Pitch The PM
Nvidia ($NVDA): As Good as it Gets
Mar 19, 2025
In this insightful discussion, Gil Luria, the Head of Technology Research at D.A. Davidson, brings over 25 years of experience to the table as he analyzes Nvidia's trajectory. He dives into the current GPU cycle, spotlighting the competition and market shifts in AI hardware spending. The conversation reveals possible declines in Nvidia's revenue and how major clients like Microsoft are reassessing their strategies. Gil critiques Wall Street’s growth expectations while exploring the sustainability of rising capital expenditures across tech giants.
01:19:13
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Quick takeaways
- Nvidia is facing a peak in customer capital expenditures due to a shift from rapid to moderate growth among major tech clients.
- Competitive pressures are increasing as major customers develop their own chips, which could disrupt Nvidia's market share and pricing power.
Deep dives
Unsustainable Customer Buying Trends
The current high level of spending by NVIDIA's customers, including major tech giants like Microsoft, Amazon, and Google, is seen as unsustainable. While these companies recently increased their capital expenditures (CapEx) significantly, this growth is expected to moderate as they approach an inflection point from rapid to more moderate growth. Analysts suggest that this peak spending is unlikely to persist, as companies must balance their investment with returns, especially in light of recent commentary from these firms indicating a more cautious approach moving forward. The anticipation is that as spending stabilizes or declines, NVIDIA may not be able to maintain its aggressive growth trajectory.
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