The Cashflow Memo
Shownotes
00:00 Intro
00:50 Energy Sector Update
Exhibit C: IEA forecasts 800k barrels/day oil demand increase for 2024, while OPEC forecasts 2M barrels/day increase. Oil prices rebounded after OPEC+ announced plans to increase production in the fall
Exhibit B: U.S. oil production stuck at 100M bpd, below 103M bpd estimate for 2024. 2 bpd of production in Marcellus shale likely shut-in voluntarily due to low gas prices
Exhibit A: Hoping 2024 deficit comes in around $1.5T rather than higher due to student loan forgiveness accounting
04:31 NVIDIA's Valuation Surge
NVIDIA's market cap has surpassed $3T, overtaking Apple and Microsoft
Run rate of $110B sales and $62B free cash flow, which is remarkably high
Jason believes NVIDIA's valuation is getting ahead of itself and growth will be hard to sustain
Mike sees NVIDIA as the most important company currently due to the AI industry's dependence on their chips
NVIDIA's tech is moving quickly with new chip generations unlocking new use cases
Cloud providers account for about half of NVIDIA's revenue
Inference will drive significant demand for NVIDIA's chips as AI becomes commonplace
14:11 Constraints on NVIDIA's Growth
Dependent on hyperscalers being able to profitably rent out GPUs
Short payback periods give room for cloud providers to lower costs and still profit
Trickle-down use cases need to create value and cashflow for NVIDIA's growth to be sustainable
Some efficiency gains and cost savings emerging for enterprises adopting AI
More proof needed on sustainable cashflows for NVIDIA from enterprise AI adoption
15:03 Other Tech News: Snowflake & AMD Hacks
Snowflake user accounts lacking 2FA were breached, hackers bought password list to target Snowflake data
AMD investigating potential data theft, highlights prevalence of cybercrime risk
Companies need to run zero-trust systems, but users and computers can still be compromised
"Everything is hackable" with enough time and resources
18:47 Ad Break: Oakcliff Sailing
19:16 Streaming & Sports Rights
Netflix's moat and switching costs
But Netflix seems to have lower churn than other streaming services, may be one of the few to last
Streaming is the new cable TV delivery method
Potential for ads to be gradually introduced to paid streaming over time
Netflix getting into live sports rights with NFL holiday games to drive subscriber growth and engagement
Streaming platforms still experimenting with live vs on-demand user experiences
Generative AI could significantly lower costs of niche video production, benefiting Netflix's content library
Disney and Comcast splitting NBA rights, Amazon also involved, still early days for live sports streaming
27:09 Healthcare News
BioNTech early-stage trial put on clinical hold by FDA due to severe side effects
Concerning as it was for an antibody drug conjugate, outside BioNTech's mRNA core competency
Reflects poorly on BioNTech's asset acquisition strategy outside their expertise
28:00 Closing
NVDA 0.00%↑ AAPL 0.00%↑ MSFT 0.00%↑ NFLX 0.00%↑ DIS 0.00%↑ CMCSA 0.00%↑ AMZN 0.00%↑ SNOW 0.00%↑ AMD 0.00%↑ BNTX 0.00%↑ TSLA 0.00%↑ ORCL 0.00%↑
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Telltales e2525: Media and the transition to Live Streaming ++ Nvidia is the most valuable company in the world