AI Mania Drives Nvidia’s Immense Revenue

0:00In light of all the AI bubble talk that we have been seeing everywhere, NVIDIA just came out with their quarterly earnings and it shocked a lot of people. They set a record and a lot of people are saying that this is quieting the AI bubble talk. So is it true? How much were they able to generate? And is the AI bubble officially canceled? I wouldn't be so sure of that conclusion, but I do think this is has some really shocking pieces of information. And NVIDIA continues to just shock people and keeps the market rally going forever, partly because they keep giving money to AI companies who turn around and give it back to them.

0:36every single AI company, major AI company I feel like I see these days has raised around. NVIDIA has invested into them. So the gravy train does keep rolling. Anyways, we're going to get into all of that on the podcast today. But before we do, make sure to go check out AIbox.ai. If you want to try any of the top AI models I talk about on the show for$20 a month, I've heard a lot of people complain that I talk about too many AI companies. So if you want to try all of them, and it's, you know, expensive to sign up for subscriptions on all of them. If you want to try them all for$20 a month, go check out my own startup, which is AIbox.ai.

1:10There's a link in the description. All of the top AI text models, image models, audio models, 11 labs for audio, Google, NVIDIA, Gemini, Claude, Anthropic, OpenAI, like everything's on there. All right, let's get into what's happening with NVIDIA. So the founder and CEO, Jensen Wang, he seems very bullish. People are talking in these, you know, like, oh my gosh, the AI bubble is about to pop and the stock market is going to crash. Jensen Huang does not feel like it's about to crash. And maybe he's talking his own book, but he does have some numbers to back it up. NVIDIA reported$57 billion in third quarter revenue.

1:47That's 60 % higher compared to the same quarter last year. 62 % higher compared to last year when everyone said it was a bubble that was about to pop and, you know, it's getting out of control. The company's net income on a GAAP basis was$32 billion. And again, that is 65 % higher year over year. So both the revenue and their profits beat results, you know, and Wall Street's expectations, basically. And I think this really shows a company that is growing at an insane rate. I think a big part of this is because of its data center business. Revenue generated by NVIDIA's data center business was a record$51 billion.

2:26That's up 25 % from the previous quarter and also up 66 % from a year ago. So$51 billion is from their data center business. $5.8 billion came from NVIDIA's gaming business. And then$4.2 billion was followed by sales in professional visualization and automotive. So they have a handful of different places where they're getting money from, but like professional visualization, automotive, those kind of, you know, sales in those areas, that's only$4 billion, only like$5 billion in the gaming, and$51 billion from the data center business. NVIDIA's CFO is Colette Kress, and she put out a statement to shareholders saying that its data center business had been fueled by, number one, an acceleration of computing, number two, all of the new powerful AI models, and number three, agentic applications, which are coming on.

3:21So I mean, essentially, it's the entire industry and the tailwind of the entire industry pushing NVIDIA forward. During their Q3 call, Kress also said that in the last quarter, the company had announced an AI factory and a bunch of infrastructure projects, which amounted to, I'd like total if you bring them all together, 5 million GPUs. She said, quote, this demand spans every market, CSP, sovereigns, modern builders, enterprises and supercomputing centers and includes multiple landmark build outs. So then we get to Blackwell Ultra, which is a GPU that they kind of unveiled this whole thing back in March.

3:58And it is available in a bunch of different that you can configure it a couple different ways, essentially. And it has been really, really popular. It's now the leader within the company, I think it's one of their like most popular products. Previous versions of the Blackwell architecture were also very popular back then, but they're also very, they have strong demand today, according to NVIDIA. So it doesn't seem like even some of their older chips are slowing down. And maybe this has to do with the fact that it's almost impossible to get as many Blackwell Ultra GPUs as you want. And so people will just buy the older one.

4:32The CEO Jensen said that the sales of Blackwell GPU chips are quote, off the charts. So obviously, they're making a lot of money. He said, Blackwell sales are off the charts and cloud GPUs are sold out. Compute demand keeps accelerating and compounding across training and inference, each growing exponentially. We've entered the virtuous cycle of AI and AI ecosystem is scaling fast with more new foundational model makers, more AI startups across more industries, and in more countries, AI is going everywhere, doing everything at once. Okay, so that was a quote from Jensen Huang. Obviously, he's very excited about everything going on in AI because it's driven his company to be one of the most, if not, I mean, it kind of depends on the day, but it is the most valuable company in the world, privately held company, unless their stock dips a little bit.

5:22So it does bounce around and not privately held company, sorry, publicly traded company. So Nvidia is obviously doing incredible numbers. Jensen Huang is incredibly bullish on it. And I mean, for all the people that want to call a bubble, they just keep making more money in revenue every single quarter. Kress, who is their CFO, did put out a bit of a damper on everything, which a lot of people expected, but that is on the performance of their H20. Essentially, they created kind of this data center GPU, and it was designed for AI, but also high performance computing. It was designed to, you know, hit all of America's regulatory export controls.

5:59Donald Trump, I believe, had to come in and, you know, authorize the sale of this thing to China. and they had a bit of a disappointment. They were at 50 million and this is because they were essentially not able to sell it to China. China banned it and so they had an issue there. This is a quote from Kress on the topic. Quote, Sizable purchase orders never materialized in the quarter due to a geopolitical issue and the increasingly competitive market in China. While we were disappointed in the current state that prevents us from shipping more competitive data center compute products to China, We are committed to continued engagement with the U.S.

6:37and China governments and will continue to advocate for America's ability to compete around the world. So, like, it's kind of interesting how they how they phrase that. If I'm being honest, they're like due to geopolitical and also increasingly competitive markets in China, like China's coming up with some great chips. And so that's kind of what was tricky for us. But like, no, China just straight up basically banned NVIDIA chips from coming in. And so I think they're trying to not be, you know, point the finger and get all mad because they're trying to be diplomatic and hope that at some point China may allow NVIDIA's chips to be sold into their country again.

7:10I think what's really important is that NVIDIA right now is forecasting more growth. They have projected revenue of$65 billion in the fourth quarter. So that's, I mean, that's what's going on right now. And I think this is going to help push the share price up more in the future. Sure, I think after trading, when they did this, it was up already 4 % in the after hours. So like the stock price reacted to this immediately by continuing to increase. A lot of people say that this is a bubble, but it does seem like more and more money is being made. And Jensen actually directly commented on this. He said, quote, there's been a lot of talk about an AI bubble from our vantage point.

7:51We see something very different. And on the one hand, I think all of us want to say this is an AI bubble. Way too much money is being spent here. There's no way that the productivity gains are going to be realized. But on the other hand, the money is being spent. The data center is being built. NVIDIA is selling the chips. And whether or not this continues forever at the current moment, it seems like these AI companies cannot get enough chips and compute, and the spending will continue. I think especially if the economy improves and perhaps interest rates come down, I don't think we're going to see a slowdown in the spending.

8:28Of course, this is not financial advice from me, and I'm not just trying to take Jensen's hype, but from where I see it as these chips and more chips and more AI is going to get put into humanoid robots and more robotics devices, I think we're going to just keep seeing a pretty incredible growth rate in this industry. even if there's a lull somewhere between AI and robotics being fully realized, I don't think this is going anywhere. And I think we're going to see some explosive growth over the next five years. So buckle up. It's going to get crazy in my opinion. Anyways, thanks so much for tuning into the podcast today.

9:01Really appreciate all of you that listen. If you could leave a rating review wherever you get your podcast, it would help the show out tremendously. I would really appreciate it. And make sure to go check out AIbox.ai if you want to get all of the best AI models in the world in one place for$20 a month. I'll leave a link in the description, AIbox.ai. Thanks so much and catch you next time.