Yesterday, we talked about Nvidia’s $68 billion quarter.  The chip supply wall has finally broken over the past two quarters.  As such, data center revenue growth is back.  

But if Nvidia is to fulfill on the demand Jensen has said is on the books for the next four quarters, global manufacturing capacity will have to have another step-change higher. 

If that happens, Nvidia would likely have around $130 billion revenue quarter by the end of this calendar year.  It would be growing at a triple-digit rate again (year-over-year).  Apply the current 60%+ net income margin to that size of revenue, and the stock (at a $4.5 trillion market cap) would look very cheap (a forward P/E in the low-to-mid teens)!

If the chip supply bottleneck has truly been broken, then Jensen's formula of "compute equals revenue" (which fuels more compute which fuels more revenue) become constrained only by the physical stuff — scarce inputs like electricy, uranium, copper, fiber optic glass, land.

With this in mind, let's talk about a few other comments of note, from Jensen's earnings call yesterday.

First, he said "every data center is power constrained."  And with that, he says data centers have to carefully choose the architecture (the AI systems) that maximize "performance per watt."  He says Nvidia wins on that front, "unquestionably."      

So, access to power determines whether Jensen's AI formula (compute equals revenue) continues to work.

And that's why Elon has said in the age of abundance, power/energy will be the true currency.  

The more abundant intelligence becomes, the more valuable the scarce inputs become.