We'll hear from the tech giants over the next two days on earnings.
Ahead of that, we heard from the most important company in the world today — which is probably a spoiler going into these earnings reports.
Jensen Huang did the keynote today at a Nvidia developer conference in DC. This event called GTC is typically done in the spring in California, but this was an additional "regional" event they put on assumingly to engage with government, which is not just pouring money into AI leadership and re-industrialization, but retooling itself (upgrading to accelerated computing).
Among the many things revealed today by Jensen about the state of AI, he posted this slide of capex plans from the big hyperscalers. Through 2026, it's over half a trillion dollars. And it rises to $632 billion through 2027. So, more than $1.1 trillion over the next two years. But that's not the big news.
He said they have 20 million of the most advanced chips already spoken for through 2026 (Blackwell and then Rubin), representing half a trillion dollars in revenue!
Now, as we've talked about here in my daily notes for the past year, Nvidia hasn't had a demand problem, it's had a supply problem.
That's why the quarterly growth has been relatively fixed, and the year-over-year growth rate has been slowing.
With that, they did $39 billion and $41 billion in data center revenue, respectively, through the first two quarters. And they report on Q3 in mid-November.
And Jensen said they've now shipped six million Blackwell chips through "3.5 quarters." If that's the case, knowing the revenues over the first half of the year, they're about to report a big number (big qoq growth) for Q3. Related to that, he said over "the next five quarters there's half a trillion dollars" to fulfill.
That would 3x the current annualized revenue in data center.
That's why Nvidia traded near a $5 trillion valuation today. And if they fulfill on that backlog, it still would be cheap — the stock would trade about a third of the current P/S, and at the current net income margin it would price Nvidia at about 18 times earnings, for a company tripling revenue.
So, the big question is, can they fulfill?
Jensen was sure to say that the supply chain all across the world was in production of Blackwell, including in Arizona (it's online and producing!).