Senior Equity Analyst at Goldman Sachs
Jim Schneider is a Senior Equity Analyst at Goldman Sachs, specializing in technology sector coverage with a particular emphasis on semiconductors, FinTech, and IT services. He follows companies such as NVIDIA, having successfully initiated coverage with major 'Buy' calls, and historically has covered over 80 stocks with a 60.5% success rate and a top rating return of +221.7% on a single call. Schneider began his technology analyst career at RAND Corporation before moving through roles at Matrix Semiconductor, Wedbush Securities, and BlackRock, rejoining Goldman Sachs as Senior Equity Analyst in 2024. He holds a Ph.D. and MS in electrical engineering from Stanford University, BS degrees in electrical engineering and physics from the University of Dayton, and maintains professional securities credentials in equity research.
Jim Schneider from Goldman Sachs asked about the magnitude and timing of headcount growth across all regions and the net impact of AI used internally to optimize Accenture's own business.
CFO Angie Park stated that they expect headcount to grow across all markets based on the demand they see. CEO Julie Sweet noted that utilization is a reflection of momentum in demand.
Jim Schneider of Goldman Sachs asked for an update on the bookings pipeline visibility, given the commentary about clients shifting from a 'pause' to a more proactive stance. He also asked about the drivers of recent gross margin pressure.
CEO Julie Sweet confirmed a strong overall pipeline heading into Q4, reflecting themes of cost optimization and digital core transformation, which supports the company's raised guidance. CFO Angie Park explained that while subcontractors were a factor in gross margin, they were not a material driver this quarter, and emphasized the company's focus on operating margin, which expanded 40 basis points.
Jim Schneider asked for an update on the bookings pipeline visibility given management's commentary on clients becoming more proactive, and also questioned the cause of recent gross margin pressure, particularly regarding subcontractors.
CEO Julie Sweet confirmed a strong overall pipeline going into Q4, consistent with the themes of cost optimization and digital core transformation, which supports the raised guidance. CFO Angie Park acknowledged that subcontractors can be a driver of gross margin changes but were not a material factor this quarter. She redirected focus to the strong operating margin expansion of 40 basis points, which is the primary metric the company manages to.
Jim Schneider of Goldman Sachs inquired about Marvell's capital allocation strategy, specifically the intended use of the $2.5 billion in proceeds from the automotive Ethernet divestiture and whether the company is open to selling other non-core business units.
Chairman & CEO Matt Murphy explained their strategy-first approach, which prioritizes investment in the data center and AI. CFO Willem Meintjes added that the proceeds provide flexibility for both opportunistic share buybacks and strategic tuck-in acquisitions to accelerate their AI roadmap. The company will continue its consistent free cash flow execution to drive buybacks.
Jim Schneider of Goldman Sachs asked for context on the upcoming Rubin product transition. He inquired about the incremental capabilities it will offer and whether the performance step-up will be larger, smaller, or similar to the leap seen with Blackwell.
Founder, President, CEO & Director Jensen Huang explained that NVIDIA's annual product cadence is designed to maximize customer revenue and reduce costs by consistently improving performance-per-watt. He noted Blackwell offered an order-of-magnitude leap for reasoning AI. While he deferred specific details on Rubin's capabilities to a future GTC event, he confirmed it contains 'a lot of great ideas' and that the company will continue its annual rhythm to drive customer success. He expects next year to be another record-breaking year.
Jim Schneider requested more detail on the automotive market, asking about the previously mentioned order pull-ins, their regional source, and the drivers behind the expected sequential decline in Q4.
EVP & CFO Richard Puccio confirmed that order acceleration occurred in Q2 (North America/Europe) and Q3 (China), likely driven by tariff concerns and expiring EV credits. He stated this pull-in is expected to unwind in Q4, causing the projected decline, but reiterated confidence in long-term growth from content and share gains.
Jim Schneider from Goldman Sachs asked about the expected impact of CPI and FX resets on organic growth heading into 2026 and potential positive offsets. He also questioned the rationale for further asset sales given the company is already approaching its leverage target.
EVP & CFO Steve Howden noted that while it's early for 2026 guidance, he expects continued leasing strength in Nigeria and Brazil to offset moderating CPI/FX resets. Chairman & CEO Sam Darwish and CFO Steve Howden both explained that further asset sales are being considered if they are value-accretive and align with the strategy to return capital to shareholders as leverage targets are met.
Jim Schneider from Goldman Sachs questioned the state of customer inventory levels in IoT and smartphones and their expected normalization timeline. He also asked about the strategic importance of the MIPS acquisition, including customer feedback and potential new revenue models.
CEO Tim Breen stated that the multi-year inventory digestion is nearing its end, though some modest upticks occurred in Q2. Regarding MIPS, he described it as a strategic fit that adds cutting-edge processor IP for the physical AI space and deepens customer engagement. CFO John Hollister added that MIPS is expected to contribute $50-100 million in high-margin annual revenue initially, with potential for hundreds of millions over time.
Jim Schneider sought more specific guidance for the industrial and 'Other' end markets in Q3, following the commentary on automotive growth. He also asked for the primary reasons behind the auto market weakness in the U.S. and Europe.
President and CEO Hassane El-Khoury clarified that all end markets—auto, industrial, and other—are expected to grow in Q3. CFO Thad Trent provided specifics, guiding for low-single-digit growth in auto and industrial, and mid-to-high single-digit growth in the 'Other' category, driven by AI. El-Khoury attributed the auto weakness in the West to a combination of factors including inventory, tariff uncertainty, and soft end-market demand.
Jim Schneider from Goldman Sachs asked for quantification of the gross margin headwinds from inventory management and operational inefficiencies, and when these pressures might ease. He also inquired about which underperforming end markets, like NAND or trailing-edge logic, are expected to recover first.
CFO Linda LaGorga attributed the margin pressure to the uncertain trade environment, decisions to manage inventory levels for better free cash flow, and inefficiencies from ramping new facilities in Taiwan and Colorado. She stated the long-term path to higher margins remains intact. CEO Bertrand Loy projected that mainstream logic would likely see the first signs of recovery, followed by NAND and traditional DRAM, likely next year.
Jim Schneider questioned whether increased fiber investment from competitors alters Charter's multi-year CapEx outlook and asked about the potential for increased rural construction investments.
President & CEO Chris Winfrey stated that Charter's existing network evolution plan, which includes 'fiber on demand' capabilities, already addresses future competition, so there is no change to the CapEx outlook. He noted that while Charter will participate in future subsidy programs, the opportunity for new rural builds is smaller now due to significant construction already completed.
Jim Schneider from Goldman Sachs asked if Digital Realty has sufficient available inventory in its existing facilities for 2026 to accommodate the sustained momentum in zero-to-one megawatt bookings, which could potentially drive upside to 2026 financials.
CEO Andy Power confirmed that the company plans for continued growth and actively manages its inventory runway. He noted that while some core markets are supply-constrained, DLR's presence in over 50 metros and its strategy of repurposing larger expiring leases into colocation inventory provide the capacity needed to support customer growth.
Jim Schneider asked about the potential for software growth to improve beyond current levels into 2026 and also inquired about trends in the consulting business, specifically booking duration and contract commencement times.
Chairman, President & CEO Arvind Krishna expressed confidence in 2026 software growth, expecting sustained momentum in Red Hat, Automation, and AI, with Transaction Processing returning to its model. SVP & CFO James Kavanaugh added that in Consulting, there are 'green shoots,' with backlog up 8% at spot rates and booking duration down six months, improving revenue realization. He noted that while overall signings were down on tough comps, net new business was up 13%.
Jim Schneider asked which end markets may have performed stronger than expected in Q2 and could be at risk of reverting in the second half of the year. He followed up by asking how the expected cash tax benefits might influence future capital return policies like buybacks or dividends.
CEO Haviv Ilan identified the industrial market as having run 'hotter' than expected in Q2, prompting caution for Q3. CFO Rafael Lizardi explained that while tax law changes will positively impact free cash flow, capital return decisions will continue to be balanced against factors like the ongoing high CapEx cycle, cash levels, and stock price, with the objective to return all free cash flow over time.
Jim Schneider from Goldman Sachs inquired about client priorities in the AI services market and whether the increased costs for growth ramps will eventually provide operating leverage.
CEO Bryce Maddock described a market shift in AI services toward more complex work, such as using subject matter experts to validate LLM outputs, with demand growing from both large players and new entrants. Regarding costs, he explained that the abrupt shift from cost-cutting to rapid expansion has led to inefficiencies, such as expedited facility build-outs and hiring incentives. These upfront investments and concessions made to win business are the primary cause of the temporary margin pressure.