Bloomberg Audio Studios, podcasts, radio news. Let's get through it, guys. We've got a bunch of numbers, and we do have the stock shares of Nvidia up about four percent in the after hours, the big things announcing a ten for one forward stock split. And to the outlook we talked with our Ian King. This is going to be important. See second quarter revenue twenty eight billion plus or minus two percent. The estimate is twenty six point eight billion.
Remember though the whisper number that Ian mentioned was about thirty billion or above.
Billions on the range. We're saying up to thirty billion dollars, but it's interesting, higher than the consensus.
Absolutely, but you know, it can be funny with that first quarter data revenue. This is important. This is the bulk of their business, right, twenty two point six billion. That is above street estimates of twenty one point thirteen billion. Gaming revenue much smaller part of the business. First quarter gaming revenue that was pretty much in line. Two point six billion. The estimate was for two point sixty two billion.
And again the company boosting the quarter cash dividend to ten cents a share from four cents a share, so really paying back all of that cash that they've been generating a lot of it right giving it back to investors.
Shares up right now about four point four percent. They climbed as much as five point one percent after that second quarter revenue. I looked topped estimates. You heard the numbers too there about its data center business. It did well in the fiscal first quarter. Revenues came in of twenty came in at twenty two point six billion. They were above the data center consensus of twenty one point one to three and then of course that ten for one forward stock split. Huge news.
Well, and you use something you focused on earlier. Adjusted gross margin for the first quarter seventy eight point nine percent versus sixty six point eight percent year over year. The estimate on the street was seventy seven percent, So that's coming in higher than forecast R and D expenses two point seventy two billion, That is up forty five percent year over year. The estimate was for two point
seven three billion, so a little bit lower. For the full year, gross margins are expected to be the mid seventy percent rate. Full your operating expenses are expected to grow in the low forty percent range, so we're getting some view and some thoughts in terms of the outlook. Right now, we've got cheers of Nvidia. They are up four point four percent in the after hour, and the company says it's poised for their next wave of growth.
Ian King writing on the live blog right now that the twenty eight billion dollar revenue forecasts solidly above the CONCESSUS estimate, but as you mentioned, Carol, not as wildly optimistic as some projections, which had ranged to more than thirty billion dollars. Stock splits Ian Ads, in in Vidia's case, a ten for one exchange are usually done by companies to keep their shares affordable by as many investors as possible.
This one, in notes is going to come into effect in a little less than a month that on June seventh. You could argue that stock splits don't matter as much anymore because you can just buy fractional shares easily.
That's a good point, all right, So let's get to it. Let's get some analysis on this report. Dan Morgan is with US senior portfolio manager at Sonovs Trust Company, joining us from Atlanta. Also Kujohn Sabani Bloomberg Intelligence Senior Semiconductor lets Dan, let's start with you your initial thoughts on the release.
All right, Tim, Hi, Carol. Quite frankly, I thought it was a fantastic quarter. I mean, Ian King, who I know very well, mentioned a whisper number at thirty billion dollars in revenues.
I was hearing more close to twenty six billion.
So obviously they you know, came in above that twenty six point eight. The beat in data center is really important. Obviously they came in at twenty two point six billion.
That was a beat.
And Carol and Tim, you know, heading into this report, we had a lot of people out there who were very concerned that there would be some sort of like air pocket between ordering patterns with the current chips that they're shipping, which are the Hopper series, and that there'd be some large customers that would hold off and wait intil the new Blackwell series was introduced sometime this fall, and then we would get some sort of slower period and growth in terms of data center revenues and the
Really there is no indication of that on this current quarter.
So hopefully this quarter will be able to answer back to some of those worries.
And I thought across the board and you know, quite frankly, guys at ten for one stock sport is absolutely huge because like Amazon and Google and they both did twenty four one stock sports.
Yeah, it really allows the retail.
Investor to participate more in terms of buying more shares and it's a psychological thing, but it does boost the stock.
Hey.
I just also one eye popping number free cash flow. Maybe this is why they're doing that dividend and so on. Free cash flow fourteen point nine four billion dollars versus two point sixty four billion year over year, the estimates for twelve point two nine billion, So yeah, generating some stay.
Looking really good. I want to bring in Kun John Savanni, Bloomberg Intelligence senior semiconductor analysts. Kunjohn just build on what we heard from Den Morgan. There is there anything in this in this most recent report from Nvidia that investors shouldn't love.
I mean, look, the dividend increases massive, more than hundred percent, and the stock split I think not a negative, but the expectation was for a sort of low double digit at least beat on both the print and the guide. We didn't see that this one. For the past many quarters we have seen beats and raises in that range. So in the absence of the dividend increase in the stock split, we could have seen some volatility here because again it was good, but not as good as people expect.
But I think in the call the dividend free cash flow in the split will be center stage.
Well, Ku, John, I do wonder is there anything in it that makes us like reset our think and enthusiasm as investors that we have seen when it comes to kind of the AI investment story, because Nvidia obviously the lynchpin if you will, to so much of it when we talk about AI, right, if you're going to do AI, you need and video chips. So is there anything in this report that makes you rethink the expectations about the impact of ai jen ai and all that it might bring. And also as an investment story.
Not really, you know, from a long term perspective, the fundamentals remain intact, the story remain intact. We were expecting some kind of you know, some folks are calling it the air pocket in this next quarter and the quarter coming in October is just a temporary timing situation where the new black Well chip starts ramping and before that
customers wants to wait for that. So what you might see and V are seeing a sort of moderating sequential growth, But I don't think that should lead to any concerns whether this AI rally has legs or not.
Jensen Wong in the press release, of course, the founder and CEO n Vidio, saying our data center growth was fueled by strong and accelerating demand for generative AI training and inference on the hyper platform. Beyond cloud service providers, generative AI has expanded to consumer internet companies and enterprise sovereign AI, automotive and healthcare customers, creating multiple multi billion dollar vertical markets. So, Dan Morgan, I mean, what are
you hearing in terms of channel checks? Johnson Wang, No surprise, He's going to be all in. This is his bread and butter. But it does sound like it's broadening out in terms of the demand. Everyone trying to figure out what their AI play is for their business.
You're right, Carol, And you know, if you look at kind of going back to that pocket issue. Coming into this quarter, estimates were that the Hopper one Hunter chip had about a ten days or ten week lag time between order periods, so there's still some slight overage of orders in that and they're trying to meet that. But you're right, Carol and Tim, it looks like we're spilling over.
You know, we've been following the stock together, it seems like for five or six years on the radio show, and we've gone from a gaming company to a data center company, and now we're seeing it going from the data center into these other areas.
There was a little crypto mining in there, just unimaginable.
I'm sorry to there was.
A little crypto mining in there too during that time, Dane.
I had some crypto mining going in there for a while too.
But you know, it's just amazing, Timmy Carroll that you know, before it was really a data center story using GPU chips in terms of AI, and now, like you mentioned in the press release, it's now spilling over into all aspects of different industry.
So it just increases the.
Amount of potential customers just beyond the big data center users that we keep talking to block aws and GCP and ASER and it just becomes a bigger and bigger story.
Well, it raises the question, Kunjon, that I've had for months at this point, which is the whole basic thesis of successful companies that are building something at high margin and if they're the only ones doing it, then there's something wrong with it, or they at least have like an incredible mode. And I'm wondering how long in Nvidia can keep doing this. I mean, they've got first quarter just a gross margin of seventy eight point nine percent.
Estimates were for seventy seven percent. How long can Nvidia keep doing this before a competitor is able to build something similar or catch up.
I don't have an answer for how long, but I will, you know, last before the Blackwell announcement, before GDC, this was the exact questions we were getting a lot and the question was like after H one hundreds or H two hundred, will the next chip be competitive and provide a lot more of value that they can continue demanding such premium. And the Blackwell is showing that yes, in terms of performance increases, in terms of TCO for their customers.
It came out and beat every other product or the wanna be products in the street, and hence that is going to command even more premium. So I think as long as they can keep on out competing themselves and their peers, they should be able to command this premium.
So in video shares just to rehash, well, they're off their highs in the aftermarket, but still up about two point seven percent as we speak. And just to kind of go over some of the headlines that did cross just moments ago again and Video giving a strong forecast on sustained AI momentum, specifically, just going through some of the numbers here, boosting its quarterly cash dividend to ten cents of share from four cents of share. We talked
about that ten for one forward stock split again. Data Center revenue for the first quarter the past quarter twenty two point six billion, that's a beat. Twenty one point thirteen billion was the estimate, and then the outlooks the second quarter revenue twenty eight billion plus or minus two percent, and the estimate on the street is below that at twenty six point eight billion. So Dan like, where do
we go here from in terms of Nvidia? Does it kind of make sense based on the spending that we heard from the likes of you know, Alphabet, I feel like Microsoft, was it Apple, was it Metal? Like they all kind of talked about right cap spend when it comes to AI specifically, So the enthusiasm maybe we've heard through the earning season from some of the big tech players. Does it match up with what we got from Nvidia?
I think so, Carol.
You know, the estimate going into the two thousand or physical year twenty twenty four, if we were to take meta Microsoft, Amazon, and Google and combine their campex that they're mostly dedicated towards AI, you're looking at about one hundred and eighty one hundred and eighty five billion dollars. So it's a huge number, and most of them have very healthy CAMPEX.
Expectations going into this year, and of course everyone's scrambling to outdo each other in terms of AI initiatives.
So, you know, Caroll and Tim, this report just keeps reiterating the amount of spending that's going into this and of course and videos are kind of waiting with their catcher's mitt and catching a large portion of it.
So I don't see any changes right now.
Based on the campex guidance that we got at the beginning of the first quarter from the big tech names, and then in Nvidia coming in with this beat and then also strong guidance for the second quarter twenty five,
they did come in above expectations. So maybe that'll put the bed some of these worries about this transition that we talked about between Hopper and Blackwell as we move into the fall quarter, and you would expect those quarters to be huge anticipation of the fact that they'll have a new product cycle going and starting to.
Shift the new Blackwell.
So to me, everything's operating on all cylinders right now.
Front Video.
Hey, Kunjohn, before we let you go, twenty five minutes to go until the call starts for in video, shareholders, investors, and of course analysts as well like yourself. What's the question that you'd want to ask on the call today.
Yeah, a couple of things. Just again going through the press release right now. One key thing we noticed this time was that the cloud customers are now somewhere between mid forties. Until last quarter they have been above fifty percentage of data center revenue, So that is interesting. You know, we think in terms of long term that's a positive because we do want that cloud concentration to moderate along with revenue growth, so that could be a long term positive.
We'll have to get more details on what droped that was. It just that the cloud customers are going with more of their own a six, so that would be something important that we are going to look out for.
All right, great, and so after the call we go all right. Shares of Nvidia right now up about two point four percent here in the aftermarket thanks to our ku. John Sabani Bloomberg Intelligence senior semiconductor analysts will be watching out for his research into the Thursday trade. Dan Morgan also watching out for his research as now that we've got all the details if you will, from Nvidia. He, of course, senior portfolio manager at Sonova's trust company.