MS TMT Conference Day 3 Summaries: NVDA, PYPL, DELL, META, FRSH, CHWY

NVDA: Colette Kress, CFO

Q4 Performance and Demand Strength

• "We did very well in Q4 in terms of growth … our H200 did grow sequentially and this is important … people ask us why are people buying Hopper when they know Blackwell is there … many of our customers are finishing out their builds in terms of the data center … so we’ll continue to see probably Blackwell and Hopper being sold together, that is something that we’ve seen architecture to architecture."

Blackwell Ramp and Supply Chain Progress

• "We were really pleased with Q4 to bring Blackwell to-market … we had expected in the onset of possibly several billion dollars worth of Blackwell, but we actually did $11 billion of that … we’re back on-track, we are going to spend another quarter this Q1, again, trying to reach the availability that is going to be necessary in the cloud with Blackwell and shipping this to customers … another quarter of expediting and a very, very strong ramp of Blackwell."

AI Compute Demand Drivers

• "Post-training is a magnitude of increase in terms of the need of compute … this is when you’re fine-tuning your models, distilling it, getting it to a very tight group … reasoning is a very key driver of the additional compute that is going to be necessary and necessary fully for the inferencing as well … the growth that we see already in post-training and the size of models that will be built will continue to enhance the amount of compute necessary."

Competitive Positioning vs. Custom Silicon

• "Almost all, if not every one of our customers is still on NVIDIA, even though they may think that they may go down a custom piece of it … it’s very difficult what we do in terms of building the compute that we do … we are the best performant, but also the best TCO for what they’re doing … what we do in terms of the systems we built, we’re trying to find the lowest TCO for our customers for them to use."

Gross Margin Trajectory

• "We are escalating everything from any form of speed that we can do to get these to our customers, we will take those actions … that’s going to give us the time in the second half of the year for us to focus in terms of adding additional suppliers … we do absolutely see a path for the second-half of the year to get back up to the mid 70s … we do want to meet what the customers’ desires were."

Networking Business Outlook

• "We believe there is an opportunity for growth both on InfiniBand and Ethernet … focusing on the moment data enters into a data center to leave is a very important part … you’ll see us grow throughout this year, we know we’ll grow in terms of in Q1 and our networking business will continue to be a big part of the performance that you’re receiving in our full systems … Ethernet inclusive of Spectrum X Ethernet here is not just general-purpose Ethernet, it’s Ethernet for AI."

Export Controls and China Market

• "The amount that we are shipping into China versus what we had way before the export controls were at about half, half that level … what we see in the current quarter that we are in the guidance, we’re going to stick at about that same percentage at about half the level of where we were before export controls … our H20 product was designed under the current export controls and it has been a product that we have been able to reach demand in China for just very simple models."

Software and Services Growth

• "Software is an important part of not only our full outlook that we have, it’s not just being a hardware sale … we just about left this quarter with strong bookings at closely a run rate of about $2 billion … NVIDIA AI E and our NIMs are some of the two most important things that we see for this market … I think we’re going to see this significantly grow going forward as well."

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PYPL: Alex Chriss, CFO