Maher: Jensen Huang ""Captain"" of AI Ship, NVDA ""Backstop"" to Tech Trade

Welcome back to Market Unclosed. I'm Sam Barnett on the floor of the New York Stock Exchange. Joining me now at the desk to continue our breakdown of NVIDIA earnings is Matt Maher, who's the founder of M7 Innovations. Matt, thank you so much for your time. Busy afternoon here. So, all in all, it looks like it was a beat and obviously a raise to the strong Q3 guidance. I mean, that just reinforces the AI story is there. We've got the demand, but it just seems like the market might have an issue with some of the supplier commitments that we've mentioned with the memory procurement. We know how much that costs right now. That could have something to do with the gross margin guidance that came in a little bit light from the 75 percent. Heavy AI CapEx data center obligations. Are these kind of the key risks, do you think, that investors are looking at right now? Yeah, I mean, the reality is the black and white of these earnings report doesn't even matter anymore. It's really about the color. The color commentary that we're going to hear and the nuance, because you're right. I mean, they have now beaten 15 reports in a row, and this is now the fifth consecutive one where their stock price drops immediately after, because people expect the black and white. They expect the objective numbers to be beat. But to your point, it's all about these amorphous things that Jensen will talk about. He said a quote actually in the front part of the report that now compute is revenue. I think he's really trying to change this narrative. He talked about this a couple of weeks ago, that chips are an investable asset class. And if you can kind of change that narrative and say the tokenization of everything, we're going to actually be able to rent this out. And it's the CapEx, don't worry about that as much. Don't worry about these bottlenecks, because what I'm building as the captain of this AI ship is much bigger than we can predict. So I think he's trying to just mitigate those fears. Do you think that's going to change the way they report earnings as we know it? I think for now, he's going to stick with this. I think we know that the Blackwell family of chips are best in class. A lot of the questions and posturing over the circular financing, over the Rubin architecture, what that's going to look like, the on-ramp for that. That's I think what really people want to hear. But I think for now, they're going to continue this because they know they're going to report these numbers every single time. But it is truly about how Jensen can paint this story, that this build-out is still happening, it's still relevant, and we're still in kind of the first inning of what this build-out will be. So we saw obviously an initial dip here. We've chopped around a bit. We're down about 1%. What would you like to hear on the call? I really want to hear how Jensen speaks about the growth trajectory. I want him to talk about how Blackwell will transition to Rubin. I want to understand how he's handling the bottlenecks. I mean, we know there's bottlenecks with electricity. We know the politics around data centers. There's so many little things that whether it's true or not true or a perceptual risk or an actualized risk that can literally just be a little poke in a bubble that can really affect things. But I think there are many of the Mag7 CEOs that can pontificate and say all these amazing things about AI. But I truly think Jensen is kind of the captain of that ship. So I think even how he answers questions, if he's kind of not defensive and just really, I'd say really optimistic about the transition, the build-out, and if he really extrapolates what this now compute is revenue means, I think that will start to turn investors into the favor of, okay, he's got the story, there's growth, and there's a bright future for Nvidia and the entire AI build-out. And Jensen has been quite explicit in recent quarters about some of those bottlenecks and some of those challenges, as you mentioned. And I mean, I guess that's why Josh Brown calls Jensen the Fed Chair of AI because, I mean, no pressure, Mr. Walsh, but it's kind of like that, right? I mean, what Jensen says has ripple effects for the broader market. I mean, he's kind of been called the Pied Piper of AI trade. I mean, what does this mean, do you think? I mean, obviously, we have to hear from the man himself for the broader AI trade, which has been struggling recently. Yeah, I mean, I would say, you know, again with the Mag 7, every CEO talks about their investments in AI and infrastructure. You know, Mark Zuckerberg a few weeks ago was kind of lamenting that he's kind of not in first place anymore and he wants an open system. We see Sam Altman, you know, pontificating about how he wants to outsource his parenting to GPT. They say all these things, but they don't really move the needle. They're all on the AI rocket ship. But Jensen Huang is the captain of that ship. He's a lot more reserved. And what he says really, really matters because NVIDIA is truly evolving from 10 years ago as a gaming company to the center of AI. And now they're kind of evolving as the backstop of AI. They're the bank of AI. That's really what he is trying to build right now, that they will be like, he believes that he can be a rising tide that can carry all ships. And do you think that is a risk that the market is looking at very closely? Because not everyone bought into what he said that day when, you know, he came out with all those Wall Street guys and kind of announced that, you know, he believes this could be an investable asset class and that he's got new check writers in town. I mean, a lot remains to be seen if he is backstopping. How much do you think he is likely to address some of the concerns around? I mean, no doubt he's going to be asked a lot of questions around depreciation and that circularity of financing. Yeah. See, the depreciation, I'm actually not too worried about. I think the Blackwell chips are still really strong. There'll be a really smooth transition and even more the quiet things that haven't been updated as much in terms of the over the air updates that NVIDIA has done to pass software chips. They're still really powerful. So, again, I really like to delineate two parts of this entire AI build out. There is the B2B AI build out, which NVIDIA is leading, and there's the B2C. The B2C is for another conversation that could be a bubble, and that's with open AI and Anthropic. Right now, I think Jensen feels really, really good about the B2B side. This is not like the Internet bubble at all. These are ridiculously strong numbers and revenue that's being generated. So, I think he's still really in a powerful position. And especially on the hardware side, he is best in class. He has best in class chips. And the fact is there will be a premium. So, he can kind of even skirt around Ramageddon and all these things with these increasing prices because he is the leader and he has the best hardware right now. Understood. And we've got the commitments as well from those customers, the enterprise customers at least as well in the B2B. Chyna, how much do we care about this story now? It matters. I think he has a strong relationship, and I think he's going to be able to handle that in a smart way. I think it'll be interesting how he talks about it today, but I think he will ideally not make that a focal point and he'll try to talk about other things as that kind of gets managed in the background, but it's always a threat. And I think, I mean, you see it on your social feeds, you see it everywhere. It feels like they're advancing so much quicker with some of the robotics and these things. I would argue I see a lot of shiny object syndrome in a lot of the robotics and a lot of things they're building. And I think he is truly focused on building out that infrastructure. And I can tell you working with many of the Fortune 500s who are implementing AI, it's not totally easy to implement. It's not the light switch that's a magical silver bullet, but I can tell you once it is actually integrated into these companies, we are seeing real revenues. And I think that's why Jensen is confident about this build-out because he knows this is the new infrastructure of the internet that he's building. Matt, great breakdown. Thank you so much for joining us today. Really appreciate your time here at the New York Stock Exchange. That is Matt Marr, founder of M7 Innovations. Mali, back over to you in Chicago.