CNBC's "Fast Money" Podcast Episode Summary: Nvidia Reports Results… And The Future OF Fannie Mae And Freddie Mac (5/28/25)

Release Date: May 28, 2025

Introduction

Hosted by Melissa Lee, CNBC's "Fast Money" delves into the most pressing financial news and market movements each weeknight. In the May 28, 2025 episode, the discussion centers around Nvidia's latest earnings report, the potential ramifications of President Trump's plans for Fannie Mae and Freddie Mac, and noteworthy stock performances, including Abercrombie & Fitch's surprising surge. Expert panelists Steve Grasso, Karen Finerman, Dan Nathan, Guy Adami, and Tim Seymour provide in-depth analysis and insights throughout the episode.

1. Nvidia's Earnings Report and Market Impact

Timestamp: [01:02]

The episode kicks off with a comprehensive analysis of Nvidia's recent earnings report. Shares of the semiconductor giant surged by approximately 5% following the company's announcement of surpassing both top and bottom-line estimates for fiscal Q1. Notably, Nvidia's data center division showcased significant growth, expanding over 70% year-over-year.

• Karen Finerman highlights the company's Q2 guidance: “Q2 guidance is really a big deal for this company, $45.1 billion, which sounds like it's a little bit less than, you know, the $2 billion guide that they always do every single quarter...”

a. Earnings and Guidance

Karen discusses the revised guidance and the strategic write-downs related to Nvidia's export restrictions:

• Nvidia initially planned a $5.5 billion write-down due to the H20 ban affecting chips intended for the Chinese market. However, the company managed to reduce this to $4.5 billion by reusing some materials: “...they were actually able to reuse the materials. And for me, that's a little bit of news because previously so many analysts said, oh, this is complete wash.”

b. Impact of Export Controls on the Chinese Market

The conversation shifts to the implications of U.S. export controls on Nvidia's market in China. Despite significant write-downs, Nvidia remains optimistic about maintaining its presence:

• Dan Nathan questions the long-term viability: “...you think the risk like it extends further...”

• Karen Finerman counters with a bullish outlook on alternative markets: “...the Middle East has come forward and promised to buy 18,000, for example, Saudi Arabia, 18,000 chips within the next five years...”

c. Middle East Deals vs. Chinese Market Losses

The panel debates whether revenue from the Middle East can offset the losses in China:

• Melissa Lee probes the feasibility: “Do you think dollar for dollar, the Middle east can replace China's revenues?”

• Karen Finerman remains skeptical about fully compensating the decline: “...they're continuously losing market share in China...but they're still being highly held and loved by investors.”

d. Market Reactions and Future Outlook

Analysts express mixed feelings about Nvidia's future prospects given the geopolitical tensions and competitive pressures:

• Tim Seymour notes: “Gene Munster tweeted that, you know, it's actually a lot better than people thought when you back out the China stuff.”

• Steve Grasso emphasizes caution: “...I think you're looking at lower prices tomorrow.”

• Guy Adami adds a bearish perspective: “I don’t think the Saudis replace that total income. I'd be a seller of this population after hours.”

e. Expert Perspectives and Price Targets

Susquehanna's Chris Rolland provides a nuanced view on Nvidia's valuation and future performance:

• Chris Rolland [29:59]: “...Jensen on the call called out Trump's restrictions here and controls and saying they are counterproductive.”

• Dan Nathan contemplates a $180 price target based on potential regulatory changes: “...maybe that is the thing for the fourth time in two months that causes them to chicken out.”

2. Macroeconomic Context: Federal Reserve Policy and Bond Markets

Timestamp: [12:07]

The discussion transitions to the broader economic landscape, focusing on the Federal Reserve's stance and its implications for bond markets.

a. Federal Reserve's Current Position

Michael Schumacher, Head of Macro Strategy at Wells Fargo Securities, shares insights on the Fed's approach:

• Michael Schumacher [12:39]: “The Fed's going to sit. There's no reason whatsoever for the Fed to move anytime soon. And I think what that means is if you're buying treasury bonds or treasury securities, you can't expect the Fed to come in with a big rate cut to give you a big capital gain.”

b. Inflation and Treasury Yields

The panel discusses the Fed's concerns about inflation and the impact on Treasury yields:

• Melissa Lee [13:06]: “What do you anticipate for yield levels here in the United States given the lackluster Japanese auction for longer-dated Treasuries there?”

• Michael Schumacher [13:15]: “It's a tale to bond markets... avoid the long end. I'd buy three to five-year securities.”

c. Global Bond Market Dynamics

The episode touches on global factors affecting U.S. bond markets:

• Michael Schumacher [14:22]: “Governments globally... more spending... yields aren't that great. To me, it's a bad omen.”

d. Potential Fed Actions

Panelists speculate on when the Fed might intervene significantly:

• Michael Schumacher [13:37]: “It's late this year. The Fed's incentive now is to wait... probably fourth quarter.”

• Tim Seymour [14:03]: “How important is what's going on in Japan to what's going on here?”

3. The Future of Fannie Mae and Freddie Mac

Timestamp: [37:23]

Shifting focus, the episode explores President Trump's contemplation of ending the government conservatorship of Fannie Mae and Freddie Mac, the mortgage giants destabilized during the 2008 financial crisis.

a. President Trump's Proposals

• Melissa Lee reports on renewed hopes for privatization: “Renewed hopes around President Trump's plans to take the mortgage giants public.”

b. Expert Analysis by Michael Bright

Michael Bright, CEO of the Structured Finance Association, weighs in on the potential implications:

• Michael Bright [38:42]: “You really want to make sure that if they are removed from conservatorship that you keep in place some guardrails and some protections to ensure that they are focused on their core mission.”

c. Market Reactions and Investor Concerns

The panel discusses investor reactions and the complexities of removing government backing:

• Melissa Lee [42:06]: “What can the government do to actually say...”

• Michael Bright [40:22]: “Agency mortgage-backed securities... It's very important...”

d. Potential Risks and Structural Changes

The conversation delves into the risks of shifting these entities back to the private sector without clear government support:

• Karen Finerman and Steve Grasso express concerns over moral hazard and the necessity of explicit government backstops to maintain market stability.

4. Notable Stock Movements

Timestamp: [43:10]

The episode highlights significant after-hours stock movements, focusing on Abercrombie & Fitch, Salesforce, HP, and emerging companies in the eVTOL (electric Vertical Take-Off and Landing) sector.

a. Abercrombie & Fitch's Surprising Surge

Despite slashing its profit outlook due to tariffs, Abercrombie & Fitch's shares surged nearly 15%.

• Steve Grasso [44:15]: “Hollister, completely different story. Gigantic, same-store sales beat balance sheet. Huge momentum there.”

• Tim Seymour [45:03]: “This time last year it was too expensive. This time this year it's too cheap.”

b. Salesforce's Performance

Salesforce reported strong guidance, bolstered by currency tailwinds and its AI-driven product, Agent Force.

• Guy Adami [21:39]: “...strong guidance driven in part by currency tailwinds with the dollar weakening.”

c. Joby Aviation and eVTOL Companies

Joby Aviation's shares surged nearly 30% following a significant investment from Toyota, supporting its certification and commercial production.

• Steve Grasso [27:08]: “...you have two choices. I think either one probably sees the future coming quickly.”

d. HP and Tariff Impact

HP faced a decline in shares due to missed earnings and lower-than-expected guidance, attributing the results to tariffs.

• Steve Grasso [22:45]: “Tariffs are really the culprit here... moving production to Vietnam and India from China.”

5. Closing Thoughts and Final Trades

Timestamp: [46:04]

In the final segment, the panelists share their last-minute trades and summaries of the day's discussions.

• Guy Adami [46:15]: “I love the eVTOL story. I'm going to play it with Archer Aviation.”

• Dan Nathan [46:27]: “Closed on the lows and I just don't think there's too many interesting retail stories...”

• Tim Seymour [46:41]: “I like Newmont Mining. I like the way it closed today.”

The episode concludes with a reminder to tune in the following night for more financial insights and market updates.

Notable Quotes

• Karen Finerman [02:01]: “Q2 guidance is really a big deal for this company, $45.1 billion...”

• Michael Schumacher [12:39]: “The Fed's going to sit. There's no reason whatsoever for the Fed to move anytime soon.”

• Michael Bright [38:42]: “...make sure that if they are removed from conservatorship that you keep in place some guardrails and some protections...”

• Guy Adami [08:44]: “...I think you're looking at lower prices tomorrow.”

• Dan Nathan [35:53]: “...if somebody like Jensen Huang is starting to push back a little bit, then maybe that is the thing...”

Conclusion

This episode of "Fast Money" offers a multifaceted analysis of Nvidia's financial performance amidst geopolitical tensions, the potential restructuring of major mortgage entities under presidential guidance, and notable market movements across various sectors. Through expert commentary and real-time updates, listeners gain a comprehensive understanding of the current financial landscape and future market trajectories.

For more detailed insights and real-time market updates, visit Fast Money on CNBC.