Episode summary
Nvidia’s $1 Trillion Slide Sends Valuation to Pre-AI Boom Levels | Bloomberg Intelligence
Bloomberg Intelligence
· · 17 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Mandeep Singh, Robert Schiffman, Anurag Rana
Summary
Nvidia’s pullback was framed as a valuation reset rather than a collapse in the AI trade. The guest said the stock is being hit by profit-taking and by the market’s anticipation that hyperscalers, OpenAI, Anthropic, and even Google-style TPU strategies will create more competition for inference chips over the next two to three years. He argued that nothing imminent threatens Nvidia, but the market is pricing in a longer-term shift toward more custom silicon.
He was also skeptical of the “AI rotation” out of chipmakers in Asia, saying indiscriminate selling ignores pricing power in memory names such as Samsung and Micron, which he described as having their best margins and strongest pricing power ever. On China, he said Nvidia’s H200 access is still limited by policy risk, but cloud-based compute can blur geographic lines.
On capital markets, the credit analyst said Amazon can still raise huge amounts of debt, even if it pays slightly wider spreads after record issuance. Apple’s expanded Broadcom deal was described as more important for its U.S. manufacturing footprint and political signaling than for product change, while Microsoft’s AI capex was cast as the main valuation concern because it may need to keep spending heavily without yet having the same chip advantage as Google or Amazon.
Key takeaways
- The guest said Nvidia’s slide reflects profit-taking and longer-term competitive fears, not any near-term threat to the business.
- He argued memory makers like Samsung and Micron still have exceptional pricing power and should not be sold indiscriminately.
- The credit analyst said Amazon can raise more debt whenever it wants, though each new deal may cost a little more.
- The guest said Apple’s Broadcom pact is as much about U.S. manufacturing and politics as it is about chips.
- He said Microsoft’s AI spending is the bigger valuation issue because it may keep buying Nvidia chips without a comparable in-house chip advantage.
Notable quotes
“What are we doing”
“the market is anticipatory in that sense. And the fact that everyone is looking to build their own chips is a sign that there will be more competition for Nvidia down the line”
“if there's any sector that has the best pricing power right now it's memory”
“Amazon could raise as much money as they want, whenever they want. They just might have to pay a little bit more”
“this deal for them says Apple's still going to them for other chips and other parts”
How the episode opens
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Let's talk a little technology. Why not? Mandep Singh, global tech research head from Bloomberg Intelligence. He joins us here. So, I'm seeing this Bloomberg news story. Nvidia's stock is at its cheapest it's been since before the AI boom after news after losing roughly $1 trillion in market value over the less than two months. What's going on there?
Taking some profits. What are we doing?
Taking profits. And uh look I think when it comes to the chip space uh we've heard quite a few announcements in the last few months uh both from the hyperscalers ramping up their efforts whether it's Amazon or Microsoft so it's not just Google TPUs anymore uh meta all these hyperscalers are focused more on the inference side of things which is where you know you're generating most of your revenue if you're focused on AI and uh they've left the training market to Nvidia. But when it comes to inferencing specifically, you've got more competition.
Even OpenAI and Anthropic are looking to make their own chips. Now, the timeline for this is all, you know, 2 3 years out. There will be nothing imminent in terms of, you know, something that can compete with Nvidia.
But the market is anticipatory in that sense. And the fact that everyone is looking to build their own chips is a sign that there will be more competition for Nvidia down the line.
That makes it sound like it's easy for them to make their own chips.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nvidia valuation
- ai rotation trade
- asia tech investments
- amazon debt sale
- apple broadcom chip deal
Companies and tickers mentioned
- NVDA
- AMZN
- AAPL
- AVGO
- Nvidia
- Amazon.com
- Apple
- Broadcom
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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