Quick note: The Black Friday sale for the Meetkevin programs is live at Meetkevin.com In this video, we are going to preview: Nidia earnings. This is a big deal if you are exposed at all to the chip sector artificial intelligence Investments or you're curious about what to look for for this upcoming earnings report. Keep in mind after the insanity of what ensued over this weekend which left a lot of people really sad with the exception of Microsoft CEO really happy. Open A A I move to Microsoft Well, at least a substantial portion of the Open AI employees who are threatening to leave in addition to those who have already left will probably mean more investments from Microsoft into artificial intelligence related spending.

Now keep in mind Microsoft does have its own artificial intelligence chips, but these are built on a 5 nanometer technology. They're not as powerful as the Nvidia H100s or the combination new Grace Hopper 200. These are great products and the reality is, most businesses right now are trying to get their hands on any kind of chips that they can get their hands on. Here's the example of what Microsoft is building out.

It is the Maya Ma A A anyway 100 AI accelerator. There's also a CPU version that sits up to the top of this racket that they're manufactur or well designing as well. Microsoft is using Taiwan Semite to manufacture. but why I Bring up Open AI At the beginning of this Nvidia discussion is I Actually believe that in order to now Panic transition I Really want you to think about that.

your Panic transition is transitioning is what you're doing from an open Aai relationship. Which you're going to maintain that relationship at Micros at um, open AI from Microsoft. But you're going to go from maintaining the GPT 3 and A2 4.0 relationship to creating your own, uh, your own version. uh, potentially even stronger than what you have with 3.5 4.0 Now, why again, am I bringing this up in an Nvidia segment? Well, because even though Microsoft is dabbling in making their own chips on a basically dated chip wafer platform or the semiconductor spacing uh platform of the 5 nanometer chips which is probably quite frankly good enough for the data infrastructure anyway, but it's still a data chip.

You know, getting down to 2 nanometers now the a lot of advanced chips are being manufactured on 3 nanometers. Point is though, Microsoft is going to in my opinion, be in a situation where they say uh-oh in order for us to catch up basically go from zero to open AI level. We're going to have to throw hundreds of millions of dollars if not billions of dollars into AI now and we don't have time to wait to get enough of our own chips. Let's buy what we can get our hands on now and that is going going to be a combination of Intel chips AMD chips Nvidia chips.

They're going to grab whatever they can. In my opinion, this is going to be very much like a Tesla bu uh buys H100s Tesla buying 10,000 H100s Uh, Thanks to Elon Musk's desire to accelerate FSD as quickly as possible, why not just make more Dojo supercomputers Because you don't have the time, you don't have the quality yet, you don't have the Perfection yet and you don't want to sandbag your ability to compete while you try to perfect the chip when you could just spend the money, buy one off the shelf so to speak as the supply becomes available and get to your real Mission Which for Tesla's accelerating FSD which for Microsoft is now creating that open AI competitor. Uh, Let's be clear: I made a video on this earlier Microsoft has now essentially de facto control of what's left of Open Ai and the brain of Open AI that created Open AI in the first place. So they kind of have everything which topic for a different video on whether or not we should be fearful about that and artificial G general intelligence and otherwise I already made a video on that you could just type in into YouTube Meet Kevin Open AI Microsoft and you'll see it.

It's very detailed, so watch that video. But let's now focus on Nvidia Nvidia's earnings are tomorrow Expected Implied one-day volatility is 7.11% It's about 2% more than the average of volatility I Think if you get anything outside of guidance here, you're probably going to see more like a 10% drop or 10% boon. That's my guess. Now it could be in either directions.

We have no idea. But if I'm looking at this thinking okay, if if implied volatility is only 7% on an AI play right now I'm probably looking at straddles not personalized Financial Advice but I want you to know where they sit with Wall Street expectations and where we have some new expectations coming in. Uh, for NVIDIA So we're going to go through all of these. We're also going to go through some price targets.

now. the first thing that I'd like to do is look at their last press release because in their their last press release, you're actually going to see what their prior estimates were and their prior estimates uh for this quarter are going to align with what Wall Street is pricing in right now and you'll kind of get to see how excited people are. Okay, here are the estimates: Wall Street Right now is pricing in $16.1 billion of Revenue They gave guidance of $16 billion. so you're leaning towards the upside on that and on margin.

Wall Street is also pricing in the upside of 72.4 on margin versus the guide that they gave. So you're already leaning into the upside on estimates I Think the biggest risks outside of course, missing these estimates for NVIDIA are going to be what they tell us about Supply In order for NVIDIA to keep printing, we need more and more Supply And in the last earnings call, Nvidia told us that they expect more Supply to come on essentially every quarter over the next year. But if there are any snags in Supply, you could have a hit to this stock price pretty quickly. It's priced well right now, and it's priced optimistically based on what we're seeing.

That doesn't mean they can't beat an optimistic forecast. It's just harder to beat something that's optimistic. It's easy to beat something that's bearish. Harder to beat something that's optimistic.

I'm not personally so worried about the China debacle and sanctions. Uh, we're still waiting on more guidance on exactly what's going to happen with that chip disaster. Uh, for selling chips to China which currently make up 20 to 25% of Nvidia's Revenue Nvidia's already told us they don't actually expect any kind of sanctions impact to be material. given that their revenue is just absolutely exploding I mean over 10 billion doar in a quarter from data center.

It's absolutely insane and the pie is growing. Even though there's more competition coming from. AMD Intel Microsoft Google All these companies making their own chips, the pie is growing substantially. We'll go through some estimates here in a moment, but I Want to be clear personally: Gaming lapping a hole? That's good news.

China Not so worried about Supply That would be the big red flag if we have a supply lag because that's just going to give the competitors more time to catch up. Keep in mind that Nvidia is also shifting from an 18 to 24mth refresh cycle down to a 12-month refresh cycle which gives them a little bit of moat against their competitors. It's kind of like having an a new iPhone every year and you're trying to like stay ahead of the competition whereas the competition is basically trying to now shoot ahead of you and that's a little harder to do. But look at what Goldman Sachs has to say Goldman Sachs right now has a $65 price Target on Nvidia They maintain this as a about approximately a 24% upside.

on uh, on the stock. They think you're going to see a lot of wallet shift. Uh, this is just a fancy way of saying. look: Google spends 20 billion on plant property and Equipment spend in a quarter.

Okay, in a quarter. That's almost a billion dollars a day going to plant property. and Equipment how crazy is that just writing those checks every day? I I don't Envy their accounting department anyway. Uh, this is massive money and Goldman's suggesting that you're going to see a lot of those Investments move away from regular data center general purpose compute storage Cloud Compute right? and it's going to move over to artificial intelligence.

Uh, Google Already reporting that 80% of their users uh, who run ads are already using some form of artificial intelligence. The problem with this is Uh you. It's not just a matter of buying the chips, it's also a matter of running these machines efficiently. So for example, if you have a server racks like this and then at the top, you have let's say an AMD CPU or maybe you use the Gh2 200 CPU uh and then on top or underneath that you have a bunch of the uh, H100 Gpus or the A1 100s or whatever you need to connect these server racks and connect within the server racks with the highest quality potential data infrastructure.

which is basically a fancy way of saying you need the Good crap. The Good: Ethernet cables. Okay, and guess who makes the really good server ethernet cables? It's a product called Infiniband. Infiniband is basically your data center Ethernet uh grade? uh Ethernet or data center quality, high-speed artificial Intelligence Robust.

Uh, you know, cabling? Uh, Infin band is uh, it's it's again very very similar uh to ethernet. I Want you to see what it looks like because I think I think it's kind of cool. This is uh, what it uh, looks like it. It kind of looks like an Ethernet that's rigged with a different plug.

Quite frankly, this is just a quick little Google search here of what infinite band looks like. Uh, and and you I mean look at this 200 G's man, 200 gigabits of data. Let's freaking go. Uh, that's awesome.

But what do you need to know about this? Nvidia owns it. Yeah, Nvidia owns infin Ban. These these people are absolutely brilliant. You have to remember that about Nvidia and look, this stock could crash horribly if they slightly Miss So I'm not here to like put the you know knee pads on for NVIDIA I'm just saying okay, they've got the cabling infrastructure.

They have the software moat called Cuda not Cuba Cuda that's their software moat. You want to make a Leading Edge uh artificial intelligence platform. You're probably building it out with Cuda software and they've got both the CPUs and the Gpus. Now with their Grace Hoofer 200.

This this is a really big deal. The problem is wall Street's already pricing in hyped up expectations. so yes, you could get screwed on this. Am I going to play these earnings absolutely not.

Am I long Nvidia Hell freaking yeah. do I think Nvidia and paler and Tesla and AMD and Intel are your best. AI plays hell yeah do I think Microsoft Probably has. you know good things going for it too.

Yes. Like what we talked about though this morning. We touched on this this morning in the market open live stream which if you're not familiar yet totally for free, you could join me in the market. Open live streams every single day the market is open.

Just type in YouTube Meet Kevin Live, subscribe to that channel and then you'll see the live streams. You can join those every day. No cost happens right before the course member live stream. uh and uh.

I'm also going to be live soon for the Meet Kevin Politics Channel if you want to watch that or the podcast Channel they're all linked down below. But anyway, regarding Microsoft it's it's worth noting: I Personally think there are some downsides to Microsoft ahead. Don't get me wrong. I Absolutely love Microsoft But here's what I look at when I look at Microsoft I look at risks of deflation leading to lower rates leading to a desire for growth at all costs.

And as you leave an interest rate sensitive environment, you move away from Microsoft as a safety play which is very robust safety play and it's performed very well. and I think your growth is potentially going to be far super Superior in these plays that I just mentioned. now if inflation stays high, you're way better off at Microsoft Okay, that's that's just my thesis. Me personally though, I believe that inflation will plummet and that's why I like Nvidia Tesla Palante or otherwise.

Okay, great. So uh, what else do we need to know about? Nvidia Well, let's keep going here with the Goldman Sachs analysis. So we've got the 610 price Target from Goldman Sachs Forward-looking commentary on infrastructure continues to be supportive of their trajectory. Uh, gaming, you're meeting? you're you're lapping the bottom.

Uh, expecting uh, investors to focus on new color going forward on Supply chains. We already know that here's their forecast. They think that if you're just bearish and you take out generative AI Nvidia still does data center revenue of about 10 billion a quarter which is basically the level where we are now about 40 billion a year. Personally, my target is actually 10 uh, or sorry, 100 billion per year which is roughly 2 and 1 12x the current estimate.

And it's a about let's see 100 divided by 65 which is Goldman's bull Target I'm about 50% higher than their bull Target So I guess if you wanted to translate that into a price for my price Target I'm probably sitting at around 900 bucks for Inidia as a longer term price Target it wouldn't be my 12-month although stock market Euphoria in the short term could price in an Nvidia 900. if it did in the short term I'd probably sell it because it's definitely a longer price target. for me. Getting to $25 billion per quarter at Nvidia probably going to be more like a 3 to 4year play.

you've you? You've really got to like double and then another half. So I think that's going to take a little bit of time I would give it about a 30% growth rate. Uh, probably actually a little bit more than that to actually get where I need to get. So if I go 30% growth rate for 3 years, I'm about 22 billion.

Yeah, I'm going to have to be about probably 35% to get To my uh Target of 25. Yeah yeah, if you got to grow at about 35% per year to get to my 25 bill, but uh, per quarter. but I think that's realistic so we'll see anyway. that's my belief and I do think there's a chance the market will price in that Euphoria I still think a lot of bears on Nvidia think that AI is a flash in the pan which which Don't get me wrong, like consumer AI to some extent is.

but I don't care about consumer AI I care about Enterprise AI because that's where the savings are going to be and that's where the capex Investments are going to go. So this is my take. I will be live By the way tomorrow afternoon 100 p.m. mark your calendar 1 p.m.

November 21st Market Live stream. It's going to be a market closing live stream meet Kevin Live Okay, that's where it's going to be for the Nvidia earnings. we'll cover it together. ready.

Buckle up, Let's go. And of course, my usual disclaimer: Even though I'm a licensed financial adviser, real estate broker, and becoming a stock broker, this video is neither personalized Financial advice nor real estate advice for you. It is not tax, legal, or otherwise personalized advice tailored to you. This video provides generalized perspective information and commentary.

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However, I have no relationship to any issuers other than House Act nor am I presently acting as a market maker. Boom! Well, there you have it folks! Thank you so much for watching I'll see you at that live stream. Remember to go to Meetkevin.com to check out my Black Friday sales on the amazing programs I'm building your wealth Goodbye.