Episode summary
Chipmakers Sink as Nvidia Fails to Dispel AI Worry | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Isabelle Lee · Guests: Kunjan Sobhani, Gene Munster, Geetha Ranganathan, Swamy Kotagiri
Summary
Nvidia’s latest quarter was described as strong on the fundamentals but weak in the stock reaction, with the analysts saying the results beat expectations on revenue, networking, and margins while still failing to calm broader fears about an AI spending bubble. The analysts argued that demand remains broadening beyond the top hyperscale customers, and that visibility for chip demand looks solid into the first half of 2027 unless a major macro or geopolitical shock hits.
The discussion then shifted to why software stocks are still under pressure. The guest argued that AI is changing software economics by reducing the value of seat-based licensing, while usage-based businesses may hold up better. He said investors are underestimating how quickly AI models are improving and how much inference demand could expand over time.
Media and industrial earnings rounded out the episode. Warner Bros. Discovery and Paramount were portrayed as structurally challenged by weak TV networks and the need for M&A or synergies, while Netflix was said to be better off walking away from a risky deal. Magna’s CEO said the auto supplier is executing well despite flat global production, with cost control, tariff mitigation, and share repurchases supporting 2026 guidance.
Key takeaways
- The semiconductor analyst said Nvidia’s quarter showed breadth in demand, with customers outside the top five hyperscalers growing faster than the biggest buyers.
- The guest said Nvidia’s April-quarter revenue guide to 79% growth was the key whisper-beat, but the stock still fell on broader AI fatigue.
- The guest said chip demand looks “locked in” through at least the first half of 2027 unless a major macro or geopolitical event intervenes.
- The guest said AI could pressure seat-based software models, while usage-based companies such as Datadog and Snowflake may fare better.
- The media analyst said Warner Bros. Discovery and Paramount both face weak TV-network fundamentals and likely need deal synergies or M&A to grow.
- Magna’s CEO said 2026 guidance assumes flat volume but still supports EBIT margin expansion to 6% to 6.6% and a 24 million-share buyback.
Notable quotes
“there is this AI fatigue that how long can you keep on increasing this spend and what happens next year every year”
“for the chip guys at least uh until first half 2027 is sort of locked in and pretty safe”
“AI agents don't purchase seats and separately that the usagebased models so we're still holders of companies like data dog and snowflake”
“the TV networks division, uh, this has been the problematic division for all of these media companies”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Uh the big earning story of the day is Nvidia put out a really really solid number but being caught up in the downdraft continued downdraft selling of technology in particular software kind of AI themed names um more specifically Kunjan Sani uh he is a senior analyst covering the semiconductor companies for Bloomberg Intelligence he's based out in our San Francisco office John I'm just reading your research note here give us a sense of how you think the quarter went for Nvidia Yeah, this was one of the more stronger quarter showings.
If you look at the last four quarters, um the one Q guide, which is the next quarter guide, blew off most of the high bar of the buy side bogeies that we think the buy side was at. Uh there was really nothing negative to find even if we go through a fine co in this quarter and print. There were a couple of positives that we really liked.
One is the revenues from their customers outside of the top five CSP and hypers scales grew actually faster than those five customer. When we look at uh the whole fis last fiscal year that group grew almost close to the top five. So all the focus always goes to the top five but this really speaks to the breadth and the quality and the diversification of demand for Nvidia products which is which is a good robust sign.
Second thing we really liked is networking. So if you look at the 4Q numbers, majority of the beat in data center was coming from networking.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nvidia earnings
- ai chip demand
- ai bubble concerns
- media stocks earnings
- auto supplier outlook
Companies and tickers mentioned
- NVDA
- PARA
- MGA
- Nvidia
- Deepwater Asset Management
- Warner Bros. Discovery
- Paramount Global
- Magna International
Watch the episode
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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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