TMTB: NVDA bogeys, ZM ADI, 3P roundup (OKTA CHWY SPOT), META Temu risk, PYPL Jeff 25% below street on EPS, MSFT mixed, WDC ug at GS, DOCN AI Ug at Opco, Gen ug at MS, AVGO/VMW close, ABNB Canada risk

Good morning - QQQs are down 40bps, Crude is down 70bps, yields are flat, and the dollar is slightly down. China is down 1%.

NVDA reports tonight (we sent out a full preview to TMTB Pro subs last night).

Key bogeys for the print:

Q3:
Total revs: $17.4B
Data Center Revs: $13.5B
Q3 EPS: $3.6-$3.65

Q4 (Jan):
Total Revs: $19B-$20B (~$17-18B DC implied)
EPS: $4.10-$4.20

Buyside is at $20-21 vs $17.5 street for FY25 EPS and $22.50-23.50 vs $20.80 street for FY26 EPS

TMTB’s take: The key debate on the stock resides in what sustainable growth will look like in FY25 and beyond.  My sense is we don’t get enough on this call to change the debate either way.   2023 has been a banner year for NVDA in many ways, but the narrative gets tougher going forward as new incremental fears around competition (AMD/custom silicon), medium/longer term China impact, and steadying spend from hyperscalers are unlikely to disappear anytime soon.  Bulls will say there is still plenty of upside left and put a 30x multiple on FY26 $23 = $700, while bears say that is a peak number and 18x a 20% haircut on $23 gets you closer to $350.  That makes the r/r still skewed to the upside but no where near as compelling as it was a few weeks ago near $400.  We don’t have a strong view on the q and while we hold some NVDA in our LT account, we prefer AMD in the near to medium term as we think the story there is a lot cleaner heading into CY24.

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META/SNAP/PINS/ETSY – WFC out with a note on China cross border ad spend (TEMU)

Several takeaways in the note but the key point I found interesting was WFC saw evidence of Temu spend mix shifting away from META over the last 3 months with Youtube and Programmatic the beneficiaries of this shift. 

Other takeaways from the note: TEMU continues to spend significantly abroad with app traffic doubling since June. WFC also notes TEMU has a significant focus on home kitchen & seasonal (higher overlap with ETSY vs EBAY). WFC thinks TEMU is making $20 in GP/order but losing $15-20 in EBITDA per order (I’ve seen numbers anywhere from $15-$30 so this is at the low end).

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3P Roundup