Carl Quintanilla, Jim Cramer, and David Faber break down expectations and outlooks on Nvidia ahead of the company's quarterly results, due after today's close of trading.

Ahead of Nvidia's earnings announcement, analysts are examining the company's central role in the development of generative AI and the significant investments being made in its technology. There is debate over whether hyperscalers and enterprises are overspending on Nvidia's hardware, with some questioning if the high total cost of ownership is justified by current returns.

While some argue that Nvidia is capturing most of the profits in the AI sector, others note that the anticipated future value of AI justifies ongoing spending. The discussion also highlights uncertainty around whether AI investments are delivering real efficiency gains for enterprises, and the importance of Nvidia's conference call in clarifying demand and return on investment.

Countdown to Nvidia earnings: Here's what to know

Jim, implied moves about 6%. It's pacing for five consecutive months higher. Yeah, okay, so we actually had the CEO of MongoDB on this this morning, talked about the overspend. Are the hyperscalers overspending? Does it really matter if we're so early in the game? It talks about hallucination and the problems there. I come back and say that the answers to everything come to this company. You cannot have generative AI the way you'd like to without NVIDIA. So you're going to have what some people say overspend, but it's table stakes. It's the price to be in the business. David, there are a lot of people who feel, this will come up tonight, that the total cost of ownership in NVIDIA has got too high and you can't make money with it. Total cost of ownership, explain what you mean when you say that. Oh, because if you buy the stuff and then you have it inserted by Dell and you try to train on it and you have the inference, it turns out that you lose money. Because if you're just spending so much, you're not getting a return. Right. But they all, I mean, OpenAI is losing an enormous amount of money right now. Right. But it's worth $500 billion because of... Because of what is expected to be coming in the future. Right. Obviously, they're spending most of it on data centers and NVIDIA equipment. Okay. So the rap is that NVIDIA makes all the money and nobody else does. And that's what has to be addressed tonight. Not China. I mean, everyone's going to say China. Yes. Okay. So you're a parrot. Like they have parrots in London. Actual parrots run around there. Well, that's those people. Interesting. China. Why China? No, I mean, like, no kidding, China. What matters is that we hear from Jensen Wang about how that whole narrative that the spend isn't getting them any results is false. That's what we have to hear. But is it false? I mean, we, you know, early days, early days. Where's the leather jacket? Get rid of that picture. In terms of spending on the in the enterprise and seeing real returns at this point. Right. Still hard to say that that's the case. I'm not going to disagree with that. But I think that Jensen might. I think Jensen might be able to say, look, the return here is monstrous. But you just have to be able to bear with it. It's monstrous. Everybody believes it will be. Well, okay. So, you know, and it's all so much of it's anecdotal. But when you do talk to people in terms of how they do their job, yes, they become more efficient. But has it really replaced certain things? And by the way, this gets the whole debate about software as a service and whether that threat is real or not. Heard on the street today in the journal saying this is blown way out of proportion. You can't replicate with AI all the different things that you're doing with your, you know, key software providers. Look, I think that that's a really important narrative. But I think that what's more important and why this conference call is so valuable is that if that's the case, what's the demand? I mean, the demand, some people say it might be as high as 10 to 1. Yeah, that's where Bush's figures were early last week. It's Dan. Sartorial Dan.

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Breakdown