Nvidia GTC: 'There's no one else in the AI market' like Nvidia
Lopez Research founder Maribel Lopez outlines what she's expecting from the Nvidia conference and discusses the recent sell-off in the chipmaker's stock.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
We got to talk a little Nvidia, the only member of the magnificent seven in the green pre-market this morning. It comes as the tech giants GTC AI conference kicks off in San Jose, but our next guest isn't sure that this will be enough to snap the tech route here. Ahead of CEO Jensen Huang's highly anticipated keynote address tomorrow, we have Maribel Lopez. Lopez Research founder for more on what to expect from the conference. Maribel, thanks for taking the time this morning. What are you going to be looking out for?
I'm looking out for Jensen's discussion of the next wave of post Blackwell chips and how that's going to enable us to get to another higher level categorization of AI beyond where we are today. I think that's what he's gunning for tomorrow.
And and do you think that that is going to be enough to lead to a significant recovery in the stock just given the amount of selling that we have seen from Nvidia shareholders?
What I see where they are right now is really Nvidia is the best game in town if you're looking for investing in AI, they're the company that sells the picks and shovels. Everybody's going to continue to buy them for the foreseeable future. Uh but there's still quite a bit of discussion about how do we get back to uh really extreme growth and better margins for Nvidia. So I think there's going to be some discussion in the investor community about how do we navigate that.
And so with that in mind, you you acknowledge what is the major consideration for investors, which is the the growth ramp and then the stalling out. And then the other side of that is, okay, the deceleration. What type of deceleration are you anticipating here within that growth figure and and how that kind of measures up to some of the investor expectations?
So where we are right now is the Blackwell chip ramp is back on track. They are actually pulling that in significantly. It's had some impact on their margins, but they're going to sell through on that and they're looking at the next generations. What we see needing to happen moving forward in this space is there's a 10x performance improvement that will get us to the next wave beyond reasoning or even more reasoning within an AI. AIs talking to AIs. But that is not a short-term growth ramp. That is not something that you could see really happening in the 2025 time frame. That's going to be the next wave in 2026. So I think it's going to be a rough navigation period in between. But the reality situation is Nvidia is selling everything it can make right now. So therefore, have we priced in that everything that they can make right now, that's a bit unclear. So we'll have to see how the investors are feeling about do they think that there's more potential upside for the hyperscalers. The hyperscalers have been very clear that they are going to build to enterprise demand. They're not going to overbuild for demand. So really, I think we won't know the answer to this question until we start to see how companies like uh Microsoft, AWS, Google, IBM, how they're actually positioning what's going on with AI in the enterprise.
And Maribel, I hear you painting sort of a longer term bull case for Nvidia, but I just wonder what's going to get us back to the prior all-time high that we had in mid-February. Are some of the product announcements and the longer-term plans going to be enough for investors to recover some of what they've lost by holding Nvidia in the short term?
I think in the post keynote after tomorrow, there's going to be tremendous enthusiasm for the future of Nvidia because Jensen does tell the story of how AI will evolve very successfully. He's done that in all of his conferences. Uh but the reality of the matter is we've been very aggressive on Nvidia stock and we've been very aggressive as a market on AI in general. And now we're at that rubber meets the road standpoint where will actual buyers be buying enough of cloud computing AI technology to actually keep this wave going? And I think we've got a good six months where there's still a lag between what we want to have happen and what buyers are actually buying.
And so considering the run-up that we've seen and appreciation in the share price for Nvidia over the course of the larger AI theme, is that still the best in class trade for that theme?
If you're looking at AI, they actually are the people that sell AI technology. Every single hardware vendor is standing up strategies at GTC over the course of this week to talk about how they're working in with Nvidia, how they're putting Nvidia in their stack. So I think that they're going to continue to have high sell through on their top line for their products. There's no one else in the AI market that is doing the kind of AI sales that Nvidia has been doing, but that's at a chip level. I mean, everything beyond that is like goes from chips, then it goes to cloud, then it goes to software, and we are just not at the software level yet. So right now, Nvidia seems to be the game to beat.
Another potential catalyst from video is Quantum, and we spoke with the CEO of D-Wave about their earnings and their quantum supercomputer. To what extent do you see quantum computing as a potential tailwind or headwind for Nvidia, especially given some of that competition that we're seeing?
Quantum is another one of those categories that fits into more of a long game strategy. I absolutely believe that quantum will happen. We've seen tremendous progress from all of the companies that are building quantum this year, even uh having said that, most organizations are doing quantum for the research community. It's a long lead time from the research community out into the general enterprise. So I don't think that this is really going to be driving significant revenue growth for anyone in tech for some time.
All right, Maribel, we got to leave it there. Thanks so much for joining us.
Thank you.
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