Paradis

Al & Semis Equity Research | Macro Analysis | No investment advice

[Paradis @ParadsLabs]

$MRVL AI ASIC Pipeline

Marvell's pipeline has gotten bigger & better contracted over recent months.

[Paradis @ParadsLabs]

Holy.... $NVDA is up 8.1%

When I say that I'm confident in my macro analysis, this is what I mean:

"I actually think broader institutional sentiment improved as of yesterday too with significant short covering which drove the share price up."

[Paradis @ParadisLabs]

Thoughts on $NVDA later today:

Prediction:
- I don't see a revenue beat being a catalyst for NVDA.
- Everyone knows that revenue will be ~10-15% ahead of estimates thanks to GB300 (and GB200) volume expansion.
- Moreover, looking historically, recent beat & raise quarters have not been a positive re-rating catalyst for NVDA's share price... perhaps the quarter's already been priced-in due to a +12% move in the last month.
- On the flip side, maybe this time will be different thanks to the stock currently trading at extremely low valuations... I actually think broader institutional sentiment improved as of yesterday too with significant short covering which drove the share price up. Time will tell.

For next quarter:
- No surprises - guidance will of course increase thanks to additional ramps in rack volumes, plus first Vera Rubin orders filtering through.
- I expect gross margins to remain stable thanks to ASP increases offsetting continued memory price surges from $SKHY, $MU, and Samsung.

In terms of "qualitative" catalysts, there are a few areas Jensen and co. need to touch on though (common threads across the street):

1. HBM:
Per JPM/MS/GS (and wider industry comments), NVDA have made changes to HBM content for both Rubin and Rubin Ultra. This is of course due to memory supply being extremely scarce currently - but what does this mean for NVDA exactly? On the flip side...what does this mean for the memory players? Can NVDA keep passing on price increases to customers if memory prices continue soaring? I hope this is all expanded on on the call in some detail.

2. Competition such as $AMD, $CBRS, OpenAI Jalapeno:
Around ~40-50% of NVDA's revenue comes from four hyperscalers that are all deploying their own stuff - $GOOGL TPU, $AMZN Trainium, $META MTIA, $MSFT Maia. Plus OpenAI / $AVGO revealing benchmark results for their in-house Jalapeno chip which shows 1.5-1.9x more throughput per kilowatt + 1.7-3.6x lower end-to-end latency against NVDA's GB200 and GB300 rack systems. All of these factors have been working against NVDA recently, even just from a sentiment perspective. Jensen's updated views will be appreciated!

3. Funding partnerships:
A few weeks ago, NVDA announced a partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR "to establish AI compute infrastructure financing platforms to mobilize over $500 billion of third-party capital." Again, what does this mean for NVDA? They quite clearly have sight over demand longer-term, but "circular financing" is still something that still comes up a lot these days (despite Jensen outlining why it's not in his X article).

Big day ahead, expecting some volatility thanks to last minute positioning adjustments.

[Paradis @ParadsLabs]

$NVDA generating $96.2B of highly profitable revenue, while also growing 106% annually is genuinely insane at their scale. People need to let that sink in.

Combine that with expectations to "grow revenue by approximately 70% in fiscal 2028" under current supply constraints...

[Paradis @ParadsLabs]

Getting goosebumps by these quotes from $NVDA CFO Colette Kress:

"We recognize the scale of this support ($500B third-party capital), and we know some will call this circular financing. We see it differently."

[Paradis @ParadsLabs]

This $NVDA call is insane outlook for upstream supply chain companies, from neoclouds to memory.

Nvidia's growth isn't easing up anytime soon...

[Paradis @ParadisLabs]

NVIDIA INSANE GROWTH!!

Q2 EARNINGS:
- Revenue: $96.2B (Est. $92.2B); +106% YoY
- Adj. EPS: $2.22 (Est. $2.10); +120% YoY
- Data Center: $89.0B (Est. $85.8B); +117% YoY
- Adj Gross Margin: 75.0% (Est. 75%); +250 bps YoY

Q3 Guide:
- Revenue: $108.0B +/- 2% (Est. $104.2B)
- Adj Gross Margin: 74.0% +/- 50 bps
- Adj OpEx: ~$9.0B

Segment Revenue:
- Data Center: $89.0B; +117% YoY
- Edge Computing: $7.2B; +27% YoY

Comments:
- “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.”
- “The AI infrastructure buildout is at full steam. Vera Rubin, now in full production, was built to power exactly this moment.”

$NVDA

[Paradis @ParadsLabs]

This is why $NVDA is down:

*Commitments increased from $119B last quarter to $279B primarily due to memory procurement

Q2 memory prices 🚀

[Paradis @ParadsLabs]

NVIDIA INSANE GROWTH!!

[Paradis @ParadisLabs]

NVIDIA INSANE GROWTH!!

Q2 EARNINGS:
- Revenue: $96.2B (Est. $92.2B); +106% YoY
- Adj. EPS: $2.22 (Est. $2.10); +120% YoY
- Data Center: $89.0B (Est. $85.8B); +117% YoY
- Adj Gross Margin: 75.0% (Est. 75%); +250 bps YoY

Q3 Guide:
- Revenue: $108.0B +/- 2% (Est. $104.2B)
- Adj Gross Margin: 74.0% +/- 50 bps
- Adj OpEx: ~$9.0B

Segment Revenue:
- Data Center: $89.0B; +117% YoY
- Edge Computing: $7.2B; +27% YoY

Comments:
- “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.”
- “The AI infrastructure buildout is at full steam. Vera Rubin, now in full production, was built to power exactly this moment.”

$NVDA

[Paradis @ParadsLabs]

Genuinely seems like the broader semis ecosystem is waiting for $NVDA earnings rn.

I think we're all (im)patiently waiting too lol.

For additional market context though:
- Start of Aug was risk-on after July's deleveraging (thanks SALP / Citadel).

[Paradis @ParadisLabs]

Thoughts on $NVDA later today:

Prediction:
- I don't see a revenue beat being a catalyst for NVDA.
- Everyone knows that revenue will be ~10-15% ahead of estimates thanks to GB300 (and GB200) volume expansion.
- Moreover, looking historically, recent beat & raise quarters have not been a positive re-rating catalyst for NVDA's share price... perhaps the quarter's already been priced-in due to a +12% move in the last month.
- On the flip side, maybe this time will be different thanks to the stock currently trading at extremely low valuations... I actually think broader institutional sentiment improved as of yesterday too with significant short covering which drove the share price up. Time will tell.

For next quarter:
- No surprises - guidance will of course increase thanks to additional ramps in rack volumes, plus first Vera Rubin orders filtering through.
- I expect gross margins to remain stable thanks to ASP increases offsetting continued memory price surges from $SKHY, $MU, and Samsung.

In terms of "qualitative" catalysts, there are a few areas Jensen and co. need to touch on though (common threads across the street):

1. HBM:
Per JPM/MS/GS (and wider industry comments), NVDA have made changes to HBM content for both Rubin and Rubin Ultra. This is of course due to memory supply being extremely scarce currently - but what does this mean for NVDA exactly? On the flip side...what does this mean for the memory players? Can NVDA keep passing on price increases to customers if memory prices continue soaring? I hope this is all expanded on on the call in some detail.

2. Competition such as $AMD, $CBRS, OpenAI Jalapeno:
Around ~40-50% of NVDA's revenue comes from four hyperscalers that are all deploying their own stuff - $GOOGL TPU, $AMZN Trainium, $META MTIA, $MSFT Maia. Plus OpenAI / $AVGO revealing benchmark results for their in-house Jalapeno chip which shows 1.5-1.9x more throughput per kilowatt + 1.7-3.6x lower end-to-end latency against NVDA's GB200 and GB300 rack systems. All of these factors have been working against NVDA recently, even just from a sentiment perspective. Jensen's updated views will be appreciated!

3. Funding partnerships:
A few weeks ago, NVDA announced a partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR "to establish AI compute infrastructure financing platforms to mobilize over $500 billion of third-party capital." Again, what does this mean for NVDA? They quite clearly have sight over demand longer-term, but "circular financing" is still something that still comes up a lot these days (despite Jensen outlining why it's not in his X article).

Big day ahead, expecting some volatility thanks to last minute positioning adjustments.

[Paradis @ParadsLabs]

Thoughts on $NVDA later today:

Prediction:
- I don't see a revenue beat being a catalyst for NVDA.
- Everyone knows that revenue will be ~10-15% ahead of estimates thanks to GB300 (and GB200) volume expansion.
- Moreover, looking historically

[Paradis @ParadsLabs]

Just some of my notes from $SMTC Q2 earnings:

TLDR: Like $AAOI, it's all about Semtech expanding capacity - CEO said the capacity they've secured "may not be enough" for FY28...

1. Q2 upside is from 1.6T qualifying early

-/driver.
- 800G TIA share has gone

[Paradis @ParadsLabs]

Humanoid BOM model:
Current humanoid BOM = ~$68k based on channel checks across 3 humanoid OEMs (UK and US).
- Actuation = 33.8% of current BOM
- Dextrous hands = 30.3%
- Structure = 7.6%
- Sensing = 7.5%
- Electrical = 6.0%
- Vision = 4.7%
- Compute = 4.6%
- Power = 4.6%

[Paradis @ParadsLabs]

London in the sun is the best city in the world 🌞

[Paradis @ParadsLabs]

Honestly - there's no shortcuts to equity research.

You can easily paste a company's 10Q into Claude and ask it to pull out the most important points.

Actually, you don't even need to do that lol. Why not just plainly ask Claude if a stock is good/bad to buy?

[Paradis @ParadsLabs]

Oil matters more than $NVDA earnings imo.

- Rising oil prices = a reliable headwind to AI stocks
- Falling oil prices = a less reliable tailwind to AI stocks

In that sense, I think that oil prices just need to stabilize and stop rising so fast lol (brent up >10% in last couple

[Paradis @ParadsLabs]

Wow, great news for $NBIS:

$NVDA's Groq 3 LPX inference rack has now entered full production, with $NBIS becoming the first neocloud to adopt.

For Nebius' Vera Rubin NVL72 Token Factory.

I think Nvidia / Jensen must really like Nebius to use them as the launch venue...

[Paradis @ParadsLabs]

I really like $UBER at ~$160B market cap.

Clearly, the lower valuation today is due to concerns with autonomous vehicles, mainly coming from the $TSLA and Waymo expansions in the US.

However, I believe that any AV risks are cordoned off to the top 30-35 markets in the US

[Paradis @ParadsLabs]

Dario wearing a bath robe? Whaaat???

[Paradis @ParadsLabs]

This doesn’t scream confidence in a short position.

[Dr. Tomislav Marinovic @DrTomsLens]

Michael Burry with a long $NVDA hedge.

Looks like Burry is short Burry now.

[Paradis @ParadsLabs]

Put on CNBC for $NVDA earnings. Wow it’s hard to watch these idiots.

[Paradis @ParadsLabs]

This is kind of crazy.

[USA TODAY @USATODAY]

The next Atlantic storm to form will be named Dolly, a name picked decades ago. The name could be used within days of Dolly Parton's death. https://t.co/DXFDcsptuD