EP 190: NVIDIA and Marvell Earnings, Hot Chips Hot Takes

Ben Bajarin (0:05)

Hello, all, welcome to another episode of The Circuit, I am Ben Bajarin.

Jay Goldberg (0:11)

Greetings programs, I'm Jay Goldberg.

Ben Bajarin (0:14)

Well we have a lot of topics to get through this week. It was a hot week because we had hot chips, which we'll get to, and we had Nvidia earnings and Marvell earnings, and I'm sure others, but those are...

Jay Goldberg (0:29)

I'm in an un-air-conditioned hotel room right now.

Ben Bajarin (0:33)

Jay is going to start sweating profusely, and because we're talking deep silicon today, for anybody who watches this, I have my TPU shirt on. Here's my glorious TPU shirt, since they did talk about TPUs at hot chips. All right, let's kick it off with Nvidia earnings.

Yeah, the stock did okay.

Kind of a little bit down on this, what, Friday, August 28th that we're recording, but was up more than it was earlier in the week, but nothing monumental. I would say the reaction was positive. Folks remain optimistic that Nvidia continues to grow. But what was your top line take?

Jay Goldberg (1:21)

So the quarter and the guide were pretty much as expected. Probably not good enough.

They were, how do I say this? They were beat expectations, but everyone sort of expects them to beat expectations, so that was fine. What I think really interested investors though is they gave revenue guidance for 70% revenue growth next year.

And I think that's what people really keyed in on. This has been a big, big topic of conversation over the last few months. People have been trying to figure out like, oh, revenue growth is going to decline. What's it going to decelerate to next year? And no, it's actually, it's going to grow 70%, they say. And Jensen kept pointing out, they could grow more if they could get the capacity. So pretty bullish signal.

Ben Bajarin (2:09)

Yeah. So let's talk on this for a second. I guess when you do something like that, you kind of set your expectations right in stone. So people will just do what they do numbers wise, assume what that growth rate means. And so now, the upside question becomes like, where can they eke out any additional surprises? And I talked to folks who were like, oh, they're probably being super conservative. It might be more than that. They're just, they realize it's a supply contained environment, so they're leaving some room for the upside.

But you're right, they're key in saying it would be a lot more. Jensen was asked this on the call, and he was like, how much more would it be? I think it was our curry. And then he's like, it would have been a lot more. It's like, okay. So great.

But you are, you know, you are supply constrained, and he was sort of like, we gotta go figure out how to get more supply, which, you know, supply doesn't grow on trees. So I don't know where that comes from. But yeah, I don't know. I guess my point is like, where do they go from here, right? They've just guided to that. So like, how do you paint a picture going forward other than you're executing on your 70% growth call?

Jay Goldberg (3:30)

Yeah. So, I mean, the typical investor relations playbook is you under promise and over deliver. And so people say, oh, he's saying 70%. It's really more like some number that's bigger than 70%.

And I think at this point, they have a fair degree of certainty around their business because they know pretty well what the orders are.

Ben Bajarin (3:51)

Sure.

Jay Goldberg (3:51)

Especially because we're talking about data center construction next year. That's all that's getting lined up now.

And I think to some degree, it's going to come down to TSMC and what capacity they can get out of TSMC. That's going to be the big swing factor. And we probably won't know that until early next year.

There's other things they can do here. They're going to start selling LPUs from Croc. We'll see how the market feels about those, but those aren't as capacity constrained. And so maybe they get a little kicker from that. There's a few other levers they could pull.

Ben Bajarin (4:33)

Yeah, they mentioned CPU stuff, which obviously they're holding their number, but they did announce a deal with Amazon that includes Vera CPUs in a shipment number of I think it was 2 million more GPUs, but that's a combination of Vera standalone CPUs and attached to head node. So do your mix, right, as you will, but they're associating value to that in the CPU side. And I imagine others, right? But part of it, too, is I guess what I'm sort of curious about is like, so all the supply chain work we do kind of seems like 2028, which is not, which fiscal 2028, which is not Nvidia fiscal 2028, but or year 28, calendar 28, calendar 28 is when pockets of capacity can start to open. And the other part of this that I think is interesting is, you know, you just look at the lag from order to data center and kind of those giant orders that people started planning a year ago, like really started ramping this capex wise, start to show up in energized gigawatts in 2028 So it's kind of like supply chain capacity, again, will still be constrained, but it will be better at TSMC with substrates and with all the components that they need, with wafers.