CNBC & Fox Today On NVIDIA Stock, NVIDIA Earnings, Micron Stock - NVDA Update

days, but Nvidia has been a company that you've keyed on for years at this point. Now, when you take a look at the results, we know what the numbers were, but it seems as though to me Jensen Hang understood the assignment. We heard all of the quote unquote concerns about what Nvidia could do to even precipitate some kind of a stock drop, and he addressed every single one of those concerns during the course of either the earnings release or the earnings call itself. Did it play out that way in your mind? Did he tick off all the boxes? >> Yeah, look, I think you could take that press release, print it out, and hang it in the Lou because to some extent, I mean, I think what Jensen saw is that he understood from a guidance perspective, the circular financing concerns, but Dom, I think the biggest thing is just demand. I mean, if you just look at the acceleration of demand that we're seeing in AI, no one has a better perch than Nvidia and Jensen. And I think it's all it's almost all a jigsaw puzzle. You think about the hyperscalers and you think about some of the software companies like Palunteer. Look at the memory players. But this was the Super Bowl. It's what does the godfather of AI Jensen Nvidia say? And that's why this it just puts more fuel in the tech rally going into the rest of the year. So the new concern might actually be that Nvidia cannot grow fast enough to satisfy certain investor expectations because it said on the call that they could grow even faster but for some supply chain constraints that are elsewhere down the system. >> Is that something that we have to now worry about or do we feel as though there will be an equilibrium reached over the course of the next few quarters or so? >> Yeah, it's a great question. Look, we don't think core equilibrium you don't hit probably till early 2029 maybe late 2028 demand to supply today is call it 12 to1 you know for chips because the reality for Nvidia I mean that it's a high class problem supply will clearly be an issue remember this is without China I mean that that's what's unbelievable about it and I think if you look at the acceleration that we're seeing in demand you put it all together anyone that worried about monetization and circular financing. It comes down to what do enterprise demand, what does it look like and that acceleration that you saw. I think that was really the explanation mark for the tech sector. >> All right. And and just give you just hold one second here. We got a news alert right now with regard to some kind of headlines coming. This is coming from Politico. All right. They're saying that the Trump administration is weighing a new round of sweeping tariffs on semiconductor companies. The story goes on to talk a little bit about the detail. The administration is weighing that new round of tariffs on semiconductors. This is according to eight people familiar with the discussions speaking with Politico. Uh the tariff approach, one tariff approach under consideration would dramatically expand the number of tech products subject to duties hitting not just chips but potentially many of the goods made with them like laptops, gaming consoles or servers that fill data centers. Interesting headlines coming out. This is at a time when there is a massively competitive dynamic developing between the US and China for tech and artificial intelligence supremacy. How exactly do you think the markets will take something like that into play? And what exactly is the administration thinking in your mind about why they would want to do this at a time when the US is trying to seek that dominance? >> Yeah, market will take it in stride because it's a continued sort of shot across the bow that you're going to see from the beltway. Look, the the the reality is is that US and China, they're in an arms race. And for the first time in 30 years, it's the US that actually has the lead because of Nvidia, because of what we see with the hyperscalers, Palanteer, and others. But this is going to continue to be the sort of tugof-war that we go on. But the the irony and I think Jensen would talk about is that by not selling into China and the and you put these tariffs on the one that ultimately wins is China tech and Huawei and so and what we see in terms playing out in China and that is going to be this balancing act almost a quagmire that the administration's looking at because you don't want to cut the knees off of big tech just like we see what's playing out in the market. >> All right. >> You know Dan's a expert on this. Nvidia has tremendous amount of competition. That competition is scaling, but for now, Nvidia is still hitting it out of the park. >> All right. You know, it's funny. One of my old bosses on Wall Street, Dan, back in the day said things Steve said. Markets do tend to gravitate towards where the most pain is at some point. Now that we've kind of cleared the decks a little bit with regard to the tech and AI trade, where exactly is the pain right now? Is it the fear of missing out on potential upside or is the pain going to be hey maybe this is enough to sell the news >> I think Grao nailed it in terms of just the narrative look the reality is it's a Jenga puzzle and you put it together think about the hyperscalers then what we saw from the memory players now what you see from the godfather of AI Jensen Nvidia the demand's accelerating I mean we we think demands accelerated 20% even in the last three months so I think the pain investors are going to feel it. They're on the sidelines. You know, the bears have scared many periods over the last few months. And I think this just shows in the AI party. It started at 9:30 p.m. It's about 11:30 p.m. Now, that party goes to 4:00 a.m. And I think a lot of investors don't want to miss out on that party. Okay. All right. >> Nvidia shares they're moving higher after the company reported better than expected results and revenue guidance. Joining us right now to break down that report is John Finn. He is a key bank capital markets equity research analyst. Good morning to you. Um obviously remarkable remarkable quarter. The question is which part of what part of Wall Street missed this? >> I think what was surprising to the upside for for Wall Street I would say is the outlook for next year, right? Um, you know, Nvidia has consistently solidly beat and raised expectations on the quarter in the guide. I don't think those results were were generally pretty much in line, but the 70% um revenue growth outlook for fiscal 28 was very impressive. Uh, Street was looking for up 45%. That was what was uh I think put Nvidia over the top here. So when you start to think out about what this company could really be worth, we're sitting at $222. What do you think it What do you think it really should be worth? >> Yeah, I mean our price target is $330. It's a a pretty I think a conservative number. It's based on 20 times our numbers. I mean Nvidia yesterday said that they actually have demand for 100% growth next year but they're actually supply constraint and as result is uh is only currently able to grow 70%. So you know potentially there's uh there's upside to those to those numbers potentially. >> And so when I mean we're all trying to figure out you know how long is this last is this last forever? What are you thinking? You know, I think every new opportunity is ultimately cyclical at some point. Um, I do think that demand is clearly durable in through all of next year and probably into into a good part of 2028 right now, right? Just given the supply constraints that we have right now. and and therefore when you think about the sort of larger question about this asset class idea and when we start to see $500 billion of loans made into this space does that make sense to you? I do um I do I feel that in this particular case it's not your classic you know asset financing situation because I think there is truly an and real demand there right and it's not a situation that if Nvidia wasn't going to provide financing for some of its customers that they would go and buy another solution right there is no other merchant AI chip solution out there on the market that is a credible alternative to Nvidia right now. And you know, I think the probably the most telling thing is they talked about how, you know, they're investing $50 billion into frontier AI companies such as like the open AIs of the world, but they're expecting uh those companies to generate over $ 160 billion in revenues next years. And these are multi- multi-year agreements. So, it's it's pretty clear that there is true demand for their solutions here. and they're just enabling that. >> Let's of course though begin with Nvidia's blowout quarter in this bullish sales guidance. Company does say it sees revenue growing 70% for fiscal 28. Jim, that along with the gross margin guide answering a lot of concerns. >> Yeah, I mean if you look at the narrative, the company reports and doesn't give you that uh forecast. They just report flat out what their numbers are and the stock goes down five, six, seven and you start thinking, "Wow, this is going to be another time that Nvidia reports again and it goes down and then suddenly they drop a ball and the ball is instead of 45% consensus uh uh growth estimate, they're going to do 70." And that just changed everything because then suddenly you have a situation where you know that they have far more demand. you know that they're going to be able to make far more per GPU and you just say you know what whatever we've been thinking before maybe this company selling it 10 times earnings and you've got one of the greatest companies on earth David you know that this was a night where Jensen took on this is a night where people took on a lot of civilists here you had Ben off take on uh SAS apocalypse but Jensen directly took on the idea that you know what we are not doing circular uh we wish we would do more of these deals deals. Computers worth a lot and the growth is far greater than people thought. Uh and those worried about gross margins. Yeah. Okay. So we uh you know we gave a customer a benefit on DRAM. >> Well the growth that 70% number to your point is constrained as a result of supply. >> So he not quite sure what the number would be were there adequate supply. In this case we're really talking memory. I think it'd be 75 or higher. Yeah. So, uh, certainly being taken as a positive. We're seeing the stock obviously potentially rally as much as 5 or 6% when we get started with trading. >> Was it was it 225 before the political story? >> Talk to me a bit about Ver Rubin and the ramp there and some of the questions they may have answered there. I know there were concerns among some of the analysts for example about delays. >> Yeah, that he just point blank said that's just not true. Mhm. >> Uh he also talked uh ethereally about the the idea of hundreds of thousands of jobs being created as opposed to laws. I thought that that was important. >> That's not really a video, but he did say that there hundreds of thousands of jobs are being created by what they're doing. >> Okay. Yeah, that's not central to what we're talking about here. >> I threw that in for you. I >> I know, but that's a separate conversation. >> I know. Okay. Look, you want to go back to Vera Rubin? >> No. Okay. Ver Rubin is a very is the growth margins really good. And what he did was he reaffirmed the road road map. You get kind of a Ver Rubin, then you get the Ver Rubin extra and then you get the Richard Feman. Uh what happens I think what what I feel most about what what was important Carl a lot of people said and I remember when Intrader is first on the show who was referenced by the way in the call uh in my interview >> the CEO of Core We should point out >> a lot of people were saying missing the point that Nvidia's the GPUs hold their value because the GPUs hold their value. uh the re reason why you can have endless numbers is the GPU is really a combination of hardware and software and they they send new software so it keeps its value because it's got this shell and the shell takes the software and I think that what Jensen was trying to say on the show last night was look we're a software company that's hardware company and if you want to value us is just a hardware company that's you're going to get the you're going to get the value of >> yeah that's why that A100 contract at Coreavee was so pivotal to the conversation a couple of weeks Yes. And he referenced that and he just keeps saying, look, you have to understand Elon Musk, he can go buy a huge amount. He go he can go buy 110,000 Nvidia GPUs. And David just turned around and rent them for a fortune. So what the theme of last night's show was, the profits are here now. Customers are using them and they're making a killing. It's no longer something where like who knows what's going on to come and maybe one day. It's right now. And that was one of the reasons why another great thing was 50% of the customers are not hyperscalers. There's other companies that think they can make a lot. >> Well, that's the whole point around this new uh financing structure. Although Amazon is going to buy a bunch over the next couple of years for their data centers >> and that was, you know, for the web services and that was a very telling moment. I think Jensen was very proud of that. you know, there's this weird kind of like you Google's trying to do something and then Google probably wishes it it it had more Nvidia because it ended up having to borrow from from uh from SpaceX. But I think Dave, when you get a situation where you know that you can buy a product and make money with it, I think the whole thing about when is it going to be profitable when is answered? >> Right now is the answer. >> Well, it may be to your point. They did talk about the revenue mix particularly in the data center and the increased revenues you get from running Vera Rubin versus running Hopper chips and on from there. So I think >> well it's revenue per watt. >> They talk about it like as content per gigawatt. So revenue revenue opportunity rose 18 billion a gawatt with hopper to 25 billion a gawatt with blackwell 40 billion a gawatt with ver rubin which is where they are now uh or at least that's the that's the the chip lately. So >> they are speaking specifically to the opportunity their customers can capture in terms of when they're using those more expensive chips. I I totally agree and that's that was really important. Everyone should I you know I want to just t myself that the interview was about debunking pretty much everything that's been said about it and I thought he did very very well >> capital return also I just you know that's still not unimportant where are they there I think they still are talking about 50% of cash flow still going back to the holders >> I think there's a wink and nod in that wink and nod >> buybacks and >> wink and nod that the buyback is going to be blowout now remember why cash flow is incredible and he doesn't need it all and he's basically said that the big buildout giving money to companies is probably almost over if not over and if you take a look at what happened you look everyone's trying to figure out when's Micron going to do the buyback when is when is Nvidia going to do a monster buyback instead of just the buyback now where they're doing say 20 20 billion I mean maybe they're going to do an Apple-like buyback I've asked over and over again to do an Apple-like buyback I think it's possible where remember Luka Mey took onethird of the share count out crunched it that Sandis like That's SK Heinox like that's Western Digital like and that's C like I think that Nvidia is more in that camp because the cash flow is just >> well certainly shareholder returns are a huge narrative on the Korean memory names you did talk to Jensen about various buckets of demand uh sovereigns and others take a listen >> we're seeing AI being adopted all over the world every single country wants to get involved every country needs to every company wants to get involved and so half of our business is in the hyperscalers and the other half of our business is everything else. It's neo clouds and sovereign clouds and enterprise companies and all of this is all growing at the same time and this is all happening of course at a time when we're rolling out Vera Rubin our next generation product. It's going to be the fastest ramping product in our history. It's really exciting. >> I want to go back to what you said about an asset we call compute. When I was at Goldman Sachs in the 80s, someone said, "You know what? We ought to bundle a lot of auto loans, make them into an asset." Everyone laughed, thought it was really stupid. It's now the second biggest market. I think compute, what you're talking about with the 500 billion, the people who are getting together on Wall Street, compute should be much bigger than auto one day, don't you think? >> Oh, no question about it. Uh, first of all, this is not compute as in your cell phone or your your PCs um that are that the moment that you buy them, you know, it's it's becoming obsolete. Uh, this is part of your infrastructure and it's productive infrastructure. It's making money for you. One of the things that's really different about NVIDIA is that we are funible, meaning that you can use NVIDIA across the entire life cycle of AI from data processing, pre-training, post-training, all the way to deploying the AI agents. >> You buy that it's not like the compute in your phone? >> I I completely buy that because these are very this is a businessto business, very big uh very almost nothing to do with each other. I mean, this is like a huge factory with these machines in it. And I do want to point out I have asked him so many times and as Klet Crest the amazing CFO hey can we get some customers away from the hypers scale can we get some customers away from well I mean the wish you got it I mean the hyperscalers are 50% and I think they're going to go down to 40%. I mean there's just >> replaced by >> by all those different by by >> sovereigns >> by sovereigns. Now some people say are they replaced by neocloud in other words placed by more for in trade or more for it's entirely possible. Now, some people feel those are speculative. We shouldn't shouldn't think about them. But he's talking about most of these guys being investment grade. So, I felt really good about this. >> You you did complain this morning that you feel the stock's trading heavy today, right? What did you what did you want? >> Well, I thought that this thing could be the greatest gainer of all time in a single day because I think that more more questions were answered in this conference call and in my interview than I've ever seen in terms of the doubters. He took on the doubters. He was not cases apocalypse Mark Benov who was just rowdy about it. He was and I like that. I like that. Don't get me wrong. Rowdy was goodness. I'm from Philadelphia. But I do think that that Jensen in a passive in a very kind way. I thought of David when I did David did the Sam Alman interview. I'm glad David's here. David did the Sam Alman interview. Yeah. >> In May, I think I thought that it was like wait a second. Alman is just he's off the reservation. And he's taking the money from Nvidia, taking 30 and he's like doing it doing jalapeno, you know, the jalapeno chip. >> Yeah, that's one. No, it's not a chip. >> Well, it's jalapeno system. It's an operating system. >> It's the right It's the operating. It's the infrance down at the bottom. >> Oh, what's your point? >> Yeah. What was your point? >> Well, I mean, why would you take why would you take Jens's money and then do a product against directly against J? >> You mentioned this yesterday. And he said, well, you know, it's kind of he said he's a lover, not a fighter. Right? You know they are I mean to be fair all of the uh Frontier Labs and every they're all developing their own custom chips for certain workloads right that is happening >> certain workloads but if you want all workloads you need Nvidia and that's what was the essence and by the way David I think the Amazon web services I think they bought all those chips because I think the customers say listen you know what we want to use Amazon web services but we not chips right over the next two years by the way to that point the hyperscalers I mean this is Nvidia's estimates but it came on the call. 800 billion in spending this year and they see it just five five hyperscalers 1.3 trillion in spending next year just to use their numbers there. where we get numbers from every then immediately >> that's just five companies >> right but he's saying look in a in a world where space you know where SpaceX can buy them and then rent them >> it's pretty good I mean think about it like this let's say you're doing a building and again I'm this I believe in the comput story let's say you're doing a building what we always liked about big office buildings is you can depreciate them but they really don't need they really don't depreciate depreciate them every year they're fine they're still standing they have to you know it's unless you do like recapture >> you got to do some work sometimes on things maybe >> right but this is but this is look that's compute that. Imagine the analogy. >> I get it. >> So you buy them and you rent them out. That's profit. And I think that that was a he unveiled a simple model last month. >> Last two cheering inside the AI world. Nvidia has got the crowd on its feet. Folks, you know what? I grew up in the 1970s, right? And my favorite baseball player uh of all time, Reggie Jackson, who earned a moniker Mr. October, right, for his World Series performances. In fact, this is 1977. Three separate first pitch. The first pitch, bam. First pitch, bam. First pitch, bam. Right? I mean, the guy was not bashful, right? He boasted that, hey, I'm a straw. I am a straw that stirs the drink. And it was true. And that's the case with Nvidia, which is rocking today, knocking the cover off the ball last night. Not only did they post these amazing earnings, but guidance was phenomenal. But here's the thing. In recent quarters, Nvidia shares have actually slumped after impressive results. So, what's different this time? Well, beyond the numbers, I think the conference call, particularly the CFO, Colette Crest, she was phenomenal. In fact, the stock was initially down. She started speaking. She turned that thing around. Also, the company provided guidance. It hadn't really been doing that. That was essential because not only did Jensen and Company tell their own story, but they also clarified the impact, the magnitude of the AI revolution. They are the straw that stirs this drink. And boy oh boy, what a straw it is. Let's take a look at these numbers for a second. Right? If you hadn't seen it already, uh the two main businesses, Hypers scale cloud industrial enterprise up 102%, data center up 117%, revenue $96 billion. This is three months, a billion dollars a day up 106%, gross margin 75%, operating margin 66%. I mean, it's just absolutely phenomenal. Phenomenal. 12 analysts raised their target on this stock, but this one uh you know, believe me, a call is out to the guy Raymond James. $515. In other words, you know how folks come on the show and say, "Well, it's a $5 trillion stock. It's going to be tough to get it to six." They're saying, "No, 13 trillion." Uh four maintain their targets. By the way, no downgrades that I can find. I got to bring in IO Fund CEO lead tech analyst Beth Kendick. Beth, I mean, golly, it was everything you said it would be and more. So, let's kind of walk through these numbers. I went through your note and it's interesting because you kind of focused on not the hyperscaler part of the business, but the other part that's generating this revenue. >> That's correct, Charles. A major takeaway last night is that Nvidia proved it may not need hyperscalers as much as the market thinks. Although hyperscalers do represent half of Nvidia's revenue, it's really those non-hyperscaler customers. So AI clouds, neoclouds, enterprises, they grew even faster than the hyperscaler uh portion of their data center segment. And what's mindboggling, Charles, is that even though the CFO says they're expecting 1.3 trillion in capex next year, and if anybody knows the number, it's Nvidia. Um that number doesn't even include the non-hyperscaler segment. So it's 1.3 trillion in capex plus some for Nvidia next year. and and and this chart here. So, uh in this report, 40 billion versus almost 49 billion, but you go down to the first quarter 28, uh 64.8, 66.2. Just to your point, just absolutely remarkable. And this gets to some of the push back, right? A narrow number of clients, a narrow number of customers. That was one of the bare arguments against it. Another thing you pointed out that I thought was interesting, the tokenization, right? Lifetime token output, AI factories. I want to start first with the token side. We know tokens have gone through the roof. Uh particularly like with the bots, you know, and the humans have very little to do with it anymore. But explain the correlation between the token usage and how it justifies the increase in price. >> Yeah, absolutely. Charles, last night, Nvidia guided for 70% growth next year. Analysts were expecting 45% growth. How can this company do that? Well, it goes back to lowering token cost. They Reuben will be lowering token cost by 35x. Now Goldman Sachs has forecast that token processing will reach 47 quadrillion per month. There is plenty of room for Nvidia to engineer better systems to drive down token costs and justify higher prices. And that is exactly what is driving that higher guide next year. >> This is that Javon's paradox I guess everyone talked about. Prices are going this way, use gone this way, and it all benefits uh uh Nvidia. This is exactly what Nvidia wanted. I got to ask you a little bit about this, the AI factory platform, right? Uh Jensen, they're there seem like they're always about three, four, five years ahead of everyone else. We know it's not just the stacks, but also the CUDA system that you introduced that you taught me about a few years ago that kind of keeps them in in this sort of lead position. >> Yeah. And Charles, you know, last night it really was about broadening the AI trade beyond big tech. In one area Nvidia has the market cornered is AI factories. And that's because they're combining compute, networking, storage, and software. Now, it's not only the complexity of combining all of that. It's also securing the supply. And that is something that enterprises will never want to take on their own. And that's why the non-hyperscaler trade really does matter because companies, neoclouds, enterprises will always look to Nvidia for those AI factories. >> What about with Jensen's uh comments about you know seeding backing these names up and know the again the push back is this is circular financing. It's gimmicky. Uh but he's saying listen these are these kind of startups. It's hard to find the billions of dollars that are needed but it's essential and it's there's nothing gimmicky about it. >> Yeah. And I would almost look at it company by company. If we look at Nvidia's financials, you stated this already, uh a very impeccable f very impeccable financials. Uh they can really afford to to start to help finance uh this buildout. And there's really no threat to Nvidia's financials uh by investing in these up and cominging companies. >> Revenue per gigawatt. Uh a few years ago, I think it was like 30 billion, now it's 5060 billion. You could see the one gigawatt platform. We go from Napa to Vera Rubin, it's 18 to 40 billion. How sustainable is this? This is again, it's hard because we just the the numbers roll off our tongue. But in real life, it's it's mindboggling this kind of pricing power. >> Yeah, it really is. What you described was a 2.2x increase in revenue density from the exact same power envelope. Now, Nvidia's customers will not be able to secure infinite power. Um the goal for Nvidia will be to double the revenue generated increase you know token output uh within those fixed power envelopes within those fixed gigawatts and that's exactly what they're doing. >> I I I got to uh there's one thing that's been bothering me today uh memory the things that they said about memory just you know the the the the demand the pricing maybe it's a even a reason to give up a little bit on the margins memory stocks were up premarket all of a sudden they got hammered. So I'm reading C CXM the Chinese memory name. There was also some news out on them about the the DRAM supplying 50% of China's DRAM. Is there this competition? You know on the memory side of this story which should be it's higher. These stocks are struggling today. Is this something we should be really concerned about as investors? A lot of people watching this show they own Micron. They want to know why it was up 35 bucks last night and then and it's down today. >> Yeah. Memory has been a wild ride in both directions. What I would say is that inference especially is only going to increase memory storage KV cache offloading. It's nearly impossible 99% probability that memory is nowhere close to the cyclical top. Uh and it's only because inference is in its early stages. How could inference be in its early stage and memory top? It makes absolutely no sense to me. >> Right. So, so hang in there folks. >> Yes. Hey All right, I hope you're all doing well today and staying calm in this market. Thursday was a mixed day in the market. Many stocks in the S&P traded lower even though we were positive at the index level. Nvidia had a notably positive session following Wednesday's earnings thanks largely to the fiscal 2028 revenue guide that leadership provided on the earnings call. I'm going to cover iron earnings in a moment and I'll recap Nvidia earnings after that in case you missed Wednesday's video. But first, let me cover some important news stories about Nvidia and memory makers. So Wednesday evening, Nvidia disclosed that they significantly increased their supply commitments and they spoke about gross margin pressure in future quarters due to higher memory prices. All of that is positive from memory makers like Micron and SKHix. That said, we saw Micron trade lower during Thursday's session likely due to a few pieces of news that I'm going to cover now. We also have to keep in mind that with Nvidia having such a strong day on Thursday and considering that Nvidia has such a large market cap, it's likely that there was some selling pressure in Micron as a result of Nvidia's significant move higher. Many managers can only have so much exposure to semiconductors at one time. That said, we also got some new stories that weighed on Micron. First, SKH Heinix broke ground on its new HBM facility in Indiana and provided a more concrete production timeline. SK Heinix is investing over $4 billion in the FAB with mass production of next generation HBM expected to begin in the second half of 2029. There are two factors wrapped up in this announcement as it relates to Micron. First, as I've said before, market participants are nervous about any new capacity coming online due to fears about potential threats to the memory makers pricing power. And second, Micron is the only US-based producer of HBM. That status is worthy of a premium, and Micron is uniquely positioned in that regard. But now, with this announcement from SKH Heinix, we're talking about SK producing HBM in the US as well. In fact, SK Heinik CEO appears to have taken aim at Micron by saying, quote, "We will become the most trusted partner in the US, where top tier customers, R&D capabilities, and partners align." This announcement weighed on Micron stock Thursday. Additionally, during a webinar, Tech Insight senior vice president said that China's CXMT successfully implemented HKMG technology in its G416 anometerclass process, and LPDD are 5X products. CXMT is also reportedly in initial production of HBM2E and sampling G4 based HBM3. Tech Insights estimates that CXMT still trails the memory leaders by roughly two generations, but the gap is narrowing. That also spooked some market participants. In other news, Politico is reporting that the administration is considering a new round of tariffs on semiconductors as well as products that contain those chips such as laptops, game consoles, and data center servers. According to the report, the commerce secretary favors a structure that ties foreign companies tariff relief to investment in US manufacturing. So, if this report is true, then perhaps companies can avoid the tariffs by simply committing to manufacture product in the US, similar to what Nvidia did. That said, Reuters said they were unable to confirm the report and a White House official said, quote, "Unless officially announced by the administration, any reporting about tariffs should be regarded as baseless speculation." Also, Micron announced their next earnings date, which is scheduled for September 30th, so mark your calendars for that. In other news, the information is reporting that Nvidia has agreed to buy Hugging Face for $12.9 billion. At the time I'm making this video, I don't know if this story is true or not. I'm just bringing it to your attention so that you're aware of it. One of Hugging Fac's co-founders actually went on Bloomberg today to talk about a different topic, and the host at Bloomberg asked him about the rumors, to which he responded by saying that he's not going to comment on that. So, make it that what you will. For those who don't know, Hugging Face is arguably the most important distribution hub for open-source AI models and data sets. We know that Nvidia is determined to be the leader in open source AI. And so, if this story is true, that is a big deal with very important implications. In other news, Nvidia announced they are expanding NVLink fusion with NVHBM, which is a next generation high bandwidth memory technology that brings higher performance and efficiency to XPUs. It will be validated and offered by leading memory partners. Traditional HBM architectures place the memory controller on the XPU die, consuming valuable silicon area that could otherwise be dedicated to compute. NVHBM is built on the same technology that Nvidia will use for future GPUs, integrating NVIDIA's custom memory controller into the HBM based die. As a reminder, Amazon's Tranium 4 will integrate Nvidia's NVLink fusion, allowing tranium chips to be used in Nvidia systems. And now, Nvidia will work with Amazon's on NVHBM technology and the NVLink scaleup architecture to enhance performance and efficiency for AI workloads. This is very interesting. Whenever we hear news about a new custom ASIC from the hyperscalers or Frontier Labs, we need to remember NVLink Fusion and the fact that Nvidia innovates across the entire stack. If another company wants to use their own custom accelerator for a specific set of workloads, they can simply integrate their XBUS with Nvidia systems via Envy Link Fusion and remain customers within the Nvidia ecosystem. The concerns about AS6 taking market share from Nvidia completely miss the point. The world is compute constrained which means there's already enough room for multiple chip makers to succeed. The market is growing an extraordinarily strong clip on top of that and XPUs can be integrated with Nvidia systems via Envink Fusion which speeds up time to market and substantially reduces risk for those developing XPUs. And now let's cover Iron earnings. Let me start by saying that I was expecting this specific earnings report to be the last quote unquote bad earnings report from Iron before we see their revenue start to ramp notably. I want to emphasize that at this current stage, I'm more focused on Iron's buildout and the company's future ramp in revenues rather than their current results. I'm not bullish on Iron because of the company's current fundamentals. I'm bullish on Iron because of the company's future growth. That said, I'll briefly mention a few metrics for the quarter. Topline revenue was down sequentially, which was expected because iron is transitioning away from Bitcoin mining. Iron also reported a notable net loss of roughly $684 million for the quarter. The vast majority of that loss was from the decommissioning of Bitcoin mining hardware, which was expected. What really matters is progress on Iron's buildout, customer contracts, and AI cloud revenue. Iron's AI cloud services revenue more than doubled quarter over-arter, which is good to see. That's mainly from capacity coming online at Iron's Prince George site. You may remember that Microsoft recently accepted delivery of the Horizon 1 data center from Iron. Horizon 1 revenue is not included in these results at all. That's something to look forward to starting on Iron's next earnings report. Iron said they have 1 billion operating ARR as of August 26th. That's good news. That implies that the aircooled capacity at Prince George as well as capacity at Horizon 1 are both online operational and generating revenue. Iron share that they have $4 billion of contracted ARR for 2026 capacity. That's very important. Iron previously announced that they're targeting $4 billion in ARR by year end 2026. Prior to this report, we didn't know that all of that capacity had been contracted out to customers. That created some uncertainty among market participants. But now, iron is saying that $4 billion worth of 2026 capacity is contracted, which should be a relief to investors. Iron emphasized that they are being deliberate in allocating capacity to a diversified customer base across hyperscalers, enterprises, AI developers, and frontier labs. In other words, they're in no rush to sign contracts and they're trying to be strategic about which customers they work with. As long as the world is compute constrained, Iron should be able to sell whatever capacity they can bring online. Demand far outpaces supply. Therefore, iron currently has a lot of leverage in negotiations. With that in mind, it makes sense that Iron is being strategic about which deals they sign. Iron is forecasting approximately 25 to30 billion of fiscal 2027 capex. That is a lot for Iron. Iron said their capital requirements are expected to be met through existing cash and committed GPU financing/prepayments of $14 billion. Iron is also targeting additional GPU financing/prepayments of approximately $8 billion. And the residual requirement is expected to be met through data center financing, operating cash flows, and corporate debt and equity. So, we could definitely see more corporate level issuance from Iron moving forward. That said, leadership made the point on the earnings call that Iron's data center portfolio is currently unencumbered, including horizons 1 through 4. That gives Iron assets against which it can raise debt. Management indicated they're already having discussions about this and could finance facilities either after commissioning or potentially before commissioning. So, we could definitely see more dilution under the ATM and corporate level issuance. That said, hopefully that would be only a small portion of the capital requirement given that Iron will have more optionality as it relates to raising debt moving forward. Iron also said they have a new multi-year contract with a leading Frontier AI lab whose name they cannot disclose at this time. I thought it was odd that they didn't announce the name, but we'll probably learn more about that in the future. On the earnings call, Iron CEO shared that recent three-year contracts are pricing at greater than $20 million per megawatt of IT load, representing a roughly 2-year payback, and active discussions are at roughly $25 million per megawatt of IT load. Recent customer prepayments are 45 to 55% of GPU capex, which is strong. Iron is targeting delivery of the Horizon 2 through four data centers to Microsoft in Q4 of calendar 2026. Horizon 2 is working toward commissioning with GPU installations underway and Horizons 3 and four are in the late stages of construction. Iron provided an update on their $6 billion ATM program. Iron said that as of August 14th, they had sold a total of 47,165,838 shares under the ATM for aggregate gross proceeds of $2.49 billion. So, if my math is correct, then that would mean that since the last update, Iron issued an additional 22.43 million shares and raised an additional roughly $1.43 billion through the ATM. That means roughly $3.5 billion of the original $6 billion ATM remains in used. Previously, I said that I was expecting a share price in the range of $100 to $150 per share sometime in the first half of calendar 2027. The main reason that range is so wide is because of the ATM program. $6 billion is a lot for iron. I also have to consider the timing gap between when iron reaches their ARR targets and when iron actually realizes quarterly revenues that are in line with those ARR targets. Iron was aiming for $500 million in ARR by the end of Q1 of calendar 2026, which would translate to quarterly revenue of $125 million when fully realized. We have yet to see the projected run rate fully materialize in quarterly revenue, although I think that is likely to be reflected on Iron's next earnings report. That time gap is something that I need to start incorporating into the expected price range. Because of that, I'm going to have to adjust both the lower end of the expected price range as well as the upper end. I have to make that adjustment because of the time gap between when iron reaches their ARR targets and when those milestones actually translate into reported revenues. Now, with all that context in mind, I am narrowing my expected price range to the range of 90 to $120 per share. Sometime in the first half of calendar 2027, as Iron issues more shares under the ATM, I will likely narrow that range further. And again, I had to adjust the lower end of the range because I need to start accounting for the time gap that I mentioned. That price range assumes that there isn't a market down and over the relevant time frame. It assumes that the world remains compute constrained. It assumes that iron reaches their ARR targets on time and it assumes that there is not significant delilution beyond the $6 billion ATM. Please keep in mind that this is not guaranteed. I'm just providing a range that I think is reasonable. But there are multiple assumptions baked into the price range that I just gave and nothing is guaranteed. Determining the exact time and price is very difficult because there are many factors at play here and there are still many unknowns. And so I would rather provide a general range that I think is reasonable and gradually adjust that range over time as necessary. But regardless of the specific timing, I continue to be bullish on iron and I expect to be bullish at least through calendar 2027, possibly longer depending on what happens. And I'll have to update my thoughts on Iron as time goes on and we gradually gain additional details. Short-term fundamentals are not great, but we expected that as iron is decommissioning their mining business and their buildout is underway. That said, $4 billion of 2026 capacity is contracted to customers. Horizon 1 is operational and Horizons 2 through 4 are on track to be delivered by year end. And so regardless of the specific timing, I do expect that Iron's share price will eventually move decently higher. Even though I don't know what will happen in the short term, I continue to be bullish on Iron and I expect to be bullish through calendar 2027. Now, in case you've missed recent videos, I'm once again going to recap Nvidia earnings. Keep in mind that when I post a video on YouTube, the vast majority of my subscribers do not see it. And so I'm going to recap Nvidia earnings again in case anyone's missed recent videos. Nvidia reported revenue of $96.2 billion versus $92.3 billion expected. Data center revenue was $89 billion versus $86.3 billion expected. Adjusted EPS was $222 versus $29 expected. And Q2 gross margin was in line with expectations at 75%. Something that I think initially spooked market participants when the report came out was that Nvidia's free cash flow decreased notably during the quarter to 21.3 billion, which is down from $48.5 billion last quarter. This appears to be due to a decrease in cash flow from operating activities, which Nvidia CFO addressed in her commentary. Cash flow from operating activities was $24.1 billion versus $50.3 billion a quarter ago, and a sequential decrease was driven by higher working capital adjustments and cash taxes. It's worth mentioning that Nvidia previously indicated that cash taxes would rise materially in Q2. Also, Nvidia had a significant increase in accounts receivable during the quarter, resulting in a roughly 22.35 billion negative adjustment to operating cash flow. That was by far the largest working capital drain on free cash flow during the quarter. In other words, the increase in receivables reflects revenue that had been recognized, but where the corresponding cash had not yet been collected by the end of the quarter, creating a significant temporary drag on operating cash flow that has to do with timing. It's not anything to be concerned about. And as for next quarter, Nvidia guided revenue at $18 billion versus $ 104.2 billion expected. And Q3 gross margin is expected to be 74% versus 75% expected. We later learned on the earnings call that the slight miss on next quarter gross margin is due to higher memory prices. That slight miss is likely why the stock initially traded lower when the earnings report was released. Also, in Nvidia CFO commentary, we got this table showing Nvidia's future commitments. This is very helpful and I'm very glad that Nvidia provided this table given all the talk about circular financing that we've heard in recent weeks. I've probably heard the phrase circular financing hundreds of times over the past month. As you can see from this table, the vast majority of Nvidia's commitments are for supply and capacity so they can produce more product and grow revenues. Nvidia's investments and cloud service agreements are relatively small compared to Nvidia's commitments with suppliers. In other words, the claim that Nvidia is quote unquote funding its own growth is in denial of the actual numbers. To put it another way, Nvidia supplier commitments are substantially greater than their investments and cloud contracts. Meaning the overwhelming majority of Nvidia's demand is not being funded by their own investments. Not even close. The circular financing fears are largely overblown and the talking points are getting stale. Now, let's cover the Nvidia earnings call. Let me start by saying that this was one of the better earnings calls from Nvidia in some time. Analysts asked some great questions and both Jensen and Colette were very direct and to the point with their answers. This was a very good call in my opinion. And now but a rapid fire important points from the earnings call. Nvidia CFO started the earnings call by saying quote we expect to grow revenue by approximately 70% in fiscal 2028. That is much better than analyst consensus of roughly 44% revenue growth in fiscal 2028 and that is a supply constrained outlook. In other words, growth would be even greater if Nvidia wasn't supply constrained. Later in the call, Jensen said that Nvidia's demand is far greater than 70%, but 70% is what Nvidia has high confidence that they can deliver given the supply constraints, but they will continue to work on that. Later in the call, Jensen said, quote, "We have more supply than 70%. Our demand is much higher than that." So, in other words, revenue growth should exceed 70% in fiscal 2028. But, of course, Nvidia is conservative in the guidance that they provide, and so they're just saying 70% even though they expect growth to exceed 70%. I can't stress this enough. Going into this report, consensus was roughly 44% revenue growth in fiscal 28. And Nvidia just told us they expect 70% revenue growth in fiscal 2028. And Jensen's comments on the call indicate that growth will actually be greater than 70%. That piece of news is what caused the stock to start trading higher during the earnings call. Nvidia also announced an expansion of its partnership with AWS. AWS is deploying an additional 2 million GPUs starting this quarter through the second quarter of fiscal 2029. Nvidia's non-hyperscaler data center revenue increased 138% year-over-year to $4.3 billion and Nvidia CFO said that non-hyperscaler customers will represent roughly half of Nvidia's data center business. Later on, Jensen reiterated that Nvidia's non-hypers scale customer segment will likely be larger than Nvidia's hypers scale customer segment. That's positive on the topic of customer concentration as Nvidia is working to reduce its dependency on hyperscalers. That said, Nvidia is still growing tremendously among the hyperscalers, which have about $2 trillion worth of backlogs. According to Nvidia, Nvidia still sees about $20 billion in server CPU revenue this year and expects CPU revenue to more than double in fiscal 2028. Nvidia expects to ship Rock 3 LPX in volume later this quarter. And on the topic of the Frontier Labs, leadership said Nvidia has invested nearly $50 billion in Frontier Labs. And with Nvidia's recently announced $500 billion partnership with financeers, the Frontier Labs will be able to build and assess AI infrastructure funded by long-term institutional capital at relatively attractive rates. Demand is not the problem. The Frontier Labs have incredible demand and they need more compute to serve that demand. Nvidia CFO said the Frontier Labs customer traction and usage are skyrocketing and Nvidia believes the Frontier Labs will become the largest technology companies in history. Yes, the largest technology companies in history. Nvidia CFO reminded us that Nvidia plans to return 50% or more of free cash flow to shareholders and she said that Nvidia has returned 60% of free cash flow to shareholders year to date. Regarding gross margins and rising memory prices, Nvidia CFO said, quote, "We are experiencing extreme pricing conditions in memory. The magnitude of the price increase has exceeded our prior expectations and are headed even higher into next year. As a result, we are resetting expectations today for Q3. We expect GAP and non-GAAP gross margins to be 74%. We expect margins to bottom in Q4 in the 71 to 72% range before settling at 72 to 73% in fiscal year 28. As executed, price increases take effect in Q1. So that update on gross margins moving lower is not great for Nvidia, but it does bode well for the memory makers. Nvidia is directly attributing the expected decline in gross margins to higher memory prices. It's also worth noting that Colette essentially confirmed that price increases will take effect in Q1, which is something that was recently reported by Bloomberg. Bloomberg reported server makers were raising prices for servers containing Nvidia GPUs by more than 15% due mainly to higher memory prices. Colette didn't give us a specific amount for the price increases in Q1, but she essentially confirmed that price increases are coming due to higher memory prices. Jensen was asked about OpenAI's new Jalapeno chip and Jensen said that Nvidia is doing something very different. He said that custom XBUS are being developed that are inference specific chips for one cloud or one service. Whereas Nvidia is building an entire AI factory platform that can be used in any cloud and spans the entire AI life cycle. Nvidia CFO emphasized that a large part of Nvidia's commitments are supply commitments that are necessary to produce product. You can see in this table from Nvidia's CFO commentary that the vast majority of Nvidia's commitments are for supply and capacity, not for investments in other companies or cloud agreements. Those commitments are relatively small compared to Nvidia's commitments to secure supply so that they can produce product and grow revenue. In other words, the talking point that Nvidia is funding its own growth completely misses the point. Nvidia's investments and cloud service agreements are much less than their supply and capacity commitments. The talking point that Nvidia is funding its own growth does not add up. The vast vast majority of Nvidia's demand is not being funded by Nvidia's investments or cloud contracts. Those that repeatedly use the talking point that Nvidia is funding its own growth are in denial of the actual numbers. And on the topic of Nvidia's exposure related to its guarantees, they've essentially provided a $ 105 billion credit back stop to the data center campus in Ohio in partnership with SB Energy. And their land power and shell guarantees for AI clouds are only $3.5 billion. That's a total of $18.5 billion. As for the $ 105 billion guarantee, Nvidia's guarantee obligations are capped at a total of $ 105 billion and become effective in phases as certain conditions are met. Nvidia's guarantee exposure declines as Open AI fulfills lease payments. The circular financing fears are largely overblown. When asked about things like AGI and recursive self-improvement, Jensen said that demand is going to inflect further. It's worth noting that Nvidia's growth is already accelerating, and Jensen expects demand to inflect even further. Overall, this was a solid earnings report with a very positive earnings call. One of the better earnings calls from Nvidia in some time in my opinion. The biggest piece of news as it relates to the stock is that Nvidia expects revenue growth of 70% in fiscal 2028, which is far greater than consensus expectations of 44% prior to this earnings report. And again, Jensen's comments on the call seem to indicate that Nvidia will likely grow revenue more than 70% in fiscal 2028, but Nvidia is conservative in the guidance they provide, and so they just guide it at 70%. Nvidia usually doesn't guide beyond one quarter, so that is also a notable change. Nvidia's expectation that gross margin will decline due to higher memory pricing is not great. But in the eyes of market participants, that appears to be more than offset by Nvidia's much better than expected fiscal 2028 revenue guide. So overall, these were solid results and a very positive earnings call. Looking ahead, Jensen is scheduled to speak at the Goldman Sachs Communicopia and Technology Conference on September 10th, and then Jensen is scheduled to speak again at GTC Berlin on October 21st. 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 dotcom 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 dot 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 revenues surge. I wish both Anthropic and Open AI were public so the public could see the ramp in their revenues. 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 aic 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 3 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 and remains in high demand. Vera Rubin is rolling out to customers. Nvidia Gro 3 LPX is in full production. 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 Finnvid. 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. Thanks for watching and hopefully I'll see you in the next