Transcript:

CAROLINE WOODSJoining me now, Dan Ives, Managing Director and Senior Equity Research Analyst at Wedbush Securities. Dan, always a pleasure. Thanks so much for joining us.

DAN IVESGreat to be here. Thank you.

CAROLINE WOODSAll right Dan break it down for us. We’ve seen Nvidia’s numbers. We’ve seen the stock reaction. What is it that we need to know about what Nvidia had to say. Give us the highlights.

DAN IVESI mean what? I think those are as good numbers as you’re going to get relative to half $1 trillion that they have in terms of Ruben and Blackwell demand guidance that they raise. You know, I call it, you know, 2 billion above whisper numbers. And this to me, just speaks to what’s going to be the early stage. There was a revolution playing out.

DAN IVESAnd I think that this is another validation for what we saw.

CAROLINE WOODSBut if this is as good as it’s going to get in terms of the numbers, and it wasn’t enough to put the bears back into hibernation, what’s it going to take? I guess what fuels the next chapter of this AI rally?

DAN IVESLook, I mean, it’s been a wolf. I don’t view it as this is as good as it gets. I mean, it’s accelerated quarter over quarter. And I think as you look into the next 12 to 18 months, you’re still early days and tell me when this is all going to play out. But as it plays out, I think more and more investors will understand the numbers that you’re seeing today.

DAN IVESI think they’re underestimated by 20, 30% over the next year. And that’s why you want to be here to achieve that.

CAROLINE WOODSSo why do you think that the 5% gain we saw in Nvidia, which really pushed the entire market higher, fizzled out today? What went on there?

DAN IVESI mean, whether it’s been driven in terms about very similar patterns here, if it’s sort of such a strong number and the stock sold off. What does that mean? Is it a risk stop for some new ideas. These are buying opportunities for women’s soccer, certain media. But for hyperscale and for Big Macs. But it’s my view, like you’re in year three of any one year build out.

DAN IVESThat continues to be the case.

CAROLINE WOODSAt this point, we’ve heard from all of the Mag seven in terms of Q3 earnings. What’s the biggest takeaway that you have from from the Mag seven earnings?

DAN IVESHey, I was not a bubble. I mean, it’s validation from hyperscalers and Palantir from Nvidia. I’m names. I mean, you know you look at bears will continue to argue it I know argued next year. But the reality is this is not a bubble. It’s the fourth industrial revolution that’s being built out.

CAROLINE WOODSIf this is a bubble and I know you don’t think it is, but if it was, what would bursting look like? What companies would still be intact, which would implode?

DAN IVESI mean, if this is a bubble when I’m in the Asia, I’d see Demand’s off. I went to 12 to 1 demand for video chips. I wouldn’t see it across other chips. I wouldn’t see across hyperscalers, across Palantir. I mean, to me, that’s my whole point. Like anthropic has an income bubble job. I think the point is like, how can this be a bubble relative to where we are?

DAN IVESWe’re talking about trillions of dollars. It’s going to be it’ll be coming years. Still, early news.

CAROLINE WOODSOkay, so not a bubble. We haven’t seen a drastic difference though, in terms of how the Mag seven specifically is performing this year. If you take a look, Meta and Amazon are essentially flat on the air. Alphabet’s up what, some 50%. Nvidia is up 35%. So I’m curious, given all of that, how is your tech and AI playbook changing as you think about next year?

DAN IVESI mean, to me, it’s more you play the second, third or fourth derivatives on software, on cybersecurity, on infrastructure, and that there’s are good examples actually. In terms on the power side, I mean, to me, that continues to be the play the second, third and fourth quarter, along with the hyperscalers and in the least.

CAROLINE WOODSAlong with the hyperscalers. So you think that there’s still more room to run for some of those big names?

DAN IVESWe’re still early. I mean, you’re only just barely penetrated on us and applied lead around the world would be screen. What would you happen? For the first time in 30 years, US and had in China on company tax went by US big parts.

CAROLINE WOODSIs the weakness that we’re seeing in crypto a red flag for the tech trade? Are you looking in that at all as like a canary in the coal mine?

DAN IVESLook, I think there’s obviously the risk off across the board. You’re seeing that obviously we see it within the year in terms of crypto. But I don’t look I just think you’re seeing a risk off across the board. But I think it’s short lived I think tech stocks rally into year end despite what we’re seeing in the sell off.

CAROLINE WOODSOkay. So so the declines that we saw today Nvidia down 3% now down call it 10% this month might be the cheapest that you could get.

DAN IVESIt could have gone cheaper. Yet it’s possible I think this is going back to 5 trillion and eventually 6 trillion. That continues to be my view where this is all hard.

CAROLINE WOODSIt’s is there anything that you would avoid right now? I know we always talk and you’re bullish on so many of the big names, but is there anything that you look at right now in the AI and tech space that you would say, you know what, I’m good without that.

DAN IVESI mean, well, when you go further down, I quantum were bullish on it. Maybe some of those names could sell off more. I mean, you got to be careful maybe on like certain. So active names. But I mean to me if we miss the early days where this is all gone and that continues to be the theme in this AI revolution, that certainly will be I don’t I mean, you’ve known each other for years.

DAN IVESI don’t get to start up in like, stocks, sell off today. Market’s telling you something. I focus on like my time in Asia, my time spend around the world. I see the demand increasing for my thesis. And I think further about even what we’ve said during earnings is.

CAROLINE WOODSOkay so early days, but how much longer will Nvidia specifically have the lead that it has? Because we know that it’s dominant. We saw it in the numbers, but who is the biggest threat to Jensen Wong’s crown in the next, say, 18 months AMD Huawei?

DAN IVESYeah, that’s some of the threat. But the reality is and video continues to be it’s you know, it’s one chip in the world fueling the AI revolution that’s in video.

CAROLINE WOODSHow should investors measure the China risk at this point? Is it a solvable headwind at this point, or will it continuously be the Achilles heel of the AI story?

DAN IVESI mean, look, it’s I did the biggest chip on the poker table for Trump in terms of negotiations, US and China. But the reality is that I think a video ultimately can get react sets to the China market. And that’s not keeping to number. It’s a risk. But I think a manageable risk relative to a big the stock.

CAROLINE WOODSOkay. So just final thoughts as we think about these early days and third inning, as you say. Not sure if there’s extra innings in this ballgame. But just final advice to investors as they think about, you know, how far AI is already run in terms of the trade, but also some of the weakness that they’ve seen.

DAN IVESJust the beginning, the white knuckle is is just all part of it. I think this said, we’re going to look at these opportunities as it all plays out second, third, fourth derivative. More and more companies going toward a sovereign go toward it. And for the first time in 30 years, us with that or China when it comes to tech.

DAN IVESAnd that’s why I think Nvidia, Microsoft, Oracle, Palantir, Boomi, Core Holdings.

CAROLINE WOODSAll right. We’ll leave it there. Dan Ives, I always appreciate you joining us. Thank you.

DAN IVESThank you.