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The forces shaping markets and the economy are often hiding behind a blur of numbers. So that's why we created The Big Take from Bloomberg Podcasts to give you the context you need to make sense of it all. Every day, in just 15 minutes, we dive into one global business story that matters. You'll hear from Bloomberg journalists like Matt Levine. A lot of this meme stock stuff is, I think, embarrassing to the SEC. Follow The Big Take podcast on the iHeartRadio app, Apple Podcasts, or wherever you listen.
podcasts, radio news. Third quarter adjusted earnings per share coming in above estimates at 81 cents estimate was for 74 cents. Third quarter revenue coming at $35.1 billion estimates for for $33.25 billion. Third quarter data center revenue. This is what everybody wants to see that coming in above estimates. $30.8 billion. The estimate was for $29.14 billion. Carol NVIDIA sees fourth quarter revenue at $37.5 billion plus or minus
2%. The estimate was for $37.1 billion. Got to say initial reaction, folks. Not an upbeat one. Kuntan Zabani of our Bloomberg intelligence senior semiconductor team. He's an analyst and then we're going to want to bring in another guest to kind of give us some more thoughts about what we got from NVIDIA today.
yeah caroline hide who uh... host bloomberg technology on a bloomberg take tv is a joining us now she's got our eyes closely watching everything happening overhead in video that forecast family to meet the loftiest estimates for the company shares in the after hours right now down about four percent so they're off of those lows caroline but is this just about high expectations a very high expectations in the video coming out and saying okay we're we're almost going to meet them but not quite
and a very high market valuation that is the most valuable in the world, that has seen a run-up of almost 200% so far in the year. So maybe some profit-taking, when you are saying yes, loop capital, if you dig into the analysts' expectations for the fiscal fourth quarter of 2025,
loot capital had it at about $44 billion at the highest realm. Then you had fuel and securities at about $41 billion and then you get into the $37 billion range with the likes of Craig Hollum and DA Davidson was a little bit above that. So compared to perhaps some of the highest levels out there,
They're coming in a bit below and there's a plus or minus 2% there to be built in as well. So I think there is some digesting that this isn't beaten, raised and blown out of every single analyst's expectations. Still, these are incredibly strong numbers. This is a guide to the fact that we're getting Blackwell on stream that supply side will be ironed out and I think we'll hear far more from Jensen Hwang on that particular perspective.
And demand is still incredible. So I think there's just a little bit of profit-taking coming on when we've seen that the rapid rise has been 200% over the year, maybe 4% or 5% sell down isn't the most remarkable shift. Caroline, great point, right? It's not that... Perspective? Yeah, well, you know, listen, this is her world and she's talking to these tech companies following them inside and outside. And this idea that there's demand, it's just the supply constraints. It's not like people are running away from the products.
Having said that I want to tap into your knowledge of this industry and that you do have companies that come out and it's gangbusters and then maybe they have some issues with supply constraints and so on and so forth. This is kind of part of the process. Is that fair?
I think that's fair when it comes to Nvidia as well, and the rapid rate of innovation. I mean, they've almost become an apple in every single year. They're bringing out their latest new chipset and design, and we go from Hopper swiftly on to Blackwell. And people have got to keep up with that innovation. Just the way in which you store your chips and the infrastructure within your data centers means that if they're vertically stored, well, that's going to lead to more heating issues than if you're doing it more broadly on a horizontal perspective. There is a lot of innovation that has to come along.
with Nvidia's own GPU, CPUs and overall chip sets. So I think that they have said and guided to the market that yes, you're getting this reporting of overheating. Yes, you're getting these reports of snags and design. This is entirely normal. And we're working very closely with our hyperscale sub...
clients to fix this, to innovate with them and ensure that we can get them out there as swiftly as possible. I think there has been and also just trying to spreading out of AI demand. What's been interesting hearing from Jensen Wang of late has been the scaling laws. Look, basically the theory goes is that the more data you fire, the more compute power you bring, the faster and more sophisticated these large language models become. But actually we started to hear from the anthropics, from
This great reporting coming out of San Francisco with the Bloomberg team that Rachel Metz is saying maybe her open AIs had to slow down a little bit in terms of the developments of their own large language models because they're not getting as sophisticated as they have been in leaps and bounds.
Jensen's still saying, look, in the next decade, you're going to see a million times increase in compute. But we've just got to get there in terms of actually making it happen. Sounds good. Yeah. I mean, hard to even imagine. How do you even imagine that kind of increase in compute at this point? Kuncha and Sabani, I want to bring you back in here, senior analyst over at Bloomberg Intelligence. We're seeing chairs down about 2% in the after hours. A couple headlines. The company sees fourth quarter revenue coming in at $37.5 billion plus or minus 2%.
That's pretty much in line with estimates at $37.1 billion, third quarter, data center revenue, blowing past expectations at $30.8 billion, estimates were for $29.1 billion. Koonjan, what's the question you'd ask Jensen Wong? I mean, my question is really would focus on trying to figure out the fiscal 2026 calendar 2025 Blackwell revenue ramp magnitudes and around gross margins. I mean, look, we have seen in the past when VDS come out and beat
way more than what they did right now. And the stock has still plummeted about double digits. You also have to keep in mind, this end of the year, the stock has tripled this year, right? So there is some incentive for profit locking and taking the gains away from the table as well. You know, I also do think about how do you feel, Kuntan, that they are giving numbers for fiscal year 2026? Good sign, do you trust that visibility? Like how do you think about their ability to put out a number
and maybe that number might change based on if they figure out the supply issues.
I mean, I see that as a very strong sign. I mean, look at this earnings season across the semiconductor, right? Nobody is giving out numbers that far out. Even Nvidia's competitors were trying to address the same opportunity and are seeing the same strong demand signals are not giving out numbers, strong confident numbers that in year out. So that really speaks to the strength and the confidence that they have that they'll be able to support this demand and the demand is there.
And you guys at BTEC talk to him a lot. Like I'm just curious what's top of mind if you were sitting down with him right now.
top two questions. And if Ed Ludlow was, but he's out in paternity leave, so congratulations to on Ed Ludlow becoming a father. But I think first and foremost, we'd be asking, exactly, as Konjuna's been saying, as you all have been saying, it's got to be about supply coming on tap and just talking a little bit more around Blackwell and the incredible demand. What exactly does that really mean? Who are the key clients? How are we seeing that diversify out of the main hyperscalers, if at all? And then I think sort of
Trying to articulate that, look, yes, maybe we haven't blown past the highest analyst expectations, but $37.5 billion guide, that's still 70% ramp up in revenue. That's following a 90% ramp up in revenue of the fiscal quarter, just reported their fiscal third quarter. I think it's just going to have to sort of remind the market how far they've come, how far they've still to go,
and maybe just take a bit of a reality check here that, you know, at the moment the numbers will go up, but maybe not at the 200% that we were hoping to see, well, that we did see in the first quarter of 2025 for their fiscal year reporting. Hey, Cunjan, Ian King on the live blog, bringing up a really interesting point, and it kind of gets at the question that I was asking with regard to super micro computer.
Ian notes that cloud computing providers are the biggest companies in technology and they still dominate NVIDIA sources of revenue making up 50% of sales for its data center unit. So that's just a handful of companies that are making up the majority of the revenue for the data center. NVIDIA watchers want that number to go down. Three months ago that number was 45%. Is that a concern to you?
I mean, I don't want to look at it from quarter to quarter because remember these large customers are lumpy in nature, right? They have to also manage their capex and deployments. We did see over the last two to three quarters, if I'm not wrong, the number come down. It was about close to 50 or even above 50 and it has been coming down steadily. So that was a good sign for us. I still have to go and digest the numbers later on. But the 50%
in the short term might not be that great of a sign but I would not jump to conclusions just looking at one quarter. It could be very well timing of them picking up a lot more hopper supply supply right now when they cannot get their hands on Blackwell. You know I'm looking at the supply chain analysis on the Bloomberg function when it comes to Nvidia Microsoft about 19% of the revenue for Nvidia met up at 10% Super Micro nearly 8% alphabet
about 6% Amazon, more than 5%, Dell, more than 3%. So we talk about these cluster of companies that are so involved. You know, Caroline, I wanna bring you back in here, you know, Nvidia, this has been such a focal point, right? The end of the earnings season, just thinking about it so much. You know, how do you think about, you know, Bloomberg technology, you know, into the Thursday edition, you guys, when you're on air, and like, what's the tomorrow story?
tomorrow's story. I think we'll be trying to articulate where the growth trajectory goes from here. I think we're gonna hear from Jensen the next decade. You're gonna hear him talking about humanoid robots. You're gonna hear him talking about drug discovery, the capabilities of generative AI, the return on AI investment. So I think we're gonna want to be talking to
the investors that back that vision. We're going to be wanting to hear from the analysts out there that are trying to square these numbers with where their own viewpoint have been on the here and now of fiscal fourth quarter. But I think we're also going to think about who else is in the space at the moment. It's answering some of the development issues, some of the heating issues, some of the concerns around AI, generative AI, chip development and manufacturing. Who are the startups in the space? Who are the rivals in the space? What are we seeing in terms of hyperscalers building their own chips?
So I think there's so many directions that we could go for, but for me it's going to be really interesting talking about where does AI infrastructure go from here, and where does Nvidia's view on sovereign AI, where does Nvidia's view on China, where does Nvidia's view on the next repurposing of their chips, not just to keep hammering large-language models, but the development of generative AI in the real world.
So what are some of the names Caroline that our investing audience has to have their eyes on? Is it the Sam Altman's of the world who are trying to raise lots and lots of money to go after Nvidia? Is it the hyperscalers who are going to be doing this in-house? Who holds a candle to them? Or who could hold a candle to them?
in terms of siphoning off future demand or in terms of just wanting to know who the name of the key players are. Well, yeah, in terms of siphoning off future demand, because, you know, Intel Intel Intel in a tough position right now, as you guys have reported on a lot over the last year, AMD maybe, but what about those up starts?
I mean, that's going to be interesting as to whether or not we just get a future type of chip development. We've got the Grox, for example, that are backed by venture backing, who have been looking at ways in which we expand and have faster and more efficient chips. You've also got different players out there thinking about not just
the data that you have to train but then the inferencing that you do and that does that become a different type of conversation around the technology and ultimately whether you need to have more efficient chips within an energy source and an energy suck. So I think so many people ampere's been doing things around that particular innovation of different types of chips. Eventually will people start to go to Gaudy and what Intel has been providing, how much can AMD chip away in terms of market share, in terms of
the AI part of the business as well. So there are so many people and analysts and investors that are looking at distributing some of their bets, I'm sure, but for now NVIDIA has been the only game in town and certainly the easiest one to back in terms of up and to the right. Good job. I want to bring you back in here, looking at our live blog, Ian King, who follows the civic inductor space and video as well. He says, one question analysts will have when the conference call begins, what's happening in networking?
Sales in that business slid sequentially, dropping by about $500 million. NVIDIA's acquired networking tech has faced opposition from many rivals, some of which argue for an industry standard approach rather than a reliance on NVIDIA's proprietary technology way in on that.
Yeah, I mean, we have identified since last year that networking in AI servers is going to be sort of the next wave of growth, especially in terms of where the dollars go beyond just accelerators. So, I mean, until now, NVIDIA, if you look at the market.
for the first Hopper series, right? They had this advantage of shipping their own proprietary networking gear, which customers had no other option but to just buy that. So two things, right? They got all the dollars, but they also got great profit margins because they could really charge whatever they wanted.
Now the competition there is increasing. Customers want to move to Ethernet, which again, NVIDIA has started offering and starting from the Blackwell series. So we are going to see that Ethernet revenue also increase for NVIDIA. But when you compare it from per chip dollar perspective, it's still less. We still think positive for NVIDIA's networking revenue share going forward. But there will be a lot more competition there. It won't be just one company taking everything in that area.
That's a really good point, right? And I do think about, you know, NVIDIA's really had this world to its own for a while and you think about increasingly.
kind of what's going on in the future as there's more competition. You too, dynamic duo. Thank you so much. Your insight really so important to breaking down these results from NVIDIA. Bloomberg Technology goes Caroline Hyde-Ketcher at 11 a.m. Wall Street time on Bloomberg television for Bloomberg Tech. And of course our thanks to Kujansabani of our Bloomberg intelligence team. He's a senior semiconductor analyst. So again, some great insight. We'll watch for some of his research.
Let's continue our conversations. Bloomberg News equities reporter Ryan Lestelica with us. He has been writing about it and kind of, you know, talking about markets bracing for what we might get from NVIDIA. He joins us from Chicago. Also with us is our own Red Brown who follows the earnings season and sets us up. Bloomberg News earnings reporter. He's back in New York City. Ryan, come on in on this. Your report ahead of the release. NVIDIA traders bracing for a potential $300 billion earnings move.
It was down more than 4% though initially. Yeah, absolutely. I don't think it would be all that surprising to see the stock really take some swings from where it's trading right now. I mean, this is not a huge move, especially not for a company as volatile as Nvidia is just to put it in context. Palo Alto also reported that stock is at about 5% and after I was trading, Nvidia is obviously much bigger, but you know, not a huge move by their standard. I like that. Ryan's out here talking about Palo Alto Networks.
Look, there are other companies out there. No question. But listen, Red, we're going to get to you in just a moment. But Ryan, I mean, it's been so important in terms of market momentum, right? Like, give us some of that context. We talk about it all. We talk about the MAG 7. But when it comes to momentum, that AI, this is a big one.
Yeah. Oh, absolutely. This stock has almost tripled this year. It's added more than two trillion in market capitalization. Like you mentioned, it's the biggest stock in the world. We've had plenty of analysts come out and say, this is more important than the Fed. This is more important than inflation data. This is the key report for Wall Street this week, if not this month. So it's obviously very significant. I do think we just got the numbers. People are still digesting the report. We are still waiting on the conference call. It's likely we're going to get a bigger move. Maybe once we get
full details once we hear from the management team, once people get a little bit more context for this. But this is certainly not a sky is falling type report. It's falling short of some of the most optimistic expectations. But people just got very used to forecasts that are just billions dollars above the consensus. Kerman Reineke, our stocks reporter on our live blog, digging into the plus or minus 2% on the revenue outlook that we got from NVIDIA.
Do in some quick math. It means NVIDIA expects fourth quarter revenue between $36.75 billion and $38.25 billion. The average analyst estimate was $37.1 billion. So if it's on the minus 2%, it would fall short of expectations. And I think that's why you are seeing investors at least in the aftermarket wanting a little bit more color or commentary around this.
Okay, so Red Brown, come on in here because you've got your eye on what's going on after hours and video shares down about 2%. Is that what it is? Is that concern around that plus or minus 2%? Yeah, I think it kind of has to be.
the main focus for everybody right now. It felt like analysts maybe weren't as euphoric heading into this report. Things definitely were more tempered. So I guess it isn't that much of a surprise to see stock trading a little bit less volatile than it has in recent quarters. I was also just looking at some of the customers.
because we don't wheat Ryan's point just how important this report is for the wider market and Microsoft and meta to other biggest customers both not really reacting as well.
So what are you read watching out for? Listen, you are with us throughout the whole earnings season. It feels like a long one. But here we are with NVIDIA, which is such a huge one in terms of the reporting season and what we get from NVIDIA. But how are you thinking about it as we were kind of reporting into it? Now we are on the other side and there's still some questions to be
had that will hopefully play out on the analyst call, but you know, walk us through it in an earning season, you know, how this kind of fits in, especially against some of those MAG 7, those very important big tech names.
I think one thing that I'm looking at for NVIDIA specifically and kind of how it fits into the wider landscape is actually the R&D spending. So if we look and actually grew 48%, if you compare that to their peers, Super Micro, 45% up this quarter, Broadcom jumped 75%. So when we kind of start to dig in beyond just the top line numbers, I think kind of an interesting dynamic is playing out there. The NVIDIA is kind of really spending handover fist to keep up or to kind of continue to have their
their lead in this race. And I think it really helps when you can double your revenue every quarter as well that spending $3 billion on R&D is a little bit easier than it is for a company like Broadcom, which is actually the percentage wise, the margin that they're spending is actually much higher. So that race, they are kind of
still a distant second compared to NVIDIA, so I'm trying to maintain that lead that they have in the AI space. Hey Ryan, what about when it comes to Blackwell and demand around Blackwell? To what extent is that the question on the call later?
It went from insane to incredible, as Caroline Hyde pointed out to us. How are you thinking about it? Yeah. Is that a deceleration to go from insane to incredible? I mean, I think, you know, in general, I think it is. You tell me. I think it is insane to incredible. Yeah. I think that's a deceleration. Yeah. We say incredible a lot. We throw that word around. When you say insane, that's like an all other level.
Yeah, fair enough. Obviously, you know, people continue to focus on supply. There have been some, you know, production hiccups here. Like I said before, people are focused very much on, you know, pricing and margins for Blackwell. So all these things together, you know, this remains like a point of real focus for investors, even kind of beyond just sort of the headline numbers of the forecast and so forth. Guys, thank you so much. Busy afternoon. Of course, Bloomberg News earnings reporter Red Brown out there in New York City. Ryan Vastelica in Chicago. He's Bloomberg News equities reporter
The forces shaping markets and the economy are often hiding behind a blur of numbers. So that's why we created The Big Take from Bloomberg Podcasts to give you the context you need to make sense of it all. Every day, in just 15 minutes, we dive into one global business story that matters. You'll hear from Bloomberg journalists like Matt Levine. A lot of this meme stock stuff is, I think, embarrassing to the SEC. Follow The Big Take podcast on the iHeartRadio app, Apple Podcasts, or wherever you listen.
