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Luke Kawa

UBS unpacks the most controversial slide from Nvidia CEO Jensen Huang’s GTC presentation

Nvidia CEO Jensen Huang didn’t move markets when he delivered his keynote address at the chip designer’s conference on Tuesday. But he did raise eyebrows, particularly with one slide that compared shipments of Nvidia’s old flagship chip (Hopper) to its Blackwell current ramp.

The chart illustrated that Blackwell demand this year from the top four cloud service providers (Microsoft, Alphabet, Amazon, and Oracle) has already far outstripped Hopper’s from last year, which was peak demand for that particular product.

NvidaBlackwellHopper
Source: Nvidia

“So you can kind of see that in fact AI is going through an inflection point,” Huang said in reference to the chart.

The CEO had specified that Hopper’s figures were 2024 shipments, but there was a lack of clarity on precisely what the 2025 Blackwell numbers meant.

UBS analysts led by Timothy Acuri got the lowdown on the matter.

“The slide generating the most controversy was a comparison of unit shipments to just the top 4 US CSPs for both Hopper and Blackwell, implying to us these customers were ~40% of total units last year,” he wrote in a note maintaining a buy rating and $185 price target on the stock. “In speaking to the company, the Blackwell number was meant to essentially represent shipments ‘in process’ — we think roughly equivalent to backlog and roughly looking out through CQ3 of this year.”

Putting this all together, Acuri has higher conviction in his call that the chip designer’s near-term earnings growth will be much more substantial than his peers anticipate.

“So assuming a similar mix and netting off the ~100k units that we think shipped to these customers in the month of January, this would imply total Blackwell units in the ~4.2 million range in the period from FQ1 (April) to FQ3 (Oct) of this year,” he continued. “While inexact math, this is nicely above our ~3.8 million model for Blackwell units over this period making us feel pretty good about our ~$5.30 EPS this year (Street still ~$4.50).”

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Nike’s China business declines for seventh straight quarter

Sportswear kingpin Nike reported results for its third quarter, which ended in February, after the bell Tuesday. The stock fell about 3% in after-hours trading.

For fiscal Q3, Nike reported:

  • Earnings of $0.35 per share, comfortably above the Wall Street consensus of $0.29 per share compiled by FactSet.

  • $11.28 billion in total revenue, roughly in line with the $11.26 billion estimate.

Nike’s sales in China — where the company earns about 15% of its revenue — fell 7% to $1.62 billion. That’s its seventh straight quarter of sales declines in the market, though this quarter’s was less than feared. The company had issued weak guidance for this quarter considering continued softness in the region.

“This quarter we took meaningful actions to improve the health and quality of our business,” said Nike CEO Elliott Hill. “The pace of progress is different across the portfolio and the areas we prioritized first continue to drive momentum.”

Nike shares are trading near decade lows this month, as tariffs continue to weigh on profits and shipping costs rise amid the war with Iran. As of Tuesday’s close, the stock was down 17% year to date.

Oil-sensitive travel stocks pop following Iran state media reporting on potential war resolution

Travel stocks are surging on Tuesday as oil prices fall following reports from Iranian state media that President Masoud Pezeshkian said the country has the necessary will to end this war, but would only do so with guarantees that prevent the recurrence of aggression.

The war has sent oil prices and refining margins surging this month, causing airlines and cruise lines to cut profit forecasts despite reported high demand.

Following Tuesday’s update, shares of the big four US airlines (Delta Air Lines, United Airlines, American Airlines, and Southwest Airlines) all climbed, along with smaller rivals including JetBlue. US airlines have stopped fuel hedging in recent years, increasing their exposure to upward swings in oil prices.

Cruise stocks also rallied, with Carnival and Norwegian up more than 6% and Royal Caribbean up about 5%.

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The FDA is expected to lift restrictions on certain peptides, the NYT reports

The Food and Drug Administration is expected to lift restrictions on certain peptides, allowing the experimental, often injectable substances to be sold by compounding pharmacies, The New York Times reported Tuesday.

The potential move was previously reported by The Wall Street Journal, and teased by Health Secretary Robert F. Kennedy Jr. on the “Joe Rogan Experience” podcast in late February.

Peptides have boomed in popularity recently, with search interest for “peptides” surpassing “ozempic” this month. Many of them are currently understudied and not approved for human use, a rule consumers are able to bypass by purchasing them from suppliers that sell them for, ostensibly, research purposes only.

As reports of the FDA changing its stance of peptides mount, consumer health companies like Hims & Hers and Superpower have been getting ready to roll out their peptide offerings as soon as they get the FDA's blessing.

Peptides have boomed in popularity recently, with search interest for “peptides” surpassing “ozempic” this month. Many of them are currently understudied and not approved for human use, a rule consumers are able to bypass by purchasing them from suppliers that sell them for, ostensibly, research purposes only.

As reports of the FDA changing its stance of peptides mount, consumer health companies like Hims & Hers and Superpower have been getting ready to roll out their peptide offerings as soon as they get the FDA's blessing.

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Memory stocks bounce as Bernstein analyst calls TurboQuant fears “overdone”

Memory stocks rose Tuesday, after Bernstein analysts called the recent panic over Google’s TurboQuant AI algorithm “overdone.”

Bernstein analyst Mark Newman wrote:

“[Hard disk drive] and Memory stocks have sold off significantly due in part to fears from Google’s TurboQuant report. This however, should have zero impact on HDD demand and negligible impact on NAND demand. Given the stock sell-off we see this as an attractive entry point for Seagate Technology Holdings, Western Digital and Sandisk’s and upgrade WDC to Outperform.”

All three stocks were up early Tuesday, as was memory chip maker Micron.

Todays rally stands in stark contrast to the pummeling these shares have endured over the last week, after Google Research published a technical paper on March 24 detailing its TurboQuant AI algorithm, which compresses the amount of data associated with AI operations without affecting the accuracy of AI models.

That was seen as a threat to surging AI demand for memory storage, which has supercharged prices for memory chips and memory-related stocks over the last year.

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