26Feb
Experts head into this report with some perceived gaps having been exposed in the Nvidia armor in the previous month.
We heard from them all earlier this month,the HyperScalers didn't flinch; Guided by Amazon, Meta,Google, Tesla, Apple, Microsoft Press the Accelerator planned Capex spending for 2025.
The "DeepSeek moment" revealed that the large definition language models can be improved upon, advancing the capabilities of generative AI, without requiring more computing capacity. Maybe AI leadership isn't determined by who gets much access to the most Nvidia GPUs.
We heard from them all earlier this month,the HyperScalers didn't flinch; Amazon, Meta,Google, Tesla, Apple, and Microsoft . Instead, they are all pressing the accelerator. If we combine the planned capex spending for 2025, guided by Microsoft, Meta, Google, Tesla, Apple and Amazon -- it's over $300 billion. It's huge growth in spend from 2024 -- about $100 billion more.
Initially it's not a demand and supply issue for Nvidia,But clues have been in the Nvidia datacenter revenue growth and It's a $4 billion drumbeat. If they maintain the $4 billion quarterly growth through 2025, and deliver everything to the American hyperscalers they still fall short of demand by $100 billion.
Potentially Stable new revenue dollars every quarter means the growth rate trajectory for Nvidia is down. At $4 billion a quarter, the year-over-year growth rate falls to under 50% by the second half of 2025.
Now, a little less than 50% growth is still an unprecedented probability number, but the market has already begun to reconsider the valuation Archimedes.
The largest company in the world then proceeded to whipsaw in an 8% range after Earnings last November (a $300 billion valuation swing).
(C.E.O)Mr.Jensen's keynote at the "CES conference in Las Vegas". And then we had this gap lower on the "DeepSeek news".
Assume neither Nvidia nor Taiwan Semiconductor has identified new manufacturing capacity.
Amidst of a correction in the American AI-theme, the movement of capital into Chinese AI—where substantial value opportunities exist—confirms the investor confidence in the AI theme. It's an opportunistic shift towards value, not a retreat from the theme.
The AI revolution is real and well intact. And a correction for the AI-theme would be a welcome buying opportunity.
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