Jensen Huang Ousted by Nvidia Board as CEO

NVIDIA

Across the shows: 118 speakers in other episodes, 99 bullish and 71 bearish calls, past 30 days

• Mandeep Singh · Bloomberg IntelligenceBullish

  Nvidia's six-month chip cadence and 5x Blackwell throughput show commendable execution, keeping it ahead.

  Nvidia has launched new chip versions almost on a six-month cadence. Its latest architecture is about five times better in throughput than Blackwell. Singh says this lets it iterate and stay ahead of rivals, which explains its large GPU market share, and calls the execution very commendable.

  “what NVIDIA has done is they have launched, you know, new versions of their chips almost at a six month cadence, and we are talking about, you know, their latest architecture, which is five times better in terms of throughput than their Blackwell architecture.”at 4:42

• Mandeep Singh · Bloomberg IntelligenceUncertain

  Nvidia's supplier ties, such as with TSMC, enabled its fast capacity ramp, which a new CEO must replicate.

  Jensen Huang combined strong technology with deep ecosystem and supply-chain relationships, a rare pairing. Those relationships with TSMC and other suppliers are why Nvidia ramped capacity so fast. Singh says managing them will be the true test for any successor, so the transition carries risk.

  “But I think to have those kind of relationships with TSMC and all the suppliers, which is why NVIDIA got to this position in terms of ramping up capacity so fast, I think that will be true test of somebody”at 8:03

• Anurag Rana · Bloomberg IntelligenceBearish

  Hyperscalers' own chips will narrow Nvidia's lead; competition gets very tough over the next few years.

  Nvidia has held a very large gap in AI accelerators, but the Jensen Huang shock gives Amazon, Microsoft and Google a chance to catch up. Hyperscalers buy Nvidia chips only because customers demand them. If they can offer their own chips, they will stop paying Nvidia so much. Rana ranks Nvidia first on technology, then Google, Amazon and Microsoft, and expects competition to get very tough over the next few years.

  “this is the chance for the others to catch up, you know, whether that's Amazon or Microsoft or Google can close the gap and say, well, why am I paying so much money to NVIDIA for all those chips when I can have my own?”at 9:08

• Matthew Bloxham · Bloomberg IntelligenceBearish

  Nvidia could face US trade-law investigations like Ericsson's, with penalties still to come.

  Bloxham says US investigations into Nvidia have not yet been discussed much. He points to Ericsson, which got a deferred prosecution agreement and large fines for breaking US international trade laws a few years ago. He argues similar actions could still come for Nvidia, adding to a busy period of reassuring customers, dealing with Washington and holding off rivals.

  “We've not really talked so much... about what The US investigations could be... So things like that could still be coming down the line for NVIDIA.”at 19:41

• Matthew Bloxham · Bloomberg IntelligenceBullish

  Nvidia has revenue visibility through 2027, possibly 2028, from orders already in the pipeline.

  Bloxham says the industry has been planning two to four steps ahead for some time. TSMC and Micron say they are sold out for at least the next twelve months because customers have orders in the pipeline with Nvidia. He expects the business to keep running on two-to-three-year orders, which gives it visibility despite the leadership shock.

  “visibility through 2027, possibly even into 2028 because the industry has been thinking two or three, maybe four or five steps ahead”at 21:06

• Ted Mortonson · BairdBullish

  Nvidia is years ahead on systems, networking and memory; Vera Rubin is a major compute leap.

  Mortonson argues Jensen Huang has kept Nvidia about three years ahead of the industry across silicon, networking and access to memory. He calls the Vera Rubin platform probably the biggest advance in compute technology in history. He sees this lead as the core of why Nvidia has been so dominant.

  “He's been three years ahead of anybody in the industry... What he's put out with Vera Rubin is probably the biggest advance in compute technology in history.”at 27:01

• Ted Mortonson · BairdBearish

  Nvidia's price and gross margin are vulnerable; it will have to give price concessions to some customers.

  Mortonson says Nvidia is vulnerable on price and gross margin. Holding its prices will require concessions to some customers. He ties this to rising competition from AMD, Broadcom and hyperscaler custom chips, which give customers alternatives to bargain with.

  “I think they're vulnerable on price and gross margin because to maintain price... I think they're gonna see price concessions. They're gonna have to give price concessions to some customers.”at 31:33

• Ted Mortonson · BairdBearish

  Portfolio managers will trim their overweight Nvidia positions and spread risk across other chip names.

  Mortonson says Nvidia has about a 6.6% weighting in the S&P 500 and Nasdaq. After talking to clients, he says all portfolio managers need to see an A-plus successor quickly. Without that, he expects them to cut their oversized index positions and diversify into alternatives such as Google's TPU, AWS Trainium, Marvell and Celestica.

  “You're going to see portfolio managers reduced their way overweight positions on the index side, and they're gonna spread out risk.”at 32:13

• Ed Ludlow · BloombergNeutral

  Nvidia's outlook unchanged after Huang exit; customers' custom chips already in progress, so no dramatic shift.

  After Jensen Huang's resignation as CEO, with Colette Kress as interim CEO, Ed argues the near-term picture is unchanged. Nvidia's earnings are still scheduled for next Tuesday, and the large customers he mentioned were already building their own chips and trying to diversify away from Nvidia before the leadership change, so that trend does not change because of it. He thinks it is highly unlikely the picture changes dramatically in the next fiscal year, though he concedes it is hard to calculate and could change. He also notes that bold growth predictions often came from Huang rather than CFO Kress, so whether the guidance tone holds is unknown.

  “in the here and now, nothing changes for anyone, including those those customers that you just talked about. They were already working on their own chips. They were already trying to diversify away from relying on NVIDIA... it's highly unlikely that in the next fiscal year NVIDIA that the picture changes dramatically. Maybe it will.”at 47:51

Microsoft

Across the shows: 46 speakers in other episodes, 55 bullish and 8 bearish calls, past 30 days

• Anurag Rana · Bloomberg IntelligenceBearish

  Microsoft's Maia chips lack customer pull; Microsoft is still forced to buy Nvidia chips.

  Rana ranks Microsoft last among the hyperscalers in custom silicon. Customers are not rushing to buy capacity on Maia, so Microsoft has to buy Nvidia chips. He does note Microsoft has begun moving its first-party apps such as Copilot onto Maia. If Nvidia's innovation curve slows, customers could later train or run inference on Maia.

  “But to be honest, nobody's rushing out and buying that capacity on that chip. And Microsoft is, you know, has to be forced to go out and buy NVIDIA chips.”at 11:04

Amazon.com

Across the shows: 49 speakers in other episodes, 63 bullish and 10 bearish calls, past 30 days

• Anurag Rana · Bloomberg IntelligenceBullish

  Amazon's custom AI chips are in demand from customers and are a credible Nvidia alternative.

  Rana says customers already buy Amazon's custom chips, and that Amazon has done a very good job with its Trainium chips. He cites this as evidence that hyperscalers can already move some AI workloads off Nvidia. That makes Amazon a strong competitor in the custom-silicon race.

  “We've already seen that with Amazon. Amazon chips are in demand by customers, and Google's obviously far ahead in that game.”at 11:28

Alphabet

Across the shows: 73 speakers in other episodes, 65 bullish and 49 bearish calls, past 30 days

• Anurag Rana · Bloomberg IntelligenceBullish

  Google's TPU is doing very well; Google is already a credible alternative to Nvidia chips.

  Rana says Google has already reached the point of proving its own chips can run workloads, and that Google is far ahead in the custom-chip race. He ranks Google second in AI technology behind Nvidia. He argues the TPU's strong performance means Google can reduce its dependence on Nvidia.

  “I think Google's already there, to be honest. Google TPU is doing very well”at 15:47

Advanced Micro Devices

Across the shows: 18 speakers in other episodes, 19 bullish and 1 bearish calls, past 30 days

• Ted Mortonson · BairdBullish

  AMD is in the catbird seat as Nvidia faces price pressure and customers look to diversify.

  Mortonson expects Nvidia to concede price to some customers, and portfolio managers to spread risk away from it. He says AMD has been much discussed in the last two days and is in the catbird seat. He implies AMD is the main beneficiary of customers looking for alternatives to Nvidia.

  “obviously, AMD ad nauseam has been talked about the last two days. They're in the catbird seat.”at 31:47

Broadcom

Across the shows: 12 speakers in other episodes, 11 bullish and 6 bearish calls, past 30 days

• Ted Mortonson · BairdBullish

  Broadcom should win business as customers look for alternatives to Nvidia's chips.

  Mortonson expects Nvidia to face price concessions and customers to diversify away from it. In that setting he says Broadcom should get some business. The support is thin, but the view follows from his argument on Nvidia's pricing vulnerability.

  “Broadcom should get some business.”at 31:54

AI infrastructure & data centers

• Anurag Rana · Bloomberg Intelligence

  Neoclouds rely on Nvidia's backstop, and a slowdown could let free cash flow recover.

  Rana argues the whole neocloud space exists because operators believe Jensen Huang will backstop them if something goes wrong, and so does the wider AI trade. Neoclouds have begun asking for prepayments, which he calls good for them. He says the ecosystem's dependence on Nvidia leaves a vacuum now. A slowdown could give time to digest the buildout, let free cash flow turn positive and push out capex.

  “they know at the back of it, Jensen's there to do the backstop if something bad happens... The entire AI trade... it's all backstopped by Jensen. So we're gonna see a big, big vacuum in this thing.”at 13:56

US growth & recession risk

• Anna Wong · Bloomberg Economics

  A further 20% stock drop would cut GDP about 1 point and lift unemployment to about 4.7%.

  Bloomberg Economics simulated a further 20% S&P 500 fall in the Fed's general equilibrium model. It subtracts about one percentage point from GDP and barely moves inflation. Unemployment rises about 0.5 point over the next year, from a 4.2% street baseline to about 4.7%. The mechanism is the consumer wealth channel: about 40% of household net worth is tied to equity. The risk is larger because the Fed is not offsetting the shock with cuts, so GDP could fall about 1.5 points.

  “So if you simulate the shock in the Fed's [FRB/US] general equilibrium model, so suppose that S and P 500 fall by another 20%. So we found that it will roughly subtract one percentage point to GDP... Unemployment rate will rise by roughly 0.5 in the next year.”at 35:38

US rates & the Fed

• Anna Wong · Bloomberg Economics

  The Fed will not offset an equity shock; Waller's talk of hikes removes the usual rate-cut cushion.

  In the Fed's own model, the central bank should be cutting rates about 50 basis points to offset an equity correction. Instead Christopher Waller is talking about raising rates by 50 basis points, and the Fed is on track to not hike as the SEP says or to hike 80 bps as futures suggest. That removes the powerful offsetting channel against the drag on the economy, so the GDP hit could be even larger.

  “the Fed is not going to react. So even in the Fed's own model, it says the Fed should be reducing rates by 50 bips. But right now... Or Chris Waller is talking about raising rates by 50 bips.”at 37:12

US inflation

• Anna Wong · Bloomberg Economics

  Headline inflation runs hotter than BLS data, but underlying inflation is narrow at about 2.3%.

  Bloomberg Price Project tracks millions of prices each month. It finds headline inflation at 4.6%, stronger than the BLS-implied 3.9%. Yet once outliers are trimmed, underlying inflation is about 2.3% and core roughly 2.5%, so price increases are not broadening. That leaves the Fed in a tough spot: the strong headline cannot be ignored, but underlying inflation is not showing broadening.

  “the headline inflation is actually stronger than BLS is saying... our Bloomberg price project says it's 4.6%... once you trim the outliers, we are actually at 2.3 for underlying inflation, and core is at roughly 2.5%.”at 38:36