500: Nvidia Q1 & Blackwell, Cloud to $1 Trillion, Microsoft CapEx, Hard Drive Industry, ASML & TSMC Killswitch, Fertility (Again), and Futurama

"amazing is expected"

Never fall victim to the dominant culture of contentedness and the ease of mediocrity.

—Thomas Oppong

5️⃣0️⃣0️⃣ 500 Editions!

That feels like a lot 🤔

If we were to print them all, and each one is a handful of pages, we’re talking about a pretty heavy tome. 📙

I still love talking to you. I still love exploring and collecting interesting items and sharing random shower thoughts and stupid dad jokes ⚓️🚢

Lately, I miss podcasting. It has been a while since my last one. Fear not, I have multiple ideas of who to talk to next. 🎙️🎧

One of the things that made me delay recording is that for the first time in years, my asthma came back. I caught a cold, and it triggered a month of coughing and wheezing even after the virus was gone.

I thought I was done with asthma after not having any since around 2019, but apparently not. I have a theory about what happened. Maybe I’ll test it out and report back later.

In any case, thanks for walking along this twisty road with me. I appreciate you 💚 🥃

🃏♠️♥️♣️♦️❄️ Did you know that if you take a normal deck of cards and randomly shuffle it, what you’re holding in your hands is extremely extremely likely to be 𝓾𝓷𝓲𝓺𝓾𝓮?

Even over the 700 year history of playing cards, the number of shuffles performed is a tiny fraction of the total possibilities

The number of possible permutations of a 52-card deck is extremely large, equal to 52! (52 factorial) which is approximately 8.07 x 10^67. 

This number is greater than the estimated number of atoms on Earth.

To put this huge number in perspective, if every person on Earth shuffled a deck of cards every second since the beginning of the universe 14 billion years ago, we still would not have come close to shuffling all the possible permutations.

Of course, this assumes a *random* shuffle, which humans aren’t very good at (especially starting with a brand new deck of cards, in which the cards are ordered).

But statistically, if you do seven riffle-shuffles in a row, the resulting arrangement of cards should be effectively randomized.

✨✨✨✨🌌🌌🌌🌌🔭 Speaking of big numbers:

• “The number of stars in the Milky Way is estimated to be between 100 billion and 400 billion.”

• “The most widely accepted current estimate is that there are around 2 trillion galaxies in the observable universe”

I think about this often.

🎹 In Edition #499 I wrote about competence. My friend David Kim (💚💚💚💚💚 🥃) shared this clip of Billy Joel talking about it. I like it, so I’m sharing it with you.

“When you’re competent, and you live in an age where there’s a lot of incompetence, it makes you appear extraordinary.”

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🏦 💰 Liberty Capital 💳 💴

😎 Nvidia Q1 Highlights 🔥🐜

Note that this isn’t Q1 2024, but Q1 for their fiscal year 2025 🙄 (you know how much I love these offset fiscal years)

Maybe that’s why they’re so good at what they do, they’re a full 12 months into the future! 🤔

Let’s get a few numbers out of the way first and then dive deeper to see how the business is doing:

• Revenue: +262% YoY 😯

• Data center revenue: +427% YoY 😲

  • Within the data center segment, networking is up over 300% and compute is up over 500% 🤯

• Other segments revenue: Who cares?!

• Gross margin: 78.4% (+13.8% YoY!)

• Operating income: +690% YoY

• Net income +628% YoY

• Free cash flow: +565% YoY

• Free cash flow margin: 57.35% 😳

I mean, these results are just bonkers.

But after a few quarters in a row, it’s a good reminder of how quickly people get used to something.

The first time, it was eye-popping and head exploding. Now it’s still amazing, but amazing is expected.

The question isn’t “will Nvidia do well?” but “by how many billions will they beat the top end of the guidance?”, which means that whenever they *inevitably* slow down, there could be an overreaction because the baseline of expectations is now so high.

Blackwell. Named after David Blackwell, who made great contributions to game theory, probability theory, information theory, and Bayesian statistics.

Here’s a deeper dive into what management had to say about how the company is doing and some very interesting information about the Blackwell ramp: