Instant Reaction: Nvidia Gets Tepid Reaction to Forecast, Ups Investor Rewards

Summary

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Bloomberg Tech Podcast: Instant Reaction — Nvidia Gets Tepid Reaction to Forecast, Ups Investor Rewards

Date: May 20, 2026
Hosts: Bloomberg team featuring Ed Ludlow
Guests:

• Kunjan Sabhani (Bloomberg Intelligence Senior Semiconductor Analyst)
• Paul Meeks (Head of Technology Research, Freedom Capital Markets)
• Jay Goldberg (Seaport Research Partners, only analyst on Bloomberg with a sell rating on Nvidia)

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Episode Overview

This episode delivers immediate analysis and expert roundtable discussion following Nvidia’s latest earnings report. The team dissects the sales forecast, investor rewards (notably a massive buyback and dividend increase), and the company’s evolving reporting structure. With investor expectations high in the AI-driven market, the episode explores whether Nvidia’s results and guidance truly disappoint—or simply mark a new baseline.

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Key Discussion Points & Insights

1. Nvidia Earnings: Revenue Guide & Market Reaction

Timestamps: [02:40]–[09:53]

• Sales Forecast:

  • Nvidia projected $91 billion in Q2 revenue, beating analyst estimates ($87B average, $96B high).
  • Despite this, the after-hours stock reaction was flat, with some characterizing the outlook as "disappointing."

• Expert Reactions:

  • Paul Meeks:

    “I think it’s B.S….guidance is not disappointing. I think it’s fine because…they’re going to upside it like they always do.” ([08:02])

  • Kunjan Sabhani:

    “Everything looks kosher…the buyback announcement…I think we like that move.” ([04:00])

    • Emphasizes that investors now expect Nvidia to beat by large margins, so only dramatic surprises draw real attention.

• Buyback Announcement:

  • Nvidia announces an $80 billion share buyback, preferred by analysts as the company generates massive free cash flow with few alternative uses.
  • Kunjan Sabhani:

    “They don't have other way what to do with that. So a buyback always is sort of preferred go to for US analysts…” ([07:00])

2. Changing Reporting Structure

Timestamps: [02:59], [21:01]–[22:13]

• Nvidia shifts reporting to two segments: Data Center and Edge Computing, rather than breaking out gaming and other lines.
• Paul Meeks:

  “They're trying to build a walled garden just like Apple did in a previous technology transition.” ([03:15])

• Jay Goldberg:

  “Data center is really where people are focused on…. It’s the only number people care about, with the exception of my 14 year old son who only cares about gaming GPUs.” ([21:11])

• Concerns that gaming, Nvidia’s foundational segment, will no longer be separately reported, but consensus is that data center now overwhelms in importance.

3. China Revenue & Geopolitical Constraints

Timestamps: [05:01], [18:28]

• Nvidia confirms no data center shipments to China, meeting current expectations amid US-China tech restrictions.
• Ed Ludlow:

  “The quarter did not include any hopper-based systems to China. And the outlook…does not reflect any China revenues or shipments.” ([18:28])
  “China from a starting place of zero...is a $50 billion opportunity. But...they're not permitted by the Chinese government to do business with Nvidia.” ([18:28])

• The panel discusses how Nvidia’s long-term ambitions view China as critical, though near-term forecasts factor in zero revenue from the region.

4. Investor Perspective: Growth, Valuation, and Skepticism

Timestamps: [14:22]–[18:03]

• Jay Goldberg (Sell rating; $140 Target):

  “It’s just underperformed. It’s a good company, but it’s hard for them to live up to $5 trillion market cap expectations…they’re increasing the dividend, which is a great signal, but it's a massive increase...signaling that they're running out of ways to grow faster.” ([14:37])

• Paul Meeks (Contrarian Response):

  “This is not a situation like Cisco…right before the Internet bubble popped, where it was trading at a couple hundred times earnings...we’re trading at an S&P500 multiple...It’s not actually expensive at all.” ([16:09])

• Debate on whether the combination of dividend hike, buyback, and slowed outperformance means Nvidia is running out of growth levers, or remains a value at current multiples.

5. Beyond GPUs: Data Center Focus and Ecosystem Building

Timestamps: [03:15], [10:28]–[14:02]

• Nvidia’s business model is expanding beyond GPU sales to include full data center systems and strong ecosystem partnerships.
• Ed Ludlow:

  “It’s that extra content in the data center: Infiniband networking, Spectrum X Ethernet, NVLink systems…that seems to maybe account for some of the beat in the quarter gone and the confidence in the outlook.” ([10:28])

• Discussion of the unique partnership with Iron (or possibly Iran/Aran)—a Neo Cloud, showing Nvidia acting like a venture capitalist, securing future demand and embedding its hardware at ecosystem partners.

6. Revenue Diversity & Competitive Threats

Timestamps: [23:12]–[25:27]

• Growing revenue outside the “big four” hyperscalers; AI-focused clouds, industrial and enterprise segments are gaining momentum.
  • Paul Meeks:

    “It’s important that over time that enterprises go direct, not through hyperscalers, to broaden this market...But Google probably can make a go of it, and I imagine Amazon will be on their heels.” ([24:13])

• Amazon and Google are ramping up their own AI chip initiatives—this is both a threat and an opportunity to diversify Nvidia’s customer base.

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Notable Quotes & Moments

• On Near-Term Guidance and Beating Expectations:

  “That's a problem when you do that. It has become sort of a baseline, no longer something that stands out. If they didn't beat with this magnitude, that would be something worse.”
  — Kunjan Sabhani, [04:00]

• On the Buyback:

  “They're generating enormous amount of cash…they don't have other way what to do with that. So a buyback always is sort of preferred go to for U.S. analysts.”
  — Kunjan Sabhani, [07:00]

• On Valuation:

  “It's a good company, but it's hard for them to live up to...$5 trillion market cap expectations.”
  — Jay Goldberg, [14:37]

• On Moving Beyond Gaming:

  “Gaming is not the growth engine…it's tiny. It's all about the data center.”
  — Ed Ludlow, [22:13]

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Important Segment Timestamps

• (02:40) — Initial reactions to Nvidia’s reported numbers
• (04:00) — Panel consensus: Numbers are solid, not surprising, buyback discussed
• (05:01)/(18:28) — No China data center shipments; understanding macro constraints
• (08:02) — Media headlines vs. analyst sentiment on “disappointing” forecast
• (10:28) — The story beyond GPUs: complete data center solutions
• (14:22) — Bear case and valuation skepticism
• (16:09) — Growth vs. value debate for Nvidia stock
• (21:01) — Nvidia’s new reporting structure and implications for investors
• (22:13) — The diminishing importance of gaming in Nvidia’s business
• (24:13) — Cloud customers’ efforts to reduce Nvidia dependency by using in-house chips

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Conclusion & Takeaways

• Nvidia’s results remain strong by normal standards, but investor expectations are sky-high—even major beats feel routine.
• Company strategy continues to shift toward integrating more of the data center stack, investing in partnerships, and locking in future demand.
• Analysts are split:
  • Some see the stock as still a value given its market multiple and growth prospects.
  • Skeptics warn of limits to growth and question whether buybacks and dividends are the best use of cash for an innovation leader.
• Geopolitical issues, particularly with China, remain a long-term question mark—not a near-term crisis.
• Nvidia’s dominance faces the future test of hyperscalers and cloud providers developing their own solutions, but diversification is growing.

Final Word:
The takeaway is not to panic—“everything looks fine.” Nvidia remains foundational to AI infrastructure, but 2026 is defined as much by what’s expected as by what’s announced.

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For more in-depth analysis, catch Ed Ludlow and the Bloomberg Tech team daily at 11 AM Wall Street time.

Transcript

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[B]

Bloomberg Audio Studios Podcasts Radio National News

[D]

this is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000

[E]

journalists and analysts around the world.

[D]

We've got a great group of people joining us to talk all things in video, including our own Ed Ludlow. He's the co host of Bloomberg Tech. He joins us from our San Francisco bureau. Kun John Sabani's Bloomberg Intelligence Senior Semiconductor Analyst Paul Meeks is also with us, head of Technology research at Freedom Capital Markets. And Jay Goldberg of Seaport Research Partners is joining us as well. Once again, Jay is the only analyst tracked by Bloomberg who has a sell rating on Nvidia stock. He's got a price target of $140. Paul, your reaction Pleased with these numbers?

[F]

It seems to me that everything is in order to like everybody else in the preview commentary, the most important metric that they could release ahead of the call was this revenue guide and it looks fine. I'm a little bit, I want to say dubious, but a little bit confused by the change in the reporting structure.

[D]

Yeah. Why? Why would a company do that? A company like Nvidia that, that has, you know, such a following right now, so many analysts covering this, some people consider it a macro event when it reports earnings. Why change reporting structure right now?

[F]

You know, one of the things that they are doing is they're trying to build a walled garden just like Apple did in a previous technology transition by going beyond the GPUs and interconnecting in the data center, all the different pieces. So this may not be some sort of dodge because the company typically is first class, very transparent, but. But it might be just reflective that they are moving beyond just selling GPUs and they want to organize their business to prove it.

[B]

Hmm.

[G]

John, let's bring you back in here, Bloomberg Intelligence Senior Semiconductor Analyst and just get your initial thoughts on these first few numbers.

[H]

Yeah, look, everything looks kosher. Like your earlier guest was saying, you know, they have made us habituated to expect them to come out and expect and to beat by such a range mid single digits. And that's a problem when you do that. It has become sort of a baseline, no longer something that stands out. If they didn't beat with this magnitude, that would be something worse. I do like the buyback announcement and to address that re segmentation, I think we like that move. I mean, look, our model has been trying to guesstimate this breakdown that they're giving in the data center business by the type of end customers for a while now. It's always painful to really get that out of them and figure it out. So we like that move that now they are coming up and disclosing that breakdown that also allows people to really see that it's not just the four top cloud customers that they're buying and running the business for. Nvidia. Right. There's also growth coming from other vectors that people often miss out because it was not publicly showcased.

[G]

And Ed, we are just getting a headline crossing that. The company's saying that no shipments of data center hopper products to China. How does that live up to the expectations of what you and Jensen Huang had discussed?

[I]

I don't know how you did that so quick. I literally just posted that in the blog. Before you read it out. This is really. That's the base case assumption. I mean, what Colette Kress, the CFO is pointing out, literally in her CFO commentary as opposed to figuratively, is that this is the fiscal first quarter financial year 27. You know the base case assumption was no product datacenter wise to China like so it meets that expectation. Reminding me in that note that in the first fiscal quarter of the fiscal year 26 they had almost $4.6 billion of sales in that same period one year ago. So that's what we're learning really. There was some other stuff I scanned through on the on the revenue highlights of the CFO commentary. I thought we'd learn more but right now that's it.

[D]

What's the question you'd ask about that on the call if you were given the chance?

[I]

Ed, why did you tell everyone in March that you were ramping up your supply chain and that you had both orders from Chinese companies along with the US licenses to issue those orders? Why did you say that? You know, if the state of play is is clearly based on the President's visit that China is not going to permit its tech companies right now to place those orders. And why did Ed Ludlow not ask Jensen that more explicitly on Monday? That's probably what I would reflect on.

[D]

Hey you know you can even Monday morning quarterback your own work and pretty easy to do that. It was a great interview with Michael Dell as well too from Las Vegas. Hey I want to bring back Paul Meeks, head of tech research at Freedom Capital Markets and also Kun John Sabani, Bloomberg Intelligence Senior Semiconductor Analyst. They're joining our roundtable. Kun John, you mentioned that you like this additional $80 billion in share buyback. Why is that? Why is that a good use of cash? Like convince people that that's a good use of cash in your view?

[H]

I mean given the stage we are in like I said every quarter now in terms of near term numbers it's basically table stakes that to beat by mid single digit they've already given a two year pipeline of a trillion dollars. So I don't know what else they could do just in terms of the print to really get excitement. So buyback usually is a good strategy and remember they're generating enormous amount of cash that right now despite all the big investments they're making, massive multibillion dollar investments they're making. They don't have other way what to do with that. So a buyback always is sort of preferred go to for US analysts that does reward shareholders from time to time.

[G]

Paul, I do want to get your thoughts on just the market's initial reaction. Actually our Bloomberg coverage the headline Nvidia gives a disappointing forecast as chip competition mounts. So we do know that number, 91 billion. But disappointing. What do you make of that word?

[F]

I think it's B.S. yeah, I think it's just fine. And we'll get some more commentary as we get into the call starting at 5:00 Eastern. But now the stock is, you know, trading after hours flattish and you know, the stock had had a pretty big run up in recent weeks after it essentially was a poor performer from July of 25 until just a few weeks or months ago. And so I don't think that there's any problem at all the guidance. I think if they do announce Chinese business, take whatever revenues you're expecting for that fiscal year and add 15% to it. So it's only going to be icing on the cake. But I, yeah, I feel pretty good about it. But you know, Jensen will do what Jensen does, right? He's the Jesus and he's an evangelist and make us all feel better about the long term. I'm not necessarily worried about what they printed or even this guidance, but this guidance is not disappointing. I think it's fine because you know what, it'll be $91 billion and then they're going to upside it like they always do. So this will be much better at the end of the day than the whisper.

[D]

We're speaking to Paul Meeks, head of technology research at Freedom Capital Markets. Also with us, Kunjan Sabani, Bloomberg Intelligence senior semiconductor analyst and our own Ed Ludlow, a Bloomberg Tech co host. Holding down the fort in the San Francisco studio, the company gave investors a sales forecast saying that revenue in the three months ending in July will be $91 billion. The company said in a statement. Though analysts estimated 87 billion on average, projections surged as high as $96 billion, according to data compiled by Bloomberg. I want to bring back Kunjan Sobhani, Bloomberg Intelligence senior Semiconductor Analyst. I know Kun John, you've got to run. And in just a couple of minutes. What's your note going to be headlined

[H]

tomorrow from the press release, I would say everything looks fine, no need to panic, no need to worry. And the stock seems to be turning around by the way, as we are going through this roundtable.

[D]

All right. Kujan Sabani's got to run. He's Bloomberg Intelligence senior Semiconductor analyst. Our roundtable though continues. We got Paul Meeks, head of technology research at Freedom Capital Markets and Ed Ludlow, Bloomberg Tech co host. Hey Ed, I want to go back to you as you've had a little bit of time to digest this and actually read some of the coverage too, from a big team here at Bloomberg News that's reporting on this. What continues to stick out to you from these results?

[I]

Yeah, you put the numbers to one side, right? So $91 billion plus or minus 2% in the fiscal second quarter. You know, it puts that outlook or that guide pretty firmly in the bullish part of the consensus or forecast on the sell side and buy side expectations were very high. So what's the extra bit here? What is Beyond Nvidia selling GPUs at the level that we would expect? And if you read Collect, Kress, the CFO's commentary, it's that extra content in the data center Infiniband networking, Spectrum X Ethernet, MV link systems, which is what combines a lot of the servers in aggregate to form that supercluster or supercomputer that seems to maybe account for some of the beat in the quarter gone and the confidence in the outlook to come. And you know, we are bouncing around now. We're modestly higher 2, 10 of 1%. We were lower. I think your last guest, Paul, himself said. Right. Like you're not going to get everything from, from the earnings release. Let's wait and see what Jensen Huang has asked and what he says.

[G]

Paul, I do want to go back to you just kind of on some of your thoughts on the company's data center expansion because Nvidia had announced a few weeks ago investing as much as $2.1 billion in the data center developer Iran or I'm not sure, is it iron or even you have a hold rating on that company. What are you kind of looking for for Nvidia to talk about with that partnership?

[F]

I don't know if they'll specify it because Nvidia, because it generates so much free cash flow, as you may have noticed the last couple of weeks and months, they seem to be sprinkling the infield with $2 billion for everybody, like Oprah. If they do highlight Iran, you know, Iran is a neo cloud. And what they did with Iran, it was pretty unique because first of all, they bought some capacity for Nvidia's own use, not to resell to customers. And then they also don't necessarily have a warrant, but they have a right to purchase more Iran stock and actually a significant amount. But it's tied to Nvidia and Iran delivering GPUs together. And I think they get the full payout once they've supplied Iran and its customers 600,000 of their GPUs. So it is a unique deal. It is A little bit different. But Nvidia, with all of its cash, it's been doing two things. It has been acting like a venture capitalist to plant seeds throughout the entire ecosystem. Remember my point that they're going beyond GPUs, and because they don't really have anything else to spend on, they're buying back some stock.

[G]

Ed Ludlow, you interviewed the Iron CEO on Monday. What was your take on the company plans for this, this kind of partnership?

[I]

Yeah, so, you know, co CEO Daniel Roberts, you know, Iron is a NIO cloud that is largely dependent on Nvidia architecture. And what is so interesting is we're talking about the industry being in a position where demand is fast outpacing the industry's ability to supply. But you know, as, as Iron would tell it, the bottleneck is not Nvidia being able to get the server designs or the GPUs into place. It is everything else. It is the utilities trying to get the infrastructure in place to switch that data center online. It's the concrete, the manual labor, the tin can that needs to go around it. So it's very interesting to hear that experience through their experience of what it's like to try and build and neoclass just a data center for AI workloads. Simple, right? But Nvidia doesn't appear to be the hold up here.

[D]

Let's bring back Jay Goldberg, Seaport Research Partners analyst there. He again is the only analyst tracked by Bloomberg with accelerating on Nvidia. Jay, I imagine that this report is not enough, and I don't want to get in trouble with compliance or anything, but not enough for you to change your rating on Nvidia.

[J]

Nothing I've seen here sort of meaningfully alters the trajectory of how I think of Nvidia's, well, you know, prospects.

[D]

What is your bear number? What is your bear case on the company? And how do you see it? How do you see the stock falling so much in just the next 12 months?

[J]

So just to be clear, I've never told people to short Nvidia. I've always positioned my mike take as an underperform. Go back to when you interviewed me in May of last year. That was what I was saying. And I think that's. That played out, right? It is, it's just underperformed. It's, it's, it's a good company, but it's hard for them to live up to, you know, $5 trillion market cap expectations. Right. And, and we've seen that this year, like they've underperformed the Sox and the SMH ETF underperforming. They've gone up whatever, 20, 30% this year, I think, and lots of other names in the sector have gone up a lot more. And it's just a function of how big they are. I think if you look at the results, I mean, one of the things that stood out to me was they're increasing the dividend, which is a great signal, but it's a massive increase and. Right. It's sort of signaling that they're running out of ways to. To grow faster. Like, couldn't they use that those funds in a different way?

[D]

I just want to point out you have a sell rating on the stock. $140 is your price target, and that is a period of 12 months.

[J]

Yes.

[D]

Okay, so you're not telling people to short the stock, but you don't. But you believe that the valuation should be 140, $40 per share, not $220 a share.

[J]

Yeah, I'll obviously revisit that today, but certainly I think it's. I think it's hard. It's hard to get excited about the stock when there are better opportunities out there.

[D]

Paul, come on in. I imagine you disagree with Jay there. Is it. Is it easy for you to get excited about Nvidia still?

[F]

Well, Jay had some very good points, and I obviously admire him and his work, but I would tell you that this is not a situation like Cisco was right before the Internet bubble popped, where it was trading at a couple hundred times earnings. If you believe, and I don't formally cover Nvidia, I cover the NeoClouds. But if you believe the consensus estimate for next fiscal year, now, this would be the fiscal year for Nvidia that ends January 31st of 28, which is really calendar 27. Right now we are trading at about half of the growth rate expected in that year. Well, Jay had some very good points and I obviously admire him and his work, but I would tell you that this is not a situation like Cisco was right before the Internet bubble popped, where it was trading at a couple hundred times earnings. If you believe, and I don't formally cover Nvidia, I cover the NeoClouds. But if you believe the consensus estimate for next fiscal year. Now, this would be the fiscal year for Nvidia that ends January 31st of 28, which is really calendar 27. Right now we are trading at about half of the growth rate expected in that year. And we're trading at an S P500 multiple. Actually, I calculate about one click below that. And here's a company that really hasn't seen much multiple expansion over the years. It's all been in delivering the mail. And so my point is I'm not necessarily disagreeing with the trend longer term and it is hard to grow something this large, but we're trading at less than a market multiple. It's not actually expensive at all. If it was expensive, then I probably swing from bull to bear.

[D]

But it's cheap.

[G]

Hmm. And I do want to bring you back in just going back to the China, the China story here because we've seen this company's revenue, the revenue that they generate from China declining quarter after quarter. They're now continuing to exclude China revenue from their outlook for the second quarter. Does, does Nvidia need business from China at all?

[I]

So there's the basics. The numbers which is the quarter did not include any hopper based systems to China. And the outlook for the current fiscal second quarter in, in financial year 27, just as you said, does not reflect any China revenues or shipments to China. And what Jensen Huang and Collect Kress the CFO have said is that China from a starting place of zero baseline zero is a $50 billion opportunity. But if you, if you can get out of the income statement, the story with China was a critically important end market for data center. And as Jensen Wong would like to say, often 50% of the world's AI research or the researchers themselves are in China or from China. And so you know, if you buy Jensen Huang's mile high, bigger picture view of what is going to happen with AI, the build out of AI training and transition to running of systems of inference to their minds, being a participant with China is critically important. And again, you know, in that interview Monday, and I'm sorry to go back to it, but you know the word he uses, he uses deliberate. The demand from Chinese tech companies is quote, incredible. It's just they're not permitted by the Chinese government to do business with Nvidia.

[D]

Yeah, certainly on the call, a lot of questions and perhaps some more answers when it comes to the China business for Nvidia. I want to bring back and remind everybody that was just Ed Ludlow. He's the tech Bloomberg Tech co host. You can catch him every day on Bloomberg TV at 11:00am Wall street time. Jay Goldberg, Seaport Research Partners joins us too, along with Paul Meeks, head of technology research at Freedom Capital Markets. Jay, I want to send a question over to you about the reporting structure and the reporting framework for Nvidia. I don't Know if you had a chance to see this yet, but this caught Ed's attention. It caught our attention when these numbers crossed at 420. Lynn Duan from our Bloomberg Technology team. She's a tech editor. She writes that the company is transitioning to this reporting framework that in the future Nvidia will report for two separate market platforms, Data center and Edge Computing. The company says the Data center segment will include business with the hyperscalers and those building AI focused data centers. Edge Computing will highlight the devices it sells for PCs, game consoles, robotics and the like. I know this is a little bit of a wonky sort of accounting question, but as an analyst, like, I know you want to see clearly defined areas when it comes to segment reporting. What's your, what's your initial reaction to this new reporting structure?

[J]

So at one level it makes sense. I have to think through it. But Data center is really where people are focused on.

[D]

It's kind of the number that. It's the only number people care about. Right?

[J]

It's the only number that people care about, with the exception of my 14 year old son who only cares about their gaming GPUs. And it's gonna be very sad, saddened by this news.

[H]

Okay.

[D]

He'll still get the gaming GPUs. They just won't be reported out separately.

[J]

It's. Yeah, it's getting harder to get them and they're not getting updated as fast as he'd like, but.

[D]

Well, that's interesting because that's the DNA of the company.

[J]

That's the DNA of the company. Yeah.

[D]

Ed, you're a gamer. Come on in here.

[F]

I'm a gamer. You're.

[J]

I'm a gamer.

[D]

But you're a gamer too, Jay.

[J]

I'm willing to forgive them on their pace of gaming GPU upgrades.

[D]

I know this is not the number that everybody's focused on, but since this is Nvidia's. Nvidia's DNA, and you're our gamer, what do you make of the gaming GPU issue? Lee? They're leaving it to someone else now. What is it?

[I]

I don't know that it's an issue. I mean, you know, again, I'm just, you know, Nvidia is changing the reporting structure. I get that. So it's just not highlighting gaming. But gaming is not the growth engine.

[D]

It's tiny for this company.

[I]

It's, it's tiny. But like again, maybe you just consider the GPU that goes into a gaming console or your home rigged gaming PC. It's still at the edge what people say is at the edge, you're running computation at a device local to you. And you know the story that Jensen Wong has been telling on the road, right? Think CES or gcc, whatever, whatever it is, whatever event, it's that the role of the GPU in the video games industry is now as much about the development of that video game, its ability to generate pixels right, rather than animate. That's the story for Nvidia with gaming. The gaming industry is in video GPUs and data centers still as much as it is about the gpu. And by the way, I got like this Frankenstein's monster Acer. It's got, you know, an amazing Nvidia GPU in it and an intel processor and core. But like, so what, man? It's all about the data center.

[F]

It's.

[D]

It is all about the data centers. Hey, speaking of the data centers, I want to bring Paul Meeks back in here. Ian King and Dina Bass writing separately on the Live blog. Ian talking about hyperscalers still being the biggest providers of sales for that unit. But others AI clouds, industrial and enterprise grew quicker quarter over quarter. It's a trend that investors will want to see accelerate to remove the concern that it's too dependent on customers who have their own components and an incentive to move away from Nvidia. Dina Bass weighing in and saying that at the same time, the greater growth in non hyperscaler customers does point to the idea that indeed folks like Google and Amazon, while they remain huge Nvidia buyers are, are trying hard to expand the workloads they can put on their own chips and get more of their cloud customers to choose them over Nvidia gpu. You cover the Neo clouds, you understand what the hyperscalers want. What do you make of that sort of revenue diversity question? And the companies that have their own ability to do this, pushing their customers into their own products.

[F]

So I agree with the push and pull here. Obviously it's important that over time that enterprises go direct, not through hyperscalers, to broaden this market. I think it's a very positive trend. Nvidia, of course, will be a beneficiary. On the other hand, particularly this announcement the other day with Google. Yes, Google and Amazon in particular are working very hard on their homegrown chips. And it looks to me like they don't want to just lower their own costs by using their own chips internally. But in Google's case, they're going to sell these chips on the merchant market. And so over time it could be a threat. Why? Because Google has very deep pockets, almost endless resources to compete. When you have other companies that say they can compete over time with Nvidia, be careful because these guys have the best balance sheet there ever was. But Google probably can make a go of it, and I imagine Amazon will be on their heels.

[E]

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