Antoine Chkaiban, New Street Analyst, tells Open Interest that he expects Nvidia to de-emphasize China and focus more closely on domestic demand when the chip giant reports results after the bell today.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

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Nvidia is poised to release its earnings, drawing attention to its ongoing growth and strong position in the GPU market. Analysts highlight that while China remains a source of uncertainty due to trade tensions and policy shifts, Nvidia's domestic and global demand for GPUs continues to be robust, particularly from hyperscalers who account for a significant portion of its revenue.

Despite emerging competition from AMD, which is improving its software and ecosystem, Nvidia is expected to maintain a dominant market share in GPUs for the foreseeable future. Experts predict Nvidia will hold around 90% of the GPU market by 2029, though its share in the broader data center compute market may be lower as other companies develop their own chips.

Nvidia to report earnings after the bell

As I said you know this company. Well our last guest called it a momentum train. It's just been unstoppable and the growth seems to know no bounds. What's your take on today's earnings report. Yes thanks for having me. I think you know a big focus is on China. As you know there's been you know a lot of news flow around Beijing trying to achieve self-sufficiency and media posing again production for the age 20. I think there's a lot of concerns around whether you know China is going to be included in the guide whether it is going to beat expectations. So of course there's one aspect related to that. I think you know it's very hard to predict what's going to happen on that front. I think it goes even beyond whether you know China is going to get reassured and whether the ship have backdoors. You know there's been like some reports that some some China senior leaders found some some comments insulting. So I think it's more you know a negotiation between the US and China that is going to shape up what's going to happen next. And the bottom line is that China is probably going to continue to represent a source of volatility for GPU vendors. Now you know I think 2025 is fairly well round up. So I don't expect a major beat for it for NVIDIA. I think you know CapEx expectations now you know make room for NVIDIA. Like earlier one of your colleagues talk about hyperscalers you know who account for 40 percent of India's revenues. They make room for NVIDIA now to meet these expectations. It's more 2026 the debate. So what I would really love to hear you know from Jensen on the call is you know some visibility that we get into next year possibly even 27. Well it's interesting when you think about the call and sort of the messaging that might come from the C-suite. We were talking with Mandeep Singh of Bloomberg Intelligence. His expectations is that maybe they're going to deemphasize China a little bit focus more on the domestic market given all of the uncertainties when it comes to the Chinese market and how of course trade policy and the relationship between those two nations will shake out. Is that your expectation as well. Yes. I would say that's our expectation as well. You know I think there are two more much more important things to monitor than what's going to happen in China and things where we can really build up a conviction. First one is how demand is shaping up. And I mean in our view it's still very very strong. You know you still have the scaling lows. You have Elon Musk tweeting that he expects to to have like an installed base of 50 million H100 GPUs by the end of the decade. That's the kind of data points that matter to us. That's the you know where we think the debate is going to shift. There is of course you know the question of the defensibility of pricing power how competitive dynamics are going to play out. You know at the different layers of the supply chain guys developing models developing applications. So you know I think that's that's where the debate should be going. You've done long range modeling and I wonder you know how long NVIDIA maintains this dominance. When I see a story like yesterday AMD said it's going to work with IBM on quantum centric supercomputers. I don't know what that is but it sounds like they might get an edge there. How long does NVIDIA rule the roost. So quantum computers are still you know a few years out. So I wouldn't call that you know like a threat to to NVIDIA. Antoine Jensen said like still 15 years out and then two weeks later he's like actually coming soon. So it seems like we're all over the shop in terms of when that's going to happen. Yes I mean there's a lot of excitement and I hope that they're going to come sooner than we think because they're going to be very very helpful very useful. But they're not going to replace traditional computing to begin with. They're more going to complement it. And AMD building a strong position there you know. And by the way they're not building a strong position in quantum computing. AMD has a very good GPU. They're just gaining momentum. I just came out from a great chips conference here in Palo Alto where all the developers were talking about how great you know AMD software has become compared to a year ago. And that was one of the roadblocks that AMD had in order to gain adoption. They've been working very hard with the largest customers to build you know software stack and momentum and ecosystem to be able to gain momentum. But that doesn't mean you know that's a major threat to NVIDIA. You know I think you know they're starting from almost 0 like less than 5 percent market share. You know I think even if you give AMD 10 15 percent share which you know in a context where NVIDIA is probably going to remain dominant they have much more resources to invest. You would still have you know like a win win situation where the market is going to diversify to AMD to in-house programs. But NVIDIA is still going to remain dominant in a very fast growing markets. So you know we like this overall. Well Antoine to that point I'm taking a look at your notes. You write that when it comes to GPUs you expect NVIDIA to maintain 90 percent share in 2029 which is down from 96 percent today but 90 percent share. Twenty twenty nine is a long way away from here. How long do you expect them to maintain that sort of dominance. Does it ever get into the 80s the 70s. So this 90 percent share is if you look specifically at GPUs if you look at the overall data center compute markets we actually you know you you don't have any GPUs. You have Google for example is developing a CPU. You have Meta who's ramping easy. Amazon who also has ramped easy. Microsoft was trying. Reportedly not doing very well. So you if you include that part of the market as well actually NVIDIA the share that we're making for NVIDIA is actually closer to 60 70 percent. It's just within GPU which is one category of the market where against it it's only AMD that they're playing that we see them remaining you know the dominance because of course they have much more resources to invest. They have a head start. AMD just started. You know they're at like they're their third real generation GPU that they're ramping now. You know it takes it took NVIDIA like decades to get where they are today.

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Nvidia to report earnings after the bell

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