[ivape]

Interesting, Marvell is actually down over 50% this year. I just don't understand the bear case at all. I'm a nobody and I'm still willing to buy a $1500 gpu, and that GPU still can't do what the cloud does. The next $1500 gpu probably can't either. It feels like we're over thinking this. The hardware roll-out is all there is imho. Jensen has mentioned he sees Nvidia being a 10 trillion-dollar company, and I'm willing to meet him half-way with my faith here.

Edit:

- I wonder what's stopping Nvida from releasing an AI phone

- A LLM competitor service (Hey, how about you guys make your own chips?)

- They are already releasing an AI PC

- Their own self driving cars

- Their own robots

If you mess with them, why won't they just compete with you?

Just wanted to say one more thing, that Warren Buffet famously said he regretted not investing in both Google and Apple. I think something like this is happening again, especially as there are lulls that the mainstream public perceives, but enthusiasts don't. To maintain the hyperbole, if you are not a full believer as a developer, then you are simply out of your mind.

[Fade_Dance]

>I wonder what's stopping Nvida from releasing an AI phone

It's a low margin business and would hurt the balance sheet more than the completely irrelevant revenue from a project like that.

I've been investing in semi for decades and what strikes me about this recent cycle is that so many don't seem to understand that semi is a highly cyclical business that is prone to commoditization waves and inventory/capacity overbuild.

And speaking as a trader, instead of reinforcing your firmly held base case, I'd strongly consider painting out the bear cases. Look at the roadmaps of the hyperscalers that are designing their own chips for internal use, etc. And never use the word faith when it comes to markets.

You could easily see NVIDIAs margins get chopped down, and see the multiple re-rate lower from here. Actually, I'd argue the name is well on the way down this path already.

It's almost guaranteed to happen sooner or later. Semi down cycles are usually brutal for semi equities.

That's not to say it isn't a great company. It's certainly not a Buffett name though.

[ivape]

One thing you have to consider is that these other non-hardware dedicated companies have to continuously create new generations of AI chips. You can't sit on the M3, or the Google TPUs, you have to keep making new and better ones. How many companies think they can do this stuff in-house and then eventually realize that they are better off relying on a dedicated vendor? One or two leadership changes and they will cut these initiatives entirely (ask the Zuck about the Metaverse), but Nvidia's whole purpose is to make GPU hardware so they can never truly cut their heart out.

The cyclical stuff was the argument made for semis during the 2010s when no one gave a shit about semis really. I think the game changed, but again, I do operate on faith, or in investor terms, conviction. The main evidence for why the game has changed to me (well, other than AI being the most incredible piece of tech we ever built) is mostly that there are companies that have no business making chip hardware now interested in making chip hardware. That's not usually part of the cycle.

[Ekaros]

I generally feel that many have hard time separating scenarios of company dying and going to bankruptcy and not being as profitable as before and thus being less valuable.

One is often unrealistic and later one is lot more common. And one really should consider later one in long term investments.

[alephnerd]

> I wonder what's stopping Nvida from releasing an AI phone

B2C is a hellish headache that has marginal returns if you are not B2C first, and the amount of investment needed to be B2C competent just isn't worth it when there are alternative options to invest in

> A LLM competitor service (Hey, how about you guys make your own chips

Already exists. AI Foundary

> They are already releasing an AI PC

It's just an OEM rehash

> Their own self driving cars

Not worth the headache and also losing customers like Google or Amazon due to competitive pressure

------

Cannot reply: releasing their own "Nvidia Car" means they will lose their existing automotive partners becuase they will not spend on a competitor. Same reason Walmart stipulates EVERY tech vendor must decouple from AWS when selling to them.

[MikeTheGreat]

> Walmart stipulates EVERY tech vendor must decouple from AWS when selling to them.

I'm curious to know more about this if you (or anyone else) can elaborate on it.

What constitutes a tech vendor? Are you talking about Walmart buying PCs from Dell, from buying/renting a SaaS from someone, from IT-consulting coming in to do a one-time service for them (even if that service takes years)?

You're not talking about stuff like "Apple wants to sell iPhones to Walmart customers", I assume - yes?

[VirusNewbie]

They have a whole huge self driving car division, they just partner with existing car companies.

[mycall]

NVidia is perfect tech for Software Defined Vehicles. Maybe if they made a car to kick start the industry, it might go places.

[fnordpiglet]

Gaming GPUs is a side business for them at this point. It’s all about AI.

[chneu]

Gosh, I have a coworker who acts like gaming GPUs are the only hardware that matters.

I've tried explaining that one or two AI data center clients for Nvidia dwarfs the entire gaming GPU market, but he just doesn't get it.

[aleph_minus_one]

> Gosh, I have a coworker who acts like gaming GPUs are the only hardware that matters.

> I've tried explaining that one or two AI data center clients for Nvidia dwarfs the entire gaming GPU market, but he just doesn't get it.

I have a feeling that the different judgements come from the fact that the coworker thinks that the AI bubble will soon burst - thus, in his judgement, the AI data center sector of Nvidia is insanely overvalued, and will collapse. What will "save" Nvidia then will be the gaming GPUs. Thus, in his opinion, this is the sector that matters most for Nvidia, since it will become Nvidia's lifeline when (not "if"! - in your coworker's judgement) things will go wrong in AI.

You, on the other hand believe AI data centers are here to stay (which is a bold assumption: it could happen that AI will move more to the edge), and no big competition will arise for NVidia for "big AI ASICs" (another bold assumption). Your judgment is based on these two strong assumptions about the future, while your coworker's is based on different (possibly similarly bold) assumptions.

[voidspark]

His coworker simply has no idea that datacenters provide 93% of Nvidia's revenue, and a single B200 GPU sells for $40k.

[aleph_minus_one]

> His coworker simply has no idea that datacenters provide 93% of Nvidia's revenue, and a single B200 GPU sells for $40k.

Currently. :-)

[moralestapia]

Real beats imaginary, though.

[kortilla]

The company will unlikely make it through a collapse like that. It’s like Netflix going back to DVDs via mail.

The market is so tiny that their capex investments into AI stuff would catch them with massive debt that the gaming revenue couldn’t support and they would have to go through bankruptcy

[chneu]

Data centers and enterprise will always dwarf consumer hardware. AI has nothing to do with it.

You're silly if you think otherwise.

[aleph_minus_one]

> Data centers and enterprise will always dwarf consumer hardware.

Before the current AI hype, except for some rather specialized applications, people had rather little use for GPU acceleration (GPGPU) in data centers.

[chneu]

Again, you're focusing on AI and GPU. Datacenter contracts have always been the bulk of sales for companies like Nvidia.

One or two large datacenter contracts will make more money than all consumer hardware for companies like Nvidia. The margins are completely different.

[Aerroon]

Consumer hardware is where the innovation slowly starts though. Without the years of people messing with GPGPU on consumer hardware we might not have got the AI revolution on GPUs.

[ryao]

Around 15 years ago in college, I took the opposite position that datacenter workloads mattered more to Nvidia’s future than gaming and no one believed me. It is amazing how times have changed.

[chneu]

I used to work for Oracle in their datacenter hardware module.

The scale of the orders that datacenters put in is insane. It's literally 1000:1 vs consumer stuff.

While building a single server I could easily handle 2-3 million dollars worth of hardware. We'd roll out 50 of those in a week. That was just my shift and we had several.

Gamers and consumers simply dont understand the scale that datacenters work at.

[m463]

Sort of reminds me of ios vs macos. I'm pretty sure the ios market dwarfs macos.

EDIT: brief search says last year apple sold 300m ios vs 20m macos devices.

[sennalen]

AI makes a lot of money. But games are what matter

[n_ary]

Gaming was sort of their major thing until the cryptocurrency wave gave them a major boost and GPUs were rare luxuries suddenly. But as crypto was fading and GPUs were suddenly becoming affordable, GenAI wave hit and again gave a major boost. Am curious how they will react to quantum(sadly no magical enterprise application apparent yet so the tail wind is not strong).

[fragmede]

simulations. Drugs work in the brain at a quantum level, and if we could simulate what a drug does before testing on live humans, that would change the world.

[arvinsim]

The supply, driver, and hardware issues that the 5000 generation of gaming GPUs has right now do show that gaming GPUs are an afterthought to them.

[kortilla]

To drive this point home, look at the nvidia valuation in 2010 or so before crypto gave them a non-gaming dominant business line.

[Jlagreen]

And yet, Nvidia innovates in gaming with SW 10x more than anyone. Strange side business it is which is also worth billions by the way.

Did you know that Nvidia has a gaming cloud running which might become the largest in the world at some time?

In 10-20 years, Nvidia might make more revenue from gaming cloud than they do today with gaming HW.

[tintor]

Their upcoming AI PC is dead of arrival since they announced its underwhelming memory bandwidth.

[adventured]

They'll do ~$110 billion in operating income over the next four quarters, with a mere 36,000 employees and no meaningful dividend or debt to maintain. I think they can trivially afford to keep trying if they see a market.

[int_19h]

One interesting aspect of NVIDIA workforce that many people aren't aware of is that it's very good at retaining people. The annual turnover rate is something like 5%, and last time they had layoffs was in 2008. They are also maintaining full on remote work at the time most other big tech companies are forcing their peons into the offices.

And that buys a lot of loyalty. Which translates to productivity.

[malcolmgreaves]

It doesn’t translate to productivity. What it actually means is that it’s an ossified company where everyone is 10 years behind the curve in everything that is not designing hardware. Hardware is a slow business so this is ok. Software is fast moving. Nvidia has extreme difficulty making software that works due to its culture. (Remember installing drivers and how much of a mess that is? That’s their core software product! Docker images and using cloud machines where the drivers are already installed have made this simpler for AI applications.)

[krainboltgreene]

That’s what everyone says up until everyone realizes the actual point when they could no longer actually afford it was 6 months prior.

[7speter]

I didn’t realize Marvell stock was down so much. I would’ve thought that there might’ve been an explosion in training and the need for ssd’s (Marvell makes controllers for enterprise drives iirc), and that Marvell would be doing well. NAND drive prices for consumers are a good amount from their lows from 2023, I figure if ssd’s weren’t moving for consumers, maybe datacenters and enterprise were gobbling them up.

Anyway, maybe marvell should focus more on the the consumer side since hobbyists seem to be building crazy ai rigs and likely needs drives, at the very least, for models. It sort of seems like hobbyists are devouring any worthy gpu that gets produced.

[KerrAvon]

I agree the concern here about Nvidia's long term viability seems overblown.

WRT your edit: The answer to all of this is that it's very hard and requires a huge amount of investment to produce good vertical solutions in each of these spaces. You cannot build a good AI phone without first building a good phone. You cannot build a self-driving car without starting with a good car, etc. For robots, I'll point you to someone using Nvidia chips: the Matic is a complete ground-up rethink of how robot vacuums should work. It's taken them 7 years to get to early adopter phase.

[hector_vasquez]

> You cannot build a good AI phone without first building a good phone. You cannot build a self-driving car without starting with a good car, etc.

More like you cannot build a self-driving car without starting with a good phone. See Huawei.

[bsder]

> I just don't understand the bear case at all. I'm a nobody and I'm still willing to buy a $1500 gpu, and that GPU still can't do what the cloud does.

Agreed, and for all the "price crash" I still can't just whip out my credit card and purchase an hour or two on an H100/B100.

It's still multi-year contracts and "Contact Sales".

[Jlagreen]

Because Nvidia focuses on being a partner in each industry you mention.

See it that way, if you have an OS/SW for all the industries you mention then who is your competitor? Not the participants in that industries. Nvidia can partner with any automotive company but won't compete with any of them as long as they don't build cars. But imagine the potential of every self driving car being build using Nvidia AI?

Think about the potential of every robot build using Nvidia AI?

Think about the potential of any AI Service using Nvidia AI?

See, Nvidia isn't directly competing in the enduser market but instead focuses on the B2B. Nvidia can also create many different revenue streams from 1 customer.

For example an automotive customer: - Nvidia HW in car for AI - Nvidia data center on-prem/cloud for DriveSim in car - Nvidia Omniverse for car design and manufacturing simulation - Nvidia Isaac for robotics/logistics in manufacturing plant - Nvidia Cosmos+GR00T for robots inside the plant - Nvidia edge devices inside any robot in the plant - Nvidia NeMo data center on-prem/cloud for AI models / LLMs for internal use

And what will be the advantage? Nvidia can actually make it more and more seamless to operate between all Nvidia solutions. For example, you can do an update to your robots in Cosmos, simulate it in Omniverse and with 1 click update your Nvidia driven real robots. The alternative is that you have 3 solutions from 3 different vendors with no interface between them.

People have no idea, what Nvidia is actually creating. Nvidia has more SW engineers and even Nvidia employees call Nvidia an AI SW company. They publish so many libs and lots of other SW stuff that it's sometimes hard to keep up. Just look at all the RTX goodies for gamers which Nvidia is developing. And they are all free, well except that you need Nvidia HW for it. The same model, Nvidia will apply to ALL industries in the world. And here they discuss about CSPs being an issue for Nvidia while Jensen focuses to build a Mega Corp. which potential TAM is in every industry in the world :)