Morgan Creek Capital's Mark Yusko explains why Nvidia makes him nervous

All right. Our next guest is concerned about NVIDIA ahead of earnings. Mark Yusko is CEO and chief investment officer at Morgan Creek Capital Management. His firm is one point nine billion dollars in assets under management. Mark, always good to see you. As I understand it, Mark, you'd personally sell NVIDIA here. Why? Well, a couple of reasons. I mean, one, all things that that the crew was was talking about. It's hard to, you know, stay on top when you're on top. You know, I'm old enough to remember that Intel stock went up 20 fold over 10 years because their chip was going to revolutionize A.I. in 2000. And today that stock is 63 percent lower than it was 24 years ago. So you don't stay on top forever. And NVIDIA came along and invented GPU. And now we've got TPUs and VPUs and LPUs. So I think innovation will keep rolling. But the thing I'm most worried about with NVIDIA, their third largest customer is about to get delisted. That's that's a big story. So you're referring to Supermicro? Yes. So how does NVIDIA get caught up in this? Yes, Supermicro can be delisted. How does NVIDIA how does that tarnish NVIDIA? Well, if it's your third largest customer and they actually haven't, they don't have the capacity to continue to be your third largest customer. What happens to your revenue growth and profits growth? You know, we've seen this move before with Nortel and Cisco back in 2000, 2001. So I don't know. That makes me nervous. Hi, Mark. It's Karen. Thanks for being on. I hear you. I just let me just push back a little bit to the extent that there is a supply constrainment here, not a demand constraint. Right. So with the customers, you look at what's happening to Dell and some others. There's the belief that those customers are going elsewhere and that that demand would still be there. Is that do you. Does that I think that's a great that's a great story and possibly is is true. But they're the third largest customer for a reason. And that that that's real for me. But I totally agree with you that there is a demand story today. I think the thing that's not being talked about enough is GPUs are really good for training. They're actually not really good for inference. Inference is the next level. So companies like Grok and others do. And the next layer of of huge demand in semiconductors, I believe, is going to be for inference focused chips, new designs, new innovations. And I think the tech debt at NVIDIA is going to cause some stress. Now, could they go out and buy some of these innovators and and take over those markets, too? Maybe hasn't historically been the way it's worked out for for other people who are on top. But I'm a huge admirer of NVIDIA as a company. I think they have great products. I just think it's it's a little overpriced here. You make a pretty strong case against NVIDIA, Mark. But as you know, your clients still own it. So how do you what's what's that conversation like when you're talking or what's the conversation going to be like on Monday when they start calling you and saying you said to sell because they're going to lose their third biggest customer and all sorts of other things? And it's in my portfolio. So a couple of things on that one. Now, I spend most of my time now in venture capital. I do venture capital in the digital assets space. We have things like Bitcoin and companies that like Coinbase. I still have a business that focuses on hedge funds and we allocate capital to hedge funds. And then we supersize their 20 best ideas. So one of those 20 best ideas happens to be NVIDIA still. So it's a 5 percent position in that half of the portfolio. And I trust the process. Those managers still have faith in it, just like a number of the people you were just talking to. If it were me and I were the portfolio manager, which I'm not, I would be a seller. But I trust the process on the other side of the house.