Nvidia Says $1T Is Coming — The Market Isn’t Buying It

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If money is evil, then that building is hell.
Welcome to Prof G Markets. I'm Ed Elson. It is March 18th. Let's check in on yesterday's market vitals. The major indices posted modest gains. The price of oil climbed higher as President Trump slammed allies for not helping him fight the war in Iran and reopen the Strait of Hormuz. And finally, bond yields fell ahead of the Federal Reserve's interest rate decision due later today. Okay, what else is happening? Nvidia expects at least $1 trillion in revenue from Blackwell and Rubin chips through 2027 That is the headline news out of the company's GTC conference, also known as the Super Bowl of AI, which kicked off this week. In his keynote on Monday, CEO Jensen Huang pitched a future where Nvidia powers not just chatbots and data centers, but also robots, factories and autonomous machines in the physical world. Nvidia's stock is up nearly 1.5% since his speech. Lots more to unpack from this conference. So here to discuss all of it, we're speaking with our friend Gil Luria, head of technology research at DA Davidson. Gil, good to have you on the show. I think we have to start with this $1 trillion number that is making all the headlines. One trillion in chip sales through 2027 That's what Jensen Huang believes. Give us your views on that number. Is that a real number or is that just a headline?

**Gil Luria** (3:57)
No, it's a real number. What's really surprising is that investors shrugged it off as unimpressive. It really added a half a trillion dollars of revenue in really in a year.
And you would think investors would jump all over that considering it implies upside to next calendar year's numbers for Nvidia. And yet investors shrugged it off, which tells us something really interesting. Investors don't believe the great data center build out will continue into next year. The market is now telling us that it is expecting 2026 to be the peak year in the data center build out. Now that's indicating a little bit of split personality for the market, because as you discussed and we've discussed, the market is also saying mass unemployment is coming, software companies are worthless, so AI is going to happen, it's going to have a huge transformational effect. And yet at the same time, the market's not believing that the great data center build out will continue into next year. So somewhere along there, there's an inconsistency.

**Ed Elson** (5:07)
I guess something that I would empathize with the market's reaction here. I mean, when we hear Elon Musk, for example, talk about optimist robots and sort of talk about these big numbers in the future, he'll often say something like, I think this is going to generate trillions of dollars worth of revenue. And he seems to sort of just say it on the fly. He said similar things about robotaxes as well, and then it never materialized, or if it did, it materialized in a much more insignificant way than a lot of people expected. And I guess the question remains here for Jensen Huang, too. I mean, why is this one real when it seems to be also a little bit of a projection out into the future? Why is it something that we should really be taking seriously?