On CNBC's Fast Money, Guy Adami discusses Nvidia's profit warning, saying the good news is that the company does not seem to be concerned about data center.
The question you have to ask is, is it gaming first and potentially data center next?
Guy thinks that into earnings at the end of the month, it's expensive here.
The question you have to ask is, is it gaming first and potentially data center next?
Guy thinks that into earnings at the end of the month, it's expensive here.
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00:00 I'll say this, the good news, I think if there's good news, is that data center, they don't seem
00:05 to be concerned about data center, which is still obviously a big driver for them. Gaming, I guess
00:10 it makes sense if you think about the way the world's going. But the question you have to ask
00:14 yourself, is it gaming first and potentially data center next? And in a company that still trades
00:20 north of 30 times next year's numbers, you got to be concerned. Now, the stock has gone from
00:25 145-ish a couple of weeks ago up to 190. I mean, it rallied 30-something percent. Now we're pulling
00:31 back. Question is, is it still rich in this environment? And you know what? I got to say yes
00:36 into earnings at the end of the month. I still think it's expensive here. I don't want to make
00:40 too much of it, Steve. Listen, a tough day for Nvidia. But you just saw on the chart, it's still
00:45 above where it was a couple of weeks ago. I mean, I don't want to call this the end of the world.
00:50 Well, when I look back on a chart, I look back on the February 2020 levels. So we could argue over
00:56 whether that's the proper level to look at or not. We're not going to do that right now.
01:00 My buddy Noel said, don't look back in anger. So don't.
01:03 Exactly. So we're not going to do that right now. But if you look at where it was at, it was at $80
01:07 back then. It's at $178 right now. So it's had a little bit of a run, but it's in a declining
01:15 trend line. What do we do with chips? Went from a drought to what's going to be a glut in chips.
01:21 People, not only have they pulled forward, they will over-order now. So you have car companies
01:28 ordering 4X what they've already needed. What does that mean? They're not going to have a
01:32 business going forward. It's cyclical. They're in a downtrend. All the chips stay away.
01:38 Yeah, but I wonder, Courtney, it's cyclical. Are they sick?
01:40 Well, yeah, I think you have to look at it. I don't think it's that surprising. We've seen
01:44 this with all of your other chip makers. They've come out, and you're showing the demand is
01:47 deteriorating right now. That is the problem, right? There was this huge glut. Now the question
01:51 is, are they over-ordering? Are they going to have this huge oversupply in their inventories?
01:54 And I do think that's arguably your largest concern with your chip industry right now. So
01:57 yes, I think they might be up for maybe a bad couple quarters here. At a certain point in time,
02:02 I do think you want to look at that from a longer-term investor standpoint. I just don't
02:05 think we're there yet. I do have to agree. I think it's still a little overvalued.
02:07 OK, a little overvalued. Jeff, so NVIDIA, again, is two things. I mean, number one,
02:13 it's a massive company that is a leader in many things like gaming, data centers, and cars.
02:17 Number two, as you know, it's also a trader's favorite. People that watch the charts that
02:22 actually probably don't even care or know what the company does because they're entirely technical
02:26 traders. And it's one of the favorite volume stocks out there. How do you read NVIDIA's news?
02:32 And how do you read NVIDIA's charts? Yeah, so I'll go back to what Steve said.
02:38 And I actually mentioned this last week when we were talking about AMD's earnings. And
02:42 these stocks are still in downtrend. So AMD rallied 40% into earnings. We just mentioned
02:47 NVIDIA, 30-some percent. But the 200-day is still sloping downward. So I mentioned last week,
02:52 again, when we were talking about NVIDIA, guidance is going to be really key. And any weakness is
02:57 probably going to be sold. And I basically said it could be sold in a pretty significant way just
03:01 because of the charts. So I think that's going to be the trend here for the foreseeable future.
03:06 And also, NVIDIA, 10P turns higher than AMD, and a reasonably similar projected EPS growth out next
03:13 year. So I don't know that that bodes particularly well for the stock in the near term. That said,
03:18 like you said, it's a really good company, plenty of things to be excited about, the Omniverse
03:23 product, lots of things going on. But some of these are longer tail areas that are going to
03:27 take some time to play out. And what this market wants now is where is the growth today? Show me
03:32 the growth today. So I think that's part of the problem. A great long-term business, but my guess
03:37 is you have some cyclically kind of negative price action here, and I think you can end up buying