00:00 Speaker A
Yeah, Angelo, you know, we as investors, we make a beeline, as you said, for that data center, uh segment. That Q3 data center revenue, again, just to emphasize, 51.2, street was at 49.34. As as you look ahead, Angelo, how how do you try and forecast what what growth and margins could look like for that segment ahead?
00:20 Angelo
Yeah, I mean, listen, I I think when you kind of look, you know, for the company here, I mean, about 90% of their revenue right now, roughly, is coming from from data centers. So the the company is, you know, essentially completely being driven by data centers. The fact that we remain supply constrained here, um, which we think will, you know, persist through 2026. and just based on the bookings that we saw here from the hyperscalers, specifically, you know, maybe the ones I’m alluding to are Microsoft and um Alphabet after Q3 earning season, uh essentially may, you know, in our view means that it’s going to be a fairly supply constrained through all of next year and probably, you know, well through 2027 if not all of ’27. So, um, you know, that’s going to bode well for the the data center, you know, revenue potential as well as the margin trajectory. We think margins will be able to be sustained at that mid-70s level here for the foreseeable future.
01:25 Speaker A
You know, more broadly, Angelo, I’m just looking at the revenue forecast for the current period. You know, that’s a strong forecast relative to expectations. I’m wondering do how much you think that that addresses, you know, some of these concerns, Angelo, broader concerns that had been bubbling up about the AI trade?
01:48 Angelo
So it probably doesn’t address the concerns as much as we’d like it to address the concerns. You know, I think the concerns are more um laid out into 2027 and beyond, right? So, you know, as far as this quarter is concerned, I think most out there anticipated a beat for the quarter as well as as as a strong guide. I think the whisper numbers were closer to 64 billion. So, even about, you know, a billion above the the you know, the whisper numbers. So, but that being said, you kind of, um, you you look at the trajectory here over the next couple of quarters. You’re you’re going to get a deceleration in terms of the revenue levels. But um when you kind of look at what uh Jensen alluded to back at GTC DC about 3, 4 weeks ago and the fact that you were talking about, you know, 500 $500 billion backlog or so, I mean, these type of numbers are consistent with that. So, I think the numbers go up, you know, across the street here over the next 12 months. But again, expect some deceleration just because the law of numbers are are getting a a little bit crazy here.