The End of NVIDIA’s Monopoly? OpenAI’s New Secret Weapon

You've probably been waiting for this night for a long time. Nvidia earnings are out as well as Crowd Strike, Salesforce, a few Fired Up wealth stocks that I own in my main portfolio. Here's the thing with Nvidia. Regardless of what they reported, it feels like the market just doesn't care. Why is that? I'm going to break down some reasons why, but Nvidia earnings are out absolutely crush it. Beat as revenue more than doubles. Think about a $5 trillion market cap company that's growing at a 100% and continuing to do it quarter after quarter. It's actually quite amazing. It's astonishing and the stock is really not that expensive if you look at where it's trading. It's really not that expensive based especially on these new earnings. Guidance was also strong. There was one thing I did notice and that is that if you look at so data center's good gross margins in line at 75% for this quarter but Q3 guide was light at 74%. But data center revenue guys 89 billion versus 86.33 billion is what the estimate was crazy numbers so this is the LSG LSG numbers on CNBC earnings per share 222 versus 210 revenue 96.22 22 billion versus 92.17 billion estimated and if you look at this absolutely crazy almost four years since the launch of opening eyes chat GBT Nvidia still seeing massive growth 100% with revenue more than doubling in the last quarter from 46.7 billion a year earlier net income for the quarter doubled to 53.95 billion $222 a share and of course the company's conference call is still going to happen so we'll if maybe Jensen Wong can turn on the heat and the stock and go the other direction. Right now it's down about 045%. So not much. We are trading over a $5 trillion market cap paying that dividend 48% which has increased dramatically uh since the last quarter or so. I'm going to get back to Nvidia, but I want to show you this. Salesforce was up 14% at one point on AI growth and enthropic investment. So Mark Beni off the CEO of Salesforce actually came on to CNBC with Jim Kramer and spoke with the CEO of Anthropic. Pretty solid earnings report overall. The big thing the reason the market is excited of course that interview right when earnings came out was big. But also if you look at this the company pointed so $2.6 billion gain on strategic investments from a stake in Anthropic. So if you look at the venture capital division, right, of Salesforce, they own $2.6 billion of anthropic. That's obviously part of it, too. Uh 14% pop after earnings. We'll see if that holds or not. But this is a big number, too. Agent Force AI topped 1.5 billion. So the message has been, hey, we want to see proof in the pudding. Software is being eaten, you know, eaten alive by AI. Well, if you listen to the interview that just happened, it doesn't seem like that's the case. We've been telling you on the channel that's not going to be the case and that's not what we're seeing. In fact, their AI product here, Agent Force AI, that's 240% growth. I mean, 240% and the growth rate at a quarter earlier was 200%. So, this is accelerating, right? Salesforce said it also had $33.5 billion in current remaining performance obligation. And then Crowd Strike also a strong quarter. You can see it beat on the top and bottom lines with about 27% growth. Of course, this is a best of breed cyber security company, not expensive, has that recurring revenue as a SAS model. I want to talk about a couple reasons why the market has been kind of against Nvidia. And what's interesting about this guys, and if if you look at semiconductors, the outperformance a few months ago, earlier in the year, 2026, you saw Nvidia actually go down when the rest of the semiconductor names were going higher. And as the rest of those semiconductor names are going higher, software is selling off. Now you have software actually doing well up until into its earnings last night. You're having software do well. And recently in the last, you know, 10 days or so when I've been on vacation in Hawaii, you've seen Nvidia actually go up. So if I just look at a quick chart of Nvidia and I look at where it's gone. So over the past year, the stock is only up 15%. Year-to date, it's up 11%. Now, if I look at just the S&P 500 and I go to year-to- date, it's at 12%. So, I mean, Nvidia is underperforming the S&P 500. If you look at year to date, now in the last 5 days, the stock is basically down before earnings, but over the last month, you see it has popped up a little bit and 13% in the past six months. So, if I look at the year-to- date though, you can see it kind of dropped off here down back into the 190 range and then popped up. Most recently, we got to $225. So, from 190 to$225 and then kind of sold off into earnings a little bit. Uh, if you look at the options, options are saying plus or minus 78%. I think the bulls are really shooting for a $200 level. I'm sorry, the bears are shooting for a $200 level. The bulls are shooting for a 220 level. So, you're looking at about a $10 pin action either way is what the bears and bulls if you look into the the stocks and you look into the Greeks. But Nvidia right now, you know, it's it's up 11% in the year to date, only up 15% in the past year. Of course, over the past 5 years, 826%. But it is surprising to me that the stock continuously smashes it and the market seems afraid. Now, there are a few reasons, and I will get to that in a second, but this is absolutely amazing. When you look at the growth, I mean, this is incredible. When you think of a company that's growing at this kind of clip, when it's a five over a $5 trillion market cap, it's unbelievable. Now, here is one of the reasons. I'll cover this right away so I don't forget. And I know there's going to be comments, there are bears out there. I've owned this stock, guys, since $3.64. I've done well with Nvidia. I'm still bullish on it long term, but as an investor, as a long-term investor, I like to look at the pros and the cons, the risks, you know, the whole SWAT analysis, strengths, weakness, opportunity, threat. And when I look at this risk here, this is like the circular financing risk you hear about. Michael Bur talks about it. Anybody that's a bear on Nvidia is going to throw this in your face. Now, the weapon is that Nvidia has a tremendous balance sheet. And what it can do is it can use that balance sheet to essentially fund these these customers. Hey, I'll give you some money. You buy some more GPUs. So the liability here is financing financial backlash. If the market determines Nvidia's revenue is heavily, you know, propped up by its own balance sheet funding, which you could easily make a case for, right? Then the valuation multiple is going to compress. And that's part of the big big fear of why the stock doesn't go higher. It's say, "Hey, it's a $5 trillion market cap. How's it going to get to$10 trillion dollars? Oh, and what about this circ, you know, circularity where we're just borrowing money and they're turn around and spending it back?" That's a red flag. And you know, if you you could look at it from accounting perspective and you could look at it from a bull or a bare case on that. And I want to be neutral and show you both sides. Now, some other threats, and this is a big one, I think, just a couple days ago. I think it was just yesterday, OpenAI released an AI chip called Jalapeno, and this is bringing a new threat to Nvidia margins as custom silken gains ground. Now, this deals with TPUs. This is Broadcom making this chip. So, Broadcom should be doing well, too. And this stock's been under pressure recently. And if you look at Broadcom, you know, so Jalapeno according to this article beats Nvidia's Blackwell systems on performance per watt in nearly all tested scenarios. This is according to OpenAI. And this is where you could say, well, is this legit or not? And more to come on this. We will see more data and the proof will be in the pudding at some point. But right now you're seeing legitimate analysts saying you know hey this is actually better than Blackwell. Now this is TPU so AS6 and this is again built by Broadcom and I'm very bullish on Broadcom longterm as well as Nvidia and you can see right here the chip is being developed with Broadcom. It'll be deployed within OpenAI's compute infrastructure by the end of the year. And OpenAI said it was already working on the semiconductor generation 2 and three. So this is an impressive achievement most of all in terms of of efficiency in in a large scale deployment. This would save power cooling and power distribution infrastructure. This is going to be mostly for inference. Now they're still going to use OpenAI is still partnering with Nvidia for that training. Right. So the deep training models, you're still going to be using that for the workloads. So for more compute intensive workloads like largecale model training for frontier AI workloads, we believe NVIDIA GPUs remain important. But part of the growth story for Nvidia is they're getting more into inference that in fact they're doing CPUs. There are a lot of things that we could cover today, a lot of developments. Another is the fact that they're gonna have to raise prices 17% because of you think of memory like Micron for example memory is basically there's more demand than supply and so you're seeing companies like Apple increase the prices of their products because of Micron of memory micron and others you're seeing Xbox Microsoft Xbox raise prices because I can't even order a new Apple Mac for the Fire Up Studio because it's ridiculously expensive. And you look at the the new chips that Nvidia's coming out with, they're actually scaling down the amount of of storage and memory that are required, right? So those memory workloads. So these AI workloads with inference, we're f we're going to have to find more ways. This is going to put pre pressure. Ultimately, it's going to help us find new ways to be creative and not need as much memory. That's what's going to ultimately happen here, right? And this is how OpenAI Jalapeno chip compares with Nvidia. So, OpenAI's labs to benchmark. It found the chip beat Blackwell on performance per watt in nearly all tested scenarios. But it added that the comparison was somewhat incomplete and unfair because Jalapeno uses newer HBM4 memory. Nvidia's Ruben platform is a better like for-like comparison and also uses HBM4. So it's really competing against chips like Ruben and also that also use this HBM4. Barry Rubin systems are starting to ship to customers now while it'll still be some time before OpenAI has anything beyond engineering samples. So this is not going to happen anytime soon. But does it put pressure on Nvidia? Yes, it does. Because when you look at this is the annual shareholder meeting presentation and one of the first things you're going to see is inference king. you know, they're pushing more into inference. So, you can see this and the problem with this is that you're going to have more and more TPUs. Now, this is good if you own Broadcom, if you own Marll, you're seeing Google, you're seeing Facebook, you're seeing Amazon, all of them build their own chips, their own TPUs, their own A6, right? But does this impact Nvidia at a at a bare minimum, it impacts sentiment? 60 to 70% of short-term stock action is going to be sentiment, not fundamentals. And if this earnings report doesn't prove that, I don't know what will because they absolutely blew the doors off. They couldn't have had a better report. But that sentiment, for the reasons I'm talking about, is still lingering. The big thing that's going to be hard for anybody to compete, especially in the GPU side, is CUDA. And that whole software platform gives you this ecosystem. This is really hard even for AMD to compete with. The problem with that as more and more workloads are going from training to inference. Part of Nvidia's growth story to continue is inference and also the margin story. You are seeing margin impression for the next quarter. They're actually going from 75% expected to 74%. That's probably one of the main reasons why the stock is also under pressure or not going up because you do have that guidance that's showing that margins are coming down. You want pricing power. That pricing power shows that you can charge you can charge what you want for your GPUs as more competition comes in whether it's for inference or not. I still think Nvidia is going to be the king for GPUs. The problem is it's moving more and more to inference loads. The other thing to consider is that Nvidia is not just going to be data center company anymore, right? We're getting more into group with robots, with autonomous vehicles, with space exploration, we got Thor, we got Hollow Scan, we have all these different things that we can use Nvidia for in the future. But most of the revenue that's coming right now, well, it's going to be data center. You know, $89 billion versus 86.33 expected. They absolutely blew the doors off. Almost a $3 billion beat. $3 billion beat just on data center. So most of that revenue is still coming from data center, not yet from vehicles or robotics or what have you. So, those are some things to think about when you're you're wondering why Nvidia stock is not up. Now, it looks like it is up 2.57% right now. Um almost 3%. So, it's very possible the earnings call starts, people start looking at this and saying, "Hey, this is actually pretty good." Because even 74% margin is still really good at showing you pricing power. But you can see here 105.9% year-over-year beat by 4.06. 06 billion for that total revenue of 96.22 billion. The Q2 non-GAAP EPS of $222 beat by 13. And the quote here from Jensen Jensen Wong, CEO of Nvidia. AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now compute is revenue, said Jensen Wong. And demand is accelerating. This time last year, one lab alone was driving the buildout. Today we have a golden age of new AI labs and startups. Multiple frontier labs scaling in parallel, a thriving open model ecosystem and physical AI coming online with strong momentum across the US and around the world. The AI infrastructure buildout is at full steam. Vera Rubin now in full production was built to power exactly this moment. So overall this is a really insanely good quarter and I do think the stock should climb higher. We'll look at a chart. At the end of the day, you know, you're going to have traders, you're going to have momentum, you're going to have pin action, you know, from from the options traders and so on. And that's just part of the game, right? As a long-term investor, this company is doing really well. And if it weren't doing really well, you would see the short interest higher than 1.21%. Not a lot of people are really betting against Nvidia in terms of short float. You can see now it's up 3.868%. But this profit profit margin, you know, 75 and 74, you're still showing A+ $3.8 million income per employee. This growth is even better than what it's showing here on the Seeking Alpha tab. Valuation wise, this number is going to be even less. 22.56 gap 4p ratio. You're talking about a a 2021 and this PEG gap is.3. It's insane. And on top of that, this isn't a huge dividend, but this is a lot more than what it used to pay. 77.26% 5-year growth rate. That's not bad either. SO, I DON'T MIND holding my shares. I've got just in the main a little over a half million dollars just in Nvidia shares. Has it been a a huge outperformer? Not in the last year. But if I look at the last five years, you know, 850%. The last 10 years, 13,000%. I've owned the stock since 2000 20 2017. So, not quite 10 years, but getting close to that. So, a very strong quarter. You can see Nvidia slips even as Q2 results and guidance top estimates. We kind of read through a lot of this already. While I'm bullish on the AI rally in Nvidia, I'd like to point out that it continues to thanks the efforts of big tech CEOs. These moments of overreaction are always great buying opportunities. nothing. The report looks to me at first glance like it's slowing down. People just don't have a lot of sentiment for it. You know, can you really get to a if I if I'm a $5 trillion market cap, can I get to a$ 10 trillion market cap because that's what I need to double my money, right? And in this kind of market, everybody wants those 5x and 10x types. You know, they want instant gratification. As a long-term investor, I've gotten great returns. I've sold some shares. I've trimmed some shares. What I have left is house shares and I'm going to continue to hold those and I do believe that it's positioned Nvidia's positioned to be worth more than what it's trading at today in my opinion. Not financial advice of course ever. And if you look at this, this is from Nvidia's newsroom. Solid numbers. We've covered a lot of this already, but during the second quarter of fiscal 2027, they returned $26 billion as shareholders in the form of of cash dividends and repurchases. also has 99 billion remaining under its share repurchase authorization. Overall, these numbers are looking really good. If you look at the outlook, it looks pretty, you know, looks very solid. Second quarter revenue 89 billion. This is just massive up 117% from a year ago. announced Vera Rubin platform is ramping up into full production with racks running at partners including coreweave, Google cloud, Microsoft Azure, Oracle cloud infrastructure and NBS NBIS revealed spectrum six switches uh Vera there's too much to read through there's a lot of great information here strategic partnerships with tons of different companies um this this is a strategic partnership to establish independent compute financing platforms this is there's some speculation around this with Apollo, Black Rockck, Blackstone, Brookfield, Goldman Sachs to mobilize over $500 billion of third party capital for the buildout of AI infrastructure over time. Interesting stuff, right? SpaceX basically Elon Musk said on earnings, Nvidia is the best and we're going to use Nvidia, you know. So SpaceX, that's basically an AI company. That's primarily where that TAM's at. Rock and XAI they're using Nvidia and they're using even Vera CPUs to accelerate Gentic applications. This is more on that inference side but you are seeing more and more of the TPUs more and more of the chips that are being built and OpenAI even said they want to do that to lessen the load the the need to always use Nvidia. So this is not anything new, but as more and more developments come out like open AIS jalapeno chip that is going to make the market digest a little bit. Lots of great news here guys. I encourage you to come look at this on your own. Edge computing up 13%. You know the problem is this is not growing. Hasn't grown in a while. But you look at some of these other areas with autonomous vehicles. I think there's a lot of opportunity for robotics, autonomous vehicles, and more. Let's look at a quick chart. If you're new here, guys, this is a quick video, not a lot of editing because I'm trying to get the information to you as fast as possible after earnings. So, I'm kind of putting this together quickly, trying to get it up to you. If this is, you know, helpful at all, first of all, I'd love if you dropped a a like and comment, get in the algo. But if you're new here, you're not subscribed, subscribe to the channel. Click that bell for notifications so you don't miss the next video. I really do appreciate the support. Let's look at Nvidia's chart so you can see we're up 4% now after after hours. We'll see how that holds up. And this is going to be old. I'm just going to pull it up. But I do think I do think that this stock can get to this red line here. This red line I've been telling you for a while. I think Nvidia, my opinion and my research says Nvidia should be 250 plus in 2026. Nvidia's delivered on everything it needs to do to get to that stock price. The market just not has not bought into the idea. Is this the time? Perhaps. We still have some time. It's, you know, end of August. Can the stock break 250 by the end of the year? I think if it doesn't early next year, it it certainly can. Now, that's not financial advice. It's not saying go buy it. And I I can't guarantee anything. I can't give you financial advice. I'm just giving you opinion and the charts actually supporting that opinion because the Fibonacci R3 is $249.51. So if you own the stock, I believe it's a hold. If you don't own the stock, I think there's still upside, but of course there's risk to that narrative, and I've shared some of those risks, but I could probably do an hour video on the pros and an hour video on the cons. Right? This is just a quick update on what's happening, some developments with the company, as well as of course the earnings and the guidance. Hope this is helpful, guys. I appreciate you watching. Have a great rest of your night. We'll see it.