Gerstner warns the market could see a 10 to 20% consolidation after recent gains.
“But the bigger risk right now is simply that we've come a long way quickly. Right? We could have a 10 to 20% consolidation in the socks or these other technology and AI markets,”
Gerstner cites a trillion dollars in Nvidia orders over the next six to eight quarters.
“But I think if you just look at the numbers, a trillion dollars over the course of the next, you know, six to eight quarters, I think speaks for itself.”
Gerstner says NVIDIA indicated a $100 billion run rate expected by end of next year.
“And they just told us that we should expect a run rate by the end of next year of a $100,000,000,000.”
Gerstner notes Altman tweeted OpenAI will exit the year at $20 billion in revenue.
“And he just said in his tweet that they're gonna exit the year at $20,000,000,000 in revenue.”
Gerstner reports Altman expects OpenAI to exceed $100 billion in revenue in 2027 or 2028.
“What Sam said multiple times on the pod and since is that he expects that they'll do over 100,000,000,000 in revenues in twenty seven or '28.”
Gerstner notes Jensen raised compute buildout forecast from $2 trillion to $3-4 trillion through decade end.
“Jensen said, you know, when he was on our pod last year, he said, we think the build out between now and the end of the decade's $2,000,000,000,000 of total compute.”
Gerstner calculates 50% growth would bring NVIDIA to $300 billion datacenter revenue, about $8 per share.
“So the consensus for next year is 250,000,000,000 of data center revenue. If they grow up 50%, that's gonna be closer to 300,000,000,000 or closer to $8 a share.”
Gerstner now forecasts $300 billion in tariffs, 4x last year's $77 billion revenue.
“Okay? I just told you that last year tariffs were 77,000,000,000. So that's still a four x increase in tariff revenue,”
Gerstner posits 30% annual infrastructure expense growth requires matching inference revenue growth from enterprises and consumers.
“if you think that infrastructure expenses are going to grow at 30% a year, then I think you have to believe that the underlying inference revenues, right, both on the consumer side and the enterprise side are gonna grow somewhere in that range as well.”
Gerstner frames NVIDIA debate as 6 million GPUs versus bearish 4.5 million estimate for next year.
“We're kind of at 6,000,000 GPUs for next year. The bearish people are at like 4,500,000. The numbers will ultimately tell.”
Gerstner notes consensus forecasts Uber reaching almost $10B in free cash flow in a few years.
“if you look at the consensus forecast for the business, which is pretty mind boggling, it's estimated by the consensus that it'll reach almost 10,000,000,000 in free cash flow, just a few years from now.”
Gerstner forecasts 5-7 good-sized IPOs in Q4 2023 and closer to 10 in Q1 2024.
“I think we're gonna see five, six, seven IPOs, good sized IPOs in q four. We'll probably see closer to 10 in q one,”