AI Summary
5 min readNvidia reported earnings after the close, and the numbers were so far beyond what Wall Street expected that the hosts are almost at a loss for words. The largest company in the world posted 106% revenue growth, "like it's some sort of scrappy startup," as one host put it. Shares rose about 7% in morning trading. But the real story wasn't the quarter itself—it was the guidance. Nvidia told investors to expect 70% revenue growth in the coming year, dramatically higher than the 45% Wall Street had modeled. And the company indicated that even that number is constrained by supply: if it could physically make more product, it would deliver even more growth.
The hyperscaler spending signal
The most important number buried in Nvidia's outlook is what it implies about the hyperscalers—the five largest cloud computing companies. Those companies are on track to spend roughly $800 billion in capital expenditures this year. Nvidia's guidance suggests they will spend $1.3 trillion next year, a $500 billion increase. That is the mechanism behind Nvidia's own growth: the hyperscalers are not slowing their AI infrastructure buildout. They are accelerating it.
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What you'll learn
- 1 (00:12) **Nvidia Blows Away Earnings** - The panel opens with Nvidia's earnings report, which smashed expectations with 106% revenue growth and guidance of 70% growth for the coming year, far above Wall Street's 45% estimate.
- 2 (03:44) **Margin Compression Concerns for Nvidia** - The panel notes that Nvidia's gross margins are no longer expanding, with the company trading about 300 basis points of margin for higher memory costs in exchange for doubling revenue growth expectations.
- 3 (05:04) **Winners and Losers in the AI Infrastructure Buildout** - The panel shifts to identifying lesser-known "picks and shovels" companies that will benefit or suffer from Nvidia's revised guidance.
- 4 (09:55) **Capacity Expansion: The Next Big Story** - The panel speculates that the key question going forward is whether memory and chip manufacturers will significantly expand production to meet the persistent supply constraints.
- 5 (12:19) **CrowdStrike Reports a Blowout Quarter** - Shares are up 18% after CrowdStrike reported a record quarter, with net new annual recurring revenue (ARR) up 51% year over year, 17% above management's guidance.
- 6 (14:33) **The "Mythos Moment" Driving CrowdStrike's Growth** - The panel discusses how the high-profile "Mythos" AI incident has actually become a tailwind for CrowdStrike, driving new business.
- 7 (17:10) **Is CrowdStrike a Buy at 37 Times Sales?** - The panel debates the valuation of CrowdStrike, which trades at 37 times sales, making it a "wonderful business at an uncomfortable price."
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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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