Closing Bell - Closing Bell Overtime: The Big Day Is Here As Nvidia Reports Earnings 8/28/24

Episode Date: August 28, 2024

We have you covered from every angle on Nvidia earnings – including instant reaction, what it means for the mega-caps and more. Bespoke’s Paul Hickey, Wealth Enhancement’s Nicole Webb and Moor Insights & Strategy’s Patrick Moorhead bring you the investor angle while CFRA’s Angelo Zino on what he is telling clients about the numbers. Plus, Madrona’s Matt McIlwain on what it means for big tech and the rest of the AI ecosystem. Other earnings include: Crowdstrike, Five Below, Pure Storage.

It's time. Stocks pulling back in the regular session as investors await a potentially narrative shifting event coming in 20 minutes. That is the scorecard on Wall Street. But winners stay late. Welcome to Closing Bell Overtime. I'm John Fort back with Morgan Brannan. Reunited. Well, it is the moment all of Wall Street has been awaiting for. NVIDIA earnings just moments away. We've got a packed lineup of guests ready to break down every angle and the impact on your money. And we'll also get numbers from Salesforce, CrowdStrike, Affirm, HP, and many more. Let's get right to it, though. Joining us is Bespoke co-founder Paul Hickey, Wealth Enhancement Senior

Vice President Nicole Webb, and More Insights and Strategy CEO and Chief Analyst Patrick Moorhead. Welcome to all of you. Of course, we're going to talk market. I'm not going to talk about the markets. I'm going to go straight to NVIDIA, Nicole, because part of what we've been saying is awaiting NVIDIA, the markets are blah, blah, blah. I'm going to say this is narrative shifting no matter what happens. Even if NVIDIA perfectly meets expectations and doesn't move at all, to me, that would seem dramatically significant. Yeah. I think when it comes to NVIDIA and the conversation that everyone's really looking for is going to come from guidance. And so while we might get an initial response based on what we hear today from the past quarter, I think what we're really looking for is are we falling off

the cliff in 2026? Or is there really more to come? Meaning, where do we go from here? So when we think about the tech stack, when you think about NVIDIA and the future of, do we get generational improvements that drive this kind of demand going forward? That's, I think, where we're pivoting to when we think about NVIDIA. Pat Moorhead, this reminds me, NVIDIA that is,

and the market's reaction to it of Apple a decade ago when a lot of people still had the mindset, oh, what goes up must come down. It didn't come down and stay down because the iPhone itself was such a transformational product and technology. Chances that Nvidia is the same? Yeah, that's right, John. And it was Cisco 10 years, 10 to 15 years before that. I don't think anything is stopping this train for at least 12 months. And I think the numbers are going to be good. The question is just how good. And as earlier discussed, this is all about the guide. And to me, the guide is going to be based on the hyperscalers and what happened there. But also, the company has to talk about these potential Blackwell delays. Okay.

Sales force results are out. We're going through the numbers. We'll get them to you here in just a moment. In the meantime, Paul Hickey, I want to bring you into this conversation because totally different company, totally different industry. But Abercrombie & Fitch reported earnings this morning. Stock finished down 17%. It's another one like NVIDIA in the sense that the stock has had a big move higher.

It's had a flurry of beat and raise quarters. And yet with results that were another beat. And I'm interrupting myself to go to Julia Borson because we do have those Salesforce results. So, Julia, give us the numbers. Yeah, Salesforce beating on the top and bottom line with $2.56 in adjusted earnings per share ahead of estimates of $2.36. Revenues also beating estimates $9.33 billion, coming in of estimates at $9.23 billion. Now, Q3 revenue guidance is for a range between $9.31 and $9.36 billion. That is lower than the consensus estimate for guidance of $9.41 billion. So Q3 revenue guidance is coming in light. The company also reaffirming its full year revenue guidance.

And the CEO, Mark Benioff, announcing that the CFO is stepping down. Amy Weaver is stepping down. Will remain CFO until a successor is appointed. Back over to you. All right. Julia Borsten, thank you. Shares up about 2% right now. Don't miss Salesforce chairman and CEO Mark Benioff. That's going to be coming up tonight at 6 p.m. Eastern on Mad Money. Paul, I'm going to go back to you and just get your reaction to what we just heard from Salesforce. Seems like some softness in the guide here, but stocks moving higher.

Yeah, I mean, it's some softness in the guide, but that's not really surprising to people. Last quarter, they missed revenues for the first time since 2006. It was the worst reaction and the stock fell over 20 percent. It was the worst reaction in over 20 years. The software sector is facing a ton of headwinds in terms of slower employment and redirection of IT budgets towards AI. So that's been a drag, but again, it's well known in the stock. So I think software is eating the world, but AI is eating everyone's lunch here. So it's been a headwind, but this is a small bounce.

But the stock, after that big drop last quarter, it's made a few attempts to get over that 200-day moving average and has pulled back each time. So unless it can clear that level, which I don't think 2% will be enough to do, maybe you want to stay on the sidelines for a little bit. Okay. And then, of course, Q2, Nicole, Q2 revenue was up 8% for Salesforce. And they did maintain full-year revenue guidance as well, subscription support revenue guidance of slightly below 10% year on year. Two, just to pick up on what Paul was saying there, software eating the world, AI eating everything else, or everything in general, we know AI has been eating software,

too, as it's been taking longer for that software stack and that application layer to actually monetize on the possibilities. So what do you invest in right now? Do you stick to NVIDIA and the chips or do you start to look at some of these other names? I think when it comes to the public markets right now, you're going to find that the hardware is more readily available for investment. On the software side, names like Salesforce, CRM, you know, when we look at 150,000 company user base right now, we think the street has them beat up, kind of like we saw from Google, when it didn't really have a vocal AI strategy. What we look at when it comes to Salesforce is if you have that many workflows embedded in that many companies, the opportunity

is endless if you find your AI strategy and can deliver on it, both from that services, high revenue, low cost perspective. And so we actually are still believers that Salesforce will pull that strategy together because they have the backbone to do so. Please don't slam the door. I want to note that CrowdStrike earnings are out. The stock's initial move is higher, about 4%. We are going through it. We'll bring you those numbers as soon as we got them.

And, hey, we got them. Let's get to Steve Kovach with those numbers. Steve. Hey, I sure do. And like you said there, John, we're seeing the stock up nearly 5% on these numbers that we cannot compare it to estimates quite yet. EPS is coming in at $1.04 adjusted and revenue coming in at $964 million adjusted. Again, now shares have pared back a little bit of about 3%. We're going to keep digging through this and see what they say about the IT outage, but I'll send things back over to you for now, John. All right. Thank you, Steve Kovach. We'll look for more. Patrick Moore, head to you on this one. And really looking at the overall enterprise landscape right now,

there still seems to be a lot of uncertainty, but a special kind of uncertainty around a name like CrowdStrike that had that big outage that broadly affected so many customers. If we just put NVIDIA to the side and look at what the enterprise itself is doing in this economic environment, how strong is demand? How stable? Yeah, so right now, the downstream effects of AI or the opportunity for AI, it changed everything. What you had is board directives coming down and saying, listen, pause everything for a while until we figure out this AI strategy. We have that. And then you have, for enterprise SaaS vendors, folks essentially saying, hey, we bought all this stuff during COVID.

We need to chew through it and get benefit from that. Mark Benioff has been talking through that. But right now, everything in enterprise is focused on AI. There are budgets that are being reduced, non-AI budgets, to make way for those AI budgets. And that can be infrastructure, that software, and that services. Okay, Paul Hickey, to you on CrowdStrike's results so far, the stock is higher. They have some detail in here that I won't try to get to because Steve Kovac is going to do that on all the provisions that they have in the guidance for making good with customers over this outage.

How much do investors need to know before they can feel comfortable getting back into a stock like this? Yeah, so I think it's been, you know, about a month since the outage here. And so the ramifications of that and the damages or the, you know, what they're going to have to, you know, make good to customers on is still unseen. But what you have to remember is before this happened, CrowdStrike was firing on all cylinders. Fundamentals were very good. So it's going to take some time. But, you know, I think if you look back, if you go ahead like two years from now, 18 months from now, you look back and where we we are now uh would probably be looked at as a good time to buy it's it's rallied 33 off its lows but it's still down a

third from its high back right before the outage so uh it's gonna tread around here for a while but uh you know longer term they'll pro they'll they'll get back on track we talked about the secular growth story in ai secular growth story in AI. Secular growth story in cybersecurity. Is CrowdStrike a buy here? You know, from our perspective, there's a really strong headwind. Going into the July event, we actually saw public cloud vendors and servicers

really investing money in R&D in this area. And so to us, we think that's going to be further perpetuated by an event like July 19th. And so we do think in terms of a competitive landscape or headwinds for CrowdStrike, this one for us is not necessarily an area of entry or the name that we would choose in that cybersecurity realm, just in the narrowness of the business. Okay. Paul, I want to go back to you as well, because I know we have some other earnings that we're working through too, but just tech is really the focus right now. It's the focus

today. It's a big focus tomorrow as well. Just how much, whether it is NVIDIA, whether it is Salesforce, whether it's Dell tomorrow, for example, just how much does this set the stage for this next leg of a potential rally or lack thereof for the market more broadly? Yes, I think as John was saying in the intro, you know, there will be a narrative shift in a few minutes here as NVIDIA earnings come out. And if they report inline numbers, that'll probably be a negative narrative shift for the sector because the company routinely exceeds forecasts. So you know you're looking at if they don't report 30 billion in revenues the street could

be looked at disappointingly on this report. So that's something to look for going forward. So what we want we're focusing on more is a broadening of the rally here. We've seen we've started to see that since mid-July at the highs. The equal weighted S&P 500 has exceeded its July high. The S&P 500 is about one percent below NASDAQ, over five percent below. And the semis are 15 percent below. So we the market hasn't the S&P hasn't done a whole lot, but we've seen a major shift underneath the surface. Hold on, Paul. Let's get back to Steve Kovac with more on CrowdStrike. Steve. Hey there, John. Yeah, we are comparing these numbers now. So let me just give you the top and bottom lines and plus some more color on that IT outage and how that's

impacting these results. First, EPS, like I said, was $1.04. We are comparing that. It's a beat of $0.97 adjusted that the street was looking for. We are excluding from those estimates, though, the impact from the outage. As for revenue, that was also a beat, $964 million versus the $958.6 million expected. They're also saying, as far as the IT outage impact, two cent negative impact to EPS from the outage. And they're expecting a $30 million subscription revenue hit each quarter remaining in their fiscal year. That's two more quarters from that outage. So that's the basic thing that we got as far as the fallout and the financial impact from that IT outage there,

John. Okay. Steve Kovac, thanks for bringing that to us. Shares are still up about 2%. Well, let's dive deeper into CrowdStrike with our next guest. We're bringing in Ben Bejaran. Am I saying that right? I apologize. CEO and principal analyst at Creative Strategies. Ben, it's great to have you on. And I'm going to start right there. We just had a revision to guidance for CrowdStrike, and they're talking about this hit to subscription as well. It does seem like there was an expectation out there in the market that we would see something like this. Your thoughts? Yeah, I think that was the expectation. And obviously, they have to do some form of remedies as they go through this.

I think, you know, if you look at the long play here, though, and I think everybody's going to align that there are just some short term headwinds for them. I think the question is, how long is that? You know, when you talk to CIOs and CTOs, you still hear how much of a fundamental play CrowdStrike is. So I don't think that they're losing customers in any rapid basis. They're still mission critical. And we know that security remains a top three priority for really every big organization out there. So I think, again, this is more of a how do they deal with some of these short-term headwinds. I think they've done a really good job recovering from this. There's a lot of organizations that got over this really quickly.

Obviously, we don't want anything like this to happen again in the future. But I think the long thesis for CrowdStrike remains intact. I think it's just a matter of how do they balance this now with customers over the next two quarters. But wait a second. SentinelOne said that they're taking market share. Stock popped today. Yeah, I think, again, right, the big challenge is where do you go when it comes to overall infrastructure for your security? There's a lot of infrastructure and sunk costs broken into this, whether those are new companies, new startups, maybe not doing CrowdStrike. How much of that share is coming from those type of customers versus the big incumbents, CrowdStrike's exact customer base, I think that's

going to be the bigger question. Obviously, there's still more for them to take in terms of new greenfield opportunity. But like I said, it's mission critical at a security standpoint. And we still think there's an entrenchment there. Yeah, Ben, I wonder how much we do have to watch the rivals, not just SentinelOne, but Palo Alto Networks, Zscaler, others who are really pursuing this cybersecurity platform strategy over time to see whether this becomes in the long term a flex for CrowdStrike, where look how significant we were, and boy, look how well we took care of customers when we had this type of incident incident or if it's opened up some vulnerabilities where some others can say hey we've got a product for you at a

good price and we haven't had the problems that CrowdStrike has I think there's definitely a conversation happening around an AI is sort of driving this right if you look at the broader themes about where budget is going and how they're reprioritizing those within a host of spends whether that's coming from downgrading certain services, letting certain services lapse or subscribing into more. There's definitely a question about how do we reorganize or redeploy within a modern enterprise. I think those questions are being asked. But like I said, when you talk to so many people in the partner ecosystem for CrowdStrike, there is, I would say, a moat there.

Again, how deep is the moat? We can argue that technically from an implementation standpoint. But I do think there is a mission critical part of this just with how far they're deployed, that there is that entrenchment. But this is, again, it's a growing market. And as you know, everybody in this space is adding AI services to these things. So I think people are really evaluating what does it look like when I want to think about AI as an enhancement to my security. And so I think people are really evaluating what does it look like when I want to think about AI as an enhancement to my security? And so it is opening up more competition as well.

But like I said, it's a growing market. And that's where I think some of those shared names are coming from as well. Yeah, side of AI with everything for sure. Ben Beharin, thank you. Good to see you. Nicole, Paul, and Pat sticking with us. Be sure to catch CrowdStrike CEO George Kurtz

exclusively on Mad Money. That's tomorrow, 6 p.m. Eastern. All right, so this is it. Final countdown to NVIDIA earnings just minutes away. We've got the numbers and a panel of experts standing by to break them down right after this quick break. Overtime is back in two. Well, Affirm earnings are out. That stock is popping huge here in overtime.

Kate Rooney has the numbers. Kate. Hey, John. So it was a beat across the board for Affirm earnings are out. That stock is popping huge here in overtime. Kate Rooney, how's the numbers? Kate? Hey, John. So it was a beat across the board for Affirm. Max Levchin, the CEO, also setting some new profitability goals here. They also beat on gross merchandise volume. I'll start with EPS. It was still a loss, 14 cents loss, but much better than expected. That was a 37 cent beat versus expectations. Revenue also stronger than expected. And then gross merchandise volume, a beat as well. Levchin saying that they achieved profitability. They also want to be got profitable by Q4. Back to you, John. All right, I'll take it. Kate Rooney, thank you. Shares up 17.5%. We're just moments away from NVIDIA's release. Back with us was spokes Paul Hickey, wealth enhancements Nicole Webb, and more insights and strategy CEO Patrick Moorhead. And our own Mike

Santoli is joining the mix here. So, Mike, we haven't heard from you yet. And as we do count down to these results, want to get your thoughts on NVIDIA, especially as we have seen some profit taking this week ahead of these numbers and in general this summer, even though the stock's still up more than 150 percent this year. Yeah, everybody, Morgan, had a chance to sort of rethink their view on this. The stock is up something like 25 percent off the low just a few weeks ago. So I think it's knitting around the edges, hovering below the highs right here.

I find it interesting that while the streets overwhelmingly bullish on it, the average price target to the upside isn't really that high. It's like 142. So I think there's pretty good kind of two way balance here in terms of what people are looking for. We know the big story. It's all about what they can kind of push forward into the future in terms of getting some confidence in there about demand guidance or not. And Patrick, I just want to get your thoughts on how much onus you put on the read-throughs we've gotten from TSMC comments on improved AI demand. The fact that we've gotten strong results from Supermicro and Hopper demand, the fact you've had full year guidance raised from AMD, and of course, we've continued to see hyperscaler CapEx.

Numbers are out, by the way. Numbers are out. You can see stocks moving back and forth between gains and losses. So, Patrick, I guess, until we're ready with these numbers, just going to get your thoughts on how much we should read from some of these other indicators.

I think every one of those reads is a good read. It's the entire ecosystem. I think numbers from TSMC, who's the main foundry and packaging partner, in addition to the downstream system makers like Supermicro, are all good. I think the big question here is, again, is it enough to impress, right? They have beaten pretty much every number that has come out for the past four to six quarters, and they'll be up. The question is, how up will they be and what is going on with Blackwell? Because Blackwell is higher content and it is a much higher revenue and margin dollar proposition. Okay. And Nicole, it looks like so far we've got something close to that scenario that I mentioned off the top,

where, you know, NVIDIA is pretty much even. It's up and down fractionally right now in overtime. We're going to get the numbers to you pretty soon. But in this kind of situation, when you've got a stock that's ripped so much, and it's on everybody's mind, on everybody's tongue. The temptation is to say, ah, too late. But anybody who felt that way, you know, hold on, let's get those numbers. Sima Modi has them. NVIDIA.

Sima, what does it look like? John, second quarter earnings are in for NVIDIA. 68 cents adjusted versus the estimate of 64 cents, so a beat on its bottom line. Revenue at $30.04 billion, also higher than Wall Street consensus of $28.7 billion. We have comments here from CEO Jensen Wong in the press release. Hopper demand remains strong and the anticipation for Blackwell is incredible. He says NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack. He goes on to say that Blackwell samples are shipping to our partners and customers.

Spectrum X Ethernet for AI and NVIDIA AI Enterprise Software are two new product categories achieving significant scale. Another data point here, NVIDIA announcing a $50 billion repurchase of shares. We are watching the stock here move fractionally higher in overtime.

John, we'll get you the guidance in just a second. All right. We'll await that guide. Looks like it's a little bit above a little bit above expectations. Nicole, what do you do with it here if you feel like you missed the big move? The earnings beats are narrowing. I think that's exactly what I was watching over your shoulder as the market was trying to digest in the moment. When the earnings beats are narrowing, the street is less impressed on where we're headed next. And so I think until there's more clarity around movement outside of the hyperscalers, obviously adoption from finance, from health care, from the consumers, like we started to hear from Walmart, that's the next leg. And so I think the more we learn about Blackwell,

what the stack's going to do, the demand for the stack and these higher, even higher margin products. Right. This next gen next wave. That's what moves us higher. And so I wouldn't say this isn't an entry point because we believe that we are long NVIDIA for 18 plus months here. Along those lines, Paul, the fact that you had revenue up 152 percent year over year, but perhaps more significantly revenue up 122 percent year over year, which represents another quarter of more than doubling. I mean, it was it tripled in the last quarter. So it does represent a deceleration in that rate of growth. And I wonder how much that is factoring into the stock as you see these rapid moves on your screen right now, but we're currently down 4 percent.

Yes. I mean, I think, you know, we talked about, you know, earlier before it released, they were going to have to exceed 30 billion just to, you know, keep the market somewhat level here. But to your point, they've been increasing revenues so high. Revenues have more than quadrupled over the last three years. That's not going to happen again over the next three years. You'd have to have revenues of over $500 billion a year in order to keep that pace going. So the pace is going to slow. And so we always hear about, oh, it's trading at a cheaper valuation now than it was a year ago. But the growth was so much stronger over the last year. That pace of growth is going to slow. I'm not saying that NVIDIA is a stock that you don't want to own,

but you have to reset your expectations here. What we've seen in the growth is going to slow down going forward. And I think there's places that where investors can look in the market outside of just these mag seven type stocks. And you want to look for a broadening of the rally to areas that, you know, we're not talking about every day that 75 analysts aren't covering and that the Wall Street Journal and Bloomberg and CNBC aren't reporting stories about newly minted millionaires because of NVIDIA stock. There's going to be a new crop of stocks going forward. And that's where you want to look at as an investor. That's certainly something we've been looking at here at Overtime specifically. I want to get back to Seema Modi. She's got more details from this NVIDIA report.

Seema. Q3 revenue guidance, Morgan, is being looked at here at $32.5 billion. That is higher than Wall Street estimate of $31.7 billion. And if we were just to break out the data center revenue for the quarter, $26.3 billion. That is above the street expectation of $25.2. But as we know, the bar was high going into this report, the emphasis being on the size of the beat and the raise. The conference call does begin at 5 p.m. Eastern.

I would also just point again to that $50 billion buyback. Shares are down 5% in overtime, John and Morgan. All right, Seema, thanks. Pat Moorhead, stocks now down 5%. It was down as much as 8 or 9. Of course, the story changes rapidly, and you can't count on anything directionally, certainly before the earnings call. Blackwell mentioned a couple of times here in the release, but nothing necessarily about volume delivery, right? That's exactly right. And, you know, data center is up 154 percent, but it's just not good enough. Investors could be reacting to what came out in the CFO note, which talked about Blackwell having a mask set change. I'm reading this right now. And they expect to begin shipping in the fourth quarter and continue into fiscal. What's a mask set change? Yeah,

mask that is essentially a metal change that goes in. You have to actually change the design and go into the foundry to increase yield and anytime yield is discussed john uh it sets off panic and that's exactly what i'm what i'm reading here even if it's you know i think on the call they have to talk about what kind of a shift could this mean it'd be great for them to say no change all of our customers are gonna are gonna this in. But yeah, they are talking about an issue with Blackwell that was rumored. Okay. All the more reason to tune into the call here as we count down to that in a little over 30 minutes. Mike Santoli, I want to get your thoughts on what we're seeing as we do see these rapid ticks on the screen here in overtime in the stock. We had

had a guest on the show yesterday and he said, you know, looking at the options action, what was priced in was a 9% to 10% move in either direction for NVIDIA. Yeah, all day today, about 11% move was priced in based on how the at-the-money options were trading. That doesn't necessarily mean it's perfectly predictive, but it shows you what people were willing to bet on. And the results, as everybody's been saying, this sort of deceleration, certainly still amazing growth, but relative to expectations, just not really vaulting them by as much of a margin. The smallest earnings beat in any quarter in the last year and a half for NVIDIA up till now was like 9%. This beat by less than 5% on adjusted EPS. So still good. The the revenue

guide, 800 million higher than than the street was at for the coming quarter. All of that's in the positive direction. But, you know, the market kind of got there. And I think it's almost going to be somewhat comforting or maybe soothing to investors not to have to feel like you're chasing this incredibly fast moving story. This company added 100 billion in annual revenue like over the course of two years. It added like a target over two years. It was impossible to keep up with that pace. So we'll see where it settles out from here. It's not a crazy valuation, but it's one that's ramped so fast. Fifty billion dollar buyback is nice. Guess what? The stock traded literally

$50 billion worth of stock today alone. So it's not exactly something that's going to soak up a ton of supply. To that point, there is a lot of money in NVIDIA stock moving in overtime right now.

This is a $3 trillion market cap stock. It was down 8%, 9% at one point. Higher, lower now. It's down about 3% in overtime, but the call is still to come. Thank you, Paul Hickey, Nicole Webb, Patrick Moorhead, and, of course, Mike Santoli, who we might see later. We often see him later. All right, we've got much more reaction to NVIDIA and the rest of today's earnings on the way. Up next, analyst Angelo Zeno is going to give us his first take on NVIDIA's results

and what he wants to hear from management on the call at the top of the way. Up next, analyst Angelo Zeno is going to give us his first take on NVIDIA's results and what he wants to hear from management on the call at the top of the hour. And later, venture investor Matt McElwain on the broader impact of the whole tech landscape from this print from NVIDIA. Stay with us. The earnings keep coming. HP results are out. Julia Borson has those numbers. Julia. HP's fiscal third quarter earnings falling three cents short of estimates, while revenues of $13.52 billion beat estimates on the strength of PC sales. HP guiding to fiscal fourth quarter earnings in a range of 89 to 99 cents that midpoint, just a penny short of the analyst consensus. The company also increasing its share repurchase authorization to $10 billion. HP CEO Enrique Lores telling me, quote, we continue to navigate dynamic and competitive markets, saying the print market

recovery was slower than we were expecting and we are taking actions to compensate for that, saying when we think about the fourth quarter, we expect it to be a strong quarter. Back over to you guys. All right, Julia, thank you. Shares of NVIDIA, meanwhile, still lower by about four and a half percent after the company reported a beat on the top and bottom lines, announced a $50 billion buyback. For more, let's bring in CFRA's senior equity analyst, Angelo Zeno. He's got a buy rating, $139 price target on the stock. Angelo, it looks like there is indeed some adjustment that NVIDIA is doing in the production process for the Blackwell platform. How much more do we need to know about that?

Well, I think we kind of want to know a little bit more in terms of kind of, you know, how, what the ramp is going to look like in terms of Blackwell here over the next couple of quarters. You know, clearly it's been delayed here. I think really what investors want to know, and when you kind of look at the numbers here, right, I mean, you look at the actual July quarter numbers, they were pretty good, beat the data center number by a little bit north of a billion dollars or so, grew 15% sequentially.

When you kind of look at the guide here for the October quarter, it implies a sequential increase of less than 10%. It's kind of the lowest sequential increase we've seen since essentially kind of the Microsoft OpenAI announcement of 10 billion plus back in early 2023. So, you know, obviously the beaten raises are going to be more difficult to come by. Partly, we think, at least going into the October quarter,

is this delayed Blackwell ramp. I do think you've got the potential now to potentially see a reacceleration once that Blackwell ramp actually takes place here, but we kind of need to know a little bit more details in kind of what the trajectory of that looks like here. But Angelo, is this kind of like NVIDIA is the U.S. women's team in the 4x400 relay? They were so far ahead that if they run one leg a little slower than they could, does it really affect

the medal? I mean, listen, I really don't think it does, right? So, you know, at the end of the day, I guess you can make that comparison. I think, you know, I think NVIDIA right now is perfectly OK with where they sit here. The numbers in our view, again, were pretty good. The guidance, I think, was OK as well. I think if you're an investor right now, you kind of have to look ahead into calendar 2025. Blackwell will launch. It will ramp. We think it's going to be an enormous cycle because of the fact that it is going to be more of this platform-based ramp.

So if you are selling your shares here after hours, we would be careful for that because this is going to be a free cash flow monster. Even if the year-over-year growth rates are clearly going to decelerate, that is pretty much well reflected in the valuations here, we think. And along those lines, I mean, we've seen more than 33 million shares change hands just here in overtime since this report was released. I just want to dig a little deeper into this, because they also said in the release that Hopper demand remains strong. So it raises the question for me, how many folks are going to continue to focus on Hopper, even if you have a delay in Blackwell,

or is that going to be deferred spending? Like how to think about that mix? Yeah, I mean, listen, I think we'll get a little bit more detail here on the call as well. But the H-200 just recently ramped. It's not like it's been out for over a year or so. It just kind of ramped here over the last couple of months. So we're still early in kind of the H200 ramp. And we do think there is significant demand. We do think kind of demand continues to outstrip supply. And you've kind of, you know, alluded or you've kind of heard a number of these hyperscale providers here over the last couple of months kind of allude to the fact that they're going to remain aggressive, you know, buyers here.

So as far as the H100, H200 is concerned here, at least over the next couple of months, we do think kind of, you know, these cloud companies are essentially going to kind of, you know, invest aggressively on kind of these hopper GPUs because essentially that's the only thing out in the market right now until Blackwell ramps. Okay. Angelo Zeno, thanks for joining us with a buy reading. Speaking of buying, a buy reading on NVIDIA. Up next, more highlights from a very busy hour of earnings. We're going to tell you about two more big movers that you might have missed, Five Below and Pure Storage.

And check out the hardest hit stock in the regular session today in the S&P 500. That's Supermicro, a big user of NVIDIA chips and its high-end data center where getting clobbered after the company said it would delay its annual filing. That follows a short report yesterday from Hindenburg Research over what it called accounting manipulation. We'll see about that. It's moving lower in overtime as NVIDIA pulls back as well. Stay with us.

Welcome back. Five Below and Pure Storage earnings both out. They are moving in opposite directions. Pippa Stevens has the numbers. Pippa. Hey, John. Let's start here with Five Below. EPS at 54 cents adjusted. That was in line with estimates. Revenue at $830 million, slightly ahead. Now, in terms of guidance for Q3 EPS, it was a bit below what Wall Street was looking for. Q3 REV guidance at $780 to $800 million, roughly in line with the $791 million that Wall Street is looking for.

Moving over to Pure Storage, that stock is sinking, starting here with Q2 results. It was $0.44 adjusted on EPS. That was $0.07 ahead of estimates. Revenue is at $764 million, also ahead. Now, for their guidance, they see Q3 REVs at $815 million versus $810 million. And they reaffirmed their full-year revenue guidance, which was essentially in line with estimates. But this is what might be hitting the stock.

They see their Q3 adjusted operating margin of 17.2% versus the 18.3% that Wall Street was looking for. Could be why the stock is down 13%. Guys? Okay, Pippa Stevens, thank you. When we come back, longtime tech investor Matt McElwain joins us with his first take on NVIDIA's results and the potential impact on the entire AI landscape.

Welcome back. NVIDIA shares are down despite beating on both lines, reporting 122% revenue growth on an annual basis. Shares are down about 3% right now. Joining us now is Madrona Venture Group Managing Director Matt McElwain. The firm was an early investor in Amazon and Snowblake. Matt, it's great to have you on and great to get your first reaction to this print we got from NVIDIA. We got shares under pressure, but we continue to see a more than doubling in revenue growth year on year, although the pace does seem to be slowing here.

How much, as we've been talking about all hour, hinges on Blackwell as the company says that they're expecting to ship several billion dollars in Q4? Well, it's great to be on, Morgan. And I think this is less about Blackwell. Hopper's doing quite fine and it's still a pretty young in its life. The bigger thing here is the thank you that NVIDIA and the entire startup community should be saying to is the big tech companies. You think about the five largest tech companies that spent $60 billion on CapEx last quarter. A good portion of that was spent on NVIDIA chips. And why the small tech companies should also be thankful is because now they've got all these different cloud service providers that they can go use for that infrastructure and the models that are being built on top of it. And so it's really

an unlocked time for the entire technology ecosystem because of what the cloud service providers are doing and how NVIDIA is benefiting from that. I mean, goodness gracious, over 15 billion in growth year over year from 10 billion to 26 billion on the data center business. That's incredible. It is incredible. And yet we've gone through the entire summer with a lot of skepticism around return on investment, especially when you start to look at application of these new Gen I capabilities. The fact that you have a name like Salesforce also trading higher, or I guess contrast to NVIDIA right now, trading higher in after hours with its earnings, how much should we be starting to look at some of those names? Yeah, I think that it's a time now for the SaaS businesses to start showing the benefit

that they have from being able to enhance their offerings with applied AI. And so Salesforce is working on that. You've got other companies, the Workdays of the World. There'll be many others. And of course, Microsoft has a big application business as well. So you've got the data center business plus this application business plus the startup business that are all breaking out. The real tough question here is how quickly can the enterprise and in what ways will the

enterprise adopt applied AI? Will they do it through their cloud partners and their SaaS partners? Or will they be able to put the CapEx in, know how to deploy and benefit and leverage from these kinds of GPUs and build their own internal intelligent applications to get the efficiencies out of it? Matt, it seems to me like these hyperscalers, again, Microsoft, Amazon, Google, might be buying these AI resources from NVIDIA without knowing exactly what they're going to do with them and it reminds me in a way of Google buying up dark fiber back in the 2000s Zuckerberg has already said that he was spending a lot on these AI resources a couple years ago not realizing exactly how important they were going to be for reals will the enterprise have to spend, economically be able to spend on it if the

hyperscalers have these resources that are a sunk cost that they're going to have to price appropriately for their customers to use them? Well, there are the cloud service providers. They also have competition from these next-gen companies like CoreWeave or G42 over in the Middle East that are buying a lot of GPUs as well. CoreWeave was even mentioned in the release from NVIDIA today. And so, you've got a fair amount of competition of AI-optimized infrastructure. And yes, the big risk here, I mean, let's tie it back to what AMD did last week. AMD bought ZT Technologies. Why did they do that? Because ZT helps people take advantage of

the infrastructure technology to go build their own intelligent applications to get their own benefits out of it. So I think these big infrastructure companies, big cloud service provider companies are taking a bet. They know the timing is going to be something of a mismatch. We don't know exactly how long that mismatch is going to be, but I think the secular trend is very positive in the medium to long term. Absolutely. And Lisa Su told us all about that ZT buy right here on Overtime. Matt McElwain, thanks for joining us. Thanks, John. Thanks, Morgan. Coming up next, a check on CrowdStrike and Salesforce with those earnings calls slated to kick off in just moments, both higher. Plus, a milestone in the market today.

The first non-tech company in the U.S. to hit the trillion-dollar mark. We're going to tell you about it when Overtime returns. Welcome back to Overtime, a wild hour of earnings. Salesforce beating on the top and bottom lines and announcing a CFO transition. The company's third quarter revenue guidance was a bit light. A crowd strike topping earnings and revenue estimates. The company saying the massive cyber outage reduced EPS by two cents in the quarter. Guidance was below estimates. You can see both of those stocks higher right now. Affirm also surging after reporting a much narrower than expected loss per share and solid

first quarter revenue guidance. And Nutanix also getting a huge pop after beating on earnings and revenue. Those shares are up almost 16 percent. And there's a new member of the trillion dollar market cap club. And for once, not a tech stock. We'll tell you about it right after this break. Welcome back. There's a new member of the trillion dollar market cap club. It's not a tech stock, but it is a familiar face. Mike Santoli returns with a look at Berkshire Hathaway's steady rise. Mike? Yeah, John.

In fact, it's been really a steep rise, at least recently, for Berkshire Hathaway. One of the things it reflects, among many, is that the market really is rewarding so-called quality companies. Financially strong. Of course, Berkshire Hathaway is one of the strongest balance sheets in the world. And so you see about a close to 30 percent gain for the quality ETF over the past year. Very similar cadence to what Berkshire Hathaway has done. Now, of that trillion dollar market cap, you know, more than 300 billion is in shares of public companies Berkshire owns. Another 277 billion is cash on the balance sheet.

That's 600 billion right there. The rest of it, of course, is for the vast operating businesses. Now, a couple of big positions, the two biggest public equity positions that Berkshire has, he's been trimming, he meaning Warren Buffett and his staff, trimming the holdings of Apple and Bank of America pretty substantially, cutting the Apple position in half. And when was he selling the Apple position? Well, right in here, actually, as it had a huge rise last year and then became an outsized portion of the portfolio. My read on it is that he seems to want to just sort of reduce the really big bets on the balance sheet so that whenever his successor is taking over, there's maximum flexibility and a ton of cash. Take a look at the valuation here of Berkshire. Now, one point, call it one point seven

plus times book value. This is the standard way to value Berkshire Hathaway, pretty much at the very upper end of a 15-year range. That was in early 2018, I believe, it got there to this valuation. Now, before the global financial crisis, it more routinely traded at this rich valuation. But it's worth keeping in mind the market's given a lot of credit for Berkshire Hathaway and the optionality embedded in this company, guys. Valuation-wise, is this perhaps a case where the hole is bigger than the sum of the parts? Yeah, I think people are going to make that argument as people get toward this notion. You know, he has an assigned successor.

Greg Abel is going to take over this company. I think it's conventional wisdom to say that there's ways to surface more value out of here by separating some businesses or reorienting it or holding less cash or whatever it might be doing a big buyback or special dividend or whatever. But yes, you can make that case. I'm just not sure the market is going to really reward in advance that kind of a potential financial engineering here. So we'll see. It does also mean Berkshire unlikely to be buying back as much stock because there is some valuation sensitivity that management shows when they do look to buy back their own shares. Interesting. Good to know. Mike Santoli, thank you. And Morgan, what an hour it has been. We got those NVIDIA numbers. The stock right now is down about 4 percent in overtime. But this is

just act one. This is act one. You had a doubling of EPS, a doubling of revenue. I'd also note that many of the other semiconductor names are trading lower in sympathy as well. Everybody from Supermicro, Micron, Arm, Broadcom. You have AMD trading lower too. So the ripple effects in the initial reaction. There's only one NVIDIA, and we're going to get some explanation on some of those Blackwell issues described. That's right. Meantime, NASDAQ finished lower.

So did the S&P and the Dow. That does it for us here at Overtime.