Microsoft just showed us Nvidia's future

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Beneath the gloss is the truth behind NVIDIA
SMCI’s turning point?
AI is telling me what to do. What about you?

If that’s enough to get the revenue records tumbling, read on…

AI Collision 💥

At the time of writing, Nvidia has only just dropped their latest quarterly results on the market. And I’ll take a respectful look at it in the coming days.

But I know what will happen before it happens. It happens every quarter with Nvidia. They smash earnings because the demand for their AI chips is utterly off the chart – particularly for Blackwell now – and they bank record revenues, explain that demand is still growing and then the market has these crazy future earnings expectaions, which Nvidia reports less than, so the market is disappointed and the stock price falls.

But then in the next quarter it rinses and repeats and they bank record revenues again, beating expectation. It’s been happening like this for almost two years now.

To give you a glimpse though as to what Nvidia’s future entails, you need to cast your eye to what Microsoft announced this week.

This week Microsoft held their “Ignite” event showcasing all the new releases for their developer and IT community. In short they got to tell the world about their harder push into AI tech for their Azure services.

What does this mean? Well it means things like the release of Azure HBv5 – with AMD for supercomputer platforms. That’s right, Microsoft isn’t completely married to Nvidia for everything. And when it comes to supercomputing, some of the kit coming out of AMD is top notch stuff.

Then there’s the Azure AI Foundry – in short, this is like a marketplace for AI models, and Microsoft is more or less saying, we’re going to be (or at least try to be) the operating system for when you want to build your own AI, and you can tap into over 1,800 different models, whatever you need to suit whatever you’re building.

Then there’s their ongoing development around quantum computing, which they’re doing in partnership with Atom Computing. This is big, and I think it’s going under the radar because of the AI mania, but mark my words, the development and opportunity in quantum computing is equally as important, relevant and potentially profitable as the AI opportunity.

Now, you can get a nice and concise rundown of all of Microsoft announcments in the video below. But after, it’s something else that really you should take note of.

For me, the big thing in that long line of big announcements is the announcement of Nvidia Blackwell on Azure.

This is the first serious iteration of Nvidia GB (Grace Blackwell) chips into serious cloud and datacase infrastructure with Microsoft. This is what those records smashing revenues of Nvidia looks like in the real world.

This is where the money is going to pump so hard into Nvidia’s coffers. From Microsoft, Elon’s companies, Meta, Amazon…and then a long line of companies around the world, that are desperate for the most powerful, efficient and exciting AI chips in the world.

Nvidia will fluctuate in price, but what Microsoft just told us is that whatever the short term says, long term money is absolutely being spent up big on Nvidia chips for generations to come.

AI gone wild 🤪

Remember that time when Super Micro Computer could do no wrong?

And then they could only do wrong.

So wrong in fact that they were on the brink of being delisted from the NASDAQ?

Well, delisting now looks unlikely. And as you’ll see from the 31% rise in SMCI’s stock price on Wednesday, investors think it’s unlikely too.

So, is this the turnaround moment for SMCI?

Well, hold your horses padre. Like I said the other week, I think some water would need to pass under the bridge before SMCI looks enticing enough to consider for investment.

While a 31% jump in a day is nice, push the chart out a bit and you’ll see even after that rise, they’re still at roughly the same price they were at in January. That’s a long way from their peak, so if you’re thinking of this as a turnaround story, fair play, but remember also, you’ve got time and frankly, it’s hard to think SMCI is completely out of the woods just yet.

P.S. Something weird just happened to me while I was looking through some sites using a Chrome browser. I went to the Cointelegraph website reading some crypto-related things…then suddenly this AI-enabled pop up appeared in my browser asking “did you mean to go to The Telegraph” and then tried to push me to The Telegraph. That’s not what I wanted, but the Google’s AI clearly thought I should. I wonder if these AI enabled coercions will be more aggresive over time, maybe ultimately leading to just not letting you go to the site you want because the AI knows better. I’m going to keep an eye on that, but if you come across or have experienced a similar thing, let me know.

Is AI telling you what to do?

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

man in black suit jacket and black pants figurine

Boom 📈

BigBear.ai (NYSE:BBAI) up 22%
C3.ai (NYSE:AI) up 18%
Vertiv (NASDAQ:VRT) up 10%

Bust 📉

Predictive Oncology (NASDAQ:POAI) down 19%
Appen (ASX:APX) down 16%
Lantern Pharma (NASDAQ:LTRN) down 16%

From the hive mind 🧠

Is this going to be the 2024/25 version of Tamagotchi? Err…probably not. But good on Casio for having a crack at something weirdly cute and possibly addictive.
Big name brands are having a rough time of it lately. Jaguar in particular (that’s not an AI thing so I’ll leave that, at that). But Coke is also getting some flack mainly because after years of classic Xmas ads, they’ve now gone full-AI and the fans don’t like it.
Yep, as expected NVIDIA blew the roof off again with earnings. And yep, as expected the market sent the stock lower because future earnings weren’t as high as they wanted. Ugh, those pesky analysts.

Artificial Polltelligence 🗳️

Crikey!

Here I was thinking our poll from last week on humanoid robots in the home was close…(that was a 37.21/31.40/31.40 split by the way)

Then you go and give one even closer!

Self-driving cars? A thing or not a thing during Trump’s term? A boom to ensue, or just pile into Tesla stock and hope for the best?

Well the jury is well and truly split.

My take is the most likely outcome is that we’re on the cusp of an automation boom in the market. It’s really a continuation of the AI theme, but in a far more visceral and engaging way.

Certainly an aspect of the market we’ll definitely look at more. Robots in the home I think is going to be a big theme in 2025.

Anyway, here’s the results of Tuesday’s poll…