Nvidia Earnings Ease AI Bubble Fears; Traders Brace for Jobs Report

On today's podcast:
1) Nvidia Corp. delivered a surprisingly strong revenue forecast and pushed back on the idea that the AI industry is in a bubble, easing concerns that had spread across the tech sector. The world’s most valuable company expects sales of about $65 billion in the January quarter — roughly $3 billion more than analysts predicted. Nvidia also said that a half-trillion-dollar revenue bonanza due in coming quarters may be even bigger than anticipated. The outlook signals that demand remains robust for Nvidia’s artificial intelligence accelerators, the pricey and powerful chips used to develop AI models. Nvidia had faced growing fears in recent weeks that the runaway spending on such equipment wasn’t sustainable. Nvidia results have become a barometer for the health of the AI industry, and the news lifted a variety of related stocks.
2) Bond investors are zeroing in on Thursday’s US labor market report, which is expected to either kill or rekindle waning expectations for a Federal Reserve interest-rate cut next month. The September payrolls report, due at 8:30 a.m. New York time after a delay caused by the government shutdown, will be the only official major jobs data published before Fed policymakers meet for the final time this year. A report showing a resilient employment situation could undercut the case for more rate cuts and dash hopes of a further rally in the $30 trillion US Treasuries market. A soft reading, on the other hand, could revive bets on a third consecutive quarter-point cut at the Dec. 10 meeting and boost a market that’s already headed for its best year since 2020. Odds of a December cut assigned by the market have steadily slipped in recent weeks as some policymakers pushed back against further easing while inflation continues to run above the Fed’s 2% target.
3) President Trump has signed legislation to compel the Department of Justice to release files on the late, disgraced financier Jeffrey Epstein. Trump said in a social media post that he signed the legislation Wednesday, approving a measure he had spent months trying to block in a fight that inflamed tensions in his own party and threatened to undermine his agenda. The president’s signature marked a stunning about-face for Trump, who had assailed the effort to require the release of the government’s files on Epstein — a convicted sex offender, who was facing federal charges of trafficking underage girls when he died in jail in 2019. It followed a lopsided 427 to 1 vote in the House — where a lone Republican lawmaker provided the only no vote — and the Senate agreeing unanimously to send the measure to the president’s desk.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.

Speaker 2 (00:09):
Good morning, I'm Nathan Hager and I'm Karen Moscow. Here
are the stories we're following today.

Speaker 3 (00:15):
Well, Karen, it was the earnings report investors we're bracing
for an Nvidia delivered, pushing back on the idea that
the AI industry is in a bubble. Nvidia shares are
up five percent in early trading. Companies results topped analyst estimates,
with revenue rising sixty two percent to fifty seven billion dollars,
and more importantly, the chip giant delivered a strong revenue forecast,

(00:38):
expecting sales of about sixty five billion in the January quarter.
Matt Bryson covers Nvidia for web Bush Securities.

Speaker 4 (00:45):
I think they hit the buyside expectations exactly. So what
we've been hearing beforehand, fifty seven billion on the top
line and then guy for mid sixties is kind of
what people wanted and they deliver.

Speaker 3 (01:00):
That's o Wedbusch Securities analyst Matt Bryce. And it has
been quite a run for in Vidia. Sales will be
up more than tenfold from where they were in the
same period just three years ago, and.

Speaker 2 (01:10):
The future looks even rosier. Nathan and video CEO Jensen
Wong says, the Blackwell ship sales are off.

Speaker 5 (01:17):
The charts and video GPUs in the cloud are sold out.
We got plenty of Blackwells to sell you. We have
lots of Blackwells coming, We're making a lot of Blackwells,
and we have a bunch of Vara Rubens coming and
so business is very very strong. But we've planned our
supply chain incredibly well.

Speaker 2 (01:35):
And that was in video CEO Jensen Wong speaking of
Bloomberg's at a Ludlow. For the full conversation, head over
to the Bloomberg Podcast channel on YouTube.

Speaker 3 (01:44):
Well Investors are finally going to get details Karen on
the September jobs report that was delayed because of the
longest government shut down in history. We get a preview
from Bloomberg's Michael McKee.

Speaker 6 (01:55):
The data are back and we're starting with a sort
of but not really important set September payrolls. If the
numbers had been released as scheduled on October third, they
would have played a big role in the Fed's October
rate decision. Instead, two months late, they're essentially out of date.
They will get scrutiny, However, it may be the last
full set of jobs numbers we get before the next

(02:18):
FED meeting on December tenth. While today's release may not
carry the same weight, at least it's something. Michael McKee,
Bloomberg Radio.

Speaker 2 (02:25):
All right, Michael, thank you all. The Bureau of Labor
Statistics will not publish on October employment report. Instead, it
will incorporate those payrolls figures into the November jobs reports,
set to be published after the Federal Reserve's final meeting
of the year in December.

Speaker 3 (02:41):
Well, the Federal Reserve has published its minutes from its
latest policy meeting from October, Karen, and they show policymakers
were divided. Many say it would likely be appropriate to
keep interest right study for the rest of the year.
Stuart Paul covers the FED for Bloomberg News.

Speaker 7 (02:57):
So folks are basically looking out at the Bureau of
Laborsitiytistics and saying, what would have been a bad jobs
report is not going to be available for the FED
to make its decisions. So there's going to be one
fewer data prints encouraging a rate cut. Now we're seeing
as early as October many committee members were ready to

(03:17):
take that December cut off. The table.

Speaker 3 (03:19):
Now, Stuart's Paul of Bloomberg News says the odds of
that December rate cut stand at about thirty percent.

Speaker 2 (03:25):
Now, Nathan, let's go to the latest on the Jeffrey
Epstein files. President Trump has signed the bill to compel
the Justice Department to release its documents on the late
disgraced financier. House Minority Leader HAKEM. Jeffries is chalking it
up as a victory.

Speaker 8 (03:39):
It's a big victory for the survivors, a big victory transparency,
and big victory for the American people.

Speaker 2 (03:45):
House Minority Leader HOCKEYM. Jeffrey spoke on Capitol Hill. The
signing comes after the President spent months trying to block
the measure before making a dramatic about face last week.
The new law requires the Justice Department to release all
its files from the Epstein investigation, but it's launched a
new probe and to his ties to prominent Democrats, Senate

(04:05):
Majority Leader John Thune says that could complicate matters.

Speaker 9 (04:09):
I trust the judgment of the Justice Department to ensure
that whatever files they release protect the victims clearly, and
I think there are other items, perhaps materials that were
acquired through grand jury trials that perhaps they will have
to make some decisions.

Speaker 2 (04:28):
About Senate Majority leader John Thune. The law gives DOJ
thirty days to release the files, including investigations, flight logs,
travel records, immunity deals, internal communications, and records related to
Epstein's death in prison.

Speaker 3 (04:43):
And there's more fallout from the Epstein matter, Karen. Former
Treasury Secretary Larry Summers is leaving his role as an
instructor at Harvard while the university investigates his ties to Epstein.
Former Harvard President will also go on leave from his
role as director of the most of Our Ramani Center
for Business and Government at the Harvard Kennedy School. Summers
is retreating from his public commitments, including his role as

(05:06):
a paid contributor to Bloomberg Television, and he's leaving the
board of the artificial intelligence company open Ai.

Speaker 10 (05:12):
Well.

Speaker 2 (05:12):
Tomorrow, Nathan, President Trump will meet with someone he's repeatedly
slammed as a communist. The President will host New York
City Mayor elect zorun Mam Donnie at the White House.
Mam Donnie won the election this month on a progressive
platform that includes freezing rents, universal childcare, city owned grocery
stores and higher taxes on corporations and the wealthy. The

(05:33):
mayor elects says that's the message he'll bring to the President.

Speaker 11 (05:37):
I want to just speak plainly to the President about
what it means to actually stand up for New Yorkers
and the way in which New Yorkers are struggling to
afford this city and frankly, cost of living is something
that I heard time and time again from New Yorkers
about why they voted for Donald Trump.

Speaker 2 (05:51):
Mayor elect zonororun Mam Donnie appeared on the cable news
network MS now. President Trump has threatened to pull federal
funds for New York now that Mom Donnie has been elected.
The city received almost ten billion dollars from Washington this
fiscal year and his time and now for a look
at some of the other stories making news in New

(06:12):
York and around the world, and for that we're joined
by Bloomberg's Michael Barr or Michael good Morning, Good.

Speaker 8 (06:16):
Morning, Karen. Senior US military officials, including Army Secretary Daniel Driscoll,
are now in Kiev to try to restart peace talks.
A US plan presented to Ukraine includes reducing its military
Russia keeping all the land it has taken and the
militarized zone. There are no plans for Russian officials to

(06:37):
meet with Driscoll. Federal agents have now arrested more than
two hundred and fifty people during an immigration crackdown in Charlotte,
North Carolina. The push for arrests also expanded to areas
around Raleigh. Meanwhile, the Trump administration's plan crackdown in New
Orleans could start as early as December first. Neil Ranu,
the attorney with the Southern Poverty Law Center, noted that

(07:00):
has caused fear among Hispanic families.

Speaker 12 (07:03):
I think the deeper impacts here, too are the emotional, psychological,
and just the distrust that children are going to develop
of sort of participating productively in a community.

Speaker 8 (07:18):
Attorney Neil Uranu says Jefferson Parish Public schools has one
of the largest Hispanic student populations in the area. A
thirty three year old Brooklyn woman was sentenced to up
to nine years in prison and a crash that killed
a mother and two of her young children. Euremi pleaded
guilty demandslaughter for the March crash. Authority say Euremi was

(07:41):
speeding when she ran a red light and hit the
family in a crosswalk in Midwood. Uremi spoke in court
before being sentenced.

Speaker 11 (07:48):
I think about the victims every day, and data goes
by andrad think.

Speaker 8 (07:53):
About the company. Audio courtesy of ABC seven. The Justice
Departs been told a federal judge that the final indictment
against former FBI director James Comy was never shown to
the full grand jury. One of the lead prosecutors attributed
the situation to a paperwork hearer. The news came during

(08:13):
a hearing Wednesday where Comy's lawyers asked to judge to
throw out the charges that he lied to Congress on
the grounds that the government is being vindictive. Global News
twenty four hours a day and whenever you want it
with Bloomberg News Now. Hi, Michael Barrn, This is Bloomberg Karen.

Speaker 6 (08:29):
Thanks Michael.

Speaker 2 (08:30):
Time now for our Bloomberg Sports update, and for that
we bring in John stash Houerd.

Speaker 10 (08:35):
Thanks Karen Keple of hot NBA team. The Houston Rockets
won in Cleveland. They've won five games in a row,
and so have the Toronto Raptors. After a winning Philadelphia,
Oklahoma City beat Sacramento, the thunder defended NBA Champs and
off to a fifteen and one start. Top ranked teams
met in college basketball, fourth ranked Arizona beat third ranked
yukon seventy one sixty seven. The knee injury suffered to

(08:55):
Falcons quarterback Michael Pennix Junior is season ending. Joe Burrow
I have the toast surgery after week two, but he
may play Sunday for the Bengals. That to Bloomberg Sports Update.

Speaker 2 (09:06):
Stay with us. More from Bloomberg day Break coming up
after this.

Speaker 1 (09:14):
Coast to coast on Bloomberg Radio nationwide, on Serious Exam
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak.

Speaker 3 (09:24):
Good morning, I'm Nathan Hagar. Don't call it a bubble.
That could be the takeaway message from Nvidia after its
surprisingly strong revenue forecast. CEO Jensen Wong says his company
is in a strong position to deliver with its most
advanced AI chaps.

Speaker 5 (09:38):
We've done a good job planning for a very very
strong year, and we've done a good job planning for
Arah Rubin. So sales are off to charts and video
GPUs and the cloud is sold out. But we've got
a bunch of Blackwells to sell.

Speaker 3 (09:53):
That was in Vidia CEO Jensen Wong in an exclusive
interview with Bloomberg Tech host ed Ludlow following the earnings
this morning after we're joined by Bloomberg Radio and TV
host Kritty Gupta. So these numbers are I popping once again,
fifty seven billion dollars in revenue in the previous quarter,
projection of sixty five billion in sales next quarter. How
significant is this at a time when so many investors

(10:15):
have been questioning all the spending around artificial intelligence.

Speaker 13 (10:18):
Critty, Well, this is a massive deal because what's essentially
happened with these Nvidia earnings is Nvidia has quite literally
put their money where their mouth is. And that was
the concern that you saw earlier in the week, where
so much of the tech jitters, we're driving this global
equity sell off. You saw it in the Asian session,
you saw it in the European session, and certainly you
saw in the US session where the likes of Nvidia

(10:39):
and Nvidia itself actually driving the index lower. This idea
that everyone was investing in everybody else and maybe these
big promises and this big guidance would ultimately not be
delivered on. Jens Enawong really put a stop to that
kind of commentary in terms of yesterday's earnings report. That
being said, take a listen to what he's actually saying.
Because the earnings of the demand backlog, I say, is

(11:00):
a significant beat. So the revenue numbers are very strong.
But concern here though, is that because the demand backlog
is so large, at what point is in Vidia going
to be able to actually deliver on that, given that
they already have delays on their Blackwell chip and their
Reuben chip as well. But the idea of the fact
that some of this demand is basically unsatiable though, that

(11:22):
was a message that was really reinforced yesterday.

Speaker 3 (11:25):
So where does this put the ball in terms of
the ball being in someone's court? Is it on the
suppliers for these Blackwell chips to keep the supply chain humming.

Speaker 13 (11:36):
A little bit?

Speaker 1 (11:36):
It is?

Speaker 13 (11:37):
It's also on in video though, because you'll remember a
couple of quarters ago, I was even a couple of
years ago, Jensen Wong had really made this big push
to say, well, our main clients right now are the Hyperscalers.
There are the Microsofts, they are the Amazons, they're the
Googles and Alphabets of the world that are investing so
much of the extra cash. We're talking about trillions of

(11:57):
dollars of cash that they have on their balance sheets
into this new technology. So you had about sixty percent
at one point of their revenue of Nvidia's revenue coming
from Microsoft, coming from Amazon, coming from alphabet who are
just looking to build out those data centers and therefore
build out these use these tips to do that. What
Jensen Wong has wanted to do, though, is diversify that base,

(12:18):
and that's where the sales to China are really really important.
The argument here is that well, sixty percent of your
revenue or more than that, shouldn't just come from a
handful of players. There's a lot of risk in that.
What happens if Microsoft says, well, we're having a bad quarter,
maybe we don't want those chips. It's a very unlikely scenario.
But there is that question of broadening out. And now
the trade seems to be not just about the hyperscalers,

(12:38):
but how do the smaller companies, the next level technologies,
the healthcare manufacturers, the medical equipment makers, even some of
the kind of equipment makers for say tractors, for example,
among other things, using those chips, using that AI technology.
At the end of the day, and that's what Jensen
Wong is ultimately trying to do. It's not just about

(12:58):
getting more and more chips and getting more and more orders.
It's getting about more chips from more people and getting
demand from different parts of the market, broadening out the
demand and therefore justifying the broadening out of the rally
you're seeing in the stock.

Speaker 3 (13:11):
Market in our last thirty seconds. It's got to get
investors attention. When Jensen Wong says that his projections include
zero revenue from China.

Speaker 13 (13:20):
And this is a really interesting piece because we know
that the White House has been urging Congress to say,
loosen those restrictions. Congress really actually trying to tighten it,
saying that we don't want to talk about talk about
selling our really high technology to China, to the Middle East,
to other places around the world. The White House trying
to seek those curbs. At the end of the day,
Jensen Wong saying, look, that zero percent number on the

(13:40):
Blackwell chips is actually a massive safety measure, and if
you do get the green light, that can only add
to the blockbuster numbers that already exist.

Speaker 2 (13:49):
This is Bloomberry Daybreak, your morning podcast on the stories
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Speaker 3 (13:56):
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Speaker 2 (14:02):
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Speaker 3 (14:34):
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