Nvidia in the Spotlight | Trading the Markets With AI

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1:08Kris Bullock:Happy Wednesday, everyone. Welcome back to Trading the Markets with AI. We're joined with Chris Bullock, a.k.a. BlastoPlast, as always. And as you know, this is the show where we talk about all things AI going on in the markets. We go over the top stories in AI and also look at some of the top AI charts as well, because this is obviously we're in a historic moment. Things are happening very fast. So we're going to get into all of that today. We've got some great stories for you to see where AI is headed and see what it can do for your portfolio. So here's what we're covering today. NVIDIA has hit an all time high.

1:54Kris Bullock:They're reporting Q1 earnings tonight, so we'll be talking about that. Is perfection already priced in for NVIDIA? We shall see. One of the biggest talent moves in AI history as well, Andre Karpathy, the co-founder of OpenAI, has just jumped ship to Anthropic. And well, speaking of OpenAI as well, Elon Musk lost his lawsuit against OpenAI. So we'll talk about that as well. And Meta has just recently cut 8 ,000 jobs while posting one of the best quarters in company history. So we'll unpack what that means as well. And Google just absolutely stole the show yesterday with their just insane AI announcements just one after another.

2:46Kris Bullock:So we're going to go through just several of the announcements that Google laid out yesterday because it's quite a bit. It's quite exciting. And Chris is going to walk us through some technicals on his AI watch list as well. So let's get into it, Chris. Happy Wednesday.

3:03Bijan Maleki:Happy Wednesday. Happy to be here. Looking forward to this.

3:06Kris Bullock:Yeah, absolutely. So the first thing that we've got on our radar, I mean, obviously, you've got to start with NVIDIA, record high Q1 earnings come tonight. What are you looking for there with NVIDIA, Chris?

3:20Bijan Maleki:Well, yeah, this one's going to be, it's funny. I really, I liken NVIDIA to kind of, it's like the Bitcoin of the AI world, you know, and pretty much everything else having anything to do with AI and AI stocks revolves around what NVIDIA is doing. It is very much the king of the hill. And so what NVIDIA does, so too does everything else, basically. And so right now, this is big. I mean, we need not just good, but great to come from this announcement, essentially. I think if it's just merely good, I think if it's, you know, we met expectations, things look okay, things are progressing as we thought they would be, that's not going to be enough.

3:59Bijan Maleki:Like you said, is it priced for perfection? And so it needs to just be, yeah, not only is it good, but things are way higher than we thought they would be. Things are ripping. Margins are massive. We need to make sure and see that there's continued data center demand. We don't want to see slowing orders with anything like that. I'd also like to see a little bit of commentary on the China export restrictions and see if there's been any developments off of that, because right now that's a huge market for NVIDIA that is right now just doing nothing. And so if there's been any positive developments from that front, that too will, I think, be very constructive in terms of prices across the board.

4:40Bijan Maleki:However, if, like I said, if it's merely just good, I think we'll probably see a bit of downward price action. I think we'll see a little bit of de-risking across the board, across the entire sector, really, which we'll get into some of the charts later. But yeah. And then, of course, if it's less than good, if it's bad, then that will be a bit of a reckoning, I think, across the board. And we'll see a pretty heavy de-risking. So like I said, everything hinges on this. The whole AI world is going to be watching this later today when the announcements come out. It's wild.

5:14Kris Bullock:Yeah. I mean, well, first of all, NVIDIA is closing in on a$6 trillion market cap. So that's pretty fucking crazy, right? And NVIDIA has beaten, they've basically beaten their own guidance every single quarter. So at this point, the analysts have been like, all right, well, you guys beat it every single quarter. We're going to start pricing this in now. Just that's what happens when you're at the top. The expectations of being there is what happens. So a little bit on the export stuff. So they did get approval for H200 chip exports to 10 Chinese companies, including Alibaba, which I think is the headline there, which is probably what's really moving them.

5:54Kris Bullock:But also interesting because Alibaba also recently came out and said, well, you know, we're also going to start developing our own chips too, even though we're buying them from NVIDIA. So that competition is going to heat up as well down the line. Right. Yeah.

6:07Bijan Maleki:I suspect it will be at least good. The question is, will it be a great report? Will things be continuing to accelerate at a rapid pace as opposed to merely just progressing as normal, you know, and so that's really what we are waiting to find out. And of course, we all hope that it is in fact accelerating because that means this train is going to keep running and, you know, the prices are going to keep going up. So that's what we want to see.

6:33Kris Bullock:Yeah, well said, Chris, like you said, this is the most important earnings print in the markets right now. And if they have a great one, well, the AI bouquet stays intact. And we are just, continuing as we have been and amiss, well, that's something that will reprice essentially the factor. So we'll worry about that after tonight when we hear the earnings.

6:58Bijan Maleki:Right. Exactly.

7:01Kris Bullock:But right now, looking good, right? Obviously, a lot of analysts are raising their targets on that. So yeah, absolutely. So another big story happened as well, because competition is ripe in this AI space, right? Which is great for the end user at the end of the day, which is great for driving prices down as well, which is what we all want. But these companies are also competing for talent against each other, which is no surprise, right? But I think what is a surprise is that Andre Karpathy, who is an OpenAI co-founder, has left the company that he helped co-found to join their competitor, Anthropic, which is like that in and of itself is just a headline, right?

7:46But I think, so he's the brains behind a lot

7:50Kris Bullock:of what has made ChatGPT and OpenAI successful, right? Codex, kind of their pre-model programming and stuff. This guy had an integral part of that. And now he's essentially, he's moving to Anthropics. So I think that loss of brainpower could be pretty huge for OpenAI. What are you thinking here, Chris?

8:10Bijan Maleki:It's gonna be interesting for sure. It's funny, we were talking offline before the show started about how there's just this constant rotation, you know, of the pecking order with these companies. It's this cat and mouse game where every week a new company comes out with a new evolution of their product and they're leading the pack. And this plays directly right into that. You know, I mean, we've seen OpenAI come out with a great product with ChatGPT 5.5 just in the previous weeks. And it was as good as anything as there is out there right now. You know, it kind of overtook Claude Opus 4.7. And I'm sure, you know, Andre had a big role in that.

8:47Bijan Maleki:And now, now he's moved over to the competition. So obviously, it's going to be interesting to see how the next version of Opus comes out. I mean, I know they're already working on it. And these, these editions are several versions down the road already in development. But yeah, it's, it's, it's definitely a big headline for sure. And it's going to be interesting. Yeah.

9:09Kris Bullock:Yeah. So he announced, he announced that he's joining Anthropics pre-training team. So for those of you that are unaware, pre-training is the large scale training runs that give an AI model, it's core intelligence. So that's the most expensive compute intensive phase of building these frontier models. So that's kind of what he's going to lead. So just kind of on his background, obviously co-founded OpenAI. He led Tesla Autopilot. Then he went back to OpenAI. This guy is just, he is an all-star in the AI space. So landing, Anthropic, landing him is absolutely huge. And Anthropic is like, what I really find interesting about Anthropic is they're like, they're doing a full court press on the whole ecosystem.

9:57Kris Bullock:Yeah, they're taking, you know, they're bringing in obviously just epic teams, but like, even on the marketing standpoint, they're like, they know what they're doing here. They like, they just announced that what Victor Wembenyama, who's like the, the youngest, like most international NBA all-stars, like his popularity is just getting started. They announced that he's joining kind of their team as like an ambassador. Uh, there was like Sydney Sweeney rumors joining their team as an ambassador. So they're like, they know, like, yeah, we know we need to have the best and the smartest people, but we're also going to get the pop culture aspect of this as well.

10:33Kris Bullock:So they're just like, it's hard not to be impressed with what they're doing on this front.

10:39Bijan Maleki:yeah i think they do a great job honestly i i love their product i even though it maybe a slip down in a second or third place incrementally i still it's still my go-to you know i prefer using claude every day and it's it's the first one i open and usually the first one i ask the questions to and uh and i agree i i am seeing more of their exposure in pop culture um i i remember uh i watched a formula one event you know a week or two ago and they were kind of all over there they were on the cars. People were talking about it. And so it's like they get it. And yeah, it's great. I think I can't help but wonder if one of the stories we're going to get into about the Open AI trial with Elon Musk in a little bit, I wonder if there's some tie-in with Andre leaving Open AI and moving to a competitor there or anything that came to light from that trial that might shed some some insight on on what's going on internally with open AI.

11:35Bijan Maleki:I don't know. But yeah.

11:36Kris Bullock:Well, I'm glad you mentioned that, Chris. So let's let's move on and talk about that. So yeah, obviously, it was a very public lawsuit, open AI versus Elon Musk. You know, they were just kind of battling with each other. So US jury ruled unanimously against Elon in his lawsuit versus open AI and Sam Altman. So Elon Musk basically claimed that open AI abandoned its nonprofit mission by prioritizing profit profits. But jurors found that Musk waited too long to sue and and claims that that barred the statute of limitations. So that's kind of like the gist, the gist of it, which is interesting. But, you know, Chris, you made you brought up a great point because during that trial, a lot of whether it was rumors, whether it was hit pieces, whether it was actually true or not, a lot of negative information came out about Sam Altman.

12:32Kris Bullock:And, you know, as the cases with all of these things, yeah, you want to take it with a grain of salt, but like, you know, within those grains of salt, there are kernels of truth too, as well. Obviously we don't know. This is, uh, this, it would just all came out, but allegedly, all allegedly, of course, but, um, you can't help, but wonder, right. If the, the fact that the co-founder leaving so fast, if that played a part, whether it was the rumors or whether it was just kind of the taste that this lawsuit left in their mouths, you don't know. But it is big for OpenAI that they won, and it clears the path for what could be the highest priced IPO in history, right?

13:11Kris Bullock:So definitely good news for OpenAI at the end of the day. True.

13:16Bijan Maleki:Also, a little bit interesting of note, just that they kind of one on a technicality a little bit, you know, as opposed to the merits of the argument. But yeah, I don't know if it was, yes, it was ultimately good for OpenAI. But like you said, they didn't come out, you know, completely unscathed from this, nor did Elon Musk for that matter. But yeah, interesting, for sure.

13:42Kris Bullock:Yeah, yeah, it's definitely interesting. We'll obviously keep an eye on it, but it seems like that is settled for now. And OpenAI is set to basically open at near a trillion, if not even.

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14:56Bijan Maleki:More. Which is just crazy, I mean, honestly.

15:00Kris Bullock:I mean, I feel like trillion dollar valuations, at least in this space, might even be the norm going forward. I mean, the fact that NVIDIA is closing in on 6 trillion, Is that the highest market cap ever? I think it might be. I don't know who has a higher market cap than that.

15:20Bijan Maleki:It's like anymore, it's like who needs to even go public at this point? I mean, why bother?

15:25Kris Bullock:Oh, man. Yeah. Well, hey, Jensen Wang was doing the rounds yesterday, basically saying that GDP is unlimited. So I thought that was interesting as well. Well, speaking of companies fighting, we have an issue with a company within itself is having some issues on the back of a very profitable earnings as well. So Meta laid off 8 ,000 employees. I think it was today as well. Yeah, the layoffs are going out today. 8 ,000 job cuts have been announced. And they're also canceling like 6 ,000 other external positions. So basically, it's their largest layoff since 2023, which is, again, happening during a quarter where they made$56.3 billion.

16:23Kris Bullock:in revenue and$26 billion in income in Q1. So obviously, the AI stuff is picking up steam as well. And actually, recently, there was a leaked call, an executive meeting call in Meta, where it was just basically Zuckerberg was talking about how they're using AI models to kind of monitor their employees' computers so that they can basically be trained on what the employees are doing in their everyday tasks and workflows. So I thought that was, hey, this race is speeding up, man.

16:59Bijan Maleki:It is. Meta's play with all of this has been really interesting to see because I feel like they're way on the back foot compared to everybody else. Yes, they finally just launched a public LLM chatbot recently. It's okay. I think we talked about it a few weeks back. I've used it. I do have it installed. I do mess with it here and there. it certainly doesn't stand out as as being at the forefront by any means you know by by my experience so far and uh i feel like they've just kind of like i said been on the back foot a lot they've also they they went heavy into like vr uh and they opened this like meta horizons world for a long time and kind of put a bunch of money into that and then have had to completely scrap that recently too and pivot away from it altogether which was flushed a bunch of money down the down the drain So like, I don't know.

17:47Bijan Maleki:I feel like they're just kind of plodding along, not really navigating this process all that well. And it doesn't give me a lot of confidence. I'm not surprised to see job cuts coming. I'm not surprised to see morale cratering within the company. They've got a lot of work to do to kind of, you know, step back into the forefront. And I don't know. Their focus is weird to me, honestly. Like, it just doesn't align with everything else. What do you think? I mean, I think like Meta has obviously been around for so long, right?

18:19Kris Bullock:They're such a rich company, but like, I just don't see how they can even compete with Google, Anthropic and OpenAI. I think those guys are just so far ahead of them. And then once these IPOs land, they're just going to have a war chest. They're going to have everything that Meta had built up for the last 15 years or 20 years, 15, 20 years. They're going to get that once their IPO launches. So, I mean, I just I don't see how Meta can even compete. I mean, they have to compete, right, because that's where it's going. And I'm sure they'll have some successes on the back of that. you know, it'll probably do well for their business at some point.