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The Long Investor
$TSM 42% gain so far and still not at its Wave 3 target at $166.
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$TSM 42% gain so far and still not at its Wave 3 target at $166.
$TSM alerted in our group on November 10th that it was starting Wave 3
Price was $97 that day
Price is at $134 now with more to run to get to our Wave 3 target. - The Long Investortweet
AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Regarding longer term prospects, TAM.
A: Lots of different #s out there regarding the accelerator market. Let's step back and our position. We have talked about the installed base in DC and our focus on being a DC computing company. That is the market in front of us. Even if you think about $1T in installed base, that opportunity for us is $1T. But if we think what it can also do in terms of efficiency and software, the opportunity is even larger, it might increase to even $2T. We look at it differently. We are not an accelerator, we are an overall platform.
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$NVDA CFO Kress at MS TMT Conference
Q: Regarding longer term prospects, TAM.
A: Lots of different #s out there regarding the accelerator market. Let's step back and our position. We have talked about the installed base in DC and our focus on being a DC computing company. That is the market in front of us. Even if you think about $1T in installed base, that opportunity for us is $1T. But if we think what it can also do in terms of efficiency and software, the opportunity is even larger, it might increase to even $2T. We look at it differently. We are not an accelerator, we are an overall platform.
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AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Gross margins going forward
A: When we completed our 4Q Gross margin levels were upper 70s. We have mastered bringing to market the ramping of our H100, using our suppliers.
However, going forward, we will have different types of products and we will come back to where we were, to mid 70s. We think that's a good place, and open to discussion of what our mix will be.
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$NVDA CFO Kress at MS TMT Conference
Q: Gross margins going forward
A: When we completed our 4Q Gross margin levels were upper 70s. We have mastered bringing to market the ramping of our H100, using our suppliers.
However, going forward, we will have different types of products and we will come back to where we were, to mid 70s. We think that's a good place, and open to discussion of what our mix will be.
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AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Inference 40% of DC revenue, is it really that big? How do you know?
A: It was a great exercise for us to work on, our work that we did, we do know our largest systems and we know engineering teams at all the customers. And we can categorize all the use cases. These are early days in Gen-AI, some have moved to Copilots and monetization. Recommender engines are an enormous part of marketing and all had to be re-designed. Search is another one. Our work is based on the inferencing of the future, not of the past 30 years.
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$NVDA CFO Kress at MS TMT Conference
Q: Inference 40% of DC revenue, is it really that big? How do you know?
A: It was a great exercise for us to work on, our work that we did, we do know our largest systems and we know engineering teams at all the customers. And we can categorize all the use cases. These are early days in Gen-AI, some have moved to Copilots and monetization. Recommender engines are an enormous part of marketing and all had to be re-designed. Search is another one. Our work is based on the inferencing of the future, not of the past 30 years.
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AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: China question, shipping to China
A: Density and performance are part of the export controls. China is interested in working with Nvidia as they have for decades. We have products keyed out for them, as they review the performance and software. We have worked with the US gov't so they are aware. Our China partners want to use our products for the long term. We don't know the future, but we will follow the rules today. Will there be a chance performance can increase in the future? We don't know yet.
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$NVDA CFO Kress at MS TMT Conference
Q: China question, shipping to China
A: Density and performance are part of the export controls. China is interested in working with Nvidia as they have for decades. We have products keyed out for them, as they review the performance and software. We have worked with the US gov't so they are aware. Our China partners want to use our products for the long term. We don't know the future, but we will follow the rules today. Will there be a chance performance can increase in the future? We don't know yet.
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AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Sovereign AI. Where is unfulfilled demand coming from, is sovereign hyperbole?
A: Many areas we have not been able to fulfill. We are seeing Gen-AI proliferating software. We have talked about sovereign AI and the unique opportunities. Chat-GPT is US-based, US culture, US language. So LLMs in other regions are important. This stream of interest, there is a very sizable pipeline for that, not been able to fulfill.
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$NVDA CFO Kress at MS TMT Conference
Q: Sovereign AI. Where is unfulfilled demand coming from, is sovereign hyperbole?
A: Many areas we have not been able to fulfill. We are seeing Gen-AI proliferating software. We have talked about sovereign AI and the unique opportunities. Chat-GPT is US-based, US culture, US language. So LLMs in other regions are important. This stream of interest, there is a very sizable pipeline for that, not been able to fulfill.
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AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Visibility on products not announced yet.
A: We have connections with our customers for over a decade, they are not surprised with what is coming and have specs in advance. We also have ideas of their demand expectations. Helpful for us when we build out our architectures. Demand may exceed our supply, as Jensen said.
Q: Transition to new products, will there be stall in old ones? Or you know where all of H100s are going.
A: We sped up from 2 year cadence to a 1 year cadence. What we see time and time again, when you are within a certain architecture, takes time to qualify it in their system. Many in this room and in this city have not been able to touch an H100. Even as we launch new products, availability of H100 will be important.
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$NVDA CFO Kress at MS TMT Conference
Q: Visibility on products not announced yet.
A: We have connections with our customers for over a decade, they are not surprised with what is coming and have specs in advance. We also have ideas of their demand expectations. Helpful for us when we build out our architectures. Demand may exceed our supply, as Jensen said.
Q: Transition to new products, will there be stall in old ones? Or you know where all of H100s are going.
A: We sped up from 2 year cadence to a 1 year cadence. What we see time and time again, when you are within a certain architecture, takes time to qualify it in their system. Many in this room and in this city have not been able to touch an H100. Even as we launch new products, availability of H100 will be important.
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AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Data center spend
A: Each year, about $250B capex on data center each year, this past year it actually increased for the first time in a long time. It was focused on accelerated computing and extending of asset life.
When you think through used of capital, ROI, will prioritize projects. Right now AI is higest priority. Question is, will they continue to upgrade, non-high ROI investments...probably not.
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$NVDA CFO Kress at MS TMT Conference
Q: Data center spend
A: Each year, about $250B capex on data center each year, this past year it actually increased for the first time in a long time. It was focused on accelerated computing and extending of asset life.
When you think through used of capital, ROI, will prioritize projects. Right now AI is higest priority. Question is, will they continue to upgrade, non-high ROI investments...probably not.
tweet
AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Lead times, power, rack space, end demand and meeting it.
A: About this time a year ago, people got in line for what they wanted. We are getting through a good portion of that, for primarily the H100.
Keep in mind, we have new products coming to market. That enters the next stage of supply and demand. Helping our customers as we bring new products to market to understand how to build out the data center. Planning processes are long.
Lot of trapped power that has been used with inefficient data center builds, will need to be re-done.
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$NVDA CFO Kress at MS TMT Conference
Q: Lead times, power, rack space, end demand and meeting it.
A: About this time a year ago, people got in line for what they wanted. We are getting through a good portion of that, for primarily the H100.
Keep in mind, we have new products coming to market. That enters the next stage of supply and demand. Helping our customers as we bring new products to market to understand how to build out the data center. Planning processes are long.
Lot of trapped power that has been used with inefficient data center builds, will need to be re-done.
tweet
AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: How have you managed to grow this quickly. This scale, size, complexity. Growing 4-5x is remarkable.
A: Ramping up supply, had to come from many different perspectives. Decades long supplier relationships, seeked out new suppliers to build out redundancies, we focused on cycle time of manufacturing and breaking it down to see how we could improve it. We want to increase our supply every quarter.
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$NVDA CFO Kress at MS TMT Conference
Q: How have you managed to grow this quickly. This scale, size, complexity. Growing 4-5x is remarkable.
A: Ramping up supply, had to come from many different perspectives. Decades long supplier relationships, seeked out new suppliers to build out redundancies, we focused on cycle time of manufacturing and breaking it down to see how we could improve it. We want to increase our supply every quarter.
tweet
AkhenOsiris
$NVDA CFO Kress at MS TMT Conference
Q: Did you foresee this DC demand a year ago?
A: Intro of Gen-AI was still ramping. We had been working with Open AI for years. We saw it as part of our long planned journey. Things have definitely changed, because of the interest worldwide. Enterprises, governments, consumers all over the world. Our overall goal as a company has been focused on accelerated computing for over 15 years. That transition is arriving. A new platform is necessary and AI is the killer app of accelerated computing.
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$NVDA CFO Kress at MS TMT Conference
Q: Did you foresee this DC demand a year ago?
A: Intro of Gen-AI was still ramping. We had been working with Open AI for years. We saw it as part of our long planned journey. Things have definitely changed, because of the interest worldwide. Enterprises, governments, consumers all over the world. Our overall goal as a company has been focused on accelerated computing for over 15 years. That transition is arriving. A new platform is necessary and AI is the killer app of accelerated computing.
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AkhenOsiris
*** Alert ***
This is a feel good capitalism story amongst all the anger out there.
3 of my passive 🐵 buddies have locked in their profits today from SMCI and a few other semis. They are tech finance nerds, so understand very well how markets work, not the guy in mom's basement. Generated well over 7 figure gains since last year on their semi portfolios.
One said to me this morning "both my kids' education funds are now complete" and another said "I just bought my parents vacation house on the beach this morning back in their home country".
I don't give a flying fuck if markets are broken, but I'm happy as hell to hear the above 👍🏼
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*** Alert ***
This is a feel good capitalism story amongst all the anger out there.
3 of my passive 🐵 buddies have locked in their profits today from SMCI and a few other semis. They are tech finance nerds, so understand very well how markets work, not the guy in mom's basement. Generated well over 7 figure gains since last year on their semi portfolios.
One said to me this morning "both my kids' education funds are now complete" and another said "I just bought my parents vacation house on the beach this morning back in their home country".
I don't give a flying fuck if markets are broken, but I'm happy as hell to hear the above 👍🏼
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