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In video sharing and the call the China impacts due to changes in export controls for the second quarter, the chipmaker expecting a loss in A20 revenue of approximately $8 billion. But Jensen just saying at the conclusion of the call that while they are thinking about developing an alternative product to be able to sell into the Chinese market, they are not, they don't have anything that they wanted to announce today.

To discuss more on what this all means for in video, let's get to CFRA research senior equity analyst Angelo Zino. Angelo, congrats, you made it through the call, so did we. So, what do you, uh, what do you make of uh, uh, of NVIDIA and particularly the the China situation?

Yeah, I mean I think overall, you've got to be pretty optimistic where NVIDIA is sitting right now. I mean the guidance, I mean the results in itself are perfectly fine, um, solid results, the, the guidance, you know, when you kind of try to dissect it, you mean, you alluded to the $8 billion in lost revenue there, um, from China, which essentially indicates that, um, the U, the, the non China business is running well ahead of expectations. Because most of us were looking at about a four to five billion dollar hit for the July quarter tied to China. So the fact that, you know, you, you're likely running a couple of billion ahead of expectations in China. As far as, um, China itself is concerned, listen, um, I think what you're getting here now is almost a de-risking of China in the fact that, hey, listen, um, you would have been potentially 8 billion above the current run rate. But the fact of the matter is, um, you now don't necessarily need to worry about another leg down driven by China. And in fact, if we were to see some sort of good news, um, and we don't think NVIDIA is going and Jensen is going to give up on China. Um, so we would expect them to at some point, um, find their way back into China. Um, once they do, that is a potential catalyst, um, for the shares.

Angelo, I know you're, you know, you got to buy on this name, but when you're talking to your clients and they ask you, hey, what are the key risks I need to think about before committing capital to NVIDIA? You tell them what, Angelo?

Yeah, I mean there's a lot of risks that are still on the table. I mean I'd say right now, um, you know, there, there are still geopolitical risks that you still need to take into account, tariff oriented risks. I mean there, we do have a pending 232 semiconductor investigation that is going on at this point where we expect to get some clarity on it here over the next couple of weeks or months. Once we get, um, you know, further information on that, there is going to be a tariff, right? On, um, technology products out there, you know, on the, on the hardware side of things. NVIDIA largely now is hardware oriented in nature. We think they're going to be able to obviously pass through a lot of those costs. But nonetheless, it is a potential headwind that's looming out there at some point in time. But still we need to find out, um, get some clarity on that side of things. That's the other thing, um, you know, when we look out here over the next couple of quarters or years, years, the trajectory of AI demand, um, I think was more of a concern maybe two months ago. But nonetheless, um, we're seeing a lot of supply growth in terms of, um, extra compute capacity getting added into the market, not only from the hyperscalers, but you know, from these tier two, three providers, whether they'd be the core weaves, the, you know, the stargates of the world. And if we would get to a point where, you know, that capacity, that supply growth exceeds the demand growth, um, that you know, clearly becomes worrisome for the AI trade. But I don't think that's something you necessarily have to worry about here clearly over the next couple of quarters, especially given what Jensen just talked about in terms of the emergence of these reasoning models, what they're doing, uh, you know, with AI agents and the demand that's providing for compute here.

So one of the questions I have is in terms of some of these other areas that you just were referring to, um, what, you know, to counter Josh's question, what are some of the positive things that you're telling people who are calling you that you're seeing? You referred to some of those things, but what are the other growth areas? Like one of the things we were talking about earlier is the fact that, you know, we're really not seeing anything on the robotics side just yet from a revenue perspective. I think there's some other opportunities out there. Any other things like that that you're seeing that you think are positives?

Yeah, so I, I think, you know, when it comes to AI, you've got to, you know, walk before you can run, right? I mean you look at 23, 2023, 2024, those were kind of the years of generative AI. You've now got this inflection here in 2025 which we think will spill into 2026, which is kind of this shift towards AI agents, more complex reasoning models. And I think 2027, 2028 will be the, the bigger opportunity, um, and you know, massive wave in terms of the physical AI world. Um, so you'll probably see some signs of that obviously here over the next year or two, but the, the greater momentum we think is probably, you know, three to five years away in time. But nonetheless, you know, there are clearly catalysts, you know, towards the growth of compute out there. Um, I'd say also think about sovereign AI more and more nowadays, um, especially after the Saudi Arabia deal, um, that we just saw. I think you're going to see, um, a lot more deal making, um, here over the next couple of quarters. And I wouldn't necessarily, you know, be surprised if you saw more NVIDIA, um, you know, in some of these deals that get announced out there in terms of, um, being used as a bargaining chip. And that's clearly going to be a potential catalyst, um, for a company like NVIDIA and the broader, um, AI ecosystem.