Sam Dickie: Fisher Funds expert on Nvidia's third-quarter earnings surpassing expectations

Nvidia's reported third-quarter earnings have surpassed expectations - and left the chip maker feeling optimistic about its future.

The company's earnings delivered a better-than-expected forecast for the next quarter.

Fisher Funds expert Sam Dickie explained further.

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Episode Transcript

Speaker 1 (00:00):
Seven Heller duper Cel.

Speaker 2 (00:02):
So the chip mak in Vidia has announced the age
of AI is in full steam. The companies announced its
third quarter earnings today, beating expectations for sales and earnings,
and Sam Dickey from Fisher Funds is with us on that. Hey, Sam,
good right, So tell me about the result.

Speaker 1 (00:17):
Another astonishing result on the face of it. So they
almost doubled revenue to thirty five billion in profits more
than doubled, and importantly, as you said, it was more
than five percent better than already lofty expectations that analysts
had and their key data center business, where by they're
selling their accelerated computer chips into data centers like Google Cloud,
for example. That grew one hundred and twenty two percent.

(00:39):
So all well on.

Speaker 2 (00:40):
The face of it, And the stock price did what.

Speaker 1 (00:44):
Not fabulously It closed about two and a half percent
after hours despite the strong results. So it is a
reminder that the bar for this company is punishingly high.
In other words, there's a lot of good news in
the share price.

Speaker 2 (00:56):
Okay, Now, obviously everybody's looking at this not just about
the perform pullmans of one company, but what this means
for the tech sector. And what it means for AI.
So what are you taking from it?

Speaker 1 (01:06):
Yeah, there's no doub there's a huge amount of money
pouring into AI, and in fact a huge amount more
than was expected just a few weeks ago. But what
is super interesting is you've got to remember the vast
majority of these in vidio chips have been sold to
companies like Microsoft and Google and Amazon, who are re
renting out those chips to thousands of smaller companies who
are racing to find the next big AI use case

(01:28):
and the one that we will all pay for, as
we've talked about before. So to that end, in video,
seeing most excited about AI agents. So AI agents to
replace call centers and course center people, AI agents to
automate everyday work streams and videos, talking about billions of
agents over the next few years. And the other thing
that's taking off again right now is industrial robotics. And

(01:51):
it was always a growth theory, but the potential for
the robots and factories and surgical robots to learn and
get better and more precise is increasingly as preaching exponentially,
And if you take Intuitive Surgical for example, they've got
near one hundred percent markets here in soft to robotic surgery.
Their new robotic system is learning so fast that in

(02:11):
time it's going to be able to perform simple operations
like stitching up the wound after a gall bladder operational boat.

Speaker 2 (02:17):
So now, I mean the thing is, it's been it's
been somewhat disappointing, you know, the our adoption, consumer's adoption
of AI. So do you think it's going to pick
up from here?

Speaker 1 (02:26):
Yeah, when the consumer adoption has been poor and we
talked about this last time, So was it going to
be the an upgrade cycle on iPhones because of the
new Apple intelligence? And it doesn't look like people are
prepared to pay an extra two or three hundred bucks
of phone just for a smartest sery. And then of
course the large language models themselves and there are people
that pay, you know, twenty bucks a month for Perplexity

(02:48):
or chat Giti or whatever. But I don't think that's
going to kind of fill that yawning gap between the
amount of these accelerated compute chips that are being sold
by in video. So it looks like corporate So the
new big buyers of AI. And this is this is
this AI agent story I'm talking about. So if you
can sadly replace lots of people with an AI agent

(03:11):
and a core center that's as good, if not better,
then that makes sense for a corporate.

Speaker 2 (03:16):
Okay, so what do you tell me what you're making
of this? For investors, Sam, it.

Speaker 1 (03:20):
Seems like the AI bonanza continues unchecked, and there are
a few things to keep an eye on those. So
the revenue guidance for next quarter, and that was one
of the reasons why the stock was a bit weak,
was only kind of in line with expectations, so not
a barber as we've become accustomed to. And the other
thing that Nvidia talked about was the profit margin guidance.
So the margin they're making on this incredibly big revenue

(03:43):
number is just a bit soggy. So they're ramping a
new generation of chip called the Black World chip, which
has got exceptional performance, but it's just not quite as
profitable in the early days as the previous chips. So
a couple of things going on there. And then of
course these AI use cases. Let's keep our bd I
peeled on the next killer AI use case to fill

(04:03):
that yawning gap between you know, three point seven trillion
dollar valuation of Nvidia and the much less lower number
of the amount of dollars were prepared to pay for AI.

Speaker 2 (04:15):
Your very very good point there, Sam Hey, thank you
appreciated that, Sam Dickey for your funds.

Speaker 1 (04:20):
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