going to do if I'm not overthinking it. Uh but appreciate that that sentiment. That's what you do. That's what you do. >> We'll talk to you again soon. Uh Jean, thank you very much. Gene Monster, Tim. >> Well, we unfortunately started the ref the show with a reference to Maneater um by Hall Notes, which is unfortunate and everybody at home is and that includes probably Hall Notes who love watching the show, but I think it comes out at night. >> Yeah. But I I think it's I'm I'm worried about Capital Eater. That that's I mean really I I am worried about lowcost models versus high cost models. I'm worried about a Zuckerberg manifesto where he's talking about funding small towns and handing out checks to school teachers which is a great concept and it's also there's a lot of politics in that. Um so I we're totally early. We're absolutely early. This is exciting. Um the question really is who is investing in in the right channel. Um, I would follow Apollo and Blackstone and Black Rockck and and and Brookfield. I would follow these guys to the end of the earth in terms of being smart enough to do their own diligence, but it's all about capital. How much capital is necessary here and how much is being wasted because we know there's capital being wasted. >> Yeah. I mean, and Becky, it's it's a whole uh flip of the world from what we were thinking about, let's say, a few years ago when it was all about look what what what could Microsoft possibly do with all of its asset and not having to be the one who was putting out that capex spending. Now, it's about capex spending and are you going to be the ones that survive through this? And I will point out both David Solomon and Jensen Wong were very quick to say, "Hey, there are going to be some losers." David Solomon said, "There are going to be big companies that lose out on this. There will be other big companies that that that win at the end of the day, but this is not a everybody wins and everybody gets to go home um with a medal >> trophy. Yeah. On the bright side, at the end of it, you do have that much more capacity built. Whether somebody's doing it profitably or not, society can can make use of it. So, we'll see. >> All right. I hope you're all doing well today and staying calm in this market. Monday was a mixed day in a market with many tech hardware stocks trading lower and much of software trading higher. We also saw a solid move higher in oil, which put some additional pressure on momentum. I'm going to cover Monday's big Nvidia news in just a moment, but first, let me quickly cover some other important news stories. First, we got TSMC's July revenue report showing revenue up 5.6% month-over-month and up 44.7% year-over-year. During the first 7 months of the year, revenue was up 37% compared to the same period a year ago. This is solid growth showing that the long-term trend remains firmly intact. Also, on Monday, we learned a lot of important details as Micron CBO spoke an event hosted by Key Bank. I'm going to rapid fire important points that stuck out to me. Micron CBO said that customer demand signals have increased further since Micron's latest earnings. He said that the shortage is broad-based but most acute in data centers. He said Micron often can supply no more than roughly half of what data center customers want. Customers increasingly tell Micron that their number one constraint is DRAM. He also said that HBM4 is in robust production and that Micron is developing custom HBM4 ESKs. That's very interesting considering the rumors I covered at the end of last week about Nvidia possibly offering multiple variants of Reuben Ultra that contain differing amounts of memory. On that note, Micron CBO also said that customers are despecifying some are dim densities in the server market because of supply limits, not because of price. He said that even with such adjustments, total demand continues to rise. As I mentioned last week, even if we see variants of Reuben Ultra with less memory content per GPU, that does not automatically mean that the memory makers will have lesser pricing power or lower total bit shipments. It's not that simple. Micron CBO also said that Micron has signed additional strategic customer agreements since their latest earnings report beyond the original 16 agreements. Most of the agreements extend through calendar 2030. They are take or pay and customers have no contractual outs under the agreements. Remember that the next time you hear someone claim that Micron's seas are the same as the LTAs of past memory cycles because there are key fundamental differences between the two. Also over the weekend, the Wall Street Journal reported that Apple has begun testing DRAM from China CXMT in multiple product lines and has held preliminary talks about potentially using CXMT components in some products sold in China. The report also claims that HP and Acer have begun using CXMT memory in devices sold outside the US. This piece of news is likely the main reason why we saw Micron open lower on Monday. It's important to remember that in that same piece from the Wall Street Journal, they say that CXMT has maxed out production for this year and is prioritizing domestic customers like Bite Dance and Xiaomi, which limits the incremental supply it can provide to Apple or foreign OEMs in the near term. That said, market participants are extra sensitive right now to any news that they perceive as being a potential threat to memory makers pricing power. Also on Monday, Zuckerberg announced that Meta would open the ways for its new Muse Spark 1.2 model. He also said that Meta would launch a new family of open source models called Muse Glimmer that are designed to run on edge devices. As I've said many times before, open source models are not bad for AI infrastructure companies like Nvidia. They actually help drive greater consumption throughout the ecosystem, which ultimately leads to more compute demand, not less. Open models are fantastic for Nvidia, and there's a fundamental reason why NVIDIA is the leader in open-source models, as it should lead to a very favorable position for Nvidia in the future. Ultimately, greater consumption increases compute demand. Now, let's cover Monday's big Nvidia news. Nvidia announced they've partnered with Apollo, Black Rockck, Blackstone, Brookfield, Goldman Sachs, and KKR to establish AI compute infrastructure financing platforms to mobilize over $500 billion of thirdparty capital. These new financing platforms turn Nvidia compute and full stack infrastructure into an investable asset class for global capital. As a brief side note, as I've said many times, now is not the time for Nvidia investors to worry about market share. There's plenty of room for multiple chip makers to succeed. At the same time, Nvidia is in a league of its own, far ahead of the competition. And now Nvidia's compute is an investable asset providing the lowest token cost, highest revenue, and longest useful life with the largest install base and rich ecosystem built upon Nvidia's CUDA platform. MUS have been signed with the six financial institutions to create partnerships aimed at establishing the first compute financing platforms of their kind at global scale. Nvidia will work with these institutions to create dedicated pools of capital at significant scale at attractive rates for Nvidia customers. Let me briefly simplify things in case anyone isn't following so far. These are new platforms that are intended to mobilize more than $500 billion dollars of thirdparty capital for AI infrastructure over time. The idea is to create large pools of financing that Nvidia customers can use to build Nvidia based AI factories. Importantly, Nvidia is not committing the $500 billion itself. These are third party financing platforms. Nvidia hasn't disclosed capital commitments or deployment timetable. I think this news concerns some market participants given all the talk about circular financing over recent months. That said, this will likely turn out to be very positive for Nvidia. We're talking about hundreds of billions of dollars worth of thirdparty capital being mobilized over time to help fund the buildout of Nvidia based AI factories. That's positive for Nvidia. Monday evening, Jensen Hang joined CNBC and partners to discuss the news. In that interview, Jensen said, quote, "AI tokens are incredibly profitable." And when speaking about AI labs, Jensen said, quote, I believe that within months, you're going to realize that these companies are extremely profitable and the tokens they're generating are incredibly profitable. That is very exciting to hear because I've been saying it for many months now. I think the leading labs surging revenues as well as their profitability may be the initial proof point that grabs market participants attention and causes them to realize that there will be a clear ROI on AI infrastructure. I really wish Open AI and anthropic were public right now so market participants could see it. That's something to look forward to as it's on the horizon. As a reminder, at the end of last week in a piece about SpaceX's AI buildout, Semi analysis pointed out that serving inference tokens is unbelievably profitable for the Frontier model companies, saying that Open AI and Anthropic can generate over $100 billion of revenue per gigawatt per year when selling API inference on a GB 300 cluster. That is significantly more than the cost of renting a GB 300 cluster for one year at current cloud prices. Once market participants realize that there is an incredible return on investments in AI infrastructure, I think we're going to see a very positive response in shares of stocks like Nvidia, Micron, Skhinix, and the rest of Nvidia's ecosystem partners. That is something for investors to look forward to, and Jensen believes it will happen within months. Looking ahead, we have Nvidia earnings later this month on Wednesday, August 26th. Now, in case you're new to the channel, I want to make sure that you have at least a basic understanding of the underlying long-term thesis. So, let's cover that. Now, I don't know what's going to happen in the short term, but from a long-term perspective, I am very confident that Nvidia will be worth much more in future years than it is today. When Jensen was on the Lex Freedman podcast not that long ago, he was very seriously raising the possibility of Nvidia becoming a $3 trillion revenue company in the near future. If that happens in the coming years, then it is very plausible that Nvidia could one day be worth tens of trillions of dollars in market cap. That might sound crazy, but that's what Jensen is implying when he raises the possibility of Nvidia becoming a $3 trillion revenue company. I guess the question at that point is what multiple the street will be willing to give Nvidia. I don't know the answer to that question, but I truly do think that Nvidia will be worth much more in future years than it is today based purely on the fundamental growth of the business. Based on everything I'm seeing, the world is still computed and I expect that to continue at least through the first half of calendar 2028. In a computed environment, developers will use whatever viable compute they can get their hands on. Today, there are no GPUs that are sitting dark due to a lack of demand. Like, there was fiber sitting dark due to a lack of demand at the height of the.com bubble. Back then, companies were laying fiber in the hopes that use cases and demand would eventually show up. Today, we are seeing the complete opposite. As I've said many times, when market participants compare this AI revolution to the do-com bubble, they ignore the fact that the internet is already here this time. This means that mass adoption of the technology and new use case development at scale are immediately possible. We don't have to wait years for it to show up. It's already here. The world is compute constrained which means there is not enough supply to satisfy demand. New capacity is utilized as soon as it comes online. The hyperscalers are monetizing capacity as soon as it comes online. Each of the hyperscalers spoke about being supply constrained on their most recent earnings calls. Additionally, many of the clouds are building out into contracted demand. They're not blindly building in the hopes that demand will eventually show up. No, they're building out because they have signed contracts and in some cases significant prepayments from their paying customers. This AI revolution is fundamentally different from the dotcom bubble and 2026 will be a pivotal year for the AI industry thanks to the rapid adoption of Agentic AI and the proliferation of agentic systems in the world's leading enterprises. The leading AI labs revenues are surging right now. Agentic coding and the implementation of Agentic systems in large enterprises are new use cases that are increasing inference demand significantly that subsequently is increasing compute demand. The rapid adoption of Agentic AI is why we're seeing an inflection in inference demand. It's why we're seeing the leading AI labs revenue surge. I wish both Anthropic and Open AI were public so the public could see the ramp in their revenues. Anthropic ARR has surpassed 47 billion up from $9 billion just at the end of 2025. Open AAI is growing rapidly as well. I think the leading labs surging revenues may be the initial proof point that grabs market participants attention and causes them to realize that there will be a clear ROI on AI infrastructure. I think the leading labs surging revenues will also help assure investors of the longevity of Nvidia's growth since these labs revenues are directly tied to compute. If they had more compute, they would have greater revenues. It really is that simple. Demand is not the problem. The problem is a lack of supply to meet the demand. As I've said previously, I expect the world to be compute constrained at least through the first half of 2028, possibly longer. And so regardless of what happens in the short term, it's important for long-term investors to remain focused on the fundamentals, maintain a long-term perspective, and remember that we are only in the early stages of Agenic systems being adopted at scale. This will increase compute demand significantly. And after that, the next surge in compute demand will likely be fueled by physical AI. We're no longer talking about digital agents performing digital tasks. With physical AI, we're talking about physical AI agents performing physical tasks in the real world. NVIDIA CFO has called physical AI quote a multi- trillion dollar opportunity and the next leg of growth for NVIDIA. This industry will fundamentally transform society and Nvidia has positioned themselves to benefit massively. NVIDIA sells the hardware for the data centers where the models are trained. They offer omniverse where the models are taught and tested and Nvidia also sells the hardware that allows ondevice real-time inference through Nvidia AGX allowing robots to have intelligent interactions with the real world even when they are not connected to a data center. Notice that Nvidia is taking a holistic platform approach to physical AI and they're embedding themselves as the underlying foundation supporting all of it. Over two million developers are already building on the NVIDIA robotic stack and this is not getting enough attention. As for production ramps, Blackwell Ultra has ramped quickly and remains in high demand. Reuben is on track to launch in 2026. Then we're expecting Nvidia Gro 3 LPX in the second half of 2026. Later on, we're expecting the launch of Reuben Ultra in 2027 and Fineman after that in 2028. We have a clear data center product roadmap stretching into 2028. And Jensen believes that AI infrastructure spending will reach three to 4 trillion annually by the end of the decade. That means Jensen is expecting growing AI demand and an expanding total addressable market underpinning all of this. I don't think we are anywhere near any type of bubble bursting type of event. With all of this in mind, I seriously think that Nvidia still has plenty of runway ahead of it and I think this company will be worth substantially more in future years than it is today. At least that's my view of the situation. Quick note before I wrap up. All of the compilations on this channel are edited by Finn Vid with original structure and commentary. Occasionally, the same edits appear elsewhere on YouTube. If you're looking for the original version, it's always here on this channel. Thanks for watching, Finn Vid. I appreciate your support. Remember to stay calm in this market. Remember to maintain a long-term perspective and do not make any hasty or irrational decisions. With all of that being said, I hope you all have a great rest of the day, and I'm curious to hear your thoughts about Nvidia in the comments below. Please leave a like on this video so more people will see it. And while you're down there, please consider subscribing. It's free and you can always change your mind.