Bloomberg Businessweek — "Stocks Fall Before Nvidia’s High-Stakes AI Results"

Date: November 18, 2025
Hosts: Carol Massar and Tim Stenovec

Episode Overview

This episode of Bloomberg Businessweek zeroes in on market jitters preceding Nvidia’s much-anticipated AI earnings report, the broader implications for AI valuations, and how institutional investors are navigating the volatility. The show also explores shifting U.S.-Saudi relations and the economic ramifications through conversations with experts on global finance and geopolitics. The closing segment focuses on the role of individual investors in contemporary markets, especially amidst corrections and political uncertainty.

1. AI Valuations, Market Correction, and the State of Play

[01:43–09:11]
Featuring: Carol Massar, Tim Stenovec, Vance Howard (CEO, Howard Capital Management), Daniel Pinto (JPMorgan Chase)

Key Topics & Insights

• AI Valuation Reevaluation:

  • Daniel Pinto (JPMorgan Chase Vice Chair) signals that current AI industry valuations may be due for correction, noting a mismatch between projected and realistic productivity gains.
    • Quote: "It’s possible there is probably a correction there… You are considering a level of productivity that... may not happen as fast as the market is pricing." — Daniel Pinto [02:03]

• HCM Byline Model — A Buyer's Market:

  • Vance Howard’s investment model remains in 'buy' territory, believing in trend-based, mathematical analysis rather than emotional decision-making.
  • He downplays the impact of 'momentum trading' fads, saying algorithmic trading now dominates volume.
    • Quote: "It's a non-emotional, mechanical, repeatable process... It's just a trend indicator and we think it's a very good trend indicator." — Vance Howard [03:20]
    • Quote: "It doesn't matter anymore. It's a big computer game. I mean, you're trading against algorithms anymore. What's 85% of all the volume?" — Vance Howard [03:56]

• AI and Automation’s Real-World Impact:

  • Prediction that AI and robotics (e.g., Tesla’s Optimus) will profoundly disrupt the workforce and corporate profitability, potentially raising unemployment as companies replace jobs with robots.
    • Memorable Moment: Howard describes a robot in Austin, Texas “walking around with a cowboy hat... stops at every red light.” [04:27]

• Caveats of Trend-Based Strategies:

  • Howard discusses the mechanical limits of his model—how violent market whipsaws can result in both missed upsides and painful losses, emphasizing scaling in/out over all-or-nothing moves.

• Risks on the Horizon:

  • National debt and the potential for systemic banking crises are flagged as bigger macro risks than daily market moves.

• AI Bubble? Different from Dot-com:

  • Howard argues today's AI leaders actually generate profits, drawing contrast with bankrupt dot-com startups of the late 1990s.
    • Quote: "They're making money hand over fist. They're making money so fast they can't spend it." — Vance Howard [08:48]

• Big Tech Bullishness:

  • Howard remains bullish on the 'Magnificent 7' big tech names ("hoping Nvidia drops so I can buy more"), forecasting higher prices in five years.
    • Quote: "Because five years from now, Nvidia is going to be a lot higher than it is today." — Vance Howard [09:03]

2. U.S.–Saudi Relations, Diversification, and Geopolitical Investments

[11:33–20:36]
Featuring: Carol Massar, Tim Stenovec, Dr. Ellen Walsh (Transversal Consulting, Atlantic Council Fellow)

Key Topics & Insights

• Saudi Investment Push:

  • Discussion of Crown Prince Mohammed bin Salman’s planned U.S. investment, with questions about how Saudi can fund deals amid low oil prices. Walsh notes the PIF’s independence from oil revenues.

• Economic Diversification Outcomes:

  • Saudi Arabia’s much-publicized turnaround from oil dependence is assessed as incomplete, with most major goals unmet.
    • Quote: "Have they achieved the goals...to diversify from oil? The answer is no...What they have done is...introduced some very important changes..." — Dr. Ellen Walsh [14:04]

• Friend or Frenemy Dynamics:

  • Walsh highlights differing perceptions: Saudi Arabia sees the U.S. as a best friend; the U.S. sees the Kingdom as a strategic partner, but not an ally of the caliber of Canada or the UK.
    • Quote: "Saudi Arabia has a very different view of the relationship than the United States does...In the Saudi mind, the US is a best friend..." — Dr. Ellen Walsh [15:53]

• Defense and Security Deals:

  • F-35 sales to Saudi, and their implications for regional security and U.S.-Israel relations, are viewed as highly conditional (e.g., dependent on progress toward Palestinian statehood, which Walsh deems unlikely soon).

• AI Chips and Investment:

  • The PIF’s interest in U.S. technology, especially AI/chips, is emphasized, but direct Saudi chip production is seen as unlikely. Data centers, backed by incentives like free land and energy, may become the focus.
    • Quote: "The PIF wants to make these investments in these firms because that's their way of kind of getting their hands on this technology." — Dr. Ellen Walsh [19:30]

3. U.S.-Saudi Integration & Political-Economic Transparency

[21:04–33:55]
Featuring: Carol Massar, Tim Stenovec, Dr. Adam Posen (President, Peterson Institute for International Economics)

Key Topics & Insights

• Saudi-U.S. Integration Path:

  • Dr. Posen views Saudi investments in the U.S. as more about diversifying the Saudi economy away from fossil fuels than as a unique opportunity for the U.S.
    • Quote: "Deeper integration with the US is a path towards [diversification] and it is a credible path..." — Dr. Adam Posen [21:41]

• Conditionality and Security:

  • Suggests that any U.S. security or tech sharing (e.g., the F-35) should be contingent on major Saudi concessions, whether geopolitical or investment-driven.
    • Quote: "It needs to be tied to something of that caliber...some sort of agreement on how the Saudis will influence Pakistan...investment...in rebuilding Gaza..." — Dr. Adam Posen [23:44]

• Business–Political Blurring:

  • Raises concerns about the Trump Organization’s business ties with Saudi Arabia, warning of new norms where political decisions are perceived as linked to personal or familial enrichment.
    • Quote: "What matters is this very strong perception...that you link things...this is a huge step change. We've not seen anything like this, at least since Teddy Roosevelt." — Dr. Adam Posen [25:17]

• Global Ramifications of Poor Governance:

  • Warns that if the U.S. abandons established anti-corruption norms, it could lower global standards and investment appeal, reduce economic returns, and increase inequality and instability.
    • Quote: "It means the US is setting an example that you can get away with it...it will reduce the returns on capital. It will divide the world..." — Dr. Adam Posen [29:33]

• Domestic Neglect Amid Global Focus:

  • Posen flags risks from health care subsidy cuts, anti-migration policies, and inflationary pressures, arguing that not enough attention is paid to domestic social welfare.
    • Quote: "It's not about choosing the global versus domestic. It's about choosing the self-interested versus the public welfare." — Dr. Adam Posen [33:55]

4. Market Correction, Retail Investors & Sentiment

[37:05–42:20]
Featuring: Carol Massar, Tim Stenovec, Stephanie Gill (Chief Investment Officer, Robinhood Markets)

Key Topics & Insights

• Nature of the Pullback:

  • Gill believes the current market downturn is a "healthy correction," not a crash—driven by overstretched valuations and the natural ebb and flow of the market.
    • Quote: "I think it's a healthy correction. You get them every one to two years. Sometimes we forget that." — Stephanie Gill [37:48]

• Proof Points for Tech and AI Investment:

  • Investors now demand evidence that large investments in AI are producing real, scalable returns at both enterprise and consumer levels.

• Rise of Individual Investors:

  • Gill notes the democratization of markets, with individuals now crucial players, especially in smaller-cap names, though their impact on mega-caps is more limited.
    • Quote: "Individual investors are now a core part of the financial ecosystem, reshaping how capital markets function." — Stephanie Gill [39:24]

• Retail Sentiment and Crypto Volatility:

  • Retail investors, particularly in crypto, are accustomed to high volatility and often "trim" when prices rise and "add" when they crash, showing a level of resilience.
    • Quote: "Those at play in the crypto space are very used to large swings...when it's down a lot, they do add." — Stephanie Gill [41:36]

5. Notable Quotes & Memorable Moments (with timestamps)

• AI Valuation Caution:

  "It's possible there is probably a correction there and that correction will also create a correction in the rest of the segments in the S&P and in the industry..."
  — Daniel Pinto [02:03]

• On Algorithmic Trading:

  "It doesn't matter anymore. It's a big computer game. I mean, you're trading against algorithms anymore. What's 85% of all the volume?"
  — Vance Howard [03:56]

• AI’s Societal Impact:

  "You'll have one person working in the cash restaurant, five people that are robots that are serving the coffee. This only costs 15 to 20 grand for Optimus the robot."
  — Vance Howard [04:47]

• On F-35s and Regional Power:

  "If the Pentagon has severe concerns about it, I think it may not actually go through as much as Trump wants it to go through."
  — Dr. Ellen Walsh [19:22]

• On Erosion of U.S. Political Norms:

  "We had laws and...expectations...that the US did not deal in family enrichment...this is a huge step change."
  — Dr. Adam Posen [25:17]

• Retail Resilience in Crypto:

  "There's kind of a meme out there that says...when stock investors have a big drag down, the crypto investors are like, 'Welcome to the way it feels.'"
  — Stephanie Gill [41:28]

6. Key Timestamps

• [01:43] Kicking off: Daniel Pinto's warning on AI valuations
• [03:00–06:48] Vance Howard on market signals, algorithmic trading, and market psychology
• [07:53–08:30] Macro risks: U.S. national debt and financial system vulnerabilities
• [11:33–13:45] U.S.-Saudi meetings and investments; PIF funds explained
• [14:04–16:58] Saudi diversification progress
• [19:22] F-35s, AI chips, and geopolitical technology transfer risks
• [21:41] Dr. Adam Posen: Saudi diversification and U.S. interests
• [23:44] Strategic conditionality in U.S.-Saudi arms and investment deals
• [25:17–29:33] Political-business ties, erosion of norms, global precedent
• [37:05–39:24] Stephanie Gill on current corrections, AI investment evidence, and individual investor influence
• [41:28] Retail investor mentality and crypto swings

7. Takeaways

• Markets are prepping for volatility around Nvidia and AI earnings, but many managers see opportunities, not systemic threats, unless macro risks like debt or a hard landing manifest.
• AI's productivity and adoption cycle could support valuations, but not as quickly as recent hype implies; mechanical models help investors cut through noise, though their limitations are acknowledged.
• U.S.-Saudi relations are shifting toward deeper economic entanglement, dictated as much by political expediency as by strategic logic; tech transfer and security deals are points of tension.
• Transparency and anti-corruption norms in U.S. political economy are under pressure, raising global governance concerns.
• Despite the dominance of institutions, individual investors—especially millennials and Gen Z—are increasingly active, resilient, and have growing albeit niche influence.

For listeners seeking a comprehensive picture of where markets, geopolitics, and the investing landscape are headed, this episode provides expert perspective, critical caution, and a healthy dose of realism.