NVIDIA (NVDA) remains the highest conviction investment, as its recent earnings showed a massive re-acceleration in growth and guidance that far surpassed expectations. Despite its run-up, the stock is considered cheap relative to its growth, with some analysts targeting $250 per share this year. A major market rotation is underway, favoring the AI hardware supply chain over software stocks, as even strong performers like Salesforce (CRM) are not being rewarded. This suggests investors should be cautious with software-as-a-service (SaaS) investments for now. For a broader play on the data center build-out, consider Nutanix (NTNX), which recently surged following a strategic investment from AMD.

NVIDIA (NVDA)

• Sentiment: Extremely Bullish. The hosts describe it as "the biggest and most important company on the planet" and believe it dictates the stock market's trajectory. One host has half of their net worth in the stock and plans to hold for many more years.
• Q4 2025 Earnings & Guidance:
  • Revenue: Reported $68.1 billion, a $2 billion beat over expectations. Data Center revenue was a record $62.3 billion.
  • EPS: Reported $1.62, a beat of about 20 cents.
  • Guidance: Forecasted next quarter's revenue to be $78 billion (+/- 2%), a massive beat over the $73 billion Wall Street expected. This represents an 80% year-over-year growth rate, which is a re-acceleration of growth.
  • Gross Margins: Reported 75% and guided for the mid-70s to continue, alleviating concerns about rising memory costs.
• Key Discussion Points:
  • Valuation: Despite the stock's run-up, it was noted to be trading at a forward P/E multiple in the high 20s, which is considered cheap for its growth rate and below its historical average. One host noted that Walmart (WMT) trades at a higher multiple with significantly lower growth and margins.
  • AI Agent Inflection Point: Jensen Huang's comments about reaching a "chat GPT moment for AI agents" were seen as a major catalyst. The idea is that AI agents (like Perplexity, Claude Codework) will automate complex tasks, leading to an exponential explosion in the need for compute power and token generation.
  • "Compute Equals Revenue": A key theme from the call was that for cloud providers and enterprises, investing in compute capacity (i.e., NVIDIA's products) directly translates to revenue growth, as tokens are now profitable. This justifies the massive Capital Expenditure (CapEx) cycle.
  • CapEx Cycle: The hosts believe the AI build-out cycle is less than 50% complete and will last for "multiple, multiple years." They noted that CapEx from the top 5 cloud providers is approaching $700 billion for 2026, higher than previous estimates.
  • Supply Constraints as a Moat: The discussion highlighted that shortages in wafers, memory, and power prevent hyperscalers from overbuilding, which could lead to a "smoother for longer" AI cycle, unlike the dot-com bust. These constraints also force customers to buy the most efficient chips (NVIDIA's) to maximize output per watt.
  • China: The strong guidance of $78 billion for the next quarter does not include any significant revenue from China. The company has received licenses to ship some products to China, suggesting potential for future upside not currently priced in.
  • Future Products: The upcoming Rubin platform is expected to be another major leap, reducing inference token costs by up to 10x compared to Blackwell.

Takeaways

• NVIDIA's earnings report showed a significant acceleration in growth, with guidance far exceeding even the most bullish expectations. This suggests the AI build-out is not slowing down.
• The company's valuation remains reasonable relative to its explosive growth, which could attract more institutional investors. The hosts believe the stock has significant upside, with one mentioning a $250 target for this year is "happening."
• The emergence of "AI agents" is a new, powerful demand driver that could lead to an exponential increase in compute demand, benefiting NVIDIA for years to come.
• The investment thesis is that NVIDIA is in the early-to-middle innings of a multi-year AI infrastructure build-out. The risk of a cyclical downturn is mitigated by supply-side bottlenecks and the fact that "compute equals revenue" for NVIDIA's largest customers.

Software & Cloud Stocks (CRM, SNOW, TTD)

• Salesforce (CRM):
  • Reported a strong quarter with a 25% beat on EPS and a beat on revenue.
  • Announced a massive $50 billion share buyback program and raised its dividend.
  • Despite the strong results and shareholder returns, the stock was down 3-4% in after-hours trading, highlighting the market's negative sentiment towards software.
• Snowflake (SNOW):
  • Reported a "crushed" quarter with a 19% beat on EPS and a revenue beat.
  • Guidance was also strong, and the company highlighted partnerships with Anthropic, Google Cloud, and OpenAI.
  • The stock initially rose but then turned red, another sign of weakness in the software-as-a-service (SaaS) sector.
• The Trade Desk (TTD):
  • The stock was down ~15% after hours.
  • The company reportedly missed on guidance and is facing significant competitive pressure from Google and Amazon.

Takeaways

• There appears to be a major market rotation away from software stocks and towards the semiconductor/hardware supply chain.
• Even companies like Salesforce and Snowflake that are delivering strong financial results are not being rewarded by the market. This suggests a broader "AI disruption" fear, where investors are concerned that new AI agents will make existing software less valuable.
• The hosts suggest that the "build-out phase" of the AI revolution is still in effect, and the monetization phase for software has not fully begun. This makes investments in the hardware layer (like NVIDIA) a more direct play on the trend right now.

Data Center & AI Proxies (NTNX, AMD, CoreWeave)

• Nutanix (NTNX):
  • The stock surged ~20-30% after a 27% EPS beat.
  • The move was amplified by news that AMD will buy $150 million of Nutanix stock as part of a strategic partnership.
• AMD (AMD):
  • Mentioned as a competitor to NVIDIA, but its data center growth of 39% pales in comparison to NVIDIA's.
  • The strategic investment in Nutanix shows AMD is actively making deals to strengthen its position in the data center ecosystem.
• CoreWeave, Iren (IREN), Nebius:
  • These "NeoCloud" providers are seen as strong proxies for the AI build-out.
  • Their own massive CapEx increases (e.g., Nebius plans to jump from $6B to $20B) are a direct indicator of demand for NVIDIA's chips.
  • These stocks were noted to be up 1-2% in after-hours trading following NVIDIA's strong report.

Takeaways

• Investing in the broader data center ecosystem, including cloud providers and infrastructure companies, is another way to gain exposure to the AI trend.
• Nutanix's massive stock move following the AMD investment highlights the market's appetite for strategic partnerships in the AI space.
• The growth of "NeoClouds" like CoreWeave and Nebius provides further evidence of the breadth and depth of the AI infrastructure build-out beyond just the largest hyperscalers.

Other Mentioned Assets

• C3.ai (AI):
  • The stock was down ~25% after its report. The hosts view this as a win for Palantir (PLTR) in their long-running debate over which was the better AI play.
• Memory Companies (Micron, SK Hynix, Samsung):
  • This sector has seen stock prices "absolutely explode."
  • High Bandwidth Memory (HBM) is the most expensive component in NVIDIA's AI chips, making these companies key beneficiaries of the AI boom.
  • While a cost for NVIDIA, the strong demand and pricing power for memory is a bullish sign for the entire semiconductor ecosystem.
• Bitcoin (BTC):
  • Mentioned briefly for hitting a price of $69,000, indicating a strong day for risk assets and crypto.