Nvidia Earnings In Focus; SpaceX Eyes Historic IPO

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from coast to coast, with Caroline Hyde in New York, and Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech coming up. Nvidia earnings on deck, a huge moment for the world's most valuable company in the stock at the center of the AI boom, plus SpaceX inches closer to launch. It could be today that Musk company unveils its IPO filing. And we take a deep dive into SoftBank's bet on open AI. Insiders worried that Masayoshi Son is too tied to the AI giant.
Right now, Nvidia is everything that the Bloomberg Tech audience is clicking on, reading about, talking about. We're up 2% taking our year-to-date gain 20%. We expect 80% top-line growth, 85% growth in earnings per share. But there are questions about China and how much momentum this AI story has. Let's get the stock story for the world's most valuable company with Bloomberg Tech Equities reporter, Carmen Reinecke.
Friday, Monday, Tuesday, we were almost in correction territory with Nvidia at the heart of what was happening in chip stocks. You write today that Nvidia's earnings will either make or will break the rally in chips. Why?

**Paulina McPadden** (1:28)
Yeah.

**Carmen Reinecke** (1:28)
So it's been so important, Nvidia overall, right? We know it's sort of the kingmaker of the AI trade. It's the stock that all investors are watching, really to see the demand going forward and if that story is still strong. And so this huge rally that we've seen in the chipmaking space, really from this March 30th low up through last week, it's had incredible momentum. But Nvidia is really the thing that investors are going to watch to see if this can go forward. We got a little bit of a rest fit over the last few days we saw a sell off, but we're kind of back up. That rally is going stronger today. So how Nvidia talks about the future demand here is going to be paramount to that entire sector.

**Ed Ludlow** (2:06)
Carmen, the MLive and MacroView team go back and say, what typically happens post earnings for Nvidia, even if it is a blowout? And this is the answer. It's a pretty mixed picture, right? There is no guarantee that even if Nvidia has a barnstorming print, that in the days that follow, even the month that follows, the market will go with it.

**Carmen Reinecke** (2:29)
Exactly. So something that we've seen over the last few earnings reports for Nvidia is that shares have actually fallen the day after results, even if they're very strong, even if it's a blowout report. Some of that is pretty typical around earnings. You get a little bit of a buy the rumor, sell the news. Obviously, this could be a good place for investors to trim, to sort of take some profits, especially after such an incredible rally. And the other thing I'd say is that, so Nvidia is still the most important stock in the S&P 500 It's the largest company in the world. It commands the most weight in the index, but it's not immune to broader macro pressures. And we have seen sort of the pull of the AI trade continuing over this year. So while it's very important to see the future demand there for these stocks, it's also no guarantee that this is going to continue to march forward and up to the right, especially just in the days after the report.

**Ed Ludlow** (3:21)
Hey Carmen, how often before the show and before a big moment, do I be you and I say, Carmen, check me on this.
Let's do it again. Nvidia's 24 times forward earnings, 12 month forward earnings, that seems below its historical average. I'm basically saying, tell me about the valuation of this company going into this print.

**Carmen Reinecke** (3:42)
Yeah, so we've seen in Nvidia's valuation sort of continuously tick down, even through the stocks rally, because its earnings growth is so astronomical. So basically what investors are paying for that forward earnings growth is less than a lot of other companies, even other companies in the space that command a much higher valuation. So it's interesting that it's so cheap. Usually that entices investors to jump back into the stock, but that remains to be seen. We'll see what happens in the after hours today.

**Ed Ludlow** (4:13)
So smart. And given the impact at the index level, that's why I wanted to start on the stock story. Bloomberg's Carmen Reinke, thank you very much.
That's the broader picture. Let's dive into Nvidia's specific concerns. We go to Bloomberg's Maggie Eastland. This is about a story of AI momentum, the infrastructure build out, the basics. What does the world think Nvidia is going to say after the market closed today?