Nvidia Delivers 'Michael Jordan' Like Numbers, Ives Says
Summary
- Nvidia's recent earnings are described as "Michael Jordan-like numbers," with 70% growth and 77% gross margins, beating street whisper numbers by 500-700 basis points.
- The sell-off in enterprise software (Salesforce, ServiceNow, etc.) is characterized as the "most disconnected trade" in Ives' career, creating a generational buying opportunity.
- The AI revolution is viewed as being in its early stages ("10 p.m. at a party that goes until 4 a.m."), with Nvidia remaining the dominant player for the next 3-5 years despite emerging competition.
Trade Ideas
Nvidia delivered "Michael Jordan like numbers" with 70% growth and 77% margins. Ives notes that the $500 billion revenue talk for Blackwell/Rubin is "conservative." For AMD, he states they are "making all the right moves" and will capture "15-20% of this market over the coming years." The AI hardware demand is not slowing down. While Big Tech (Meta, etc.) may try to build internal chips, for high-performance tasks like autonomous robotics, there is "no choice right now" but Nvidia. As the market expands, AMD will successfully establish itself as the secondary vendor. LONG. Nvidia is the "only game in town" for the next 2-3 years, and AMD is the clear runner-up in a massive TAM. Long-term competition from internal silicon (hyperscalers) or Huawei, though Ives views this as a 3-5 year risk, not immediate.
Software stocks have been "taken out to the woodshed," which Ives calls the "most disconnected trade" of his career. He explicitly names Salesforce, ServiceNow, and Microsoft as core winners. The market fears that AI will disrupt these "system of record" companies, but Ives argues this is a "fictional tale." These companies own the proprietary data necessary for enterprise AI use cases. The current bearish sentiment provides a "generational opportunity" to buy high-quality software names at a discount before the narrative shifts. LONG. The "bears are winning the narrative" currently, but this is short-lived; these firms will monetize AI through their installed bases. Continued negative sentiment/multiple compression in the software sector; slower-than-expected AI monetization for SaaS.
Apple is starting to "tiptoe into AI" with the upcoming iPhone cycles (16 through 18). Ives suggests the current trading levels are attractive. The integration of AI (specifically into Siri and the OS) will drive a massive product refresh cycle peaking in 2026. He draws a parallel, suggesting the AI growth seen elsewhere (Google 2025) will manifest for Apple in 2026. LONG. Position for the multi-year "supercycle" driven by AI features on the iPhone. Delays in AI feature rollout; consumer reluctance to upgrade hardware.
