Episode summary
Instant Reaction: Nvidia Gets Tepid Reaction to Forecast, Ups Investor Rewards | Bloomberg...
Bloomberg Businessweek Daily
· · 24 min · Hosts: Tim Stenovec, Emily Graffeo · Guests: Ed Ludlow, Paul Meeks, Jay Goldberg, Kunjan Sobhani
Summary
Nvidia’s $91 billion revenue forecast for the July quarter drew a mixed reaction: several participants said the guide was solid and even bullish versus expectations, but the market initially treated it as disappointing because investors had been conditioned to expect another big beat. The discussion centered on whether the company is losing some of its easy upside as its growth becomes so large that only modest outperformance is enough to satisfy the Street.
The guests argued that the bigger story is Nvidia’s expanding data center platform, not just GPUs. They pointed to networking products, systems integration, and a new reporting structure that separates data center from edge computing, which they said better reflects how Nvidia is building a broader AI infrastructure business. The host and guests also highlighted the company’s new buyback and dividend increases as a sign of massive free cash flow and limited near-term capital needs.
China was a major focus. The host noted that Nvidia is excluding China revenue from its outlook and that no Hopper data center shipments are included. One guest said that fits the base-case assumption, while another argued China could still be a long-term opportunity if regulatory conditions change. A different analyst remained cautious, saying Nvidia still faces valuation pressure and tougher competition from companies like Google and Amazon building their own chips.
Key takeaways
- The guests said Nvidia’s $91 billion July-quarter revenue guide was fine, even if the market called it disappointing.
- Kunjan Sabani said the company’s $80 billion buyback supports shareholders because Nvidia is generating enormous cash.
- Ed Ludlow said the new reporting breakdown shows Nvidia is trying to prove it is moving beyond just selling GPUs.
- Jay Goldberg said Nvidia’s growing dividend and $5 trillion expectations make it hard to get excited at current levels.
- Paul Meeks said China could add upside later, but the near-term outlook assumes no data center shipments to China.
Notable quotes
“Pleased with these numbers. It seems to me that everything is in order”
“the most important metric that they could release ahead of a call was this revenue guide. And it looks fine”
“buyback usually is a is a good strategy. And remember, they're generating enormous amount of cash”
“I think it's BS. Uh yeah, I think it's uh just fine”
“the data center segment will include business with the hyperscalers and those building AI focused data centers”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world.
We've got a great group of people joining us to talk all things Nvidia, uh, including our own Ed Lllo. He's the co-host of Bloomberg Tech. He joins us from our San Francisco bureau.
Kunjan Sabani's Bloomberg Intelligence, senior semiconductor analyst. Paul Meeks is also with us, head of technology research at Freedom Capital Markets. And Jay Goldberg of Seapport Research Partners is joining us as well.
Once again, Jay is the only analyst tracked by Bloomberg who has a sell rating on Invidia stock. He's got a price target of $140. Paul, your reaction?
Pleased with these numbers. It seems to me that everything is in order. Like everybody else in the uh preview commentary, the most important metric that they could release ahead of a call was this revenue guide.
And it looks fine. I'm a little bit um I don't want to say dubious, but a little bit confused by the change in the reporting structure.
Yeah. Wait, why why why would a company do that? a company like Nvidia that
That has you know such a following right now so many analysts covering this some people consider it a macro event when it reports earnings why change reporting structure right now you know one of the things that they are doing is they're trying to build a walled garden just like uh Apple did in a previous technology transition by going beyond the GPUs and interconnecting in the data center all the different pieces. So this may not be some sort of dodge, you know, cuz the company typically is first class, very transparent, but it might be just reflective that they are moving beyond just selling GPUs and they want to organize their business to prove it.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nvidia forecast
- investor reaction
- data center revenue
- semiconductor outlook
- analyst estimates
Companies and tickers mentioned
- NVDA
- Nvidia
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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