Nvidia Earnings Ease AI Bubble Fears; Traders Brace for Jobs Report

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0:41That's vanguard.com slash audio. All investing and subject to risk, Vanguard Marketing Corporation Distributor. Donald Trump is rewriting the Washington rulebook and reshaping the global economy. If you're trying to connect the dots behind the headlines, Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, Head of Government and Economics at Bloomberg. Every week I'll bring you a smart, focused conversation with reporters and experts from Washington, Wall Street and beyond. Listen to new episodes every Wednesday and follow Trumponomics wherever you listen.

1:20Bloomberg Audio Studios. Podcasts, radio, news. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Well, Karen, it was the earnings report investors were bracing for and NVIDIA delivered, pushing back on the idea that the AI industry is in a bubble. NVIDIA shares are up 5 % in early trading. Companies' results topped analyst estimates with revenue rising 62 % to$57 billion. And more importantly, the chip giant delivered a strong revenue forecast, expecting sales of about$65 billion in the January quarter. Matt Bryson covers NVIDIA for Wedbush Securities.

2:03I think they hit the buy-side expectations exactly. So what we've been hearing beforehand,$57 billion on the top line, and then guide for mid-60s is kind of what people wanted, and they delivered. That's Wedbush Securities analyst Matt Bryson. It has been quite a run for NVIDIA. sales will be up more than tenfold from where they were in the same period just three years ago. And the future looks even rosier, Nathan. NVIDIA CEO Jensen Wong says the Blackwell chip sales are off the charts. NVIDIA GPUs in the cloud are sold out. We got plenty of Blackwells to sell you. We have lots of Blackwells coming.

2:43We're making a lot of Blackwells and we have a bunch of Vera Rubins coming. And so business is very, very strong, but we've planned our supply chain incredibly well. And that was NVIDIA CEO Jensen Wong speaking to Bloomberg's Ed Ludlow. For the full conversation, head over to the Bloomberg podcast channel on YouTube. Well, investors are finally going to get details, Karen, on the September jobs report that was delayed because of the longest government shutdown in history. We get a preview from Bloomberg's Michael McKee. The data are back and we're starting with a sort of but not really important set, September payrolls.

3:20If the numbers had been released as scheduled on October 3rd, they would have played a big role in the Fed's October rate decision. Instead, two months late, they're essentially out of date. They will get scrutiny, however. It may be the last full set of jobs numbers we get before the next Fed meeting on December 10th. While today's release may not carry the same weight, at least it's something. Michael McKee, Bloomberg Radio. All right, Michael, Well, thank you. Well, the Bureau of Labor Statistics will not publish an October employment report. Instead, it will incorporate those payrolls figures into the November jobs report set to be published after the Federal Reserve's final meeting of the year in December.

3:59Well, the Federal Reserve has published its minutes from its latest policy meeting from October, Karen, and they show policymakers were divided. Many say it would likely be appropriate to keep interest rates steady for the rest of the year. Stuart Paul covers the Fed for Bloomberg News. So folks are basically looking out at the Bureau of Labor Statistics and saying what would have been a bad jobs report is not going to be available for the Fed to make its decision. So there's going to be one fewer data print encouraging a rate cut. Now we're seeing as early as October, many committee members were ready to take that December cut off the table.

4:37Now, Stuart Paul of Bloomberg News says the odds of that December rate cut stand at about 30 percent. Now, Nathan, let's go to the latest on the Jeffrey Epstein files. President Trump has signed the bill to compel the Justice Department to release its documents on the late disgraced financier. House Minority Leader Hakeem Jeffries is chalking it up as a victory. It's a big victory for the survivors, a big victory for transparency and a big victory for the American people. House Minority Leader Hakeem Jeffries spoke on Capitol Hill. The signing comes after the president spent months trying to block the measure before making a dramatic about face last week.

5:13The new law requires the Justice Department to release all its files from the Epstein investigation, but it's launched a new probe into his ties to prominent Democrats. Senate Majority Leader John Thune says that could complicate matters. I trust the judgment of the Justice Department to ensure that whatever files they release protect the victims clearly And I think there are other items, perhaps materials that were acquired through grand jury trials that perhaps they will have to make some decisions about. Senate Majority Leader John Thune, the law gives DOJ 30 days to release the files, including investigations, flight logs, travel records, immunity deals, internal communications, and records related to Epstein's death in prison.

6:01And there's more fallout from the Epstein matter, Karen. Former Treasury Secretary Larry Summers is leaving his role as an instructor at Harvard while the university investigates his ties to Epstein. Former Harvard president will also go on leave from his role as director of the Mosavar-Ramani Center for Business and Government at the Harvard Kennedy School. Summers is retreating from his public commitments, including his role as a paid contributor to Bloomberg Television, and he's leaving the board of the artificial intelligence company OpenAI. Well, tomorrow, Nathan, President Trump will meet with someone he's repeatedly slammed as a communist.

6:36The president will host New York City Mayor-elect Zoran Mamdani at the White House. Mamdani won the election this month on a progressive platform that includes freezing rents, universal child care, city-owned grocery stores, and higher taxes on corporations and the wealthy. The mayor-elect says that's the message he'll bring to the president. I want to just speak plainly to the president about what it means to actually stand up for New Yorkers and the way in which New Yorkers are struggling to afford this city. And frankly, cost of living is something that I heard time and time again from New Yorkers about why they voted for Donald Trump.

7:09Mayor Alex Zoran Mamdani appeared on the cable news network MS Now. President Trump has threatened to pull federal funds for New York now that Mamdani has been elected. The city received almost$10 billion from Washington this fiscal year.

7:27And it's time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. Senior U.S. military officials, including Army Secretary Daniel Driscoll, are now in Kiev to try to restart peace talks. A U.S. plan presented to Ukraine includes reducing its military, Russia keeping all the land it has taken, and a demilitarized zone. There are no plans for Russian officials to meet with Driscoll. Federal agents have now arrested more than 250 people during an immigration crackdown in Charlotte, North Carolina.

8:02The push for arrests also expanded to areas around Raleigh. Meanwhile, the Trump administration's planned crackdown in New Orleans could start as early as December 1st. Neil Ranu, the attorney with the Southern Poverty Law Center, noted that has caused fear among Hispanic families. I think the deeper impacts here, too, are the emotional, psychological, and just the distrust that children are going to develop of sort of participating productively in a community. Attorney Neil Ranu says Jefferson Parish Public Schools has one of the largest Hispanic student populations in the area. A 33-year-old Brooklyn woman was sentenced to up to nine years in prison in a crash that killed a mother and two of her young children.

8:54Miriam Urimi pleaded guilty to manslaughter for the March crash. Authorities say Urimi was speeding when she ran a red light and hit the family in a crosswalk in Midwood. Urimi spoke in court before being sentenced. I think about the victims every day. It's not a day that goes by. I read my feet about what I did, what happened. Audio courtesy of ABC7. The Justice Department told a federal judge that the final indictment against former FBI Director James Comey was never shown to the full grand jury. One of the lead prosecutors attributed the situation to a paperwork error. The news came during a hearing Wednesday where Comey's lawyers asked a judge to throw out the charges that he lied to Congress on the grounds that the government is being vindictive.

9:40Global news, 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr. This is Bloomberg. Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. A couple of hot NBA teams. The Houston Rockets won in Cleveland. They've won five games in a row and so have the Toronto Raptors after a win in Philadelphia. Oklahoma City beat Sacramento. The Thunder defended NBA champs and off to a 15-1 start. Top-ranked teams met in college basketball. fourth ranked Arizona beat third ranked UConn 71-67. The knee injury suffered.

10:14Falcons quarterback Michael Penix Jr. is season ending. Joe Burrow had the toe surgery after week two, but he may play Sunday for the Bengals. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients.

10:51We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, Go see the record for yourself at vanguard.com slash audio. That's vanguard.com slash audio. All investing is subject to risk, Vanguard Marketing Corporation Distributor.

11:37as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts.

12:20Coast to coast on Bloomberg Radio, nationwide on Sirius XM and around the world on Bloomberg.com and the Bloomberg Business app. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Don't call it a bubble. That could be the takeaway message from NVIDIA after its surprisingly strong revenue forecast. CEO Jensen Wong says his company is in a strong position to deliver with its most advanced AI chips. We've done a good job planning for a very, very strong year. And we've done a good job planning for Vera Rubin. So sales are off the charts. NVIDIA GPUs in the cloud is sold out. But we've got a bunch of black wells to sell.

12:59That was NVIDIA CEO Jensen Wong in an exclusive interview with Bloomberg Tech host Ed Ludlow following the earnings. This morning after, we're joined by Bloomberg Radio and TV host Kriti Gupta. So these numbers are eye-popping once again. $57 billion in revenue in the previous quarter, a projection of$65 billion in sales next quarter. How significant is this at a time when so many investors have been questioning all the spending around artificial intelligence, Kriti? Well, this is a massive deal because what's essentially happened with these NVIDIA earnings is NVIDIA has quite literally put their money where their mouth is.

13:33And that was the concern that you saw earlier in the week where so much of the tech jitters were driving this global equity sell-off. You saw it in the Asian session, you saw it in the European session, and certainly you saw it in the U.S. session where the likes of NVIDIA and NVIDIA itself were actually driving the index slower. this idea that everyone was investing in everybody else, and maybe these big promises and this big guidance would ultimately not be delivered on. Jensen Wong really put a stop to that kind of commentary in terms of yesterday's earnings report. That being said, take a listen to what he's actually saying, because the earnings, the demand backlog, I should say, is a significant beat.

14:08So the revenue numbers are very strong. The concern here, though, is that because the demand backlog is so large, at what point is NVIDIA going to be able to actually deliver on that, given that they already have delays on their Blackwell chip and their Rubin chip as well. But the idea of the fact that some of this demand is basically unsatiable, that was a message that was really reinforced yesterday. So where does this put the ball in terms of the ball being in someone's court? Is it on the suppliers for these Blackwell chips to keep the supply chain humming? A little bit. It is. It's also on NVIDIA, though, because you'll remember a couple of quarters ago, I want to say even a couple of years ago, Jensen Wong had really made this big push to say, well, our main clients right now are the hyperscalers.

14:53They're the Microsofts, they're the Amazons, they're the Googles and Alphabets of the world that are investing so much of the extra cash. We're talking about trillions of dollars of cash that they have on their balance sheets into this new technology. So you had about 60 % at one point of their revenue, of NVIDIA's revenue, coming from Microsoft, coming from Amazon, coming from Alphabet, who were just looking to build out those data centers and therefore use these chips to do that. What Jensen Wang has wanted to do, though, is diversify that base. And that's where the sales to China are really, really important.

15:27The argument here is that, well, 60 % of your revenue or more than that shouldn't just come from a handful of players. There's a lot of risk in that. What happens if Microsoft says, well, we're having a bad quarter, maybe we don't want those chips? It's a very unlikely scenario, but there is that question of broadening out. And now the trade seems to be not just about the hyperscalers, but how do the smaller companies, the next level technologies, the healthcare manufacturers, the medical equipment makers, even some of the kind of equipment makers for, say, tractors, for example, among other things, using those chips, using that AI technology at the end of the day.

16:01And that's what Jensen Wang is ultimately trying to do. It's not just about getting more and more chips and getting more and more orders. It's getting about more chips from more people and getting demand from different parts of the market, broadening out the demand and therefore justifying the broadening out of the rally you're seeing in the stock market. But in our last 30 seconds, it's got to get investors' attention when Jensen Wang says that his projections include zero revenue from China. And this is a really interesting piece because we know that the White House has been urging Congress to say, loosen those restrictions.

16:33Congress really actually trying to tighten it, saying that we don't want to talk about selling our really high technology to China, to the Middle East, to other places around the world. The White House trying to seek those curbs. But at the end of the day, Jensen Wang saying, look, that 0 % number on the Blackwell chips is actually a massive safety measure. And if you do get the green light, that can only add to the blockbuster numbers that already exist. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m.

17:05Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston and nationwide on Sirius XM Channel 121. Plus, listen coast to coast on the Bloomberg Business app, now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow.

17:42And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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