right folks uh Tim and I've just been pouring over this Nvidia press release stock still down a little bit about nine tenths of a percent in the aftermarket but it was taking a little bit of a bigger hit uh earlier so let's get to it because back with us is uh Dan Morgan so glad to have him with us follows the tech sector and obviously uh Nvidia he's senior portfolio manager at cenova's trust he's on the phone from Atlanta um Dan help us out here because it looks like it's a big beat on a lot of levels I

mean expectations were really high

okay but they met them and then some stock still down about nine tenths of a percent one percent off the lows in the aftermarket tell us about the quarter that was in the outlook

hi carol hi Tim um you know if you look at these numbers at least the headline numbers it's hard to find a flaw right because they beat on revenue for the third quarter 18.12 billion versus 16.18 and then they asked their estimate going into the fourth quarter was 20 billion plus or minus two percent consensus was around 17.81 billion huge beat in data center which is where the AI chips are housed uh coming in at 14.5 billion versus about 12.8 billion that's a 41 percent increase year over year and you know earnings were a beat so to be honest with the guy this stock traded up in anticipation of blowout numbers because I don't want to say anything leaked out but there were a lot of reports saying that channel checks were showing that they were doing very well in terms of selling their AI chips and I just think that it's you know again carol and Tim with those situations where it's like buy on the rumor sell on the news because I can't see any flaws in this report what about the China

element here one of the headlines that we have on the Bloomberg terminal Nvidia saying that it expects sales of uh sales to China to decline significantly in the fourth quarter but the decline will be offset by growth in in other regions how should investors take that information

we're right Tim you know China is probably going to be the the major focus on this upcoming conference call everyone's going to be asking about their China business we know that Nvidia generates about 20 to 25 percent of their sales from China there are two core ships that they sell in AI which is the H100 and the A100 have Chinese equivalent H800 and A800 we also know they have a slew of new chips coming out that are going to be focused just on the Chinese market that are supposed to meet all these new restrictions so yeah I think that quote Tim because that's kind of in the back of everybody's mind in terms of a worry surrounding Nvidia and the fact that they mentioned on the initial report I think raises the big red flag and that could be why Tim

and Carol will see in the stock kind of sell off a little bit on this news yeah you bring up a good point about where the revenue comes from if you have Bloomberg terminal all you got to do is type in FAGO on the terminal and you go over to segments by geography and you can see that foreign revenue accounts for about 69.3 percent of the company's total revenue in the in 2023 Carol 25.9 percent of that came from Taiwan a whopping let's see

21.4 percent of that came from China but what's interesting is that I want to go back to the outlook they talked about revenue in the current period about 20 billion I think give or give or take what was it 2 percent yeah 2 upside downside are Ian King writing that the estimate that some were projecting was as much as 21 billion was it like you said just the case of that people just wanted more expected more you know

Carol and Vinnie have turned into a poster child for whisper numbers right remember we used to talk about that yeah yeah we talked there was an estimate and then there's the whisper number so we're back to the whisper numbers it sounds like with Nvidia so yeah I think you're right even though it's a huge beat right because the estimate was 17.81 billion again they keep putting these matrix to go higher and higher and higher and it just gives the point where you know you just can't please right to be

fair the stocks now up about eight tens of a percent in the aftermarket so it's like somewhere somebody like slap somebody on the face and said did you look

at the number but maybe I mean maybe maybe look it's it's tough to look at what happens you know when earnings come out before the call and before the markets open in the morning so we take you know take yeah it's early it's early we take the moves of the grain of salt but maybe Carol you know there were some there maybe there was a block trade or maybe people saw this as an opportunity just off of you know all-time highs to to sell stock I don't know that's fair that's fair having said that Dan I do wonder you know what

I think about Nvidia I'm like well who's going to take share from Nvidia who will yeah and that's that's

an interesting question because if you look at the data center space right now their total revenues that they generate is about twice of the combined competitors right which is Intel AMD marble but they do have companies like AMD like marble that are coming out with new chips that are going to be introduced in that space Intel has Falcon Shores they also have their Hibana which is supposed to be coming out here so I think that may be another thing that's on a lot of people's minds which is you know right now Nvidia 70 80 percent as you know of the AI chip market really these other companies have been a little bit slower to come out with their competing chips but they are coming down the road right AMD has the MI 300 you've got marble technologies which has already introduced their PM4 DSP so will they be able to be still the king of the mountain right or are they going to have to share a little bit of market share with some of these other companies and there are slew of chips that are going to be coming out here the next six to 24 months from some of these competitors that I've mentioned and it'll be interesting to see if maybe buyers want to start using AMD chip. Okay

I got to ask you this because everything this week comes back to Sam Altman but I mentioned this earlier Dan and amid the drama over the reporting of Sam Altman's Oster at OpenAI last week and the ongoing discussions that our team is reporting that he's having with the board of OpenAI to return we learned that Sam Altman was had some outside projects he was trying to raise money for a chip competitor to take on Nvidia could a startup actually emerge to take on Nvidia?

You know Tim I think it would just be really tough because you know we Carol and I will always follow that video we thought of the big gaming chip and they had all the cash cow and money that was coming in from that they used that to leverage it to go into the AI space so it would be really hard to take on the likes of some of these companies that we mentioned just because of this sheer size and the amount of cash they have I don't think they could raise enough money so I'm not as worried about a startup like the one that you mentioned I'm more thinking in terms of some of the older names that have these new chips coming out.

Okay so just go about a minute and a half left what would you ask on the conference call you mentioned about China coming up but what is front of mind or front you know for you in terms of the Nvidia story Dan?

Well the China issue which we mentioned and also how does Nvidia continue to defy gravity in regards to the data center space right we know that Asia we look at all these competing inner IAF programs in terms of AWS and GTP we're seeing growth rates flowing down and yet we see a continued increase spending towards Nvidia the AI space in the data center so will they eventually fall suit to this slowdown so obviously getting a little bit more information about how they're seeing the data center space and

why they're growing when everyone else is de-accelerating. Would you buy or sell on this news today just got about 20 seconds left here.

Yeah Kerri Nvidia's been a long time stock on our buy list obviously for clients that have the proper investment objective and risk tolerance and they don't own it it would be something that we look at you know stocks not crazy it's 45 times fiscal year 2024 earnings and we're already going into fourth quarter so everybody hangs their hat on that trailing multiple but it's not that overpriced if you look at the forward

growth rate expectations times are earnings.