Talking Nvidia, Vital Farms
Question: Where are all the eggs? Answer: Not where they used to be.
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Happy New Year!
As upbeat as I’d like to be, it’s back to business…
Nvidia: Is it setting itself up for a telecom moment?
Vital Farms: Will it be helped or hurt by the fact that you can’t easily find its eggs? (At least here in California.)
Container Store case study: If you missed my writeup, you can read it here.
Podcast fun: And if you missed my recent free-ranging discussion on the Stansberry Investor Hour, we covered a lot of ground, including when to sell a stock and what I think about people who don’t agree with the angle of my reports. It was fun to do, and I hope equally fun to listen to. You can hear it here.
Nvidia’s Telecom Moment?
The FT ran a story yesterday that is likely to stir the pot today about how Nvidia NVDA 0.00%↑ invested $1 billion into 50 startups that also happen to be customers.
The story of seemingly round-trip transactions in AI-land aren’t new, but this number –$1 billion – is.
I was going over this with a friend, and it was an immediate flashback to the peak of the telecom bubble, which we both lived through – when the likes of Lucent, Nortel and Cisco did the same.
Except this time there’s a twist, which the FT lays out very well…
Some of Nvidia’s largest customers, such as Microsoft, Amazon and Google, are actively working to reduce their reliance on its GPUs by developing their own custom chips. Such a development could make smaller AI companies a more important generator of revenues for Nvidia in the future.
The story quotes Nvidia as emphatically saying that there’s no quid pro quo.
Maybe there isn’t, but let’s just say… as a fill-in on the margin, these related-party sales don’t hurt. And make no mistake, regardless of whether they quantify as bona-fide related party-transactions, they are related.
On the Other Hand…
A friend who is long Nvidia and the broader AI theme – and has been from before they were as hot as they are now – disagrees, saying…
That story has been paraded out several times. What people under appreciate is the speed at which Nvidia is moving – most likely leading to the hyperscalers buying the newest. They then take the oldest, re-purposing them for inference, in turn killing the inference opportunity everyone is so excited about.
Infer at will.
A Vital Situation for Vital?
News of the rapidly spreading bird flu is not news, especially if you’ve been to the grocery store lately – certainly here in California.
Egg pricing has skyrocketed, and supplies have fallen.
What are the implications for Vital Farms VITL 0.00%↑ , which I first red-flagged back in September in my report headlined, “Shell Game”?