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Quest Means Business

NVIDIA To Release Highly Anticipated Earnings; Durov Placed Under Formal Investigation, Cannot Leave France; Harris And Walz To Sit Down With CNN's Dana Bash; Israel Launches Major Operation In Occupied West Bank; Nvidia Releases Second Quarter Earnings; Lego Is Going Green. Aired 4-5p ET

Aired August 28, 2024 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:11]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. Zacks ringing the bell. It is going to be a big

after-hour session. Arguably the after-hours will be more important.

We look at the markets and how they traded, down 158, we were further down. Trading is coming to an end. Do the duty, Dear Sir. One, two, three, and

now we just wait and wait and wait.

The markets and the events: The AI darling, NVIDIA due to report earnings any moment now.

Telegram's founder, Pavel Durov has been placed under formal investigation. He now cannot leave France.

And Kamala Harris is to sit down with CNN's Dana Bash tomorrow. It is Harris' first interview since she became the Democratic Party nominee for

president. But now, hold on to your hats.

Live from New York, Wednesday, August the 28th. I am Richard Quest and with NVIDIA around the corner, I mean, business.

Good evening.

In a few moments, NVIDIA will release its numbers and the market now considers these amongst the most important earnings, if not data, period,

over the year.

The company makes the advanced chips used for AI. We are going to be looking at all sorts of things for NVIDIA. Its sales tell us where

companies are spending and where the AI boom stands at the moment. Expectations are high, but we know cutbacks are taking place.

Analysts expect NVIDIA's Q2 to have doubled from last year, even a slight miss could stare investors.

And Wall Street also wants to know the status of the next generation chips. Report this month of production delays are also giving everybody a nasty

fright.

And then you've got the Q3 outlook, Morgan Stanley says NVIDIA must beat revenue expectations by $2 billion to justify its share price.

Clare Duffy is in New York.

When we get these results and I am keeping an eye out for when we do, so we've got just the health of AI, NVIDIA will tell us that.

CLARE DUFFY, CNN BUSINESS WRITER: Exactly, Richard. You had your three questions there heading into this report. I also was thinking about three

big questions heading into this report. And one of them is indeed whether were going to start to see a pullback in AI infrastructure spending from

the Big Tech giants, because as we know from the last few weeks, there have been a lot of questions emerging about how profitable AI will be and

whether these Big Tech companies should continue to spend on AI infrastructure, which includes these NVIDIA chips.

The other two big questions for me are how will these US export restrictions on China continue to weigh on NVIDIA sales, and then this

question about chip delays with the new Blackwell AI chips.

I think the thing that really matters with the Blackwell AI chips, which were supposed to launch, be in the hands of customers later this year. Now

there are rumors, reports that they could be up to three months delayed and that is important because NVIDIA's big advantage here, the reason they've

been so successful is that there hasn't really been a competitive AI chip, but that is starting to change.

Competitor, AMD just back in June released its latest AMD AI chip, I should say that will compete with NVIDIA. That is supposed to be in the hands of

customers later this year.

And while there is still plenty of AI love, AI demands to go around at this point, NVIDIA doesn't want to leave space for a competitor to come in and

challenge its dominance just because its latest product was delayed.

QUEST: So we have all of you will, the industry issues that will affect NVIDIA directly on the market as a bellwether, if you will, but I was

interested. We are talking about NVIDIA's own share price.

Now, that is going to be much more affected by its new chip, its sales, and the competition on whether this price, this frothy price can be justified.

DUFFY: Absolutely. I think, it is a big question.

We've seen the stock price grow just tremendously. I mean, it is up about 3,000 percent over the last five years. It is mind-blowing. And I do think

there are questions about whether this is sort of AI hype, whether we might see the bubble burst at some point, but I think the important thing for

people to know is that the Big Tech giants, the Apples, Microsoft, Meta, Amazons of the world are continuing to increase their AI infrastructure

spending, spending tens of billions of dollars, in large part by these chips to put in data centers to train AI models.

That is not slowing down at this point. It is possible we will see that change, but for now, even if we start to see the NVIDIA share price cooling

off, the fundamentals for this company are really strong.

QUEST: We will talk more and we will see the results when we get them. Thank you.

[16:05:09]

The other story that we are following very closely happened in the last 20 minutes.

In Paris, prosecutors say the chief executive of Telegram is officially under investigation after his dramatic arrest this weekend.

The Russian-born, Pavel Durov has been transferred to court earlier from the police cells. This is the video of him leaving police custody. His bail

was set at $5.6 million. He is forbidden from leaving France.

And now, there are some questions about whether he is going to be charged. French authorities have said, Telegram may have been complicit in several

crimes, including fraud, drug trafficking, child pornography. We are still waiting to find out what those charges might be and how long he will be

held or the broad investigation.

Alain Bauer is the French criminology professor at the National Conservatory of Arts and Trades. He joins me now.

For those of us not familiar or too familiar with the inquisitorial versus adversarial system that is used in France, what is the significance of this

transfer from police custody if you will to the courts where now the investigative magistrates and judges take over?

ALAIN BAUER, FRENCH CRIMINOLOGY PROFESSOR, NATIONAL CONSERVATORY OF ARTS AND TRADES: Well first, thanks for having me, Richard.

First, the French system works exactly is the same, but not as the same pace and not the same way.

At the moment, there was an opening of incriminatory discussion about 12 issues. Most of them were complicity. One is about conspiracy and the

police was just asking questions and with the answers they sent after so 24, 48, or 96 hours, depending on the gravity of the act, so the judge will

decide or not to incriminate.

The just decided to incriminate him, ask him to stay in the French territory, get his passport out, and now, his lawyers are going to argue

and ask an appeals court to review the incrimination and decide if they are substantial or just not depending on what was the real issue, which is not

freedom of speech, but the way Telegram may organize or not this position to sell child pornography, arms or drugs.

QUEST: All right, let me jump in here, sir, because what we have here is a chief executive being held personally liable, if you will, for whatever

might be the corporate misdeeds, which is somewhat unusual. I mean, it is not unknown. We have had individuals and a company on corporate

manslaughter and those sorts of things.

BAUER: But we -- in France, chief is responsible for what his subordinate do. When he doesn't act to make them comply, to what maybe in the US a RICO

act or a National Security letter, for example. You have a lot -- for examples, the Boeing CEO was grilled by the Congress about what his

engineers were doing or not doing it that he was accountable for what it is.

It is the same system in France, and now, the attorneys are going to argue about is he responsible or not and is he under a French special legislation

that make him responsible?

QUEST: Okay, but, Alain, by the way, I can now confirm that he has been charged with a variety of offenses. We are not sure exactly the range of

that. Is it unusual for him to have been charged so quickly before really the investigative matter stretch all the investigative part has got

underway.

BAUER: But that's the beginning. In fact, what you see is the beginning of the investigative matters. There was an opening of an inquiry. During this

inquiry, he was arrested, then he was questioned, and now, he is incriminated and he will go to defend himself. That's the way it works.

QUEST: So he has been charged now, so we do actually have the charges that he will eventually have to go before another court to actually face and he

answers on them.

BAUER: Exactly. He has 12 incrimination, not all of them are charged now, but we will have a very specific communication by the attorney about it.

[16:10:00]

He is charged under the National Organized Crime Special Division of the National Attorney of France, not the district attorney, and it is under a

kind of a RICO organized crime issues.

QUEST: You gave the example of the Boeing case and certainly, the chief executive was hauled, if you will, for an accountability as you point out.

And there was talk about whether or not there could be prosecutions, but it is exceptionally rare for a chief executive to be prosecuted criminally for

the acts of their company. Would you say it is rare for the Durov case for the authorities to go against the chief executive?

BAUER: No, we just had a few of them recently for complicity for terrorism, complicity for paying terrorists to have the company continuing the

activities in very complicated areas, so surprisingly or not, the French judicial system is going very -- on the top now, it is more frequent than

what we think, but it is new.

QUEST: So, finally, when it does come to trial again, help me and our viewers understand jury trial? Trial by judge? What is the French system

for actually determining guilt?

BAUER: That is a system -- that is a thing that will be discussed by his lawyers. First, they will contest incrimination and that will go to an

appeal court that will decide that his is incrimination is correct or not correct.

Then if it is a criminal matter, it will go by jury. If it is not a criminal matter, it will go on a system with three judges.

QUEST: Alain, I suspect you're going to be answering many questions about the intricacies. Come back again, sir. We are going to need you. Don't go

too far to help us understand the system there and how it is progressing. I am grateful for you. Thank you, sir for joining us tonight.

BAUER: Thank you.

QUEST: QUEST MEANS BUSINESS, all different judicial systems.

And when we come back, the Democrats have Georgia on their minds, literally.

Kamala Harris and Tim Walz are campaigning in the key southern state. It is the state that helped put Joe Biden in to the White House, in a moment.

(COMMERCIAL BREAK)

[16:15:13]

QUEST: There you are. Getting off the plane. It is the vice president of the United States and it is the governor, and they are, of course, the

candidates for the Democratic Party more precisely, meeting supporters ahead of the bus tour that they are about to take in Georgia.

They have landed in Savannah in Georgia and they are going south. They are visiting some parts of the state that typically vote Republican, trying to

rope them in.

Joe Biden carried Georgia four years ago by fewer than 12,000 votes. You can see there how it is predominantly -- it is predominantly Republican in

terms of land size, but those blues, of course are where are the population centers are -- Atlanta and the like, and so that is why you've got this

unbalanced versus geography versus population.

Harris and Walz will also make time to sit down with our own Dana Bash on Thursday. It is an in-depth interview. It will be the first time for the

vice president since she became the Democratic nominee.

Priscilla Alvarez is in Georgia for us.

You know, I guess, we are all wanting and watching. Let us clear a couple of things up straight away. I mean, the vice president has done a gazillion

interviews in her life so she can put two words together and make sense. We get that bit.

So what are we looking for in this interview tomorrow with Walz?

PRISCILLA ALVAREZ, CNN WHITE HOUSE CORRESPONDENT: Well, the significance of this interview is that it is her first now as the Democratic nominee for

president, but over the last month since she launched her presidential bid on the heels of President Biden stepping aside from the race, it has been a

quite scripted campaign.

Of course, it has all been quite choreographed and they have had a lot of success. Just look at the numbers that they've been raking in, over $500

million coming in in donations and a lot of momentum, especially after the Democratic National Convention last week.

So what an interview provides is a less scripted moment, it provides her and her vice presidential nominee, Tim Walz the opportunity to answer

questions, do so candidly and have those unscripted remarks and answers.

And so there has been a lot of attention on their first sit-down interview for those reasons, in a moment where every piece and step has been

choreographed, what does it look like when that is not the case? And then of course, there is the substance of the questions, especially on policies

and where there may be distinctions between where she stands on an issue versus where President Biden is.

We haven't seen in that so much over the last month. Of course, this was the Biden-Harris administration, but there are certainly a lot of questions

as to where she may try to distinguish herself from the president.

QUEST: And we have this strange business, of course, she is doing it with vice presidential nominee. There has been some criticism.

I was listening last night to all various -- to coverage and commentators basically saying, oh for goodness sakes, sit down on your own. You're the

one who is going to be president. Why do you need Tim to make two, if you will.

ALVAREZ: But that's also not unusual. We've previously seen Democratic candidates sitting with their vice presidential nominee for their sit-down

interviews. So while there has been some pushback here, there is some precedent to doing it this way.

And then of course it is a newly-minted ticket. They are coming off of the Democratic National Convention where they are now officially the Democratic

nominee and the vice presidential nominee.

Now too, from the campaign standpoint, they are trying to introduce the duo in more ways to Americans across the country who may not know Tim Walz very

well, the governor and may have little familiarity with the vice president over the last three years.

So it is also an opportunity from their perspective to introduce or reintroduce both of them. And notably, of course, the two of them are doing

the bus tour here in Georgia today and tomorrow. So they are trying to show a united front. Of course, were not going to always see them together. This

is a close race and they will be separately traveling across the country, but certainly in this moment, they are trying to introduce this ticket,

this Democratic ticket together.

QUEST: Thank you. Good to see you, in the heat of Georgia, I am sure it is sweltering that today, but I hope all is well. Thank you.

Kamala Harris and Tim Walz, that interview here on CNN. Dana Bash, Thursday at 9:00 PM Eastern, two in the UK, three in Europe and you could work out

from there on towards the Middle East, Africa and beyond.

[16:20:18]

Fake accounts on the social media platform X are using photos of European influence as an AI to push the pro-Trump agenda and propaganda.

CNN investigative reporter, Katie Polglase has been speaking to some of the women who have -- wait for it -- had their photos stolen.

(BEGIN VIDEOTAPE)

KATIE POLGLASE, CNN INVESTIGATIVE REPORTER (voice over): Debbie is heading home from work in Luxembourg, Northern Europe. Crossing the border into

Germany, she races back to her son --

DEBBIE NEDERLOF, PROFESSIONAL MODEL: Yoohoo.

POLGLASE: And of course, Lou, but Debbie's day doesn't end there.

She is also a professional model. Her image not only her identity, but her source of income helping support her and her son.

But it has been stolen used in a pro-Trump account on X, attracting nearly 30,000 followers in less than six months.

NEDERLOF: Here is Luna. Here. That's very crazy.

POLGLASE (on camera): And when you see these views, it is saying vote for Trump in 2024, what is your reaction?

NEDERLOF: To be honest? What the (bleep)? -- was my reaction. That was my reaction because I have nothing to do with the United States, with Trump or

the political things over there.

POLGLASE: And if people following this account believe that this is, you, what do you want to say to them?

NEDERLOF: That it is definitely not me, definitely it was never me and it will never be me and they have to unfollow, please.

POLGLASE: In fact, Debbie is not alone.

In partnership with the Center for Information Resilience, CNN found nearly 60 fake Trump supporting accounts. And from these, we identified nearly a

dozen women, real women from across Europe from Denmark to The Netherlands and as far away as Russia, whose identities are being used in accounts

telling voters, American voters, to vote for Trump in the upcoming US election.

POLGLASE (voice over): Let's take a look at some of these accounts like Alina, 33 and voting for Trump, but she is not. She is really Kamilla from

Denmark.

KAMILLA BROBERG, 30-YEAR-OLD FASHION AND FITNESS INFLUENCER: I think it is weird. Anything that can discriminate other people on my account because it

is my little universe, I don't think it is fair.

POLGLASE: And this one, Eva, she even has a verified blue tick, which is the supposed to weed out fake accounts.

NERIAH TELLERUP ANDERSEN, 22-YEAR-OLD INFLUENCER AND DIGITAL MARKETING PROFESSIONAL: You feel very taken advantage of, also because it is kind of

my image. I don't want to think -- people think that I do want those profiles sometimes are promoting.

POLGLASE: We run this suspicious X photos through a reverse image search engine and found they were lifted from Instagram posts, certain patterns

emerged.

The fake accounts repost each other. It is a sign of a coordinated campaign. Here, several of the fake accounts post the exact same wording:

If you're voting for the man who survived an assassination attempt, I want to follow you. It is another sign the accounts are linked.

And that's not all, some of the accounts manipulated the images of these women. Have a look at Debbie's post, the original on Instagram, and now the

fake one on X. Her hat now reads Make America Great Again. Look at this t- shirt before, and then Trump 2024.

For now, we don't know who is behind all these accounts, but the former US National Security council spokeswoman, who also used to investigate fake

accounts for Twitter, told us this.

EMILY HORNE, FORMER GLOBAL HEAD OF POLICY COMMUNICATIONS AT TWITTER AND FORMER SENIOR DIRECTOR FOR PRESS AT NATIONAL SECURITY COUNCIL IN THE BIDEN

ADMINISTRATION: I don't think it is unreasonable to ask questions about could there be a state actor involved? We know that there are multiple

state actors who have been using social media to try to sow disinformation campaigns in the run-up to the 2024 election.

POLGLASE: But regardless, the accounts are reaching influential politicians.

Doug Mastriano, a Republican state senator for Pennsylvania, follows Debbie's fake account. CNN contacted the senator about the account, but has

not heard back.

Back in Germany, Debbie is shocked and upset that her image is being used in this way.

With President Trump now back on X and Elon Musk, the owner of X throwing his weight behind him, fake pro-Trump content appears to be flourishing,

silencing the real women affected.

Once again, women's rights at the very heart of this presidential election.

Katie Polglase, CNN, Trier, Germany.

(END VIDEOTAPE)

[16:25:02]

QUEST: We have reached out to X regarding these accounts. We have not received a response. But in the last 24 hours before publishing, X took

down the majority of the accounts and there is no indication that the Trump campaign was indeed involved.

The carmaker, Ford and the retailer Lowe's are the latest companies to pull back on diversity, equity and inclusion, known as DEI.

The companies have told their respective employees, they will no longer participate in surveys for LGBT focus groups like the Human Rights

Campaign, the HRC.

And both companies, ford and Lowe's are planning to overhaul minority resource groups. Several other US companies have already changed DEI plans

in the face of backlash from conservative activists.

Nathaniel Meyersohn is with me in New York.

It was the rage. You could go -- some could call it woke, some could say otherwise, but why have these companies suddenly backtracked?

NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: Richard, they've backtracked because of all of the pressure that the political right has put on DEI

programs. And all of these companies, they don't want to turn into another Bud Light. We saw last year Bud Light come under a lot of scrutiny and have

to pull back after a campaign with transgender influencer, Dylan Mulvaney and these companies are very fearful that that is going to happen to them.

And then Richard, they are also responding to the changing legal environment. The Supreme Court struck down affirmative action in higher

education last year, so the political winds have changed and these companies that are all politically conservative and rely on politically

conservative customers, they are responding to this trend.

QUEST: Okay, but Ford is now saying it is no longer going to take part in the LGBT or the HRC on LGBT issues, and yet, just -- all right, five or six

years ago, Ford was trumpeting the fact, as you can see from this news release that they put that there had been at the -- they got a hundred out

of a hundred on the index.

Is this Mr. Starbucks, who is the right-wing activist, is he really having much effect than a company like Ford that was so proud of it one time is

now running in the opposite direction?

MEYERSOHN: So Starbucks is taking credit for these companies pulling back, and he -- most people don't even know who he is, but he has really kind of

caught fire online by targeting these specific companies, calling attention on social media, and X rallying conservatives.

But the business experts that I talk to who really study company policies, diversity, equity, and inclusion, they say that what Starbucks is doing is

he is exposing how weak and how thin these corporate promises were to begin with, how haphazard they were after the George Floyd murder, how companies

just raced to do DEI without really thinking it through.

And so Starbuck, he is just showing kind of how thin the commitments were. And also, sorry, just one more -- to your previous question, I mean the

company -- DEI has become politically toxic on the right and the companies, they are responding to that.

QUEST: And yet, we saw from MIT, Massachusetts Institute of Technology, one of the best institutions educational that could no longer do affirmative

action because of a separate Supreme Court decision. They announced a dramatic falloff in enrollment from minorities that would have been allowed

under the old system.

I mean, some say that this is the system working and its merit got the other people -- got the others in, but are we not getting a ticking time

bomb in terms of DEI, diversity, minorities and their advancement?

MIT, So Richard, that is exactly what business experts say that you know, that diversity and inclusion is going to drop at these companies. You're

going to see kind of wider, less diverse companies and in a couple of years when the police political winds may kind of turn more in favor to DEI, that

these companies are going to have antagonized customers, are going to have antagonized employees.

And Richard, you think about the brands. These are brands with older customers, John Deere, Harley Davidson, these are companies that need to

attract younger, more diverse consumers and employees.

And as they step away from some of these DEI policies, as they step away from LGBT inclusive policies, what type of signal does that send to future

employees and future customers?

QUEST: Nathaniel, fast indeed, thank you. Good reporting. Glad to have you.

As we continue tonight, Israel has launched what it says its largest operation in the West Bank for years.

The country's foreign minister says it must deal with threats there as it also does in Gaza.

(COMMERCIAL BREAK)

[16:30:09]

QUEST: Hello, I'm Richard Quest. Together we'll have more QUEST MEANS BUSINESS.

Nvidia earnings are out. The report, I mean, earnings are up. Extraordinarily the numbers are strong, but are they strong enough? And

Lego, the chief executive will tell us how he's making -- I love it, little Lego bricks. I'm happy now, I could be playing with Lego for -- no, no, no.

How they're most sustainable.

We'll only get to Nvidia and Lego after the news headlines because this is CNN, and here the news comes first.

The FBI has released photos of the gun used to shoot Donald Trump during a Pennsylvania rally in July. Officials say the gunman from that

assassination attempt spent months looking to attack a major gathering before deciding to target Trump. The FBI also said the gunman researched

U.S. president Joe Biden's campaign events.

Russia is banning entry to 92 more American citizens, including journalists from the "Wall Street Journal," "The New York Times," and the "Washington

Post." Russia says it's a response to what it calls the Biden administration's Russia phobic cause. The "Journal" says the bans are

laughable and part of Russia's attacks on the free press.

SpaceX Polaris launch has been delayed a second time because of weather, and in addition to that complication, federal regulators have announced the

grounding of the SpaceX Falcon Nine rocket because of concerns over its landing abilities.

[16:35:13]

That makes the Falcon Nine rocket unable to fly on upcoming missions.

Palestinian authorities said at least 10 people were killed in one of the most expansive Israeli operations in the West Bank in years. The video

released by the IDF shows what it says was a drone strike on terrorists in Nur Shams and the video shows bulldozers tearing up streets in Jenin.

Israel's foreign minister said the operation was once thought only called Islamic Iranian terrorist infrastructure, and that Israel must deal with it

just as it does in Gaza.

Nic Robertson is with me. Nic is in Tel Aviv tonight.

Nic, so now we're at the West Bank. I mean we've got the border with Lebanon. We've got -- where does this go?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: You know, I think what we're seeing is an uptick definitely in the occupied West Bank. But I think

a lot of people here would argue, a lot of the human rights groups, a lot of Palestinians that we've talked to in the West Bank that really the

uptick in the West Bank came after October 7th, Hamas' brutal attack. And the authorities in Israel looking to make sure they didn't have a similar

spike of violence inside the West Bank.

So far, however, until Sunday last, couple of days ago, 622 Palestinians have been killed in the West Bank, most of them in security operations by

the military. So another 10 dead today, more than 20 injured. But I think what's clear here is that the government for the first time, not just the

foreign minister and what he's saying, but the IDF, too, pinning this on Iran saying there's a systematic plan in Iran to bring weapons, smuggle

weapons into the West Bank that can be used in the rest of Israel, open another front inside of Israel.

And I think a lot of people here and the IDF spoke about it today in part what's going on now is a reaction and a response to that failed bombing

attack in Tel Aviv 10 days ago when a lone attacker with explosives on his backpack, the explosives went off killing him before he could kill other

people here in Tel Aviv. And the intelligence led back to the West Bank. And this is the outgrowth of that, but it's big. But it's strategically

maybe different. But part of something else that was going on.

QUEST: Nic, I'm trying to phrase this in a sort of an easy way. If, if the goal here is not to have escalation, Israel seems wanton in disregarding

it. I mean, it doesn't seem to care. It can say it doesn't want escalation, but every activity the country is engaged in takes it ever closer to

escalation.

ROBERTSON: And it believes that it can win by dominating the battlefield on all those fronts because it sends a message. Look, I mean, look at Iran's

attack back in April, it failed to get through. Look at Hezbollah's attack at the weekend. It failed to get through. So Israel's deterrence method by

being the strongest one in the room appears to work.

I would say to what you're saying, look, I think it's hugely interesting that, for example, this, what would have been it appeared a suicide bomber,

the first of that type for a couple of decades here in Tel Aviv failed of course 10 days ago, but what's Hamas' response to the IDF's action today?

To call Palestinians to take up suicide bombing again after telling -- after essentially halting that 20 years ago.

So there is, as you're saying, a very clear reaction. You get a reaction, but Israel's firm belief is it wins by being the strongest and most

destructive in the room because it sends a signal to the others not to act.

QUEST: Nic, I'm grateful. Thank you, sir.

Nvidia has released its second quarter earnings. Revenue of 18 percent from Q4, 260 odd percent from a year ago. Kept the stock split. And they've

beaten on all the metrices. So we need to understand, we need to take Nvidia's results and factor them into the A.I. rally and where we go next.

That's our job and you'll be hopefully with us afterwards in a moment.

(COMMERCIAL BREAK)

[16:42:43]

QUEST: Returning to our top story, Nvidia's latest results. The chipmaker's revenue came in at $30 billion. It's up 122 percent from a year ago.

Earnings per share EPS $0.68 above expectations, and the outlook is more in line with what everybody was looking for. $33 billion for their current

quarter and the ramp up of its latest Blackwell chips in Q4.

Dan Niles is the founder of Niles Investment Manager and is with me now.

And as you look at these numbers, they're in line with what the market was looking for. But are they good enough?

DAN NILES, FOUNDER AND PORTFOLIO MANAGER, NILES INVESTMENT MANAGEMENT: Yes, I don't think they are unfortunately because you have to remember this

stock has been the name that's led the market higher and if you look at how much they beat their revenues by it was about 4 percent only a year ago,

they were beating revenues by 22 percent. And if you look at the EPS, it's about a 5 percent beat. And a year ago, they beat that number by about 31

percent.

And then the guidance, the revenues are only going up about 2.5 percent from where the street already has it. So you got to remember, this is a

stock that's up 750 percent from the end of 2022.

QUEST: Right.

NILES: And it has been the poster child as it should be for the A.I. trade and so now people have to think, am I going to see a digestion period in

demand much like I saw in the middle of 2022 before this thing called generative A.I. hit the scene?

QUEST: So that would -- taking what you've just said and splitting it into two, in terms of the industry, the A.I. going forward, you're from what I

gather, from what you're saying, these numbers say either a slowdown, it's not going to be as far or as fast, never mind Nvidia share price, just as

the industry that this is going to be tougher and slower going forward.

NILES: Absolutely. And that's what we've been saying now since we wrote about this back a couple of months ago that you spent a lot of money on

A.I. infrastructure. But if you think about it at a certain point companies want return on that and the forward numbers from Microsoft, Amazon, and

Google, three of the biggest customers for Nvidia, all went down after they reported their June quarters, even though their CAPEX spending on A.I. went

up.

[16:45:14]

And so at a certain point, you're going to slow down your spending if you're not seeing a return on all that investment in A.I.

QUEST: Now, let's flip to the other side of the same coin which is Nvidia's share price, which is predicated on stronger and higher expectations. I

mean, on an EPS, or straightforward basis if the expectations are not that good, can the share price be justified?

NILES: So you have a short-term and a long-term, and what I would say is if you go back to the build-out of the internet and you take the end of '94

when you have this thing called a Web browser come out from Netscape, from the end of '94 to its peak, Cisco's revenues went up 15 and a half times.

Their revenue, their stock price went up 4,000 percent over that period.

QUEST: Right.

NILES: For Nvidia, the same thing if you look at when we heard of this thing called ChatGPT and OpenAI, since the end of 2022, their revenues are

up buybacks, not 15.5, and the stock is up about 750 percent. So, much like what Cisco where they saw a drawdowns of 37 percent and their stock price

and 38 percent in their stock price in '97 and '98 you're going to see similar volatility with Nvidia because these big companies like Microsoft,

Google, Amazon, they spend a lot then they take some time to digest it and they spend more.

I think we've got several more years of spending ahead of us but in the near term, I fully expect them to digest what they've already spent.

QUEST: Right. But you raised Cisco and funny enough, a couple of weeks ago, I looked at Cisco. You and I are old enough I suspect to remember dotcom

boom and bust and all of that. And I looked at Cisco, yes, if you take from peak to trough of the boom and bust, you do see that sharp fall. But if you

extrapolate out five, 10, 15 years, then you see back to gains as the maturity of the internet comes into play. And one would expect surely to

see that with A.I. longer term.

NILES: Absolutely. I mean, I think from my perspective, if you want to take a long term view, I fully expect Nvidia's revenues to double from here over

the next several years. And I think the stocks going to double from here over the next several years. It's never a straight line up, and I'm sure if

we go through a digestion period, and some of your viewers may remember this, we had a massive build-out during COVID because everybody had to get

online.

And so all of these same customers, Microsoft, Amazon, Google, they're all buying a ton of chips from Nvidia and then in the first part of 2022

Nvidia's revenues went down 28 percent sequentially over the course of six months.

QUEST: All right.

NILES: As these same customers digested that bill. So you're going to get these fits and starts going forward. It's never a straight line. My big

picture is once you get through some of this digestion, the stocks going to march and double again.

QUEST: We'll watch. We're grateful, sir. Thank you.

In a moment, this is Lego and it's going green. How Lego going green to become more sustainable? Assuming I've ever managed to stop playing with

it.

It's QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[16:51:19]

QUEST: You recognize there, of course. We all recognize Lego from our childhood. Now, Lego, the individual pieces are -- oops, the bell as well.

The individual pieces are made up of a mix of chemicals. Think of it like the hodgepodge of these bricks. Most of these are things you've never heard

of. Acrylonitrile, butadiene, styrene, and so on and so on and so forth. Well, last year, just 12 percent of this material was sustainable. 12

percent.

Lego is changing that idea and is going to make up to 50 percent of it by the middle of 2026 sustainable. Now, how's it going to do for the rest of

it? Well, it's going to get rid of this slot, too, and in the fullness of time, it will all be sustainable.

What you are rapidly realizing, dear viewer, is I was pretty useless at Lego. I still enjoy having a go at it. They'll all be renewable in the

future.

CNN's Anna Stewart spoke to the chief exec Niels Christiansen.

(BEGIN VIDEOTAPE)

NIELS CHRISTIANSEN, CEO, LEGO: If you were to wish you would like some material that will just solve all problems and be total (INAUDIBLE).

ANNA STEWART, CNN CORRESPONDENT: Right.

CHRISTIANSEN: Now certified mass balance is a mix of oil based plastic and really plastic based and renewable. But it's a mix that has the majority of

it being actually green or renewably based materials. So that's the way for us to go down and I've just said we've got to 30 percent. It actually means

that as we take a legal break, produce this half year, 22 percent of that is not based on oil. So we actually managed to grow the company 13 percent

while actually using less oil for plastic, while doing so.

So we kind of got through a milestone or a turning point but from now on, we have a way and it's our ambition to keep growing the share of mass

balance, as you say, and thereby the renewable content.

STEWART: Do you ever see there being a time when the Lego brick has no fossil fuel, no oil in it at all?

CHRISTIANSEN: Yes, we have the ambition to be at that point in 2032, and I think what we see right now, this development gives me line of sight that I

think we will get there.

STEWART: You're going to be competing of course when you're looking at more renewable oils with other industries, perhaps aviation industry springs to

my mind with SAF, also using cooking oils and waste oils. Is that going to be a problem do you think as lots of different industries look to the same

technologies to try and decarbonize?

CHRISTIANSEN: I actually see it would also be an opportunity in the sense that, you know, partly what we're doing right now, we're spending extra. So

we are paying more for these kind of materials and we've decided not to load that onto consumers. So we kind of carrying that in our own P and L.

Part of the logic for that is that we want to be part of driving the industry in this direction, allow those who actually make the materials to

make the investments it takes to make more volume.

So while also seeing other industries, like you mentioned, airlines, if they go into this and they also push for it, I think that would actually

probably give more momentum rather than less. So I would welcome anybody who would want to be on the journey and help investing and driving this

forward.

STEWART: How much more expensive do you think a brick that has zero fossil fuel in it would be compared to now? And will you really not pass any of

that cost on the consumer?

CHRISTIANSEN: I don't know exactly how it looks in 2032, but I know right now we're paying a considerable premium to get these kind of materials in

there and it's something that I think consumers really want.

[16:55:01]

I get a lot of letters from kids kind of talking about sustainability and the world they will inherit. And how important it is that we also move

forward. So I feel kind of obligated that we do this and being privately owned and being able to make these kind of decisions, we're pushing this

forward. And by now, we don't see consumers really ready to take on the cost. I do hope that they look at the brand and they really think this is

the brand that I can relate to because they're actually doing something good. And I think that has value for us as well.

STEWART: Looking at some of your top selling themes, anyone who buys Lego for kids at Christmas or for birthdays will know that the top ones are Lego

Icons, Star Wars, Harry Potter. But I know that you've also had a lot of success with Fortnite. Are you looking to do anymore gaming partnerships or

licenses?

CHRISTIANSEN: We constantly having had different licenses also in gaming. We will continue doing that. But we also be expanding the Lego-Fortnite

partnership in the sense that there are constantly new things coming there. We have Lego Islands that pop up. We have great ideas for also how to

expand that experience. So it'll be less about one partnership then out of that and into another one. I think it's really building the present by now.

As you may have seen 83 million kids and people have already been on Lego Fortnite. So it's been fantastic and it's positioned us also, I mean, just

a strong in the digital world as we are in the physical world. And I think that's just what the Lego brand is all about.

(END VIDEOTAPE)

QUEST: I love Lego. I was pretty crappy at it, but I still liked it. We'll take a "Profitable Moment" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment." It doesn't really matter whether you say that the French authorities have opened a formal investigation into

Durov or that he's being indicted or that he's been charged. The nomenclature isn't really that important. What is more significant is that

Durov, the CEO of Telegram, is about to feel the full weight of the French judicial system. And you and I are about to get a lesson in exactly how it

is, what it means, how the French system operates and all those sort of things.

The French system is inquisitorial versus adversarial, which is the rest of us all use. In the long term, what it means and how Durov takes the rap for

what Telegram is doing is becoming ever more significant.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.

END