How tensions in China could have an impact on Nvidia.
Transcript:
Angelo Zino: So how do we see the China US relationship impacting NVIDIA long term? I would say the dynamics are extremely important. And what comes out of that relationship here over the next couple of quarters and years is going to be very important to the long term potential for NVIDIA. Jensen has alluded to the fact that it’s a potential $50 billion market on an annualized basis – and growing – which is really important to note. And again, we talked about the $8 billion in lost revenue here for the July quarter from China. So when you think about where the biggest hyperscalers are in the world, they are still in the US. But when you think about the next level, the Alibaba and the Tencent and the Baidu’s of the world, your next levels are really out in China right now. And it’s so important, especially when you look at their capital spending plans with some announced from the likes of Alibaba. Essentially, more than doubling CapEx run rate here over the last two quarters, looking to more than spend more in the next three years that they have in the last 10 years. So there’s some aggressive spending going on in China. NVIDIA wants to be part of that. And they want to take advantage of that if they can. It’s a huge missed opportunity. Not to mention it allows a company like Huawei, which is probably now their biggest competitive threat, to really gain in power. And that’s going to be a thorn for this company here in the foreseeable future if NVIDIA can’t get in that market. In many ways, the way Huawei is a thorn in the likes of a company like Apple right now.
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