Nvidia’s Blowout Can’t Calm AI Anxiety | Prof G Markets

Everyone thinks that we're going to see an issue and everyone gets very anxious and then just an unbelievable quarter. Your initial reactions? Well, not only is it, and it is unbelievable, the numbers are just getting staggering, especially for a company that's so profitable to be able to grow at these rates continuously. But beyond that, they just said they're going to grow sequentially for the rest of the year. They don't typically give more than one quarter out. So the fact that they have that visibility and talked about that going into Calendry 2027 tells you that they have more visibility than ever.

Their customers are making longer-term commitments than ever. They can see the rollout of the data centers happening at such a rate and with such a backlog that they know that they'll be able to continue to grow from here on out, which is, again, And very impressive, especially when the numbers are this big.

I think that the Salesforce earnings is a good sort of foil to the NVIDIA earnings, both coming out the same day, which is a reflection of those AI anxieties that you just brought up there, that AI is going to be so great that it's going to kill all of the legacy companies. I look at the Salesforce earnings, revenue grew 12%. That's very strong. I looked at remaining performance obligations, $35 billion, which is actually higher than expected. The only issue was the revenue guidance for the year, which everyone is saying was a miss, but to me, it was a meet. I mean, they said $45.8 to $46.2 billion. Wall Street expected $46 billion. I mean, that sounds like exactly what they said. But shares are tanking, down nearly 6% after hours. What does that earnings tell you about the AI anxiety story? And what do you think

After the break, what you didn't hear in Trump's State of the Union. And for even more markets insights, you can subscribe to my weekly newsletter, simply put, at edwardelson.substack.com.

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needs. While domestic issues dominated the speech, Trump did briefly touch on foreign policy as well. He claimed that he's ended eight wars and warned that Iran is rebuilding its nuclear weapons program. He also briefly acknowledged the, quote, unfortunate ruling from the Supreme Court that deemed the tariffs illegal. Earlier that day, his new 10% global tariff rate officially went into effect. So here to discuss the State of the Union, we're speaking with Ian Bremmer, founder and president of Eurasia Group. Ian, thank you for joining us on Profity Markets. My pleasure. So this State of the Union, Trump spoke for a record 107 minutes, lots to unpack here. Let's just start with your initial reactions. What stood out to you?

I had 108 minutes, but I mean, you know, we might have started and stopped the timer. Is it different points. You never know. It was very long and there wasn't much new there. I mean, there was a surprise that a high level member of the Venezuelan opposition and someone that would be credible in a democratically elected government released and then surprised right there, introduced to his family on right there in in the Capitol building. That was a pretty big deal, frankly i mean it wasn't just cinematic it is an actual success uh of the trump administration and it's a success for for um uh an attack against an authoritarian regime there's like forces of liberty and freedom this is the kind of thing that any american president if they had done you would say good on them so and and yeah i gotta be excited about having the american American hockey team win the gold. I remember being in Vancouver for the gold medal match back when the Americans and the Canadians liked each other. And it was one of the most exciting sporting events I've ever been to in my life. I don't even like hockey, but everyone was so excited to be there. And frankly, the Americans were pretty happy for the Canadians were there

because they're more excited about hockey at the end of the day. But it was great to see them come home after that extraordinary overtime win that could have easily gone the other way. And there they were and excited and they're athletes first and foremost and they're flying the flag and they're proud to be Americans and everyone was cheering them and that was great to see. But I mean, I'm obviously starting with the good moment. Right. Because, you know, after that, there wasn't a lot. There wasn't a lot. The economy is not doing well. Trump cannot will it. So this is Prof G markets. You know that the average American is not happy about where the economy is. Trump is underwater on that. He didn't mention Epstein, even though it's been what we've been talking about for weeks now. Larry Summers is being forced out of Harvard. He clearly did not want to go.

He was kicking and screaming. There are a lot of Democrats that are getting in trouble. So why is it that Trump is actually not saying a word about this? And it's because it's a two tier judicial system. He's protecting himself. He's protecting his members of his cabinet, his friends. And that's clearly unpopular for him, too. And there are only so many more months to go before midterm elections. And if those elections were today, the Republicans would get thumped pretty badly. And he knows it. He knows it. So this was not an easy speech to give. And, you know, for someone who's only going to have so many opportunities to be in front of the population and really explain to them why it is they need to turn out for him and for the people that are his proxies on the ballot in November.

He didn't do much of that last night, in my view. It sounds like we might agree, or at least my initial reaction to this State of the Union address. I expected it to be, or at least was waiting and preparing for it to be quite awful, or at least somewhat insane, kind of unhinged. that was kind of what I was expecting. What we saw was a speech that was relatively normal and relatively less unhinged, in my view at least, for Trump. And I think one of the things that you bring up there is there was a lot that he didn't say, and it seemed that he was actually weaving around all of the things that seemed to be going wrong for him. The economy would be an interesting one. There were some moments where he flat out lied about things, like when he said, you know prices are coming down which is just not true not um the 18 trillion in foreign investment that didn't really seem to make any sense to me i don't know where he pulled that number from i mean for me the 65 million people that he personally saved in indian pakistan i mean were that true uh you know we should he should He should be president for life. That's pretty extraordinary. Of course, it's utter bollocks. So, yeah, I mean, it is to be fair. You're saying it's normal for Trump. And that's a that's a significant caveat. Yes.

I think that we should try to avoid that caveat because it is still a representative democracy. Look, I mean, the biggest thing he had to respond to was his signature policy for his first year was struck down by the Supreme Court. I've never seen that happen in the State of the Union before. And there the Supreme Court justices are and people that he appointed voted against this signature policy because it was clearly illegal. And he was told by members of his cabinet, this is illegal, sir. You don't need to do this. You can actually do these tariffs in other ways and you're not going to get hit back. And he refuses to listen. That is uniquely batshit crazy. It's an own goal. And now he's got to deal with the consequences of that makes him weaker.

And he seemed quite sheepish about that as well. He seemed quite sheepish about the tariffs. He was mentioning things like the border over and over again, didn't really seem to mention the tariffs at all, which is interesting because, as you say, that is the centerpiece of the policy, and it's the biggest news of the week.

final question here um we have to ask you because while we have you we really get to speak with you on this program he said he he said he ended eight wars that was the claim and then he listed a bunch of countries he said he ended wars in israel and iran and then he said he's ended the war in gaza but then said it's slightly progressing i forget his exact uh language what do you make of that claim? Is it right? Is it wrong? If so, how wrong? It's, you know, has elements of correctness.

You know, Modi refused to give Trump credit for bringing about the ceasefire. In reality, he and his administration, particularly Marco Rubio, also J.D. Vance at the margins, played a significant role. Not you. laterally, but played a significant role in helping to get those two sides to ceasefire. It is unfortunate that Modi gave him no credit. It is ludicrous that the Pakistani prime minister says he should get the peace prize. But the reality is somewhere in between. Armenian Azerbaijan, he has advanced the cause of peace, but the two sides were not actually fighting when he got engaged. It's a lot easier to end a war when they're not fighting. The case of Israel and Gaza, I give Trump a lot more credit in resolving that conflict to a degree than under Biden.

We actually have a U.S.-led peace plan that got Security Council resolution approval. The Russians and Chinese abstained. Everyone else voted in favor. All of the Gulf states and the countries in the region favored it. Trump facilitated the release of all of the hostages, both living and remains, and has been able to move ahead, a ceasefire that has not held perfectly, but has held more or less with humanitarian restrictions of aid now being largely ended. And so we no longer have mass starvation in Gaza. So, I mean, frankly, I mean, he was lying a lot more dramatically on the economy than he was on foreign policy, in my view. And in some of the places where he hasn't done that well, like Russia, Ukraine, he didn't really mention. I think he got 20 seconds, Russia, Ukraine.

because he said he was going to end the war and he's failed at the end of the war. And he's admitted repeatedly that he's failed at the end of the war. So, I mean, he's not completely untethered from reality. He just frequently chooses not to recognize it when it's inconvenient and uncomfortable. OK, Ian Bremmer, founder and president of Eurasia Group. Ian, thank you. Appreciate your time. Good talking to you. Okay, before we end here, just a quick review of the State of the Union address from me. There's been a lot of talk about the address, as you would expect, but I would like to just take a moment to focus on what was actually said in the address, and more importantly, what wasn't said.

So let's just start with what was said. Interestingly, the issues that Trump talked about the most were actually the ones that he's kind of getting right. For example, the child investment accounts unfortunately named the Trump accounts, which gives every American child a free state. in the stock market. We have discussed why we think this is a great thing in previous episodes, and it surprisingly made a very large appearance in the speech. I did not expect that. He also talked about the cost of healthcare and the cost of pharmaceutical drugs and the cost of energy, which will only go higher as we ramp up these data centers. And he actually offered solutions to those problems, and he did speak to them at length. That is surprisingly pretty good, especially for a guy who usually spends all of his time at the podium rambling from one usually racist talking point to the next now that isn't to say that it was all good he certainly did mix in his fair share of racism calling Somalians quote pirates he also had his fair share of lies he claimed he's brought down prices he hasn't and he also said that he secured $18 trillion of investment, which was probably his dumbest and most egregious lie. But that is kind

of par for the course with Trump at this point. What was most interesting to me about the speech was actually what he didn't say. And that is he barely talked about tariffs. He also didn't talk at all about ICE. He also didn't talk about our relationship with Canada. He didn't talk about our relationship with China. He didn't talk about all of these great trade frameworks that he's been hashing out. And of course, he didn't talk about Epstein. Now, the Epstein omission, I kind of understand. But the rest of those issues, those have been central to his entire agenda. So there's an important question, why isn't he talking about them? Well, I think those omissions were really a tell. Specifically, I think he and his team know that he is actually losing on those issues, and perhaps even further, that he is wrong on those issues, that he's wrong about the tariff policy, wrong about his handling of ICE, wrong about allowing his agents to gun down two American citizens in the middle of the street, wrong about all of this. And so instead of trying to fight these issues on the biggest stage of all, they took what is arguably the smarter route, and that is they chose to ignore them entirely. And so it appears that Trump's team is actually

clocking what is happening here. The fact that 60% of Americans think he is doing a bad job on the economy. The fact that two-thirds of us think his tariffs were a bad idea. The fact that his approval rating has fallen 12% in just one year. Trump is in trouble. And it appears, based on this address, that for the first time, maybe ever, he actually knows it. okay that's it for today this episode was produced by claire miller and alison weiss edited by joel patterson and engineered by benjamin spencer our video editor is brad williams our research team is dan shalan isabella kinsel chris no donahue and mia silverio and our social producer is jake mcpherson thank you for listening to prof g markets from prof g media if you liked what you heard give us a follow i'm ed elson tune in tomorrow for our conversation