NVIDIA Earnings Blow Everyone Away

Key takeaways

Nvidia’s recent earnings greatly exceeded expectations, signaling strong demand for AI infrastructure despite supply constraints.
Smaller companies like Credo Technologies may benefit from increased GPU interconnectivity, representing potential hidden growth opportunities.
High memory costs pose risks for some companies, such as HP and Garmin, potentially impacting margins and costs.
CrowdStrike reported outstanding growth fueled by AI demand, but its high valuation raises questions about valuation and long-term sustainability.
Both local and cloud AI will coexist and grow, serving different needs and applications, with infrastructure and memory capacity being critical factors.

Summary

Nvidia's Stellar Earnings and Guidance

This section discusses Nvidia's recent earnings report, which significantly exceeded expectations with a 106% revenue growth and a forward guidance of 70% revenue growth, even amid supply constraints. The company's data underlines the immense demand in AI infrastructure, with hyper-scalers expected to spend up to $1.3 trillion next year, highlighting Nvidia's dominant role and the company's supply constraints despite its remarkable growth.

Industry Impacts and Hidden Winners and Losers

The conversation shifts to the broader impact of Nvidia’s success on related companies and the industry landscape. Smaller, lesser-known companies like Credo Technologies could benefit from increased GPU interconnectivity, while others like HP face challenges due to rising memory costs impacting margins. The panel also discusses potential winners in the supply chain, such as companies involved in memory inspection and data center electrical systems, alongside the risks for companies heavily reliant on memory components like Garmin.

CrowdStrike’s Impressive Earnings and Future Outlook

This section focuses on CrowdStrike’s recent earnings, which beat expectations with an 18% rise in shares. The company reported a 51% increase in annual recurring revenue (ARR) and increased guidance, driven by AI demand and a strategic shift in billing models. The discussion highlights the high valuation of CrowdStrike, its rapid growth, and the debate on whether the stock is a buy, considering its valuation metrics and long-term prospects. Alternatives like Zscaler are suggested for investors wary of the high valuation.

The Future of Local vs. Cloud AI and Industry Trends

The panel explores the evolving landscape of AI, emphasizing that local and cloud AI serve different purposes without necessarily being in competition. Local AI will see growth for personal, enterprise, and security applications, while cloud AI remains vital for innovation and large-scale processing. The discussion touches on how this dual trend can potentially benefit cybersecurity companies and notes the importance of memory and infrastructure capacity in supporting AI growth.

Show notes

With a company as large and as meticulously covered as NVIDIA, you would think there wouldn’t be anything that surprises us anymore. So much for that thesis. NVIDIA's most recent earnings and guidance blew past everyone’s expectations and setup another stellar year for anything AI related. Jon, Matt, and Tyler dissect NVIDIA’s most recent earnings as well as the “hidden” winners and losers from the most recent earnings results. Plus, Crowdstrike’s earnings and a mailbag question about local vs. cloud AI.

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Tyler Crowe, Matt Frankel, and Jon Quast discuss:

- NVIDIA’s earnings and guidance update

- The winners and losers from NVIDIA’s earnings

- Crowdstrike’s earnings

- Is Crowdstrike’s stock a buy?

- Mailbag: Is local AI a hyperscaler problem?

Companies discussed: NVDA, HP, DELL, CRDO, ONTO, IESC, GRMN, RBRK, ZS, SPCX,

Host: Tyler Crowe

Guests: Jon Quast, Matt Frankel

Engineer: Dan Boyd

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