Nvidia (NVDA) Doesn’t Care About China Anymore

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Transcript:

[00:00:04] Doug McIntyre: Lee, Nvidia is back as the most valuable company in the world. Again, it’s I think they’re up to 3.27 trillion. They passed Microsoft. Interesting. Does that count

[00:00:17] Lee Jackson: how much their core weave is up? Yes.

[00:00:21] Doug McIntyre: Yes. Now it did something else. And that is, their, Mr.

[00:00:25] Doug McIntyre: Huang, their CEO Yes. Is now worth $135 billion. So he was helped out by that as well. Was he ever? Yeah, so I mean, this stock has rallied almost 40%. it hit that, tremendous low in March and it’s had a ridiculous rally since then. It’s up like

[00:00:49] Lee Jackson: 66%. Yeah, it traded down to almost 90 didn’t it?

[00:00:53] Lee Jackson: Back in April or the, at the very low.

[00:00:56] Doug McIntyre: Well, and, at that point, the comment was, is that a big worry about the fact that there was $50 billion that they couldn’t get because they were being shut out of China by Trump. So I guess their earnings, plus all these announcements about, AI server farms, I think by my calculation, the amount of money in aggregate that’s going to be invested in AI server farms is about $600 billion.

[00:01:27] Doug McIntyre: If you take Microsoft and Meta and OpenAI, what people have said they will spend to build these things. So I think it’s gonna be

[00:01:35] Lee Jackson: more than that. The, place that,or Meta’s built building in Louisiana is like a whole county.

[00:01:43] Doug McIntyre: Yeah. So let’s just say that’s the low end. But if you add all those things together.

[00:01:49] Doug McIntyre: I think what you get is the impression that they’re not gonna have any trouble selling, chips at all. No, and listen, there, the one thing about their earnings is that they guided, to 44 billion for this quarter. Right. So that implies that they would be up in revenue another 60 or 70%, quarter over previously years quarter.

[00:02:17] Doug McIntyre: and what that means is that their mon momentum stays, from a revenue standpoint, roughly the same. They’ve got 92% market share. Right now, AMD (NASDAQ: AMD) is second with about, I dunno, six. listen, all companies are stoppable at some point e every, everybody reaches a wall.

[00:02:40] Lee Jackson: Yep, they will. They will,

[00:02:42] Doug McIntyre: but they haven’t yet.

[00:02:43] Doug McIntyre: So that’s why. Well,

[00:02:45] Lee Jackson: and it,

[00:02:46] Lee Jackson: doesn’t appear, especially based upon, to your point. The addition of all these server farms it’s everywhere. it’s all across the country. So yeah, the, I think they have, there’s some more tailwind to, this rally, but again, we’re getting near the end of literally a 20% bounce back.

[00:03:07] Lee Jackson: So it’ll be interesting to see how it trades from here.

[00:03:10] Doug McIntyre: Well, they’re also, I think, sort of being helped psychologically by the fact that all the other, with one or two exceptions, all the other big tech stocks have also bounced back. And since so many of them, the impression investors have is that all of these are AI proxies.

[00:03:27] Doug McIntyre: Yeah. Yeah. in one way or another, everybody on the list, Microsoft, Meta, Amazon (NASDAQ: AMZN | AMZN Price Prediction), Oracle (NYSE: ORCL), they’re all, listen Tesla (NASDAQ: TSLA), that Tesla is now an AI play in the minds of investors, and that’s why market cap is so much higher than the other car companies. So Nvidia has benefited from two things. It looks like it’s in great shape and China doesn’t matter.

[00:03:52] Doug McIntyre: And it looks like everybody else is in great shape who wants to be in this business and the people in the private capital is still going into these companies. Yeah,

[00:04:05] Lee Jackson: I haven’t seen a stock like this since the nineties, so I really haven’t that I can, at least I can think of. I mean, back when everybody would wait for Intel’s (NASDAQ: INTC) numbers or everybody would wait for Microsoft Numbers or some microsystems or whatever back then, but I haven’t seen anything like this in a very long time.

[00:04:24] Lee Jackson: Yeah.

[00:04:26] Doug McIntyre: I’m gonna say that I think that it still has room to run. I mean, I know that it’s up by really a ludicrous percentage amount. It’s at a high, the market cap, 65% off that April low, but I, there’s no news that’s gonna stop this until earnings. The China thing is baked. China’s baked in, right?

[00:04:49] Doug McIntyre: Good earnings are baked in. Every time there’s another, a server farm announcement, nobody’s surprised. It’s if you said to me that, OpenAI was gonna open a server farm in Canada and they were gonna spend, a hundred billion dollars, like, okay, sure. that’s par for the course.

[00:05:08] Doug McIntyre: I’m not surprised at all. So

[00:05:10] Lee Jackson: yeah, it’s really become so, and it’s interesting though, even though technology has led this big bounce, four of the Mag seven, I think we’re still down a week ago. I mean, Apple (NASDAQ: AAPL) was down, Tesla was down and, for this year, and I was kind of surprised when I saw that, but boy, it, has been a just a ripped the shorts head off kind of rally that I haven’t seen in years.

[00:05:36] Doug McIntyre: Yeah. So, that takes along with it, the markets are basically at an all time high. Yeah. And so, no surprising, you’ve got some of these big cap companies, they’re leading the rally as has happened, the last leg up on this before you had some sell down. It’s the same companies leading this rally up, so.

[00:06:01] Doug McIntyre: Yep, yep. I mean, that’s the news in this segment. You’ve got, Wong becoming one of the richest people in the world. You’ve got the market cap up and you’ve got all the reasons why it is up, so.

[00:06:13] Lee Jackson: yep. And, it’s the old don’t want to be the last one in the door versus don’t wanna not have it in your portfolio if you’re a pm, Yeah. So it’s, like you’re, caught between a rock and a hard place here.

[00:06:26]