00:00 Speaker A
we are watching Nvidia, Arm and Madison Square Garden Sports.
00:04 Speaker A
Markin’s data editor Jared Blikre here with me now. And let’s talk about Nvidia first. We got a two-parter for Nvidia today.
00:10 Jared Blikre
Yes.
00:11 Speaker A
And second, all right.
00:12 Speaker A
Yes. So first, Nvidia is announcing a multi-year partnership with Meta. The deal will see Nvidia supplying the social media giant with its GPUs and CPUs.
00:22 Jared Blikre
Yeah, key.
00:23 Speaker A
And Nvidia is bouncing back a little bit today. I don’t know if it’s just because of that or also just because we’re seeing a broader bounce back today.
00:30 Jared Blikre
Yeah, I think that’s part of it and chip stocks have done well this year. Software has done terribly, but chip stocks, you know, they they tend to go up this year. Uh but let’s get to the points. This has to do with millions of Nvidia processors and you said something key here. These are CPUs, um not these GPUs and Nvidia has been branching out. So this is the first large scale Grace CPU only. Grace is the CPU offering for uh Nvidia. That’s a first employment at a major hyperscaler. Um they also have a Vera line that would be the successor to Grace. Um that would be the future. and this is just designed for broader data workloads.
01:14 Jared Blikre
And so Nvidia is trying to control the whole stack. They’re not just doing the GPUs, they’ve got the networking, they got the CPUs. Um but importantly too, this is not just an exclusive for uh Nvidia. Meta is still shop or Meta is still potentially shopping its own chips. um and we, you know, if you’re that size, you can just do that in this day and age. You can hire chip designers and you can build your own stuff. Um Google could be an option although the TPUs are not a substitute for uh CPUs. And then there’s a read through and into some of the Nvidia uh competitors like Intel and AMD.
01:57 Jared Blikre
So if we go to the Wi-Fi Interactive, I think it’s not a coincidence that AMD here is down. That little red rectangle right there. Intel, I’m going to circle that. It’s at the bottom. That’s up about two-thirds of 1%. It is underperforming the socks. That’s kind of the broad ship index. Uh but nevertheless, Intel is positive. And then you’ve also got Arista which makes the networking uh components. That’s kind of in the mix as well.
02:22 Jared Blikre
So this just seems to be a big deal for Nvidia kind of strengthening its position as, you know, the big one, the big uh 400 pound gorilla in the semiconductor room and it’s not just GPUs anymore. I did want to point out one thing for Nvidia. Here’s um a one-year chart. Nvidia has been going sideways since the middle of last year. So this is just a bunch of noise and doesn’t really mean anything until we break to the upside or the downside and today is not that catalyst.
02:45 Speaker A
Um and one more reminder on Nvidia, remember, it always reports late in the earnings season. One week from today after the close of trading.
02:51 Jared Blikre
Yes. Yes.
02:54 Speaker A
So we have that to look forward to. Okay, here’s the second part of Nvidia now. Um Arm is the one that’s related to that. Shares in that chip designer, they’re in the green after Nvidia sold off the last of its stake in the company. Nvidia, remember, had tried and failed to buy Arm six years ago. It was a $40 billion deal, but it broke down over regulatory concerns. It’s interesting that arm’s trading higher after this. I mean, I guess
03:16 Jared Blikre
Chips go up, right?
03:17 Speaker A
Yeah, I guess so. I mean, do we know, you know, they also maybe it’s not a shock.
03:20 Jared Blikre
I was looking for a reason and so I kind of, you got to kind of read between the lines here, but let me outline the background. As you said, 202, uh, 2020 to 2022, Nvidia was trying to buy Arm, and then we just learned through a 13F filing that sometime in the fourth quarter last year, Nvidia divested all their shares. So this is real world uh this is uh you know, looking in the past already. Um do what’s the read through here? Nvidia, I think is effectively saying we don’t need to own Arm to benefit from arm because they’ve been highlighting their partnership with Arm technology. Arm licenses their IP, their intellectual proper uh property to the likes of Nvidia and Nvidia has deployed this in a lot of their chips. um and I think Nvidia wants to keep that partnership alive. But Arm has also been making noise that they’re going to design their own products and compete with Nvidia on a few different fronts.
04:22 Jared Blikre
And so that could be a little bit of of an awkward position for Nvidia to have this huge stock ownership in a competitor. So it could be just that it’s a clean break, but clearly Nvidia still relies on Arm and their technology.
04:36 Speaker A
And here’s a fun one for number three. Madison Square Garden Sports
04:39 Jared Blikre
Let’s do it.
04:40 Speaker A
exploring a possible spin-off that would separate the New York Knicks business and the New York Rangers business. That potential split would create two separately separate publicly traded companies. Those MSG, MSGS shares are up by 17%. Now, listen, we’re New York. So like we always pay a lot of attention to this. Um Jim Dolan, who’s the owner has always been a colorful New York character. So it’s always fun to talk about MSG.
05:05 Jared Blikre
Inside baseball. Charismatic, yes. Yeah, so let’s kind of break down what MSG Sports is beyond the teams and that kind of speaks as to why this split might be happening in the first place because you got two different sports and you might have want to pursue deals that uh require different thought processes, different things. Um so MSG Sports is essentially a sports franchise holding company. You got the Knicks and uh you also the Westchester Knicks. And then you got the Rangers and also the Hartford Wolf Pack on the uh ice hockey side. Media rights are a big part of the ecosystem.
05:40 Jared Blikre
Uh in filings, MSG Sports notes that its licenses uh local media rights and the Knicks and Rangers have agreements with MSG Networks, that’s another uh enterprise for local telecasters and radio with long remaining terms. Um so why would be, why would they be pursuing a split here? Could be a clean sum of the parts logic that investors can value NBA versus NHL economics separately and a split could surface uh different growth and rights trajectories, especially as local sports media economics keep uh them in tow and keep evolving.
06:17 Speaker A
And of course, this is not the first split of the MSG Empire because there’s an MSGS and there’s an MSGE, which is the the, yes, I’ll get to that one in a second. Then MSG what’s the what’s the other ticker for the sphere?
06:33 Jared Blikre
Yes. Yeah. Oh, that’s a… That’s a good question here.
06:35 Speaker A
Well, we’ll Oh, it’s Sphere, S SP SPH, SPHR.
06:42 Jared Blikre
Okay.
06:43 Speaker A
Anyway, it’s already been split into a bunch of different parts. And so this would be more splitting.
06:48 Jared Blikre
Yes. Yeah. Speaking of stocks, let’s uh go to the Wi-Fi Interactive and we’ll just chart this real quickly. So MSGS here, the main ticker we’re talking about is up 17% today. And I want to show you a lot. Let’s just do a max chart and you can see it finally broke through this long-term ceiling that it’s had since pre-pandemic only a few months ago.
07:05 Jared Blikre
So if I show you the six-month chart, you can see that clean breakout right here, little consolidation, move to the upside. So 75% over the last six months. Stockholders seem to like this as a potential value unlock. So when you get a huge pop like that on the just the announcement of the news, that’s usually a good sign that you’re in fact, not just making, you know, reshuffling uh chairs on the deck of the Titanic here but doing something valuable.
07:29 Speaker A
It it has underperformed the other MSG things. The sphere has more than doubled over the past year and um the entertainment arm is up about 75% even before today. So,
07:43 Jared Blikre
There you go.
07:46 Speaker A
trying to unlock more value, I guess.