Microsoft will be an early driver of AI agents, says Melius' Ben Reitzes

Where's the opportunity in chips across NVIDIA, which has already been huge. Then you got AMD and you got Intel, which hasn't been doing so well. Well, you're talking about two of my favorite names right there, NVIDIA and AMD. NVIDIA just sounds like it's great. I mean, you know, congrats to you to have that great interview the other night with him saying the word insane. I love that. That sort of tells you what you need to know. We, our checks on Blackwell are great. And everybody wants it. That should drive some significant sequential growth in January and then again in April. And then we think the gross margin starts to improve quite a bit on the back of Blackwell after a quarter or two, and that'll get the stock going again. So, you know, we feel pretty good there. We know some folks have voiced some concerns on your network as well, but we're seeing, you know, really good demand. And remember, OpenAI just launched a bunch of stuff and we're not even inferencing with that stuff yet. And Apple, you know, is getting out Apple Intelligence, which hopefully drives some of the OpenAI. So we feel good there. And on AMD, they got a big event next week. We don't think they're bringing us out there, you know, to lay an egg. And we think that last year on that event, it really popped. And, you know, there is room for another two there, number two there. So we feel good about AMD as well. Speaking of Jensen Huang, here he is with us just a couple of days ago. This is now the beginning of a new wave called Enterprise AI. And then after that, as we're entering into Enterprise AI, we'll simultaneously developing, cultivating the wave after that, which is Industrial AI. So we've got Industrial AI that Jensen is talking about. We've also got Apple Intelligence, and perhaps an application driven consumer AI wave, which is more investable? Well, I think it's all investable. I think a lot of stuff gets started in consumer, and then it creates actually a lot of interest in the enterprise. And just like what happened when we had the chat GPT mania, then a bunch of enterprises woke up to it. I think as investors, investors, well, as consumers start using visual intelligence from Apple, as well as from Google, their version of that, and those kinds of things where you're seeing things with your phone and then asking questions about it, that's going to drive a lot more awareness of AI in general. And I think in enterprise, you're going to start seeing many enterprises want to work with small language models so they can cater it to their industries. And then you're going to also see more adoption of the NVIDIA NIMS architecture, which is really going to fuel more enterprise adoption. And we're in the early innings there. We haven't even seen the interest in AI agents, which are autonomous, really pick up. And that's going to be huge. You've been hearing a lot about it from Benioff. I actually think Microsoft's going to drive that more than a SaaS company. And we're just in the early innings, John, on so many things. I'm pretty excited. Yeah, the other chip news of the week, Lunar Lake from Intel, maybe it's the space enthusiast in me, I like the name, but I want to get your thoughts on this and whether this is a step in the right direction for that company. Yeah, probably on the top line, Morgan, the issue with Lunar Lake is that they don't make it. TSMC does. So there could be margin issues. Gross margins has really been the big disappointment here. Obviously revenue has been tough, but there was a real whammy this year with gross margins. I mean, people were thinking like it could be, if you take us a year ago, we were thinking it could be closer to 50 and now we're lucky if it's close to 40. And when Lunar Lake is a great chip, it's getting great reviews, it's actually even better than we thought in terms of the reviews and battery life, but it's the gross margin that comes out there and they're going to be relying on TSMC quite a bit through the next year. So what we need to see from Intel is, obviously some revenue momentum and we think we can see that, but I think the big concern is gross margin. And we'll have to see that. They really shouldn't benefit too much from some of their new manufacturing until 2026 on the gross margin line. So that's the big concern there, but it is a good chip.