Halftime Report: "Banking on Nvidia" – May 28, 2025

Host: Scott Wapner
Guests: Joe Terranova, Stephanie Link, Malcolm Gladwell, Ryan Reynolds
Release Date: May 28, 2025

1. Introduction

In this episode of CNBC's Halftime Report, host Scott Wapner delves into the anticipated earnings report of Nvidia, examining its implications for the AI-driven stock market. Joined by financial experts Joe Terranova, Stephanie Link, Malcolm Gladwell, and Ryan Reynolds, the discussion navigates through current market sentiments, semiconductor trends, and strategic investments in technology sectors.

2. Nvidia's Earnings Outlook

Scott opens the discussion by highlighting Nvidia’s robust performance, noting, “those shares are having their best month in a year” (02:00). With Nvidia’s stock up 40% since April 4th, the panel debates whether the upcoming earnings report will sustain this momentum or lead to a market correction.

Joe Terranova emphasizes the resilience of demand outside China, stating, “The demand is there. Outside of China. The demand is there” (02:56). He believes that despite potential revenue misses due to the H2O ban in China, the existing demand has already been factored into the stock price, positioning Nvidia for further gains.

3. The AI Trade and Market Sentiment

The panel discusses the broader AI trade, with Ryan Reynolds asserting, “I have been buying Broadcom the last month, month and a half” (06:27), highlighting confidence in AI-driven investments. The conversation touches on the sustainability of the AI boom and how it underpins investments in key tech stocks.

Malcolm Gladwell points out, “It is the key point is visibility. What are they going to say for '26 and '27” (05:16), indicating the uncertainty surrounding future AI developments and their impact on stock performance.

4. Semiconductor Stocks and Broadcom

Broadcom emerges as a focal point, with discussions around its strong financials and strategic acquisitions. Ryan Reynolds notes, “We do get 31% of their revenues as AI” and praises Broadcom’s software segment post the VMware acquisition (07:15). The consensus among the panel is bullish, with multiple analysts reiterating positive price targets.

Joe Terranova adds, “The VMware acquisition is proving to be an excellent acquisition” (08:22), underscoring the long-term benefits of Broadcom’s strategic moves.

5. Software Sector Performance

Shifting focus to the software industry, Stephanie Link highlights the sector's resilience, stating, “If we look at a company like a Microsoft or an Oracle or an IBM” (18:40). The discussion centers on high gross margins and operating leverage that make software stocks attractive defensive plays against market volatility.

6. Meta Platforms and Regulatory Challenges

The conversation turns to Meta Platforms (formerly Facebook), exploring its governance structure and regulatory hurdles. Ryan Reynolds emphasizes confidence in Meta's fundamentals, saying, “I want fundamentals. I want a CEO that delivers” (14:09), while Joe Terranova discusses Meta’s strategic positioning with the current administration (15:07).

Malcolm Gladwell reflects on Meta’s focus on free cash flow and return on investment amidst regulatory scrutiny, suggesting the company is poised to maintain its market stance despite external pressures (15:20).

7. Cybersecurity Stocks Debate

A heated debate unfolds around cybersecurity firms, particularly Palo Alto Networks versus CrowdStrike. Stephanie Link expresses concerns over Palo Alto's reliance on federal contracts and potential budget cuts, whereas Ryan Reynolds counters by defending the cybersecurity market's robustness and diversification opportunities (22:09).

The differing perspectives highlight the complexities within the cybersecurity sector, balancing government dependency against enterprise-focused growth.

8. Retail Sector Earnings

With several retail giants reporting earnings, the panel analyzes the impact of tariffs and consumer confidence. Joe Terranova expresses caution over margin contractions in big-box retailers, noting, “the companies are eating the cost of the tariff” (30:37), while Ryan Reynolds remains optimistic about brands like Abercrombie and Gap showing positive sales momentum despite market challenges (30:37).

9. Family Offices and Investment Shifts

A segment discusses a UBS study revealing that family offices are increasingly bullish on public stocks while reallocating away from private equity. Stephanie Link and Malcolm Gladwell debate the implications, with the consensus being that this shift signals a strong preference for liquidity and public market growth opportunities (37:10).

10. Record-Setting Stocks and Final Remarks

The episode concludes with highlights of top-performing stocks such as Monster Beverage and IBM, reinforcing the theme of momentum-driven investments. Joe Terranova praises Monster for its revenue growth and strong balance sheet, while Ryan Reynolds lauds IBM’s transformation under new leadership (40:49).

Conclusion

The Halftime Report episode on "Banking on Nvidia" offers a comprehensive analysis of Nvidia's pivotal earnings report and its ripple effects across the tech and investment landscapes. Through insightful discussions, the panel underscores the intertwined nature of AI advancements, semiconductor performance, and strategic investments shaping the current market dynamics.

Notable Quotes:

• “The demand is able to strip outstrip the supply.” — Joe Terranova (02:56)
• “If Nvidia falls, that's when you want to take a look at it and buy more.” — Ryan Reynolds (07:07)
• “I have said this before, they had the best max 7 quarter out of the max 7.” — Ryan Reynolds (14:09)
• “Palo Alto specifically scares me because I look at a Trump administration that has taken a very different stance towards cybersecurity.” — Stephanie Link (22:47)

This summary encapsulates the key discussions and insights from the "Banking on Nvidia" episode of Halftime Report, providing a detailed overview for listeners and non-listeners alike.