Closing Bell - Closing Bell Overtime: Nvidia Reports Earnings 8/27/25

Episode Date: August 27, 2025

Kristina Partsinevelos sets the market theme as all eyes turn to Nvidia's pivotal earnings report. Brenda Vingiello and Mike Santoli analyze markets ahead of the chip giant's results. Plus, instant reaction from all angles once Nvidia numbers are released with Gil Luria and Patrick Moorhead. Steve Grasso breaks down the readthrough from Nvidia and what's next for AI stocks, while Pure Storage CEO Charles Giancarlo discusses his company's latest results and storage market outlook in an exclusive interview. Other earnings include Snowflake, NetApp, CrowdStrike, and Pure Storage.Mad Money Disclaimer

LaBelle marks the end of regulation. Van Eck, bringing the closing bell at the New York Stock Exchange. Microsoft doing the honors at the NASDAQ and stocks are higher across the board as the S&P 500 closes at a new high for the 19th time this year. Small cap rally keeps rolling along with the Russell outperforming the other major averages and the energy sector, the big winner today. Energy with oil prices rebounding, Valero, Marathon, and Apache among the outperformers in the S&P. and consumer staples on track to be the worst performing sector this week. Jam smucker, not helping things on that front today falling sharply in a jam after posting a first quarter loss thanks to rising costs from coffee tariffs. That is the scorecard on Wall Street.

Welcome to closing about overtime where winners stay late for Nvidia earnings. I'm John Ford. Morgan Brennan is off today. Invidia is the big name we are waiting this hour, set to report at 20 minutes after the hour. That stock ahead of today. those numbers is about flat down very slightly. It's not the only company we're going to hear from, though. We're going to be bringing new results from Snowflake, CrowdStrike, NetApp, Pure Storage,

and Pure CEO, Charlie Giancarlo is going to join me after those results. But before he talks to analysts on the earnings call right now, though, let's start with the markets, Christina Parts and Nevelis, before we talk about NVIDIA, which we're going to talk about all our. Let's talk about, I don't know, some other stuff. I know. Yay, I get to talk about something else, which is why I was excited, Because it's rare that I get to see or talk about any software stock lately, closing 37% higher,

especially this year when strong beats and raises really just tend to fade quickly the next day. Take Confluent, for example. It fell over 30% on lukewarm outlook just recently, just a few weeks ago after their report, but it's MongoDB that I want to focus on. Their quarter was exceptional, according to Missoujo, marking the second consecutive quarter revenue growth acceleration in their core Atlas business, so that's their cloud-based developer data platform. And so analysts suggest this wasn't a short squeeze,

but rather real institutional buying from investors who had just overlooked this infrastructure software name. Cybersecurity firm Octa, another name, also raised its outlook on strong public sector performance, including solid renewals despite these widespread budget cuts happening from Washington. The order backlog also grew up, and that's why you're seeing shares closing over 1.5% higher. Then you have other software names just a throw-in-the-mix data dog, Atlassian workday.

You can see all closing over 3% higher among the NASDAX top performers today. And typically, when money flows back into semiconductors, software gets left behind. There's this rotation, as we've seen just over the last three months or so. But not today. Both the semiconductor ETF SMH and the software ATF IGV also moved in tandem perfectly timed ahead of NVIDIA's earnings and all of those software names, too, that you have, John. Good news for software. What do you know? Christina, thanks. Let's stay with the market here. Bring in Sandhill Global Advisor Chief Investment Officer Brenda Vengello and CNBC Senior Markets commentator Mike Santoli.

Brenda, you own Nvidia. I guess we all do in a way if we have like the S&P or, but you specifically own Nvidia. How much do these earnings matter given all the questions that have been swirling around the stock? Or if you've owned it for a while, do you just sit on it? Yeah. So we are long-term holders and think that some of this volatility around quarterly earnings is not all that much to get too excited about. However, this time around, I think, heading into this print, we had the release of this MIT survey showing that a lot of implementation of AI at the corporate level was not really going as planned. And some questions that have come about, and certainly the question mark about China, which is an important part of NMVIDIA's business,

about 13% of revenues last year. So really, there are some questions, and there has been a question for the last several years of everybody questioning, are we at peak? Is this the peak moment, and things are going to slow from here? So I think that's something to be aware of, but I think given all the commentary that we saw coming out of second quarter from the hyper-scalers,

comments the last quarter from Nvidia itself, from Jensen Wong, talking about other avenues of growth in areas like sovereign spending, I think there still is a huge opportunity here for a continued build-out if infrastructure. So we don't think that we're close to peak, but that's certainly a question. I think the market grapples with frequently

when it comes to this name. Mike Santoli, I guess it would be problematic if nobody were questioning the AI narrative. If everybody were a buyer, given how much some of these stocks have ripped from here, what would it take for Nvidia to surprise? It's a very good question, John. I mean, I think there's a tremendous amount of confidence

that the street has based on the inputs that we already know into Nvidia's earnings, right? We kind of know what the cloud company said they're going to spend. We know roughly how much Nvidia takes out of that. We know their operating margins are what they are. So I do think it probably would take just having great clarity about the strength of the next couple of quarters to materially raise the guidance, as everyone's been saying. So I do think that you have to kind of keep a couple of things in mind that are kind of offsetting. is, look, we were at the tail end of an earnings season where even great numbers were not received

particularly well in the immediate stock reaction. But overall, the earnings growth has supported the index valuations to be where we are, which is at record highs. So, you know, you can kind of say maybe you hit some bumps, maybe you get a euphoric reaction instantly, but it might not necessarily be something where the overall market rides those coattails. Well noted, well, a less than euphoric reaction to one of the first earnings that we're getting out of the gate today. That is net app. It's down about 7%. Steve Kovac has the numbers. Steve. Yeah, John, and that's despite beats on the top of bottom lines here. I'll get into the rest of it in the second. EPS did come in here at a $1.55 adjusted. That's a beat by one penny, what the street was expecting. Revenues were a beat as well.

1.56 billion. Street was looking for $1.55 billion. Let's call that a beat to flat. But there are a little bit of weakness in the numbers within the numbers here. Product revenue was lower than expectation. $654 million. Street wanted to see $664 million. I'm also looking at a little bit of softness on the lower end of the range for some of the guidance. That could be a drag as well. We see shares down about 5.5% now, John.

All right, Steve, thank you. Let's move on to Pure Storage, another storage company, about the same size. Market cap-wise, its results are out. Let's see if it's moving in the other direction. It is up 10%. and get you the results. Revenue came in for Pure Storage at 846.2 million for Q2. Sorry, it came in at 861 million for Q2 versus an expectation that it would be around 846, guidance of 845, so well above. The product revenue for Pure came in at 446 million, well above the 421.7 expected.

Earnings per share for Pure in Q2. This is non-gap came in at 43 cents versus around 39 expected. The guide strong on Pure as well. Revenue was expected to be at 913.2 million, but they're guiding to 950 to 960 for the quarter. And they've up their full year revenue guide to 3.6 to 3.63 billion from previous range that was looking at 3.5. 2 billion. You can see the stock there now up more than 13%. And coming up later in the show, Pure Storage's CEO, Charlie Jen Carl is going to break down these results, an exclusive interview before he dials in to the analyst call.

More results rolling in. Another enterprise software name, Snowflake earnings are out. Julia Borson has those numbers. Julia. John, Snowflake beating on the top and bottom line, reporting adjusted earnings for share of 35 cents versus the 27 cents estimated revenues of 1.1. $1.4 billion ahead of estimates of $1.09 billion. Product revenue also coming in ahead of expectations, non-gap operating margin, 11% versus the street account estimate of 8.2%. The company also guiding to third quarter product revenue just ahead of expectations at $1.13 billion, also saying they see non-gap third quarter operating margin of 9%, which is a full percentage point ahead of

expectations. Also just want to mention this one quote in the, in this quarterly report here, the company CEO saying thousands of customers are betting their business on Snowflake and now more than 6,100 accounts are using Snowflakes AI every week. Snowflake shares up over 12% in after hours trading. Back over to you. Julia Borsden, thank you. And do not miss Jim Kramer's exclusive interview with Snowflakes CEO, Shredar Ramoswami. It's coming up 6 p.m. on Mad Money. Brenda, you own Snowflake. What do you think of these numbers and the direction where Streetar is leading this company? Definitely a great report.

And not surprising, though, I think when we look at Snowflake's offering, it's incredibly relevant in this environment where companies really need to be able to aggregate data and to do that in a secure way in order to implement AI. I also think when we'll see this play out over the next year or so, but when we look at Snowflake's largest competitor, it's private. privately held Databricks, and data bricks is valued much more highly in the private market than Snowflake is. It has similar revenue run rate and it's valued at 100 billion market cap versus Snowflake

at about $66 billion. So I think it'll be interesting when some of these companies do finally come public and how that affects the current publicly traded companies and whether they kind of rise up in some of their just, you know, higher level of valuation because more justified. Yeah, it'll be an interesting comp for sure. Mike Santoli, as we await Nvidia coming in just a few minutes here, we're also looking at some software impacts of this AI story. We saw Box have stronger than expected results last night and pop today. We saw, of course, MongoDB, another software name with their Atlas database, also has an AI play.

And now we see, and software hadn't been doing so great lately, Snowflake up here as well. How much chatter is there about perhaps the dog days of summer and spring, maybe a whole dog gear for software, perhaps starting to turn a corner? Yeah, I mean, you're obviously seeing that the street was not positioned for anything that looked like sustainable good news in most of the group. I still think it makes sense to expect it to be a little bit spotty within software in terms of potential winners and losers and those stocks that really did get kind of overdone on the downside. I mean, if you look at a MongoDB, it had been crushed from its highs earlier in the year. And so the setup is good. We'll see how far relief takes us. What's interesting to me, too, is really the mega-cap software names.

Microsoft has traded poorly since its earnings reaction. You know, Salesforce is kind of where it was a couple of years ago. So it seems like there's a little bit of a bifurcation going on here in terms of, you know, who's got the sustainable edge. Yeah. Speaking of, we got crowd strike results. Just crossing. Initial move is down. We're going to bring those to you just as soon as we've gone through them. But for now, Brenda, Mike, we'll see you both again in just a little bit. We're just a few minutes away from InVidio's reports. Expect it at around 420. We'll get you those numbers as soon as they cross and reaction from our All-Star panel.

Over time, we'll be right back. back to overtime. Crowdstrike is down, I think about 7% on earning. Steve Kovac. What are the numbers look like? The numbers look great, John. I'm trying to figure out why we're seeing the stock down nearly 8% on this. They pretty much beat on every metric here. We got EPS beating by 10 cents at 93 cents adjusted. We have revenues beating slightly 1.17 billion. Street wanted to see 1.15 billion. Subscription revenue right in line with estimates. ARR. Better than estimates. Guidance looks good. So I'm really not clear what's going on. I'm going to keep digging. third's report for you, John, and see what's really sending shares down. But pretty on the

high level here, it looks like a pretty good report. We see shares off better than 7.5% right now, John. Well, yeah, we're just a few minutes in. We've got the call, of course, so we'll watch that as well. Steve, thanks. Well, don't go anywhere. Our All-Star panel breaks down Nvidia's earnings. What they mean for the AI trade and the stock and pure storage shares are soaring after an earnings beat. We're going to hear from that company's CEO coming up on overtime. Be right back. Welcome back to overtime. We are moments away from the main event in video's results.

But while we wait, let's bring in our panel. Joining me now, Patrick Moorhead for more insights and strategy, Gil Luria from D.A. Davidson, and Brenda Vangelos back from Sand Hill Global Advisors. Pat, what's the big question in this earnings report? with all we've heard about China and all the questions about the ongoing demand? Yeah, you ask for one. I'm going to give you three. The first one is Blackwell shipment cadence, given it's a new product. It's a different product. It's completely rack scale. I think networking supply is a different one, which is you can't ship a rack without networking, and it doesn't have to be

NVIDIAs, but it should be NVIDIAs if VATIA has its way. And the third is China run rate, right? it's not a binary question anymore. It's how much, how much off the top to the federal government. So those are the three things I want to know about. Gil Luria, what does it take to buy it here? You could argue, boy, it's at these highs. Look how much it's run. But it had been running a lot more until it ran into all these questions lately. So is that a springboard for the stock or is so much of this priced in? Well, I think they're appropriately priced right Now, if you look at about a 35 times earnings multiple on what looks like to be at 25% or so growth next year, I think that's fine.

To Patrick's point, China will provide noise. It's important that when we get the numbers, we isolate why the China effect is. If the numbers, if the guidance for next quarter is low, that's probably because the company doesn't want to commit to what chips it can sell next quarter and how much of them. So China is going to be really the most important topic. It's going to provide all the noise because what's really important is that the AI demand is still strong. It's getting stronger.

If we've learned anything over the last six months is that the models are getting better. They're getting adopted. They're creating a tremendous amount of inference demand. So the demand is healthy. It should remain healthy. China will just provide noise in the meantime. Brenda Vengello, that sounds like a reason to really, really be careful and listen very closely to the earnings call itself and not react too much to

just the numbers in this report. Yes, I think that's absolutely the case. But I will also say that the CEO Jensen Wong also does a pretty good job every quarter of really laying out the bullish case for Infidia in terms of opportunities that he still sees in front of the company. So we'll hear that as well. But certainly with a stock move recently, the stock is, you could say, somewhat price to perfection, although honestly, it's really not that expensive,

given the overall growth rate and the underlying earning strength. But what we've seen in this market is that any slight disappointment is cause for some kind of correction. But I think if we did see that kind of correction, I think it might be an opportunity to step in for those who aren't involved. I just saw the results cross the wire. We are going to go through them. You saw the stock was in the green a little bit. Now it's in the red a little bit.

I don't know how much that is to react to because that often happens with Invidia. and then it can reverse course. Patrick Moorhead, as we're going through this, what has been the impact of Invidia on the overall AI trade and on these equipment makers that are so hungry for their allocation of Nvidia chips? I mean, AI defines the AI market right now

and it pulls everything along with it and whether that's CPU, networking chips, racks, power, cooling. it pulls everything with it. So the read-through, it even reads through to its competitive products that are XPUs, which aren't even necessarily GPUs. And, you know, I think, you know, John, if I look at the core hyperskiller demand, I mean, it's intact. And what we're doing is we're nitpicking right now. I don't know stuff that's important short-term, but long-term, that's really what matters here. Hmm. Gil, how important are the gross margins, or are they just still, you know, as long as they're in the low 70s, it's nosebleeds for chip margins regardless?

us. Yeah, there's a lot of noise in the gross margins. Invidia has gone into introducing a new product set every year. Every time there's a new product, it has to ramp up. The margins come in a little lower. What's more important that Nvidia is still a price maker. And so its customers are paying it whatever it asks them to, which is what's really important for gross margins. I got to interrupt you because we're already with those results. Christina parts of now with us, please give us those in video numbers. That's a beat on the top and bottom line. EPS, $1.5.

That's adjusted. That's higher than what the street anticipated on revenues of $46.7 billion. That is an increase of 56% year over year. In regards to the data center revenue for the quarter, that's coming in at $41.1 billion, slightly less than what the street anticipated at $41.34 billion. non-gap gross margins, 72.7% slightly higher. There is a line in the report saying, quote, there were no H20 sales to China-based customers in the second quarter.

InVIDIA, though, benefited from $180 million release of previously reserved H-20 inventory from approximately $650 million and unrestricted H-20 sales. So they did benefit from $180 million, but overall, the key takeaway there is there were no H-20 sales. I'll come back with the guidance in just a moment. You can see shares dropping 4% on this news. All right, Christina, thank you, and we will look for that guidance as well.

Gil, they're beats, but they're modest beats, and I guess we can possibly expect that on the guide as well, given how careful Nvidia has tended to be about this stuff. What do you make of it? Yeah, again, the last quarter they didn't have any China, so that's to be expected. What's far more important is the guidance, and again, how much of the guidance relates to China. The expectations for next quarter are for the largest sequential increase they've ever seen.

For the quarter after that, it's for the largest sequential quarter they've ever seen, growth they've ever seen. So it really has to be some China to make those numbers work. That's why that's adding more noise. Going forward, we'll start talking about other bottlenecks. Are there enough data centers with enough power and enough HR? equipment's available fast enough to take in that chip inventory. But for now, it really is just China as the bottleneck. Brenda Vengello, do you buy NVIDIA on dips here, even here in overtime or is your cost base is so low for up? Hold on. We got the guidance, I believe. Christina Parts

Nevelas. Come back. Yeah, and this is why you're seeing the stock drop. $54 billion. The company also saying that it does not include any sales to China. So they are not accounting for China's sales, for their Q3 guide. Keep in mind that the whisper number by side was anticipating more of a $55 billion number, possibly. So just the fact that they're saying no China sales within that guidance could be why we're seeing a negative reaction for the Q3 non-gap gross margins coming in at 73.5 percent higher than the street anticipated. They're also announcing the board approved a $60 billion share repurchase or buyback program, no change to the dividend. So that's what we're seeing and I will come back with CFO commentary in moments. All right, Christina, thank you.

Gil Luria, should we interpret that commentary around Q3 that China sales are not included in the Q3 guide as meaning that the actual number could be higher, or should we take that to mean that they don't expect to have China sales in Q3? We're going to have to parse it one level deeper. We do know they've sold H20 chips, right? Those have been licensed and they've been selling those into China. There may be a freeze now, they may have to pay a portion of that back to the government. So we know there's some China sales. If the company is saying without China, they probably mean, we'll find out, they probably mean no B30 sales.

We don't know how much we need to degrade our chips yet in order for the US government to license those sales into China, because we haven't heard that they've gotten those license. We're not even sure they know what they need to do to those chips to sell. So it sounds like that's what we're hearing. If they do get license in the quarter and are able to sell within the quarter, there should be upside to that $54 billion guidance. And I imagine that given all of the negotiation around that 15% that the U.S. government wants off of those China sales, all of that might have been a bit difficult to guide to, Gil, in time for this report? Yeah, that's exactly right. The news flow is daily. The U.S. administration is split on this issue.

There is a faction of the U.S. administration that's saying absolutely no sales to China. And then there's the president's approach, which is let's wheel and deal. And if this looks, if the deal looks good enough, then we can sell some chips in the China. And then there's the Chinese side. We've started putting trackers into these servers so we make sure that no advanced chips make it to China. China's reaction to that is, hey, hey, hey, that looks like a back door. security issue, so we're going to hold off on those chips. The news flows daily. I trust in Jensen Wong to navigate it, but until he has a strong answer, they do have to guide without China

numbers in there. And Nvidia stock is off the lows from after the report was released. It's now off just about 2%. It was down, I think, around 5 or more at some point. Pat Moorhead, anything in this report so far that you see that shifts your opinion on NVIDIA's position in the market at all either way? What we know so far, the short answer is no. And I do appreciate the comments that Gil had about China. This is day-to-day. And the two camps are clearly DOD and three-letter acronym agencies versus commerce and Trump. And I think that NVIDIA, if the guide is clearly about China, which we'll hear more about the call, they're just being conservative. Nobody could put a number out there that includes China right now. If they did, they would be making it up.

And I think NVIDIA is just being conservative. Now, we can hear on the call that, you know, its potential supply chain challenges. And, you know, this Blackwell is, is extremely more challenging than its predecessors, right? And you have to look at co-os. You have to look at packaging. You have to look at NVLink and Spectrum and all of the different cooling implementations and power implementations that go in. Gail also talked about the data centers being ready. I hope to get data center digestion details out of this. But until now, let's assume it's China. And I think they made the right move. All right. The stock is now off a little less than one and a half percent. Brenda Vengello, China aside, we just talked a lot about China. What do you as a shareholder want to

hear about on the call the most color-wise? Right. What I really want to hear about is ongoing future opportunities for growth beyond where we're at just to, again, kind of substantiate the view that we aren't at peak yet. There are still a lot of opportunities. We have, you know, There's some concern about customer concentration at NVIDIA, but to the extent that they are able to continue to grow their business internationally and with sovereign entities, that's another area for diversification away from U.S. and away from China. So I think hearing more about that opportunity is also important. I don't think we'll get a whole lot of information about very specific details, but very big picture opportunities. I think that would be helpful for the longer term story. All right. And that stock off just between one and a half and two percent now well off the lows.

Brenda, Patrick, Gill, thank you. Thank you. Well, we're still just getting started on this Invidia earnings coverage. Up next, Fast Money, Steve Grasso, on how you should be trading the stock and what the next catalyst for this market could be now that those Nvidia results are, well, they're not exactly in the rearview mirror, but they're getting there. And shares of Cracker Barrow, a little different from Invidia. They are a big winner today, though, the restaurant chain announcing it's scrapping its new logo,

bringing back Uncle Herschel following social media backlash and criticism from President Trump. The stock sold off nearly a week ago after it revealed the new logo as part of its brand refresh. It's now higher than it was before that brouhaha. We'll be right back. Welcome back to overtime stocks closing in the green, the S&P hitting another record. And on the earnings front, crowd strike falling here in overtime, despite strong numbers. He had down 6%.

Snowflake rising, those shares up about 11% after beating on the top and bottom lines. Pure storage, another big winner here in OT, up 13% on better than expected EPS and revenue. We're going to hear from the CEO in a few minutes. And on the retail front, urban outfitters and five below moving in opposite directions after both beat on the top and bottom lines. Now, let's get back to Christina Parks Nevelas with more on, yes, that's right, Invidias. results. Christina, what do we know? So we know that Nvidia did beat in several business categories including gaming, pro visuals, as well as

auto, but it's the data center segment that really just failed to hit the market. It's the second straight quarter in a row that data center revenue came in a little bit less than what analysts were expecting. The CFO did publish her usual commentary, and in that report she said that they recognize Blackwell revenue across all categories and customers, but it's primarily led by cloud. service providers. They contributed roughly 50% of that data center revenue. They also pointed

out too that their inventory was at $15 billion, a little bit higher, to support the ramp of Blackwell Ultra, which hopefully we should hear more about that ramp on the call, which could help also turn this stock around too. And then lastly, we said it earlier, but just to make sure everybody heard, they have not assumed any H20 chips to China in their outlook. So very similar to AMD, they did not include China in their outlook. All right. Yeah, Christina, thanks. The stock's off of those down about two, two and a half percent.

Well, joining me now, Steve Grasso, Grasso Global CEO, Fast Money Trader. You like what you saw from NVIDIA? You got questions? Yeah. Well, John, you know, I was involved in Avidia pretty repeatedly, but I'd stopped being evolved in it around $110 price target. For me, I thought the ship has sailed way too fast, got to its destination. And then there was going to be a pullback. I was wrong. Trade it up. You see where

it's traded now. But it's hard for me to get on board because as you've touched on, as your guests have touched on, 40% of their revenues are driven by four different clients. Are those clients going to be buying more or less chips going forward? My thesis is that they're going to be buying less. They're going to be making more of their own. Microsoft revenue percentage for Nvidia is 18%. Meta, 9%. So if you look at those, and Microsoft's making its own chip, so the competitive nature of this whole entire space, it used to be booms and busts, we've only had booms in the commodity space since AI entered the landscape job. But Steve, my question here has to be, what if AI is remaking the entire technology stack, right? If it's not just a twist,

on what's happened in the data center, if it's really remaking the whole thing the way smartphones remade computing, we just got Apple wrong so many of us and what its total addressable market is. Could we be getting Nvidia wrong too? And could that be a different kind of catalyst for the stock if we figure that out? I agreed. I like the angle that you're taking there, but who says that it's Nvidia's total addressable market? Invita has 47% market share up, up basically from 44%. So it's still growing. Is this the quarter that they start flatlining?

Maybe, or growth slowing, maybe. If you look at Broadcom, they're up from 17 to 18% market share. Intel is coming on in third place. AMD is still stuck at 9%. Why is it the market? I think it's the market share for Nvidia to lose, not the market share for Nvidia to hold on to. So that's why I'm saying, let's broaden out, let's play a different couple of names that maybe have some of the tailwinds that NVIDIA has already.

Okay, we'll see what we got on the call. The stock now down about 3.5%. Steve, so thank you. And don't miss, Steve, the rest of the fast money traders coming up 5 p.m. Eastern right after overtime. Well, we've got a shakeup at the CDC. Our Megan Kassela has the details. Hey, John, this is the Washington Post reporting, saying that the head of the Centers for Disease, control and prevention is being ousted from her job just weeks after she was confirmed.

This is Susan Monterey. She was just confirmed to this position at the start of the month of August. It's only been there just a few weeks. And the post says, according to multiple administration officials familiar with the matter that she is now on her way out. The CDC, of course, has been an agency very much in turmoil since the start of this year. There was some relief that there was finally going to be a permanent director at the helm. And of course, she was going to have to contend with budget cuts, with mass layoffs, with sort of a contentious. boss in RFK Jr., the HHS secretary. Now, of course, just more turmoil contributing to that. I should say, I have reached out to the White House to try to get confirmation on this and no

response yet. But for now, it's the post reporting that Susan Monteraz on her way out at the CDC, John. All right. Megan, thank you for that. Well, we'll have much more on NVIDIA's earnings still to come, including how much more spending on NVIDIA's products is needed to get artificial intelligence to a truly useful stage. But first, shares of pure storage, soar it. You see them there up 14.5% after their earnings report. Up next, the company's CEO is going to break down those numbers in an exclusive interview before he speaks with analysts on the call. Overtime, we'll be right back. price target implying an upside about 30%. The analyst there says Micron's well positioned to cash in on the crest of the AI wave. Speaking of AI waves, pure storage up double digits on

overtime after posting strong numbers across the board, including margins and guidance that topped analyst expectations. Joining me now exclusively before the earnings call is Charlie Giancarlo, Pure Storage Chairman and CEO. Charlie, good to see you. So these numbers, the first thing that jumps out at me is the beat on product revenue. Give me the color there, and what led to that? Well, actually, we had strength across the board. Yes, product revenue is up, but so has been our as-a-service offerings. This is where we provide our capabilities completely as a service based on consumption to our customers.

As were, we had good balance across our various products as well as our software products as well. So actually, it was just, generally speaking, a very good quarter. So very high-performance storage is what I think of, when I think. of pure. How does that play into the AI story and to what degree is this preparation for AI experimentation with it driving that marginal upside? It's a great question. We play into the AI environment in multiple ways. One, of course, is that we sell product into AI environments, whether it's a training environment or whether it's more of the inference environment that would be more typical in an enterprise environment. But frankly, AI has changed the lens upon which

enterprises are looking at their data. And what they realize is that their current data state, their current global data state is highly fragmented. We introduced a concept earlier this year of what we call our enterprise data cloud. And this is the ability for the data storage environment that we provide to operate like a cloud within the enterprise. In other words, cloud doesn't have to be a destination. Cloud is the way one operates. And we can turn an enterprise's data environment into more of a cloud-type environment, both for security as well as performance, but also to make all that data available for AI analytics. So it operates more as a way for customers to be rethinking about their architecture inside their enterprise. And maybe we've got

to remind investors about some of that cloud terminology. Remember hybrid cloud and how AI has made both having some on-premise as well as having perhaps some with the hyperscale, There's some equipment spend, some technology spend, there are some data location there making sense. To what degree is your customer a hyperscaler versus an individual enterprise? And how are these technology trends affecting that split? Well, we've been selling into the enterprise since our founding over 15 years ago. But much more recently, we started developing a business that's targeted very much at the hyperscalers. We actually received, we actually were able to recognize our first revenue into a hyperscale environment just last quarter.

And we believe that will continue to scale in the years ahead. You might ask why. What is the benefit? Well, we provide only flash storage. A lot of the hyperscale environment, it's either SSD, which is flash or hard disk, which is 90% of it. We're able to operate in both environments and lower the total space power and cooling. power in particular in the hyperscale environment. With power being at such a premium,

the ability to use less power on storage and therefore be able to use more power for things such as AI becomes very, very interesting. The power and cooling part is important. How important is the performance part? Nobody likes to wait for that answer when they're asking Claude or chat GPT or whatever model you're using.

How big a role does storage play in that? play in that and the performance level of that storage? Well, performance is what it's all about in an AI environment, right? You have to deliver, not only do you have to deliver the data with very low latency, but you have to deliver vast amounts of data, you know, at a very rapid rate. And we introduced a product earlier this year again, which we call Flashblade EGSA, which has hit the highest of benchmarks in the industry. So we're very pleased with that.

It's an early start to the product, but we're expecting. a lot from it as we go forward. And geographies for this demand, how does it look? Well, North America by far is the largest, you know, furthest along in the AI space, although sovereign, you know, there's a lot of buying by sovereign nations in the AI space, and we're seeing quite a bit of that in the Middle East, the Far East as well.

But I would say right now, the focus, really 80, 90% is in the North American. How confident do you feel in the macro environment as you're making this guide compared to how you felt six months ago? Yeah, well, it's a big difference, John. Obviously, at the beginning of the year, there was a lot of uncertainty in the macro environment by everyone, economists, banks, and so forth, some of them calling for a downturn in the second half. We're obviously now seven, eight months into the year. And, you know, we have two months behind us.

We've had strong quarters over the last three quarters. And as we look at the rest of the year, we're seeing strong buying signals. And so that's a function of both the macro as well as what we believe is, you know, our strength in our industry securely. I'll let you get ready for that earnings call. Charlie, appreciate you taking the time with me here on overtime ahead of that. Thank you, John. CEO of Pure Storage. Well, up next, all the other overtime earnings movers that need to be on your radar as we count down to NVIDIA's analyst call.

And check out shares of Krispy Kreme under a lot of pressure today, down three and a half. percent. J.P. Morgan says, do not own shares of the donut maker, downgrading the stock to underweight from neutral. The analyst there says the recently ended partnership with McDonald's leaves crispy cream in survival mode. shares are down more than 60% this year. We'll be right back. Welcome back to overtime. Let's get you caught up on some of today's big overtime earnings movers. Nutanics falling down about 6%. The company beat on the top and bottom lines,

but issuing some weaker than expected revenue guidance. Another look at CrowdStrike here. It is dropping in OT down about 7.5% despite a beat. And Snowflake is popping nearly 12% thanks to strong results across the board. Up next, much more on NVIDIA's earnings as we count down to the call at the top of the hour. That stock's down about 3% so far. Plus, Mike Santoli is going to look at the correlation between spending on NVIDIA's products and taking AI capabilities to the next level. Also, don't forget, you can catch us on the go by following the closing bell overtime podcast

on your favorite podcast app. Be right back. Welcome back to overtime. Let's get you set up with tomorrow's trade today. On the economic calendar, weekly jobless claims, the second reading of Q2 GDP, and the July pending home sales report. And another big day for retail and tech earnings. Before the bell, a lot of stocks that start with B,

let's see if I can say them all. Results from Best Buy, Bath and Body Works, Burlington stores, Dollar General, Dick Sporting Goods, Victoria's Secret, and Jack Danielsmaker, Brown Foreman. I made it. And in overtime, we'll break down results from Gap, Ulta Beauty, Affirm, Dell, and Autodesk. And speaking of earnings, NVIDIA shares, still in the red a bit, 3% down. As the analyst call gets set to begin in just a few minutes, let's bring back Mike Santoli for a look of future spending on

Nvidia products to get AI to a truly useful stage. Mike? Yeah, John, I always try to come back to this in terms of the really grand investment case for Nvidia mostly depends on just how much longer we think this sort of hyper urgency to spend as much as possible on data center products from Nvidia is going to last. Rothschild Redburn makes an attempt at quantifying some of this. So what these yellow bars are is the amount of spending on Nvidia products required to improve AI capabilities by 1%. So 100% is AI is perfectly at the human scale of intelligence. It's exactly replicable to human beings. We're at like 50, percent. And this has been going down. So their case is $6 to $7 billion a quarter to get each

new percentage point of incremental improvement. It's higher at the back end there, but that's only because it was using only two months out of the three of improvement in AI and a full quarter's worth of spending. So basically consider it to be $6 to $7 billion pace. Now, where are we in terms of getting to that threshold of superintelligence for AI? Well, here's the next chart. They're basically using 80% basically 80% of human intelligence as a level where it becomes, quote, truly useful. So at the current pace of advancement, they say it would take until about the first quarter of 2027, this hyper spending pace to 210 billion in total spending to Nvidia to get us to that threshold. If we keep improving at this rate, it could bend lower and maybe it's, you know,

into 2029. This to me is the key debate that's going on, whether the exact numbers are right or not. I do think it's an interesting way of thinking about the duration of this AI infrastructure investment trend. And maybe, Mike, human intelligence is too low a bar. I just, because I'm thinking about what if we were talking, you know, hundreds of years ago about when will the machines get stronger than a man? You know, the old John Henry argument, well, you know, they're plenty stronger. And the total addressable market for this stuff, if it changes computing entirely, as some think it might, could be even bigger than the estimates, right? No, that's an absolutely fair point.

It's not as if we have this, we made it moment, you know, when we get to a usable level of intelligence, presumably it's just going to be the mode of continuing to improve and invest. I do think, though, you wonder if it's going to still always be just the brute force of more compute, more compute, and more data centers, or if it's going to be something else that gets overlaid on top of it all. For sure, and this has been a big hour. As we've mentioned, once or twice, Nvidia did report the numbers were a beat, but the guide, there are lots of questions. questions about China and other pieces and got to listen to the earnings call to understand it. It's down right now about two and a half percent. A lot more coming up on fast money, so that's going to do it for us here on overtime. Fast money starts right now.