TMTB Morning Wrap - Part 1

Good morning. QQQs +78bps helped by some solid EPS from NVDA and SNOW. BTC +2%; yields ticking up 1-3bps across the curve; China +70bps. This Part 1 will cover NVDA and News + Research + 3p releases. Still working through CRM, SNOW and some other earnings and will send out shortly. Let’s get to it…

NVDA +3%: Good enough as Q1 guide a bit better than feared + BW revs better. GM guide a bit light. Buyside #s not moving. Jensen bullish on the call. Next up: CFO at MS next week and GTC in March

Q1 rev. $43.0B plus or minus 2%, est. $42.3B at low end of bogeys $43-$43.5B
Q1 GM guide 70.6%-71% vs bogeys closer to 71.5% and street at 72%
Blackwell revs for the Q were $11B, which is better than expected and better than last Q when Jensen said BW rev estimate of “several billion”

We thought Jensen did a good job talking through key areas of investor concern - Scaling laws/LT demand, ASICs vs Merchant GPUs, and China on the call:

1. Scaling Laws – Jensen reiiterated compute demand is “insane” as customers remain "anxious and impatient" to get their hands on Blackwell:

“The scale of post-training and model customization is massive and can collectively demand orders of magnitude more compute than pre-training. Our inference demand is accelerating, driven by test-time scaling and new reasoning models like OpenAI''s o3, DeepSeek-R1, and Grok 3. Long-thinking reasoning AI can require 100x more compute per task compared to one-shot inferences. Blackwell was architected for reasoning AI inference.”

He explained “multiple scaling laws” saying pre-training will continue to grow because of new reasoning data; post-training will grow from RLHF, AI feedback and verifiable rewards; and test-time compute, long thinking & inference scaling will grow inference. We went from a "one shot" of tokens to thousands, and "that's just the beginning."

2. ASICs vs Merchant GPUs - Jensen defended Merchant GPUs saying NVDA’s architecture is more general and flexible than ASICs and widely accessible and talked up advantages in sw ecosystem: