Nvidia’s Magic Fades | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY AND POWER COLLIDE IN SILICON VALLEY AND BEYOND. THIS IS BLOOMBERG TECHNOLOGY OF AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK THIS IS BLOOMBERG TECHNOLOGY. NVIDIA SAYS ITS NEW CHIPS ARE ON TRACK BUT THE RUSH TO GET THE LINEUP OUT THE DOOR IS MORE COSTLY THAN EXPECTED. BITCOIN RISES TO NEW HEIGHTS AS THE TRUMP TRANSITION TEAM WEIGHS THE CREATION OF A DEDICATED WIPEOUT -- WHITE HOUSE CRYPTO POST. THE CEO PALO ALTO NETWORKS JOINS PAID HOW AI CAN HELP STOP THE THREAT FOR THE FUTURE BUT FIRST WE GET STRAIGHT TO THE WORLD OF NVIDIA AND INDEED THE POINTS DRAG ON THE NASDAQ IS SOMEWHAT.
THERE'S BEEN A VOLATILE DAY OF TRADING AS PEOPLE TRY TO PASS ULTIMATELY HOW STRONG FUTURE GROWTH STILL LOOKS UNDER NVIDIA AND INDEED THE SUPPLY-SIDE HEADACHES, LET'S GET STRAIGHT TO IT WITH IAN KING. WE HAD ALL BEEN THREAT -- FRETTING ABOUT BLACKWELL. HOW EASY IT IS TO GET INTO CUSTOMERS HANDS. DID JENSEN MANAGED TO CALM INVESTORS NERVES. >> OBVIOUSLY TO AN EXTENT, WE HAVEN'T SEEN THE MASSIVE FALLOFF WE HAVE SEEN MANIFEST PREVIOUSLY WITH CONCERNS. HE TALKED ABOUT WE ARE GETTING INTO MARKET AND GOING TO PROBABLY BE GETTING MORE TO MARKET THEN WE THOUGHT WE WOULD.
AT THE SAME TIME IT WILL COST US. >> WEIGH IN ON THE MARKETS. ULTIMATELY THIS IS A COMPANY THAT GAVE US 94% INCREASE IN REVENUE IN THE THIRD QUARTER. GIVE OR TAKE PLUS OR -2% BUT THE PROFITABILITY IS WHAT'S COMING DOWN EVER SO SLIGHTLY TOWARD 73 TO 74% MARGIN. >> THAT IS RIGHT. I THINK THAT'S THE RIGHT WAY TO LOOK AT IT. THEY HAVE SET SUCH HIGH
EXPECTATIONS, THEY WERE AT 75% WHICH HAD NARROWED SLIGHTLY BUT 75% IS A SOFTWARE MARGIN. THIS IS A SEMICONDUCTOR COMPANY. AME IS 20 POINTS SOUTH OF THAT. INTEL ISN'T EVEN IN THE SAME ZIP CODE. SO YES THEY ARE LOSING A FEW POINTS BECAUSE THEY ARE SPENDING MORE ON ENGINEERING TO GET THOSE CHIPS OUT AND SYSTEMS IN PLACE QUICKER BUT REALLY A VERY HIGH BAR. >> AND THEN FULL PRODUCTION COMES, THE BACK END OF THEIR FISCAL 2025 YEAR. BUT I SUPPOSE THEY STILL HAVE
TO ADDRESS THE ISSUE SURE THEY ARE GETTING THEM OUT THE DOOR BUT IT IS TO THE SAME KIND OF COMPANIES. HOW ARE THEY MANAGING TO DIVERSIFY DEMAND BASE. >> THAT WAS ONE OF THE THINGS WE SAW, THE AMOUNT OF REVENUE COMING FROM THOSE BIG COMPANIES, THE MICROSOFT AND AMAZON'S HAS ACTUALLY GONE UP FROM 45% TO 50% SO LIKE HALF OF THE MOST IMPORTANT DIVISIONS THEY HAVE IS DEPENDENT UPON A FEW COMPANIES. INVESTORS ARE CONCERNED ABOUT THAT. THESE COMPANIES ARE MAKING THEIR OWN CHIPS TRYING TO REPLACE NVIDIA AND EVERYONE ELSE THAT SUPPLIES THEM. >> IS THERE ANY REAL COMPETITION HERE BECAUSE WE'VE HEARD TIME AND AGAIN THAT IS MUCH AS AND TRIES.
>> THAT DEFINITELY APPEARS TO BE THE CASE. ANY QUESTIONS ABOUT DEMAND OR QUESTIONS ABOUT LOSING MARKET SHARE WERE JUST IRRELEVANT. YOU TALK ABOUT INCREDIBLE DEMAND THAT THEY CANNOT MEET RIGHT NOW SO THAT PART OF THE QUOTE OF THE STORY IS REALLY IN THE FUTURE IF AT ALL.
>> THANK YOU VERY MUCH, IN THE PRESENT WHEN IT COMES TO THE MARKET MOVE WE REALLY APPRECIATE IT. LET'S BRING MORE CONTEXT TO THE REST OF THE MARKET. SENIOR ANALYST AT SWISS QUOTE AND RETURN TO YOU FOR THE BROADER MARKET IMPLICATIONS BECAUSE WE WERE ANTICIPATING AS A $300 BILLION MARKET CAP SWING UP TO 8% MOVE HIGHER OR LOWER. A LACK OF VOLATILITY MUST BE A SLIGHT SIGN OF RELIEF. >> ACTUALLY IT IS BECAUSE THERE HAS BEEN A FEW RED FLAGS IN YESTERDAY'S REPORT AS THEY WERE JUST TALKING ABOUT, THE PRESSURE ON THE PRODUCTIVITY LEVELS DUE TO THE MANUFACTURING CHALLENGES FOR THE BLACKWELL CHIP IS ONE OF THEM.
THE FACT THE BIG TECHNOLOGY COMPANIES MAKE UP TO 50% OF NVIDIA'S REVENUE IS ANOTHER STICKING POINT YET THE RESULTS HAVE BEEN STRONG AND DESPITE THE SMALL RED FLAGS YESTERDAY FROM THE REPORT. THE IMMEDIATE SELLOFF HAS BEEN ONLY 2.5% AND THIS MORNING WE DO NOT SEE THE NVIDIA SHARES BEING SOLD AT THE LEVEL WE WOULD EXPECT THEM WITH SUCH A DISAPPOINTMENT OVER THE SMALL DISAPPOINTING FROM INVESTORS. WE WOULD THINK ANY MISSTEP WOULD BE A BIG SELLOFF YET WE JUST SEE THAT THE MARKETS QUITE RESILIENT. >> WE GOT A BIT TO USE TO HIM MANAGING TO SMASH EXPECTATIONS THAT HE HAD SET AND THAT OF THE MARKET. HE ONLY BEAT THEM SLIGHTLY WHEN IT COMES TO THEIR OWN INTERNAL GUIDANCE. THE REST OF THE MARKET THOUGH
HAD BEEN ANTICIPATING MAY BE A QUESTION AROUND VALUATION. DO YOU MAKE OF THE FACT THAT WE ARE STILL UP 200% OVER THE COURSE OF THIS YEAR. IT'S AN EXTRAORDINARY RUN UP FOR ONE PARTICULAR COMPANY, CAN IT BE SUSTAINED. >> IT IS ABSOLUTELY AN EXTERNAL RERUN UP AND NOW WE ARE QUESTIONING THE VALUATION LEVELS ESPECIALLY IF THE DEMAND STARTED TO SLOW. THIS IS NOT THE CASE RIGHT NOW BUT AT SOME POINT WE EXPECT THE DEMAND FROM THE BIG TECHNOLOGY COMPANIES WILL START SLOWING AND BECAUSE THIS IS A BIG CHUNK OF THE COMPANY'S REVENUE THAT WILL BE A HEADACHE.
RIGHT NOW THE COMPETITION IS NOT A PROBLEM BECAUSE NVIDIA HAS THE MOST EXPENSIVE BUT THE MOST PREMIUM CHIPS. AND THE BIG TECHNOLOGY COMPANIES ARE LOOKING FOR THOSE. IF THE DEMAND WAS TO SLOW FOR TECHNOLOGY COMPANIES THAT NVIDIA WOULD HAVE TO FIND OTHER CUSTOMERS AND THEY MAY NOT BE LOOKING FOR THE PREMIER SOLUTIONS, THEY MAY JUST BE LOOKING FOR THE SOLUTIONS TO MANAGE THEIR DAY-TO-DAY BUSINESSES AND INCREASE COSTS. THEY WOULD ALSO UP FOR MAY COST-EFFICIENT OR SLIGHTLY MORE AFFORDABLE CHIP SOLUTIONS THAN NVIDIA OFFERS AND I THINK THAT WILL BE A MAJOR ISSUE. CAROLINE: WE WILL BE TALKING THAT LATER IN THE PROGRAM.
WHEN WE THINK ABOUT THE CONTEXT OF NVIDIA. 20% OF THE RUN-UP IN THE S&P 500 IS THANKS TO THIS ONE PARTICULAR NAME. 25% EARNINGS-PER-SHARE INCREASE. POUTY RISK IS NVIDIA AND HOW DOES ONE PROTECT THEMSELVES FROM THAT. IPEK: THE AI RALLY AND NVIDIA HAS BEEN A MAJOR PILLAR OF THE MARKET IN THE U.S. WE HAVE SEEN. ANY LACK OF APPETITE FROM NVIDIA FROM NOW ON WILL HAVE A NEGATIVE IMPACT ON THE MARKET SENTIMENT. WE HAVE SEEN AI TOWARDS OTHER
SECTORS. BUT IT'S WORTH NOTING THAT THIS COMPANY HAS SO MUCH UPSIDE PRESSURE TO THE S&P 500, SO ANY KIND OF LOSS OF MOMENTUM HERE WILL OBVIOUSLY BE QUITE NEGATIVE FOR THE S&P 500 ESPECIALLY KNOWING THE S&P 500 TODAY IS TRAVELING EUROS ALL-TIME HIGH LEVELS. >> SO WHEN YOU ARE SAT ULTIMATELY IN EUROPE THINKING ABOUT A GLOBAL PERSPECTIVE, SHOULD PEOPLE BE BROADENING OUT WHEN IT COMES TO MAGNIFICENT SEVEN LET ALONE JUST NVIDIA OR U.S. THAT'S THE TECHNOLOGY.
>> WHEN IT COMES TO TECHNOLOGY A REALLY BELIEVE THE U.S. IS STILL IN A VERY DOMINANT POSITION SO YOU WOULDN'T BE GOING TO EUROPE FOR A TECHNOLOGY SOLUTION. IT'S ONE PLACE WE ACTUALLY LIKE AND THAT IS JAPAN ESPECIALLY GIVEN THE GOVERNMENT THERE WILL GIVE US MORE SUPPORT TO THEIR TECHNOLOGY INDUSTRY SO IN TERMS OF GEOGRAPHICAL DIVERSIFICATION, JAPAN COULD BE A SOLUTION. THERE IS CHINA AS WELL THAT WE HAD BEEN LOOKING AT BUT WE ARE STILL NOT POSITIVE BECAUSE THE CHIP WAR HAS MOVED ON THE PROGRESS OF THE TECHNOLOGY ADVANCEMENTS SO WE ARE NOT REALLY LOOKING AT CHINA SO ONE PLACE THAT INVESTORS COULD BE LOOKING AT WOULD BE JAPAN BUT OTHER THAN THAT THE U.S.
IS STILL IN A DOMINANT POSITION SO IF YOU WANT TO INVEST IN TECH THE FIRST PLACE YOU WOULD LIKE TO GO IS THE U.S. BECAUSE THIS IS WHERE YOU HAVE MASSIVE UPSIDE POTENTIAL. >> THE CLIENTS CALLING YOU ARE THEY SAYING THEY WANT TO ADD TO NVIDIA FOR EXAMPLE AS A NAME AT THESE LEVELS OR DO THEY KEEP THEIR EXPOSURE WHERE IT IS. >> TO BE PERFECTLY HONEST I DON'T HAVE CLIENTS THAT WOULD LIKE TO SELL NVIDIA BUT AT THESE LEVELS PEOPLE ARE MORE SKEPTICAL ABOUT ENTERING INTO THE SHARES. WHAT I HEAR IS AN ENTRY-LEVEL SEEING A PRICE PULLBACK FROM THE ACTUAL LEVEL. PEOPLE WILL STILL BE BUYING
NVIDIA SHARES FROM THIS POINT ON BUT THEY ARE STILL AT THIS VALUATIONS AND POINT IN TIME LOOKING FOR GOOD ENTRY-LEVEL SPREAD -- ENTRY LEVELS. CAROLINE: ARE THERE SMALLER CHIP RIVALS YOU THOUGHT WOULD BE A BETTER ENTRY POINT? IPEK: AMD DO NOT OFFER THE SAME MARGINS BUT THEY ARE GOOD. IT'S SHARE PRICE HAS COME DOWN QUITE SIGNIFICANTLY TO OFFER AN INTERESTING ENTRY POINT AT THE CURRENT LEVELS. IT'S ALSO TO BE SAID THEY ARE ABOUT TO LAUNCH TWO POWERFUL CHIPS. ONE FOR THE END OF THIS YEAR
AND ONE FOR NEXT YEAR. IT'S INTERESTING IS THEY MAY NOT BE AS POWERFUL AND PREMIUM AS NVIDIA CHIPS BUT THEY ARE CLEARLY GOING TO BE MORE COST-EFFICIENT AND THERE ARE MANY SECTORS AND COMPANIES OUT THERE THAT WILL BE LOOKING FOR MORE COST EFFICIENT AND AFFORDABLE SOLUTIONS. THEY COULD END UP FULFILLING THAT GAP. >> CURRENTLY TRADING AT 41 TIMES EARNINGS.
THANK YOU SO MUCH FOR YOUR TIME. SENIOR ANALYST, COMING UP BITCOIN NEARING $100,000 AS THE TRUMP TEAM IS LOOKING TOWARDS CREATING A NEW CRYPTO ROLE. MORE ON THAT NEXT, THIS IS BLOOMBERG TECHNOLOGY. >> BITCOINS MASSIVE RUN SEEING THE ASSETS MOVING TOWARD $100,000. THIS IS THE TRUMP TEAM IS SET TO BE CREATING ITS FIRST-EVER CRYPTO ROLE THAT WOULD OVERSEE THE CRYPTOCURRENCY POLICYMAKING. KAILEY LEINZ JOINS US NOW SO WHAT IS BEING WEIGHED RIGHT NOW. KAILEY:
A LOT OF IT IS STILL UP IN THE AIR. THIS WOULD BE THE FIRST CRYPTO SPECIFIC ROLE IN THE WHITE HOUSE AND IN MANY WAYS SIGNAL DONALD TRUMP WAS SERIOUS ABOUT THE CRYPTO RELATED PROMISES ON THE CAMPAIGN TRAIL WHICH INCLUDED MAKING U.S. THE BITCOIN CAPITAL OF THE WORLD, FIGHTING FIRING CURRENT CHAIR AND SAID HE WANTED TO MAKE THE FIRST-EVER CRYPTO PRESIDENTIAL ADVISORY COUNCIL SO IN SOME WAYS IT SHOULD NOT BE TOO SURPRISING HE IS LOOKING AT A ROLE LIKE THIS BUT IT'S NOT ABUNDANTLY CLEAR WHAT FORM THIS WOULD TAKE IF THIS IS GOING TO BE IN ACTION THE WHITE HOUSE STAFF POSITION OR SOMEONE WHO IS MORE OF A CRYPTO CZAR IF YOU WILL PRAY I WAS SPEAKING TO A SOURCE ON THIS WHO SAID THIS IS ALL VERY UP IN THE AIR THEY ARE SERIOUSLY LOOKING AT THIS BUT IT'S NOT CLEAR WHAT KIND OF POWER WOULD COME WITH THIS ROLE IF THEY WILL HAVE STAFF REPORTING INTO THEM FOR EXAMPLE, IF THEY WILL JUST BE ADVISING OR IF THIS WILL THE ABOUT LIAISING AND COORDINATING. ALL THE DIFFERENT PARTS OF GOVERNMENT THAT ARE INVOLVED IN OVERSEEING CRYPTO SO BETWEEN THE WHITE HOUSE AND CONGRESS YOU WOULD WRITE DIGITAL ASSET LEGISLATION OR THE WHITE HOUSE AND OTHER AGENCIES THAT HAVE JURISDICTION LIKE THE CFTC. I WOULD POINT YOU TO THE TWEET FROM KRISTIN SMITH, THE CEO OF THE BLOCKCHAIN ASSOCIATION WHO POSTED SAYING THE CRYPTO CZAR IDEA IS A GREAT IDEA BUT ULTIMATELY THEY CAN ONLY ACTUALLY DO THINGS IF THERE IS A STRONG SECRETARY OF THE TREASURY AND SEC CHAIR TO GO ALONG WITH THAT AND WE HAVE NOT GOTTEN PICKS FOR EITHER OF THOSE ROLES FROM THE PRESIDENT-ELECT YET.
>> A LOT OF THIS IS SIGNALING. BUT JUST REMIND US ON THE CAMPAIGN TRAIL SOME OF THE PROMISES TO MAKE THE U.S. THE CRYPTO CAPITAL OF THE PLANET, TO MAKE MINING EVER MORE FOCUSED IN THE UNITED STATES, TO HAVE A RESERVE OF BITCOIN. IS THAT NECESSARY TO HAVE CONGRESS MAKE MOVES OR CAN THIS BE DONE FROM AN EXECUTIVE ORDER FROM A LEAD POSITION. >> SOME OF IT CAN IN THAT THE PROMISE -- THE PRESIDENT CAN MAKE APPOINTMENTS, PUTTING IN PLACE MORE CRYPTO FRIENDLY CHAIR WHO WOULD BE MORE LENIENT WITH THE INDUSTRY PERHAPS THAN WE HAVE SEEN IN THE BIDEN ADMINISTRATION BUT A LOT OF THIS WILL COME DOWN TO CONGRESS AND IT WAS NOT JUST PART OF DONALD TRUMP'S CAMPAIGN PLATFORM AT THE REPUBLICAN FLAT -- PLATFORM AT THE CONVENTION IN MILWAUKEE THAT THEY WANT TO END WHAT DEMOCRAT -- WHAT THEY CALL DEMOCRATS ON DEBT -- UN-AMERICAN CRACKDOWN ON THE INDUSTRY. CONGRESS WILL BE REALLY
IMPORTANT AS THEY HAVE THE LAWMAKING POWER IN TERMS OF DELINEATING JURISDICTION BETWEEN THESE AGENCIES THAT HAVE BEEN KIND OF JOCKEYING FOR CONTROL AND THE CHAIRMANSHIP OF THE HOUSE FINANCIAL SERVICES COMMITTEE IS SOMETHING WE SHOULD PAY ATTENTION TO. THE 119TH CONGRESS COMES IN. PATRICK MCHENRY IS GOING TO BE LEAVING THE HOUSE AND THERE IS KIND OF A THREE WAY BATTLE BETWEEN BILL -- CONGRESSMAN ANDY BARR OF KENTUCKY, BILL OF MICHIGAN AND FRENCH HILL OF ARKANSAS WHO LEADS THE SUBCOMMITTEE ON DIGITAL ASSETS SO WHOEVER'S CHAIRING THE ARMED SERVICES COMMITTEE WILL HAVE A LOT OF THAT COULD ULTIMATELY WORK ITS WAY THROUGH CONGRESS AND THAT WILL BE A LOT OF THE INDUSTRY'S LOBBYING TIME IS SPENT SPECIFICALLY ON. >> AND INDUSTRY LOBBIED GOING INTO THESE ELECTIONS AND IT WORKED. MONEY PUT INTO BACKING CRYPTO FRIENDLY CONGRESSPEOPLE IS IMPORTANT.
>> ABSOLUTELY. YOU LOOK AT THOSE WHICH DEPLOY TENS OF MILLIONS OF DOLLARS IN SOME OF THOSE KEY CONGRESSIONAL RACES INCLUDING A SUCCESSFUL OUSTING OF THE CURRENT CHAIR OF THE SENATE BANKING CHAIR. HE WAS OUSTED NOT JUST BY ANY CANDIDATE BUT A CRYPTO ENTREPRENEUR IN BERNIE MORENO. THE INCOMING SENATE DESIGNATE OR SEND IT ELECT. THAT IS GOING TO BE INTERESTING TO WATCH AS I MENTIONED THE HOUSE FINANCIAL SERVICES COMMITTEE, THE SENATE WILL BE WHERE A LOT OF THE UPHILL CLIMB HAS BEEN WHEN IT COMES TO ADVANCING THE CRYPTO INDUSTRY AND TIM SCOTT WILL BE TAKING OVER AS THE SENATE BANKING CHAIR. I WOULD POINT OUT THE RANKING MEMBER COULD BE ELIZABETH WARREN WHO FACES A CRYPTO OPPONENT OF HER OWN BUT WINNING HER REELECTION RACE THAT SHE MAY HAVE A LITTLE BIT OF A ROLE IN EFFORT TO PULL BACK SOME OF THE EFFORTS TO ADVANCE THE INDUSTRY'S INTEREST BUT THE CRYPTO MONEY ACTIVE IN THIS ELECTION CYCLE HAS NO SIGN IT'S GOING ANYWHERE NOW THE BASE PROVEN THEY CAN MAKE A DIFFERENCE IN OUTCOMES HERE. WE WILL WATCH TO SEE HOW THIS
PACK AND OTHER INTEREST GROUPS AND OTHER INDIVIDUALS CONTRIBUTE INTO IT, HOW ACTIVE THEY WILL BE IN THE MIDTERMS AND ULTIMATELY IN THE NEXT CYCLE IN 2028. >> WE THANK YOU. LET'S TALK ABOUT ARTIFICIAL SUPER INTELLIGENCE. PERHAPS IT IS NOT FAR OFF.
THE SOFTBANK CEO PREDICTED IT WOULD BECOME A REALITY BY 2035. THE FORMER GOOGLE CEO ERIC SCHMITT WHO IS OUT WITH A NEW BOOK SAYS IT MIGHT BE COMING SOONER THAN WE THINK. TAKE A LISTEN. >> IT'S PROBABLE WE CAN BUILD SYSTEMS THAT ARE THE TECHNICAL TERM IS SUPER INTELLIGENT. YOU'VE A SIMPLE -- A SINGLE
SYSTEM THAT IS AT THE 90TH PERCENTILE OF PHYSICS, MATH, CHEMISTRY AND ARTS AND SO FAR NO HUMAN CAN DO THAT. IT LOOKS LIKE THE SYSTEMS WILL NOT ONLY BE AVAILABLE NEXT FIVE YEARS AS WE ALREADY HAVE EXAMPLES OF PASSING THESE TESTS ALREADY BUT ALSO BUT THEY WILL BE BROADLY AVAILABLE FOR ALL OF SOCIETY. CAROLINE: HAPPENING TODAY IN NEW YORK THE EVIDENT AI SYMPOSIUM WERE SOME OF THE MOST SENIOR LEADERS OF THE WORLD'S BANKING AND ARTIFICIAL INTELLIGENCE AREAS CAME TOGETHER DISCUSSING THE REALITY OF AI ADOPTION BASED ON THE LATEST DATA FROM THE AI INDEX. A GLOBAL STANDARD BENCHMARK FOR AI MATURITY IN BANKING. I SAT DOWN WITH TERESA AND
ASKED IF THE EFFICIENCIES FROM AI ARE THE NUMBER ONE RETURN ON INVESTMENT. TAKE A LISTEN. >> THE QUESTION IS WHAT IS THE RETURN. AND THE ANSWER IS VERY DIFFICULT TO QUANTIFY. I THINK AT THIS STAGE OF THE GAME IT'S A LITTLE BIT OF EFFICIENCY FOR A LOT OF PEOPLE EVERY DAY NOT SOMETHING YOU CAN HANG A NUMBER ON. SO I THINK THE NEXT GENERATION
OF WHERE WE SEE THIS HEADING IS RATHER THAN USING IT TO HELP WRITE YOUR EMAIL OR SUMMARIZE A DOCUMENT IS WHEN WE START TO PUT THE TECHNOLOGY IN TO KNOWLEDGE BASES. WHEN WE START TO LOOK AT THE WORKFLOW OF A PARTICULAR PERSON OR GROUP AND LINK TOGETHER THE STEPS IN THAT WORKFLOW SO YOU BASICALLY FIVE MINUTES OF EFFICIENCY TO THE FIVE HOURS OF EFFICIENCY. THAT IS GOING TO TAKE SOME TIME TO ACTUALLY GET THERE BUT I THINK THAT IS WHERE WE SEE THE PROBLEM. SO THERE ARE NEAR-TERM BENEFITS BUT I THINK THE MOST COMPELLING IS PUTTING THE TECHNOLOGY IN PEOPLE'S HANDS AND LETTING THEM START TO EXPERIMENT AND UNDERSTAND HOW IT WORKS AND BE USED. >> CHIEF DATA ANALYTICS OFFICER RIGHT THERE.
COMING UP IT IS OFFICIAL. THE DOJ DOES WANT GOOGLE TO DIVEST ITS CHROME WEB BROWSER. ALL DETAILS NEXT, THIS IS BLOOMBERG TECHNOLOGY.
CAROLINE: THE JUSTICE DEPARTMENT AND A GROUP OF STATES SUGGEST GOOGLE WILL HAVE TO DIVEST ITS CHROME RED -- WEB BROWSER IN ORDER TO ADDRESS ANTI-CAN TRUST -- ANTITRUST CONCERNS. FOR MORE, IT WAS YOUR REPORTING THAT ULTIMATELY HAS BEEN CONFIRMED. JUST TAKE US THROUGH HOW REALISTIC STILL THIS DIVESTMENT WOULD BE. >> WE WILL SEE IN EARLY SPRING. THE JUSTICE DEPARTMENT HAS SAID THEY WANT GOOGLE TO SELL OFF CHROME.
THE TOP TWO OTHER MICROSOFT AND APPLE WHO HAD THE CASH, SO THE NEXT CANDIDATE LIKE OPENAI OR SOME OF THE OTHER AI STARTUPS. THAT WOULD REALLY LOVE TO CUSTOMERS ON THE AI SEARCH OF GOALS. OTHER THINGS THE JUSTICE DEPARTMENT PUT IN THERE IS THEY WANT GOOGLE TO HAVE TO LICENSE A LOT OF ITS DATA. THAT'S PROBABLY A MORE REALISTIC THING THAT WOULD HAVE TO HAPPEN AND DEFINITELY GIVE ABUSE THROUGHOUT -- THAT WOULD NOT HAVE TO SCRAPE THE WEB THEMSELVES. CAROLINE: ALPHABET ONE OF THE KEY TODAY, INVESTORS WORRIED ABOUT THIS.
ALPHABET WORRIED ABOUT IT ONCE AGAIN TRYING TO SAY THIS IS A RADICAL TURN OF EVENTS. HOW COMPLEX IS IT TO SEE THE SELLOFF OF SUCH BUSINESSES. AND HOW MUCH DO THEY HAVE TO WAIT FOR THE LEGAL MANEUVERING A COUPLE MONTHS TO RESPOND.
>> THEY HAVE UNTIL NEXT MONTH TO RESPOND, TRUMP ADMINISTRATION IN MARCH GETS TO HAVE ANOTHER REPLY. WANTS TO CHANGE THE PROPOSAL. WE PROBABLY WON'T HAVE A DECISION FROM THE COURT. PROMISING HE WILL RULE BY AUGUST OF 2025 PUT GOOGLE SET -- GOOGLE SAYS IT WILL APPEAL. AT THE EARLIEST WE ARE LOOKING AT DOING THIS IN 2026. BUT I THINK CHROME DEFTLY RECOGNIZING CHROME IS CRUCIAL TO GOOGLE'S BUSINESS. AN AVENUE IN WHICH A LOT OF
PEOPLE ACCESS IT SEARCH ENGINE BUT ALSO HOW GOOGLE AFFECTS A LOT OF DATA. AS A USER LOGS AND IT KEEPS A LOT OF INFORMATION ABOUT THE BROWSER HISTORY WHERE PEOPLE ARE GOING ONLINE AND WHAT THEY'RE LOOKING AT. USING THAT DAY THAT HELPS SELF ADVERTISED -- HELP SELL ADVERTISING. CAROLINE:
APPRECIATE THE UPDATE, THANK YOU. IT IS TIME FOR TALKING TECH. FIRST UP WE ARE TALKING PDD DUE TO TENSE IF I -- THE TEAM IS STRUGGLING TO CATCH UP WITH UNSPECIFIED RIVALS BECAUSE OF LACK OF EXPERTISE.
ALIBABA APPOINTED A NEW EXECUTIVE TO OVERSEE ITS ENTIRE E-COMMERCE OPERATION. LEADING A NEW DEPARTMENT THAT CONSOLIDATES ALIBABA SHOPPING ASSETS MAKING HIM MOST POWERFUL PERSON IN THE COMPANY AFTER THE CEO. BAIDU REPORTED ITS BIGGEST REVENUE DROP IN MORE THAN TWO YEARS AFTER CHINA'S ECONOMIC -- THE EARNING SPOT HAS FALLEN BEHIND IN CHINA USAGE PAID WHILE ITS CORE BUSINESS IS LOSING GROUND TO NEWER SOCIAL PLATFORMS. COMING UP WE ARE GOING BACK TO THE U.S. EARNINGS STORY. NVIDIA, THE IMPACT ON THE CHIPS SECTOR. OFF BY 1.2% FOR THE WORLD'S MOST VALUABLE PUBLICLY TRADED
COMPANY. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. LET'S GET BACK TO NVIDIA'S EARNINGS. HERE'S A REACTION FROM SOME OF
OUR GUESTS ON BLOOMBERG TELEVISION. >> I HAVE A FEELING WE HAVE REACHED PEAK NVIDIA. >> I DO THINK THAT A LOT OF INVESTORS ARE EXPECTING A LITTLE BIT TOO MUCH. >> THERE IS A LITTLE BIT OF THIS FATIGUE BUT MAKE NO MISTAKE, THIS IS A REMARKABLE GOOD QUARTER.
>> WHEN THEY ARE PUTTING UP IN TERMS OF OVERALL GROWTH, IT'S EXACTLY WHAT THE BULLS WANT. >> NEVER UNDERESTIMATE WALL STREET'S ABILITY TO MISS THE BIGGER PICTURE. THIS COMPANY HAS DOUBLED THE OPERATING MARGIN OF ANY OTHER MAG SEVEN OUTSIDE OF MICROSOFT, TO NITPICK NVIDIA ON THOSE MARGINS IS TRULY MISSING THE BIG PICTURE. >> PORTFOLIO MANAGER AND SENIOR TECHNOLOGY ANALYST JOINS US NOW. DANIEL, WE ARE QUIBBLING ON A MARGIN OF 75%, SO MUCH MORE PROFITABLE THAN RIVALS. >> YES, GOOD MORNING. I THINK THE MARGIN STUFF IS
LARGELY BEHIND US. THEY'VE GUIDED FOR 75% EXITING THE YEAR AND I KNOW THIS WAS A CONCERN A WHILE BACK BUT I WOULD ARGUE IT SOMEWHAT FRANKLY IRRELEVANT, I THINK WHAT WAS MUCH MORE IMPORTANT WAS TWO THINGS. THE COMPANY NOTED THE SCALING WAS WELL AND ALIVE AND WE CAN BOTH SCALE TRAINING AND INFERENCE GOING FORWARD SO THIS ENTIRE DISCUSSION ABOUT HITTING THE WALL IS PROBABLY OFF AND THERE'S MANY WALLS FAR AWAY. IN THE SECOND REALLY IMPORTANT
THING I THOUGHT THEY MENTIONED WAS TO SAY DATA CENTERS ARE BECOMING A LITTLE BIT LIKE SMARTPHONES. THEY ARE AN ELECTRICITY CONSTRAINT AND WHAT THAT MEANS IS EVERY YEAR THE HYPER SCALARS HAVE TO BUY A NEW CHIP BECAUSE IT IS BETTER IN TERMS OF ELECTRICITY USAGE AND WE'VE NEVER HAD THAT BEFORE. SO THOSE TWO THINGS ARE VERY POSITIVE FOR THE MEDIUM AND LONG TERM OF THE COMPANY.
CAROLINE: YES WE HAVE HAD JENSEN BACK ON THE CONFERENCE TRAIL EARLIER THIS WEEK TALKING ABOUT HOW COMPUTER POWER WILL EXTEND AND THE MORE DATA AND THE MORE COMPUTE YOU HAVE THE MORE SOPHISTICATED THE LARGE LANGUAGE MODELS WILL BECOME. THEN YOU LISTEN TO THE REPORTING AROUND OPENAI AND THE LATEST ITERATION OF LARGE LANGUAGE MODELS STUTTERING A LITTLE. WHY ARE YOU SO CONFIDENT THE SCALING LAWS ARE IN PLACE? DANIEL: THE KEY THING TO NOTE IS ALL OF THAT INFORMATION WE HAVE HAD IS BASED OFF OF SMALLER CLUSTERS.
SO NOW THE FIRST TIME YOU HAVE A CLUSTER THAT IS SOMETHING LIKE 200,000 GP USE OWNED BY ELON MUSK AND WE WILL SEE WHAT COMES OUT OF THAT. SECONDLY, THE BLACKWELL CLUSTER STARTED AT 100,000 GP USE. HARDWARE STARTED AT 10,000. WE WILL HAVE TO WAIT WHAT CAN WE TRAIN WITH THESE MUCH BETTER CHIPS AND LARGER CLUSTERS AND WHATEVER COMES OUT OF THAT IS THE CRUX. MOST OF THE STUFF AROUND THESE ARTICLES IS KIND OF BACKWARD LOOKING. CAROLINE: THERE HAS BEEN REPORTING ABOUT THE LATEST VALUATION OF X AI AND THEY ARE RAISING MONEY TO BUY MORE GPUS.
THERE IS A WORRY ABOUT DENSITY OF CUSTOMER. WILL WE SEE THAT? DANIEL: I THINK YOU ARE RIGHT. FOR THE BIG CUSTOMERS, THE HYPER SCALARS AND HEALTH CARE COMPANIES ARE USING TRAINING A LOT. MY SENSE IS THAT THE MOST IMPORTANT THING TO LOOK AT FOR
THE NEXT YEAR IS THIS IDEA OF SPENDING MUCH MORE COMPUTE ON INFERENCE AND LETTING INFERENCE THINK AND I THINK IS STARTING JUST NOW IF WE CAN SEE THIS, COMPANIES CAN START USING THIS BY USING SERVICE NOW, WORKDAY, MICROSOFT. I THINK THAT MIGHT BE OF TIPPING POINT AND WE ARE GETTING ONE OF THAT. JUST TO BE CLEAR, IT'S THIS AI THAT CAN DO THINGS AUTONOMOUSLY WITHIN AN ENTERPRISE AND HELP WITH WORKFLOWS. CAROLINE: WE HAVE HEARD A LOT ABOUT AGENTS, SERVICE NOW AND SALESFORCE. WHEN WE LOOK AT YOUR FUNDS MANAGED, THE TOP HOLDING IS NVIDIA. DOES THAT SORT OF BROADEN OUT OR REMAIN COMFORTABLE WITH THE ALIGNMENT ON NVIDIA EVEN THOUGH IT'S THE MOST VALUABLE MARKET CAPITALIZATION IN THE WORLD.
DANIEL: ONE, I THINK THERE'S A GOOD SCENARIO TO BE MADE FOR NVIDIA TO BECOME THE $10 TRILLION MARKET COMPANY. EVEN IF YOU LOOK AT THE TOP FOR MICRO SCALARS, THEIR ESTIMATED -- OF CASH FLOW. THERE ARE A LOT OF DOLLARS LEFT TO GO TO NVIDIA IF THE SCALING LAWS HOLD TRUE. SO THAT IS ONE. WE CONTINUE TO BE POSITIVE. BUT THE TRENDS ARE REALLY PROLIFIC -- FOR LIBERATING -- PROLIFERATING. THE SOFTWARE COMPANIES, SERVICE NOW, THEY WILL BENEFIT BUT THERE'S ALSO COMPANIES THAT HAVE SIGNIFICANT COMPETITIVE ADVANTAGES AND RETAKE AI AND ONE GREAT EXAMPLE MIGHT BE A COMPANY CALLED AXON THAT MANUFACTURES TASERS AND CAMERAS FOR THE POLICE FORCE THEY HAVE ADDED THE ABILITY TO TRANSCRIBE POLICE WHEN THEY ARE ENGAGED WITH PEOPLE AND THAT SAVES 40% OF TIME FOR THE POLICE.
IT'S A HUGE IMPROVEMENT AND THE STOCK HAS PRICED THEM AS AN AI WINNER. CAROLINE: SO GREAT TO HAVE TIME WITH YOU, SENIOR TECHNOLOGY RESEARCH ANALYST. HOW INTERESTING HE KEPT REFERENCING INFERENCE. WE WILL HAVE A CONVERSATION ON THAT NOW.
THE CEO OF SAM ANOVA IS AN AI CONSTRUCTION COMPANY, YOU ARE KIND OF AN NVIDIA COMPETITOR UPSTART. I JUST WANT TO ARTICULATE WHAT IT IS YOU DO. >> WE STARTED AND REALLY FOCUSED ON EFFICIENT COMPUTING.
AS WE ARE SEEING NVIDIA SCALE AND THE GREAT NUMBERS PEOPLE TALK ABOUT WITH NVIDIA WE ARE NOW SEEING WHAT HAPPENS WHEN THE WORLD WANTS TO GO INTO PRODUCTION AND GO INTO SCALE. ONE THING WE ARE NOT TALKING ENOUGH ABOUT IS THE FACT POWER AND ENERGY, PEOPLE TALK OF A BUILDING NUCLEAR POWER PLANTS AND THINGS LIKE THAT. WE TOOK THE FOCUS OF HOW TO RETAKE AI AT SCALE POWER EFFICIENCY AND DRIVE IT DOWN SO YOU CAN SCALE WITHOUT RUNNING INTO THESE LIMITS WE SEE WITH BOTH COMPANIES AND COUNTRIES RUNNING OUT OF POWER AND FIGURING OUT HOW TO PROVIDE ENOUGH ENERGY TO SUPPLY THESE GPUS. CAROLINE: SO YOUR VIEW IS THERE IS GOOD TO BE A CERTAIN LIMITATION ON THE AMOUNT OF ENERGY EFFICIENCY THAT A COMPANY LIKE NVIDIA WILL EVER HIT WITH A GPU WHERE AS YOU OFFER WHAT? RODRIGO: TODAY FOR EXAMPLE, A SINGLE IRAQ OF NVIDIA IS NORTH OF 100 KILOWATTS.
THAT'S 100 HOMES THAT IT POWERS. WE ARE ABLE TO DRIVE PERFORMANCE AT 1/10 OF THE POWER. BECAUSE IT'S A COMPLETELY DIFFERENT ARCHITECTURE. NVIDIA HAS HAD AN ARCHITECTURE AROUND FOR SEVERAL DECADES. WE'RE TRYING TO EVOLVE THIS
GRAPHICS GPU ARCHITECTURE. FOR INFERENCING THERE SO MANY NEW TECHNIQUES YOU CAN APPLY BECAUSE NOT NEED TO DO ALL THE HEAVY COMPUTING THAT TRAINING REQUIRES. SO YOU CAN DRIVE A MUCH LOWER FOOTPRINT IN TERMS OF COST AND SPACE ULTIMATELY IS REQUIRED WHEN YOU ASK THINGS TO SCALE. AI INFERENCE WILL BE 10 TIMES MORE FOOTPRINT THAN TRAINING. I THINK WE'LL HAVE TO THINK ABOUT HOW HER WE ENERGY EFFICIENT AND COST EFFICIENT BEFORE IT GETS TO SCALE. CAROLINE: FOR OUR AUDIENCE THAT IS NOT ONLY AN INVESTING AUDIENCE BUT TECHNOLOGICALLY SAVVY, DESCRIBE WHAT IS DIFFERENT THAT ENABLES THIS HIGHER ENERGY EFFICIENCY WITHIN YOUR PARTICULAR TECHNOLOGY. RODRIGO:
IT IS SOMETHING INVENTED RESEARCH AT STANFORD UNIVERSITY CALLED DATAFLOW ARCHITECTURE. IT ALLOWS YOU TO MAP THE HARDWARE IN THE WAY THAT A NEURAL NET WANTS TO OPERATE. WITH NVIDIA TODAY YOU HAVE TO BREAKUP THESE INTO THOSE CORES INSIDE THE GRAPHICS CHIP WHICH TURNS OUT TO BE A LOT OF WORK, ENERGY AND POWER. IT ALLOWS YOU TO AVOID -- WEN YU ASHLEY BREAKUP THESE NETS AND LATER FLOWS THROUGH THE MACHINE SO WE GET THIS ORDER OF MAGNITUDE OF POWER AND EFFICIENCY WHICH ALLOWS YOU TO DEPLOY THESE EXISTING DATA CENTERS WHICH IS ONE OF THE THINGS THAT IS NOT TALKED ABOUT WHEN WE ACQUIRED GPUS BECAUSE WE HAVE TO UPGRADE THE DATA CENTERS. WITH EXISTING POWER GRIDS AND EXISTING COOLING SYSTEMS IT BECOMES ONE OF THOSE THINGS THAT ALLOWS US TO GENERATE VALUE FROM ENTERPRISES QUICKLY. CAROLINE:
HOW ARE YOU MANAGING TO SELL THIS NARRATIVE INTO CORPORATE AND FEDERAL GOVERNMENT? RODRIGO: AS A START UP. NVIDIA IS AT THE TOP, WE ARE A START UP THAT'S COMING IN AND PROVIDING DISRUPTIVE TECHNOLOGY. WE HAVE BEEN GOING TO PLACES LIKE THAT AND TODAY WE POWER SAUDI ARAMCO'S META-BRAIN. THEIR INTERNAL GPT, NOW OPERATING THEIR GAP WITHIN THE COMPANY SO COMPANIES CAN NOW TRAIN THESE MODELS ON A SEMINAL PLATFORM COMPLETELY SECURELY AND THEN DEPLOY IN THEIR INFRASTRUCTURE BECAUSE YOU DON'T HAVE TO EXPOSE THE DATA OUTSIDE YOUR FIREWALLS.
>> THERE ARE OTHER STARTUPS IN THIS SPACE OR INDEED TRYING TO OFFER MORE ENERGY EFFICIENT OPTIONS. YOU YOURSELF USED TO WORK FOR ORACLE. I'M INTERESTED AS TO WHAT YOUR NEXT STEP IS TO GAIN MARKET SHARE. IS IT ABOUT RAISING FUNDS? RODRIGO: A REALLY GOOD POINT. I BELIEVE WHEN WE STARTED THE
COMPANY SEVEN YEARS AGO IT'S ABOUT ACCESS. TO DEMOCRATIZE AI YOU HAVE TO MAKE IT AVAILABLE TO EVERYBODY. YOUR PREVIOUS GUESTS JUST SAID, TODAY NVIDIA IS RUNNING A LARGE SCALE TO A FEW CUSTOMERS. THE COLLAPSE OF THE POWER IS TO BE ABLE TO MAKE IT AVAILABLE TO EVERYBODY, TO MAKE IT EASILY AVAILABLE AND THAT MEANS LOWER COST, MUCH LOWER POWER AND ABLE TO DEPLOY IN VERY TIGHT SPACES AND NOT NEED A DADO -- A GIGAWATT DATA CENTER. FOCUSING ON RESTRUCTURING THE
POWER REQUIREMENTS OF THE AI INFRASTRUCTURE SO THEY CAN DEPLOY AT PERFORMANCE MUCH HIGHER THAN NVIDIA. NOT LESS THAN NVIDIA BUT MUCH HIGHER AND MUCH MORE POWER. CAROLINE: TALKING ABOUT SOME OF THE ALTERNATIVES OUT THERE. WE THANK YOU FOR COMING ON. PALO ALTO NETWORKS EARNING, LOOKING AT THE FIRST QUARTER PROVING ITSELF WITH A FOCUS ON PLATFORMIZATION. THIS IS BLOOMBERG TECHNOLOGY.
APPLE, SPOTIFY AND I HEART THIS IS BLOOMBERG. CYBERSECURITY COMPANY PALO ALTO NETWORKS AFTER THE MARKET WEDNESDAY. SEEING REVENUE CLIMBING 14%. PLATFORM IS ASIAN AND ALSO A STOCK SPLIT. LET'S LOOK WITH THE CEO OF PALO ALTO NETWORKS.
I'M INTERESTED ON THE NUANCE. YOU ARE TRYING TO TELL A DIFFERENT STORY TO INVESTORS TALKING ABOUT PLATFORMIZATION, BUNDLING BUT STILL THEY WANT TO TURN TO YOUR BILLINGS NUMBER. HOW DO YOU GET THAT ACROSS TO THEM.
THERE WAS A LITTLE BIT OF WORRY ABOUT BILLINGS? >> THANK YOU FOR HAVING ME AND I APPRECIATE YOU SAYING THE WORD PLATFORMIZATION BECAUSE WE'VE BEEN TRYING TO TELL THE MARKET THIS. WE ARE SEEING THE SHIFT IN THE CYBERSECURITY INDUSTRY WHERE PEOPLE ARE TIRED OF BUYING BORING PRODUCTS WHICH ARE NOT SOLVING THE PRODUCTS OF TODAY. YOU HAVE TO MAKE THESE WORK TOGETHER.
EVERYBODY IS TALKING ABOUT AI. THINGS ARE GOOD HAPPEN FASTER. WHICH MEANS A COMMON LANGUAGE, COMMON DATA WHICH ACTUALLY POINTS TOWARDS INTEGRATION OR POINTING TOWARDS PLATFORMIZATION . CAROLINE: A STRATEGY THAT SEEMS TO BE EARNING YOU PLENTY OF COMPANIES. HUMILITY VIEW OF 1100
PLATFORMIZATIONS. PEOPLE ARE WORRIED MAYBE WITHIN THIS BUNDLING THERE IS DISCOUNTING GOING ON. NIKESH: ONCE YOU DEPLOY A PLATFORM AND IT WORKS WELL FOR YOU YOU ARE NOT GOING TO REPLACE IT SO COMING FROM AN INDUSTRY WHERE WE'VE HAD THEM FOR EIGHT TO 10 YEARS BUT THEY'VE BEEN THROUGH A CYCLE AND YOU HAVE TO REPLACE THEM BECAUSE THE LAST ONES DID NOT STAY. WHAT WE ARE TRYING TO DO IS STAY EVERGREEN, TRYING TO MAKE SURE WE EMBED THE PLATFORM AS PART OF THE SECURITY SOLUTION THAT WILL HOPEFULLY COME TO US AND YOU HAVE TO GO THROUGH A HUGE PROCESS OF CONSTANTLY TRANSFORMING. TODAY MORE CUSTOMERS OF
SECURITY TRANSFORMATION PROJECTS ON TAP IN ANY TECHNOLOGY TRANSFORMATION. >> LET'S TALK ABOUT THE CYBER LANDSCAPE AND WHETHER IT CHANGES WITH THE NEW ADMINISTRATION. IS THERE MORE CONSOLIDATION AND WILL THERE BE MORE DEALMAKING FROM YOU? >> I'M WATCHING IT LIKE EVERYONE ELSE SAYING IT SOUNDS LIKE WE WILL SEE THE NEW DOGE DO A LOT OF COST-CUTTING. TRADITIONALLY THE FEDERAL GOVERNMENT OF THE UNITED STATES HAS BEEN SLOW TO ADOPT NEW TECHNOLOGY. RIGHTFULLY SO. BUT AS YOU SEE EFFICIENCY AND TECHNOLOGY INVESTMENT HAPPENING IT HAS TO BE SECURE. I THINK SECURITY GETS A KNOCK
ON BENEFIT IF WE ACTUALLY SEE A TECHNOLOGY WAVE COMING IN. DO I EXPECT REGULATE -- REGULATION. DO I EXPECT THINGS WILL MOVE FASTER, HOPEFULLY.
I THINK GENERALLY IT WILL BODE WELL FOR ALL OF US IN TECHNOLOGY, BUT WE WILL FIND OUT. >> AS YOU INNOVATE, AS PARTICULARLY IN THE WORLD OF GENERATIVE AI WE MANAGE TO GET MORE SOPHISTICATED CYBER PROTECTION YOU ARE ALSO GETTING MORE SOPHISTICATED HACKERS. THE U.S. GOVERNMENT HAS FLAGGED SOME
FLAWS WITH PALO ALTO PRODUCTS THAT MIGHT'VE BEEN EXPLOITED BY HACKERS. CAN YOU TELL US A BIT ABOUT WHETHER THAT WAS REALISTIC FOR YOU AND WHAT PATCHES HAVE BEEN MADE? NIKESH: BECAUSE WE ARE COMING FROM THE HARDWARE INDUSTRY WHERE WE SELL PRODUCTS AND CUSTOMERS DEPLOY THEM, THE PRODUCT CYCLE, AT ANY POINT IN TIME THERE IS ALWAYS SOME BUG OUT THERE THAT NEEDS TO BE PATCHED AND FIXED. WE WERE VERY GOOD AT MAKING SURE WE WORK WITH CUSTOMERS ON WHO HAS WHAT PRODUCT. I THINK AS WE MOVE FROM A SOLUTION BASED TO A SOFTWARE BUSINESS, THAT'S BECOMING A LOT EASIER TO FIX. I THINK SOFTWARE BEATS HARDWARE FROM A SECURITY PERSPECTIVE ALL THE TIME SO AS THIS TRANSFORMS. IN THE FUTURE.
>> TRANSFORMS EVERYONE BECOMES AN INVESTOR, RETAIL COMMUNITY AS WELL. TALK TO US ABOUT YOUR 2-FOR-1 STOCK SPLIT. IS THAT WHY YOU SPLIT, ABOUT GIVING MORE ACCESS. NIKESH: FIVE YEARS AGO WHEN I STARTED WE WERE LOOKING FOR A NICHE NAME IN THE CYBERSECURITY INDUSTRY AND WE ARE DELIGHTED WE ARE PART OF THE GENERAL CONVERSATION. >> FOR NOW WE ARE CURRENTLY SEEING IT'S GOING TO BE ACTION IN 2-FOR-1 STOCK SPLIT.
ON THE FUNDAMENTALS AND SOME SHARE MOVES. WE APPRECIATE YOUR TIME TODAY. THANK YOU. SNOWFLAKE GIVING A PRETTY STRONG OUTLOOK FOR ITS PRODUCT SALES GROWTH. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: SNOWFLAKE SHARES JUMPING AFTER THE COMPANY GAVE SOME PRETTY SOLID SALES OUTLOOKS. SUGGESTING THE RECEIVING A STRONG SUGGESTION FOR CUSTOMERS. EXTRAORDINARY MOVE TO THE UPSIDE FROM SNOWFLAKE.
WHAT'S MANAGING TO WIN OVER CUSTOMERS? >> IT IS SOFTWARE -- IN SOFTWARE RIGHT NOW THE QUESTION IS WHO GETS LEFT BEHIND. FOR A LONG TIME INVESTORS WORRIED ABOUT SNOWFLAKE FOCUSING ON MAY BE A TWO NARROW SLICE OF THE DATA MARKET. SERVICE IS USED TO ORGANIZE AND ANALYZE YOUR DATA AND SNOWFLAKE IS SUCCESSFULLY MAKING AN ARGUMENT IN THE ERA OF GENAI WHEN FOLKS NEED TO UNDERSTAND SUCH A WIDE ARRAY OF DATA, WE WILL REMAIN A PLATFORM WHERE THEY SPEND THEIR MONEY AND MAKE THEIR DECISIONS. THAT IS WHAT INVESTORS ARE REACTING TO WITH THESE RESULTS. CAROLINE: WHEN IT COMES TO UNSTRUCTURED DATA OR HAVING TO MAKE PURCHASES HERE.
>> YES. MANY HAVE HEARD OF THIS FAMOUS RIVALRY BETWEEN SNOWFLAKE AND DATA BRICKS. THE ARGUMENT WAS THEY HANDLED THE UNSTRUCTURED DATA BETTER. SOMETHING THAT IS NOT IN A SPREADSHEET, MAYBE IT WAS A BUNCH OF GOOGLE DOCS TO SCAN THROUGH.
SO SNOWFLAKE HAS WORKED TO BEEF UP THAT HARD TO ACCESS DATA. A STARTUP THAT FOCUSES SPECIFICALLY ON INGESTING THIS KIND OF MESSY UNSTRUCTURED DATA THAT YOU NEED FOR A LOT OF THESE CASES. CAROLINE: I KNOW YOU'VE REPORTED ON THAT RIVALRY SO WE WILL SEE IF THAT HELPS. UNDER THE GUIDANCE OF THE NEW LEADERSHIP, HE IS ALSO TRYING TO INTEGRATE LARGE LANGUAGE MODELS. HOW IS THIS BEING SEEN? BRODY: LLM -- THEY WANT TO BRING MORE LLM ACCESS FOR THEY WANT TO MAKE DASHBOARDS AND VISUALIZATIONS, YOU CAN DO IT IN SNOWFLAKE. YOU DON'T HAVE TO LEAVE THE PLATFORM. SO BRINGING THOSE MODELS INTO
SNOWFLAKE IS AGAIN HOPING TO MAKE A PLATFORM WHERE YOU REMAIN, WHERE YOUR MOST IMPORTANT DATA IS, THEY REALLY HOPE TO BE A CENTER OF GRAVITY FOR THE INFORMATION AND NOT JUST SOMETHING YOU USE WHEN YOU WANT TO MAKE AN ANALYSIS OF A SPREADSHEET SOMEBODY SENT TO YOU. CAROLINE: THE INTRICACY OF THE EARNINGS. A BROADER PERSPECTIVE OF HOW SNOWFLAKES FIT INTO MORE BROADLY. IT HASN'T BEEN A ROUND OUT RISK ON KIND OF THE DAY.
WE'VE BEEN PULLED LOWER BY ABOUT 2/10 OF A PERCENT. LARGE PART NVIDIA IS OFF. OFF THE BACK OF THAT FORMALIZATION MOMENT THAT THE DOJ DOES WANTED TO BE SELLING OFF CHROME FOR EXAMPLE. IT IS THE MOST VALUABLE COMPANY. IT IS GOOD HAVE A HUGE POINTS PERSPECTIVE WHEN IT DRAGS LOWER.
WE WERE ANTICIPATING AS MUCH AS AN 8% SWING, SO THIS IS RELATIVELY STABLE AFTER EARNINGS DID SHOW A 94% INCREASE IN REVENUE, 70% INCREASE IN REVENUE FOR THE GUIDE AND MARGINS BEING PRETTY STRONG. THE SHIPS SECTOR IS UP SOME 7/10 OF A PERCENT. HAVE A LOOK AT WHAT'S HAPPENING WITH ALPHABET BECAUSE THE PARENT COMPANY OF GOOGLE OFFERED 6.8%. -- OFF ANOTHER 6.8%. ANTITRUST AND IT MAY HAVE TO BE SPLIT OFF. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. YOU CAN CHECK IT OUT ALL AGAIN
ON THE PODCAST. THIS IS BLOOMBERG. ♪
2024-11-24 02:05
