I was watching Fast last night and Julie Biel called NVDA earnings an open book test. She's right of course, everybody already has a pretty good idea where earnings will fall. Huang has not done anything to increase capacity. He will tell you all day about AI being the largest buildout ever, but he won't put his money where his mouth is.He will continue to dole out compute at his pace, on his own terms when he sees fit. It will be a painful road for the hyperscale's and many more, who eventually need to see gains in their bottom line. Will it hinder AI development. Yes.
Let's first look at what appears to be the beginning of an existential crisis in software. All these companies you see getting slaughtered now are all customers of NVDA. Live by the disruption die by the disruption. How many NVDA customers will NVDA put out of business? Is NVDA safe from disruption. No, they are out in front of the game so far but that could change quickly, reversing NVDA's fortune on a dime. Does NVDA deserve to be garnering a higher multiple. I don't think so the game is changing into a binary one, success or failure. The market has to throw its old PE ratings out the window. NVDA is the one that started this whole Donner Party existentialist unsurety. They aren't immune to it either. Its the Donner Party. (JMHO)
