00:00 President
Nvidia's shares are down just over 2% after the Chinese company Huawei develops an AI chip which, according to her, can compete with Nvidia H100. It is according to the Wall Street Journal. For a more in -depth examination of the flea sector, I want to bring Brian Colallo. It is the actions strategist in Morningstar. Brian, great to talk to you this morning. Tell me about this potential competition from China, especially Huawei here. To what extent is it a real headwind for Nvidia?
00:33 Brian colallo
Oh, I think the headwind is in place and I think it's about the game for Nvidia in China. I think that the H200 ban was probably the final straw of Nvidia able to sell anything in half in China, and I expect Huawei products to probably be best than the older products that Nvidia has sent or the H200, if not today, then at some point in the new ones in the future. So I think Nvidia is almost cut, and I think Nvidia from now is much more a developed market story. There is still a lot of growth in the United States, Europe, uh so I am much more concentrated in these markets at this stage.
01:41 President
Brian, I had to check the transcription when I sat in my new seat here to make sure I heard you properly. You are very down to the business of Nvidia China specifically at the rear of this news. What do you think the initiates for Nvidia? Do you think they potentially allow the China sector at some point, or do you think they simply reduced their losses and invest in other markets?
02:15 Brian colallo
Well, he thinks they already have a radiation of five billion dollars, and we will hear more at the end of May, so maybe you know, it's possible. Maybe there is something they will send, uh, but I think that the restrictions have reduced the materiality of Chinese affairs in stages, and I think that this H200 uh cup and the radiation and a half of radiation is as close to the final straw that I could think. I think they are moving away and focus on the United States.
03:04 President
And talk to me as
03:06 Brian colallo
As long as UM as they can, I mean, there is if the restrictions rose, Nvidia would like to be there, but I just don't think the US government will leave them, frankly.
03:18 President
So, what does this mean for American investors, especially since we are heading for this Nvidia income? Do you think there is still a case of bull for this short-term name?
03:31 Brian colallo
Absolutely. I think Nvidia always sells everything they can do on the Grace Blackwell side. UM There is still a great growth in hyperscalers, Google, Microsoft, etc. We see few signs, if necessary, that they really slow down in 2025. It seems that they buy all the BlackWells they can for this year due to performance improvements, and we are always skeptical that American companies will slow their investments in AI, even with the recession. AI is the future. It's uh certainly a race at the moment, uh and we think that the expenses are continuing in the short term. So I think Nvidia is created. Now, China, uh, could be a success, so maybe we see uh, you know, less growth in profits this year, less income growth, I may even be a declining quarter due to China's great success. We will see on this, but everything else should be good enough, and there is still a lot to be silent for the United States and AI in the future.
