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The Best Stock Strategies Following a Rate Cut 9/22/25
00:49:41
Scott Wapner and the Investment Committee discuss their best stock strategies following the Fed’s rate cut last week. Plus, CNBC’s Jon Fortt brings us some breaking news, Nvidia investing up to $100 Billion in OpenAI to build computing infrastructure. And later, we hit the latest Calls of the Day. Investment Committee Disclosures
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- [00:00]
A
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones Member, SIPC.
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B
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- [01:03]
C
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour. Don't fight it, don't chase it. That's the call today from one well known market voice. We discuss and debate it with the investment committee. Joining me for the hour today, Joe Terranova, Stephanie Link, Sirat Sethi and Bryn Talkington. We will go to the markets here as we watch the first trading day of a new week. And we're modestly green, the dust now settling from the rate cut which leaves us Joe Ware, Goldman Sachs. David Costin today raising his 12 month s and P. Target raised a few of them but the 12 month target is now 7200. It is Goldman's Tony Pascarello who makes the call I referenced at the top of the show today too. Don't fight it, don't chase it. Do I love the positioning setup and tactical risk reward? I don't with that, do I think you should be stepping in front of the US Mega cap tech freight train? I don't. It's a bull market. The primary trend is higher. I feel like this matches with the Tepper view Joe from Squawk last week. Don't really love the valuations that we're trading, but I'm not going to stand in front of this this market, not with this Fed, not with fighting.
- [02:26]
B
The Fed fully agree and that's exactly I Think the disposition that most people have towards the market right now. It's interesting because he says don't chase it. Well, if you' well positioned, if you're long like we all are the market, you're going to see that the work is going to be done for you. As the calendar approaches the end of the year from a lot of people that are forced to chase it, they're forced to chase it because they might be underperforming year to date. So I do believe that chase for performance ultimately is going to happen. It's difficult to find opportunities. We'll talk about a couple. On Thursday I gave the XPI as a final trade that looks like that's breaking out. And then I think if you look at the, the Mag 7, there's only two Mag 7 names that have not made an all time high in 2025. That would be Tesla and Apple. Well, guess what they're doing right now. They're going back towards those highs that they traced out earlier in December. So I think there's some opportunity, very strong momentum in those two names right now.
- [03:25]
C
I mean the XPI is up 2% since the rate cut. We're talking really only two full trading days last Thursday and Friday as we know. What about this staff from Pascarello? Don't fight it, don't chase it. Yeah, I mean, you know, I don't think the, the best investors in, in the world, they look at the market, they see the valuation, they're like, I don't really love it but man, this AI theme is powerful and the Fed's cutting. So I'm not an idiot. I've seen what happens before. I've seen this movie before. Right. Maybe a few times before. I'm not going to get in front of that.
- [03:57]
A
Well, the Fed is cutting into a strong economy so that's actually very powerful. I would say yes, the market is expensive but you're going to see double digit earnings growth, free cash flow growth of 14% year over year. Companies are buying back a ton of stock stock and you have margin expansion. So I actually think we're probably just going to sort around here for a couple of, a couple of weeks until earnings season and on the 14th of October that's when it all starts again. Earnings season with the big banks. And I went back and I added up all the buyback news from the banks. The big six, they still have 100, 192 billion left to buy back stocks.
- [04:35]
C
I can't believe earnings are that close.
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A
I know.
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C
Feels like the earnings Season kind of just ended. Now here we are in October. We're going to, we're going to be doing it all over again. By the way, since you mentioned buybacks, it's a great setup for if you, if you consider what are the next legs of this rally, where does it potentially come from? Well, JP Morgan notes buybacks, which Steph was just talking about. S and P companies have announced buybacks at an unprecedented rate. Close to 960 billion committed year to date, significantly surpassing the three year average of 644 billion 960 committed year to date. Three year average. 644. That doesn't give you an idea. Your financials. Charles Schwab, bank of America, Morgan Stanley and JP Morgan have all announced buybacks.
- [05:26]
A
Well, an Uber is going to buy back 20 billion and that's 9.5% of its float. I mean so this is really material. I think that the banks are going to hit off the earnings season really powerfully. I think are going to be very, very strong. And then we get into that what I call silly season. So yeah, you don'. Have to chase. Silly season is when a company reports good numbers and the stocks fall and numbers are still going higher. That's your opportunity. So that's what I would say wait until earnings season. I do think, by the way, the $7 trillion of cash in money markets will come. Not all, but some of it will come and will be a tailwind as interest rates come down because you're not getting 5%.
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C
Let's debate that Sarah, because that, that's been a key point from some that look at all this money that's still on the sidelines going to come into the market now because the Fed is going to do its thing and that's going to be good for the market as well. Maybe not. Wall Street Journal today says investors are flush with cash. Excuse me, and happy to keep it there. Assets and money market funds reached a record 7.7 trillion last week. Pardoned Surat, take it away.
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B
So let me take it from you. Get your water there. So I think Steph's absolutely right here. So what's going to happen is rates start coming down. Investors are going to say wait, my 3, 4, 5% money markets I'm not.
- [06:47]
C
Really going to get.
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B
So at that point, what am I going to do?
- [06:51]
C
I'm going to put money back into.
- [06:53]
B
The market and I'm going to look for opportunities because even fixed income today spreads are the tightest that they've ever been. So you're not going to be chasing that. So you're going to go back into equities and the equity point that we were talking about. You have two things going on. You have a put basically with the Fed because if things start slowing down, they're going to cut rates faster and buybacks are going to accelerate. So that's going to also help the equity market. So I think you've got three positive things going into. Whether you get good or bad news. I want to push back a little just on the premise that the cash coming into the market is such a big catalyst. It seems as though that cash has been sitting on the sidelines since the great financial crisis. Maybe there's so much cash in existence because the world is just getting wealthier. So I really think it's about what Steph mentioned before. I think it's the profit margin expansion because the profit margin expansion is the solution to offsetting the tariffs. The profit margin expansion allows you to buy back your stock. And I think as long as that profit margin growth is there, where we went from 12 and a quarter to 13 and a half percent, as long as that's present for the s and P500, then I think for sure we are in a really good position. I don't think you need that quote unquote cash.
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A
I think it's nice to have though.
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C
What if people.
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B
It's nice to have but I think people keep making that argument and I don't think you should sit there saying yourself, okay, I'm going to rely on the cash coming in from the sidelines.
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A
Three years ago you didn't get 5% on the money market. Now you're getting 5% and now it's going to come down gradually if you, the Fed continues to do what they're doing.
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C
By the way, rates are up since the rate cut.
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B
They are 398 for a 10 year.
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C
On Wednesday, still up.
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A
The 30 year fixed mortgage is down 100 basis points from January.
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C
Tell me, tell me why the homebuilders are down one and a half percent since the rate cut.
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A
Because they were up 30% from the second quarter earnings report.
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C
So it was all pull forward.
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A
I think a little bit of was a pull forward and they can take a breather but they are still extremely cheap. We haven't had a housing cycle and we're still growing the economy at 2 and a half, 3%. Imagine when we get a housing cycle.
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C
I mean Brin, this idea of money, maybe money coming in, maybe people aren't convinced the economy is as strong as Steph wants everybody to believe. Maybe they look at the market valuation, they're like, I don't know, stocks look expensive to me. As part of this article, a little tear from it from the Journal today. With stocks by some measures now more expensive than ever, some investors are willing to wait for discounts and it may take more, more than one or two or three rate cuts to change their minds. It is indeed a wall of cash because it ain't going anywhere. That's according to the president of the data company that came out with this 7.7 trillion last week. Brent, forgive me. You hold your thought because we do have breaking news. It's regarding in video. We'll get to John Fort now, who can fill us in with more. John, what do we know?
- [09:45]
D
Scott Walker, thank you. I am here at Nvidia headquarters in Santa Clara with the CEO of the world's most valuable company and the CEO and president of the world's most valuable private company, Jensen Huang of Nvidia, Sam Altman and Greg Brockman of Open Air. So let's dive right in to the news, Jensen. Nvidia is making $100 billion investment in OpenAI and working together to build out, I think you're saying, 10 gigawatts of capacity over several years. The investment's going to come with the gigawatts one at a time. You're telling me, you guys, as quickly as you guys can get it done. Jensen, first of all, set the stage.
- [10:24]
E
Why this is the biggest AI infrastructure project in history. This is the largest computing project in history. Well, the reason for that is because computing demand is going through the roof for OpenAI. You know, ChatGPT is the single most revolutionary AI project in history. It's being used everywhere. Every industry, every country, every person practically that I know uses ChatGPT. The computing demand is going through the roof. And so this partnership is about building an AI infrastructure that enables AI to go from the labs into the world. This is about the AI industrial revolution. Arriving is a very big deal.
- [11:09]
D
$100 billion, a lot of money. Sam, Greg, you guys are used to dealing with a lot of money in big projects. So, Sam, I think it was just eight months and a day ago, the initial Stargate announcement, talking about the overall move that Open Air is making in building out this capacity. Where does this fit?
- [11:28]
F
So, as Jensen said, building this infrastructure is critical to everything we want to do. Without doing this, we cannot deliver the services people want. We can't keep making better models. And now that we really see what's on the near term horizon of how good the models are getting, the new use cases that are being enabled, what people want to do. This is like the fuel that we need to drive improvement, to drive better models, to drive revenue, everything. So this is helping us get to a world along with our partners at Stargate, Microsoft, Oracle, where we can build out increasing amounts of infrastructure to deliver on what the world is demanding out of these services. There's like no partner but Nvidia that could do this at this kind of scale, at this kind of speed. It's really like quite incredible. But this will expand on the Stargate ambitions and let us push further and further. We have found every step along the way that we did not quite set our sights big enough, given the market demand. So this will help us push towards that next level. The compute constraints that the whole industry has been in, our company in particular, have been terrible. We're so limited right now in the services we can offer. There's so much more demand than what we can do. And as we look forward another year or two years, if you have, you know, let's say it takes 10 gigawatts of compute or 5 gigawatts of compute, you could choose one of two things. You could choose to cure cancer by doing a bunch of having AI do a bunch of research, or you could choose to offer free education to everybody on Earth. No one wants to make that choice. And so increasingly, as we see this, the answer is just much more capacity so that we can serve the massive needs and opportunity with this.
- [12:57]
D
Greg, one way of measuring that demand is the number of users that OpenAI has. Chat GPT says somewhere between 700 and 800 million. How quickly are you growing? What's the technology that you guys need to bring to bear from Nvidia included in order to satisfy that?
- [13:14]
G
Yeah, so 700 million growing extremely quickly. Like, I think that Chat CBD has grown from nothing to that scale and continues to grow faster than any product in history. And really the reason we were able to make this breakthrough and serve it to the extent that we have is by leveraging Nvidia's platform. Like, we've worked together very closely since Jensen actually hand delivered a server to us back in 2016. And we were just doing some math earlier. I think that this deal is really for a billion times more computational power than that initial server. And so we're able to actually create new breakthroughs, new models, to be able to be able to actually solve problems like create cures for diseases and to actually be able to Empower every individual in business because we'll be able to reach the next level of scale.
- [14:00]
D
Jensen, step back for me. I mean, a few days, you're all over the place, literally. I mean, you're in the uk. I saw the white bow tie and all that. The top is very nice, but you're also doing a lot of investments. The intel investment announced last week, quite a bit smaller than this one, but seems significant also because it's weaving in video technology in the PC and data center level in a way that perhaps it wasn't before. Where do these kinds of investments fit in? How do you think about the value of the ecosystem to Nvidia?
- [14:34]
E
The intel partnership is about recognizing that accelerated computing and AI's day has arrived. Remember, general purpose computing was invented practically 60 years ago, and for the last 60 years we've been following that basic blueprint, that basic architecture to build the ecosystem, the computing of the world. So all of a sudden, accelerated computing's time has come and we're fusing, if you will, the intel architecture with the Nvidia architecture to bring them into the world of accelerated computing and AI. So that's what that partnerships about, this partnership. I mean, this is, you know, monumental in size. There's never been an engineering project, a technical project of this complexity and this scale ever. And it really just says that AI was in the early adopter phase in the labs. And finally it's breaking out into just about every single industry, every single use case we can imagine it is very soon where every single word, every single interaction, every single image, video that we experience on, you know, through computers will somehow have been reasoned through or referenced by or generated by AI. It's going to be touched by AI somehow. So all of our computing experiences throughout the day, everywhere, in every industry will be powered by AI. This first, this is the first 10 gigawatts. It's surely it sounds like an enormous, enormous undertaking, but there's no question that AI is transformational for every industry. But the important thing is the AI infrastructure will be everywhere and it will power computing experiences for everyone every day. And it's going to be just everywhere.
- [16:15]
D
Sam, it seems like the two most valuable companies in the world, Nvidia number one, over four trillion, about four and a quarter trillion last time I checked. Today, Microsoft, just under for trillion, are going to be major investors in Open Air. How should we understand the governance, the influence that these companies have over OpenAI, where those lines are and even, you know, the investment, size wise, where that's going to net out.
- [16:44]
F
We're thrilled to have them both as partners. They're, they're passive investors. You know, our nonprofit and board are in control but with the ecosystem is really important to us. Nvidia and Microsoft are two of our most critical partners and have been from the very front, from the very beginning. And having them so aligned with our success is I think great for us. Hopefully great for them too.
- [17:04]
D
Greg, where does Nvidia fit along with all of the other infrastructure providers? Oracle. You guys kind of touched Oracle and the stock went up even though the name wasn't attached to it. When they reported earnings in their guidance, a lot of people were looking over at OpenAI. Where do these different technology infrastructure players fit in terms of importance in the amount of capacity that you need?
- [17:29]
G
Well look, the project that we're trying to do is something that as Jensen was saying is bigger than any infrastructure build out that's ever been done. It's much larger than the Apollo program for example. And so we're going as big as we can with the biggest partners in the world. Nvidia is a core strategic partner for our build out. There's just no one who could build as fast or as big as they are going to be able to accelerate us to be able to do. We are working together with Oracle to do a lot of the infrastructure builds with Softbank and Stargate to be able to actually do a bunch of that work as well. We're starting to expand into just trying to figure out every single way that we can actually get this compute to the world. But there's really been no partner like Jensen, like Nvidia and it's just been a very, very special partnership for more than a decade now. And we're moving into a next phase together.
- [18:15]
E
So it's really important to, to say is that and Sam and Greg hinted at it, this is additive. This project. 10 gigawatts of infrastructure is additive to everything that has been announced and contracted. Remember they've contracted huge amounts of capacity through Azure, through oci, through Core Weave and all of that is powered by Nvidia. And we're really delighted working with all of these partners and that's going to continue to grow. This is additive incremental on top of that which is kind of puts it in perspective the scale of AI computing that's needed for the world.
- [18:49]
D
That really not asking exponential yet to to say anything different from what's already been included in the financials that you've given or the guidance that you've given. But this is an announcement that's breaking right here on cnbc. Has this been factored in to the numbers that you've given Wall street up to this point?
- [19:06]
E
This is additive to everything that we've spoken about so far. It's pretty incredible.
- [19:11]
D
We're also talking about AI infrastructure for the world. One of the headlines last week had to do with China and how they're dealing or not dealing with Nvidia. When you look at where this capacity is getting built out and the global use that it's going to have, how do you think about the way different regions, the way different countries are going to tap into that and how that affects Nvidia's competitiveness?
- [19:37]
E
Well, you know, President Trump was clear about this, and you've heard me say this before, that we want the world to be built on the American tech stack. And the American tech stack, the AI computing stack, includes chips, infrastructure, models and applications. We have every, every reason to believe that the United States should lead in every single one of those layers. And in doing so, we want the world to be built on top of American ships. We want American infrastructure, American models, and for the world to integrate with American applications. And we ought to diffuse this capability as fast as possible because the world is racing to bring AI out to the world. And so I think the, the, the need to build AI infrastructure all around the world. This is just beginning. Notice most of the infrastructure work, infrastructure conversations we've been having are largely located in the United States, but we're going to see infrastructure built in Europe and in southern parts of the world. You're going to be Southeast Asia, all over the world, we're going to be building AI infrastructure.
- [20:43]
D
Sam, there's a deep seek moment. Several months ago, the market kind of freaked out about what this means for infrastructure, for capacity, for expense. What, what was the legacy of that? Given the moment that we're in right now, this $100 billion investment Nvidia is making in you, clearly you see value in these chips or, or you wouldn't need that kind of money for that kind of equipment. What does that mean? How has the way the conversation around AI and models has shifted affected the way that you guys are looking at the, the buildup?
- [21:17]
F
Two thoughts about this. First of all, I think most of the world still thinks of AI as what ChatGPT can do. You know, it's a better version of web search or it helps me, you know, with some small tasks here and there. AI has moved an incredible distance. AI is now outperforming humans at the most difficult intellectual Competitions we have for the first time with GPT5, you're starting to see scientists saying AI is like making novel discoveries. Small ones, but real ones. And so there's this. I think there's this huge mismatch in the world of what most people think AI can do and what the frontier of AI can do. And so when deepsea came out, I think people had this like brief freak out. I think maybe your stock went like way down in one day and people were just like, ah, this is like the end. People really want to predict the end of the compute scaling somehow. And then it turned out that people need a lot of AI and they need a lot of the frontier AI. And so it is totally true that the cost per unit of intelligence will keep falling and falling and falling. And we think that's great. We'll be able to offer services like ChatGPT, more of it, cheaper, the whole thing. But on the other side, the frontier of AI, the maximum intellectual capability is going up and up and that enables more and more use and a lot of it. So there's this huge overhang that the world I think, does not yet grasp of where the models already are today. And when you throw a lot of inference, computer them what they can do for you, that is totally different than ChatGPT or generating an image or whatever. And so I think that was really missed in the deep SEQ moment. And why we want to do this. It's that the models are at this point actually quite capable for things far beyond what most people use them for in ChatGPT. And the world is just catching up with that second thing. We throw on these numbers, 10 gigawatts, 100 billion, and there's a few syllables here and there. We're all, you know, it's like a Monday morning. We're all kind of like low energy. We got a lot of stuff we got to go do and stress about the day ahead. But the.
- [23:13]
E
We've already had a pretty long day.
- [23:15]
F
We did have a long day, but the magnitude, big deal.
- [23:18]
D
Yeah, I mean, but I flew out here not knowing exactly who I was talking to and this came together. So, yeah, thank you.
- [23:23]
F
But for sure, thanks for taking the flyer on that. But the magnitude of the scale of this project, 100 billion is a small dent in it. And the numbers are also like, they're missing the story of what this amount of infrastructure is capable of doing. 10 gigawatts of compute. Again, easy to throw around numbers like that, but the amount of work it takes to build that out the size and scale of these multi square mile gigantic things and the complexity at every level of the supply chain. And then what that amount of brain power which does not exist today, can do already today, what it will do as the models get better. Like this is the real deal. This is the thing people have been waiting for. They talk about AI or when it's going to do this and when it's going to do that. The stuff that will come out of this super brain will be remarkable in a way I think we don't really know how to think about yet.
- [24:20]
D
100 billion is a small dent. Now you sound like President Trump.
- [24:24]
G
One way to contextualize the scale of what we're talking about in the compute scarcity of the world that we're heading towards. You know, chatgpt today. You talk to it, it gives you answers, but clearly you want an agent that's going to go do work for you proactively while you're asleep, be able to organize your calendar or go, you know, try to work on projects for you. And so you really want every person to be able to have their own dedicated GPU. Right. So you're talking order of 10 billion GPUs. We're going to need this deal we're talking about, it's for millions of GPUs. Like we're still three orders of magnitude off of where we need to be. So we're doing our best to provide compute availability, but we're heading to this world where the economy is powered by compute and it's going to be a compute scarce one.
- [25:01]
E
So Sam, John, remember this new project that we're talking about 10 gigawatts or roughly 4 million, 5 million GPUs. That's approximately in one project what we shipped all year this year. Okay. And twice as much as last year, twice as much as the year before that. And so that kind of puts it in perspective. This is a giant project and we.
- [25:28]
D
Don'T yet know how many years to amortize that over sort of, but it's.
- [25:33]
E
Well, we just need OpenAI. OpenAI is the fastest growing software company built history.
- [25:39]
D
So about the infrastructure, we were talking about data centers, but I also want to talk to you about the edge and I guess Sam or Greg, this could be either of you. Apple had their big launch of selling iPhones last week. A lot of people thought they're behind on AI. They're trying to push this idea that these phones, because the chips they have in them are AI ready. And of course they're talking to you guys, are these part of the infrastructure that you need? What should the world understand about the role of the edge and places like this?
- [26:15]
F
This is where there's this important idea which is most of the world thinks about AI as ChatGPT and yet AI capability has moved far beyond. So for the kind of chat with ChatGPT about most stuff, you will be able to do a lot of that on your phone and we think that's great. We released an open source model called GPT OSS recently that can run on a laptop or a phone and it's incredible to me what you can do on a device. It's gone way further than I thought and we'd love to see a lot of that move to the edge, curing cancer, like an AI that thinks really hard and cures cancer, that'll need the big data center. But for like, you know, the sort of standard ChatGPT queries, we hope we can push a lot of that to the edge.
- [26:52]
D
So what's the significance of these platforms, whether it's from Apple, whether it's from the likes of a Qualcomm, and being able to provide a standard platform for you guys, for other partners, for other application providers to build AI driven applications, on top of which are going to drive some of this demand that we've been talking about here.
- [27:13]
G
I think you need all of it, right? I think that, that no matter how much gets built, we are still going to be in this world of compute scarcity. And every time there's a new compute platform, new availability of this kind of computational power that it's possible to design new algorithms, new methods, new models, new products that are able to deliver benefits to everyone. And so you should expect that you'll see this whole ecosystem of models from us and from everyone else that is able to take advantage of what's out there. It's a little bit like when the App Store first came out. Suddenly people started creating apps and filling that, that platform because there was this new availability, this new way of building. And I think we're heading towards a platform shift that's going to be much more significant than anything in history.
- [27:52]
D
Another potential either roadblock or opportunity is talent. Right? You got to have the right people to build this stuff, to design this stuff, etc. Immigration is a part of that. Jensen, there have been some moves, some announcements over the past few days about that. How does that position the US maybe the H1B issue and the extra charge on top of that. How does that position the US in terms of Competitiveness. What are your thoughts on where we need to go?
- [28:19]
E
We want all the brightest minds to come to the United States. And remember, immigration is the foundation of the American dream and we represent the American dream. And so I think immigration is really important to our company and it's really important to our nation's future. And I'm glad to see President Trump making the moves he's making.
- [28:38]
D
What kind of policy needs do we have?
- [28:41]
F
I echo that. We need to get the smartest people in the country. And streamlining that process and also sort of aligning financial incentive seems good to me.
- [28:49]
D
How far are we from yet another big announcement, right, about the capital needs and how you hope to fulfill?
- [28:57]
F
You should expect a lot from us in the coming months. We are really. There are three things that OpenAI has to do well. We got to do great AI research. We have to build these products that people really want to use. And we have to figure out how to do this unprecedented infrastructure challenge and build out which there's chips, there's power, there's buildings. There's a lot of pieces that go into that. And that that latter category is going to be my big focus in the coming month. And we have very ambitious goals, so we'll have a lot to say.
- [29:25]
D
Jensen, the next big catalyst that you see on the horizon, I mean, AI is what's driving so much of the market and the imagination right now of economies across the world.
- [29:38]
E
Look, we saw in the last five, 10 years, I move from generative to reasoning to now thinking models, went from text to multimodal. It is very clear that there will be a persistent AI connected to every device to be everything that's out there. You know, it could be a persistent AI connected to the car, connected to smart glasses, connected to the phone, as you mentioned, connected to a human or robot and robots of all different sizes and shapes. And all of that is just beginning. None of it exists today and yet everything's around the corner. That's how exciting this is. We're literally going to connect intelligence to every application, to every use case, to every device. And we're just at the beginning of that. That's the reason why we need such gigantic infrastructure. And this is the first 10 gigawatts, I assure you of that.
- [30:27]
D
Well, I'm looking at the CNBC app and there's Nvidia stock stock right now. We can't see open Air stock yet, but call me when we can. Scott and the Halftime crew, back to you on this breaking news from Nvidia headquarters here in Santa Clara.
- [30:41]
C
Yeah. John, really extraordinary the announcement and what we just heard from those three men gathered with you there. John Ford at Nvidia headquarters today. Thank you very much for that. You saw Nvidia shares are at the highs of the day. Christina Partanovelos joins us now. She obviously, obviously covers this space closely. It's good to have you and your perspective. The two most important lines that I think I heard, this is additive to everything that's been announced to date from Jensen Huang was almost like a de facto upping the guidance right here on live television sort of a statement. And also when he gave a little more specifics to put it into perspective. We're talking about 4 to 5 million GPUs for this one project. He said 4 to 5 million is what we'll do for the whole calendar year, this year. So it really gives you an idea of how powerful literally and figuratively this announcement is.
- [31:40]
H
You were spot on. And that's why we saw the stock jump higher for Nvidia because he made that statement, that additive statement, not only for this being an additive data center project. Keep in mind that in video and Oracle and others Microsoft have collaborated on Stargate, Jensen is saying that this is going to be an additional 10 gigawatts. He also John Fort specifically asked him about the numbers, you know, is it reflected in what analysts know on Wall Street. And then Jensen responded saying, quote, it is additive. So that is the reason why you're seeing the stock up so dramatically. You mentioned the number of chips, GPUs 4 to 5 million just for this particular project. You also had Sam Altman as well as the OpenAI president, both comment on how essentially the market doesn't seem to understand how capacity restrained they are. Specifically they are seeing the cost per unit of intelligence come down at the same time the strength and the compute go up and quote, Sam Altman said that the overhang, this is the overhang the world does not grasp. So he's saying that we're to going just not understanding how dire they need to start building out all of this. He also said that they're going to be making more news in the coming months, more announcements in the coming months. So I thought that was telling. And then Scott, one more thing that really stood out too is keep in mind that OpenAI has investors as Microsoft as well as Nvidia. So John Ford asked him specifically, how do you deal with that when you have, you know, suppliers that are investors, that are customers, etc. And Sam Altman did reply, he's the opening ICO. He did say that they are passive investors trying to assure people that there is a line that is not, that is separating both a customer and investor for that. But really you're seeing some big news and the stock just continues to climb as people digest what's coming out of does.
- [33:25]
C
And John Ford referenced this as well. It does take you back to a deep seek moment, if only to underscore why many may have been wrong that very day in their initial assumptions about what that announcement of maybe cheaper compute and less compute to do what they claimed to have done might not be the case. The old Jevons paradox that many of us learned about for the very first time on that given day that I think it was Satya Nadella was one who came out after that and suggested, no, no, no, this is going to.
- [34:00]
B
Mean that we're going to need a.
- [34:01]
C
A lot more compute because of what's capable from the power of AI Sam Altman saying, he said, quote, the compute constraints in our company have been terrible. Just giving you an idea of what they think that they need in terms of their ramp up for a company that had a valuation last I checked in the private market of some $500 billion.
- [34:24]
H
Yeah, that's an excellent point. And maybe just the overarching theme for that conversation that maybe we have not grasped yet just how supply constrained they are going to be. And then that means that in video and you know, Nvidia counterparts, all those companies that contribute to the data center are going to be in continued demand. So I know we're showing Nvidia shares, but you could probably look at a lot of the other partners within the data center. Tsmc, you know, Cisco, Ethernet, Oracle Gold. Yes.
- [34:53]
C
So you could cycle, cycle through all of them because they're all the highs of the day to your point.
- [34:57]
H
Super Micro, another example because this is a very bullish statement for the entire market and essentially Sam Altman was very frank when he said it that we all don't understand how badly we need to build out and how we are not where we need to be and there's going to be constant supply constraints. And that he didn't mention power, he didn't mention the fact that it's going to be only on US soil or anything like that. But just in terms of the number of chips you need, you mentioned that number 4 to 5 million chips just for this project alone, which equates to what Nvidia has sold in an entire year. And if they're going to be announcing more projects like this, not necessarily here on American soil, but around the globe. They mentioned Europe, they mentioned, you know, you have the Middle east. Everybody is going to be building out. Sovereign AI is extremely important. That would further add fuel to the demand and would offset any concerns of, you know, weakness coming out of China, that's for sure.
- [35:49]
C
Yeah. Christina, awesome. Thank you so very much for jumping on with us. Christina. Parts nevelos. So let's hear from the Nvidia shareholder. Certainly one of them first. And Bryn, my apologies, we haven't even heard from you yet and you just barely started when we had to go to John. But you're a long standing Nvidia shareholder. You heard what Jensen had to say. What do you think?
- [36:08]
A
We are definitely in a moment of time, a very special moment of time. We'll see how this plays out. So just Pragmatically, Jensen, Nvidia invest 100 billion in open AI which then open air turns back and gives it back to Nvidia. So I feel like this is going to be very virtuous for, for Jensen. When I think about 10 gigawatts, if you think about that in electricity terms, that would be enough to power. I think about a 8 million person home city. So if you think about the constraints, if I just think about the electricity constraints when the majority of our grid was built 50 to 60 years ago, I think realistically this probably takes five to six years to actually play out. So it's, I mean it's very bullish. But I'm just saying, pragmatically, the electricity side of this is a little bit of a head scratcher on how we're going to affect that. So once again, very bullish. If you don't know how to play it, you can just buy the Qs because you basically hit all of the names in the top 10 holdings of the queues. And I just think it's a, it's a moment in time that we'll all look back on.
- [37:15]
C
So let's just hit you quick. Oracle obviously one of the big movers. You could go in so many different directions and we will in a moment to try and cover as many stocks that are on the move and that we have exposure here. You're the Oracle guy and look, we.
- [37:31]
B
Owned it and it's done really, really well.
- [37:33]
C
So we've been trimming it back now.
- [37:35]
B
Just to take some profits off the table. We bought low, bought low for a while, but I think so much of Oracle is, it's not like Nvidia where you're seeing it Day to day. It's so longer term in Oracle. So I still want to hold it.
- [37:47]
C
But I would be careful as to making it not a huge position. Joe, it's in the table.
- [37:51]
E
It is.
- [37:52]
B
Don't fight it. Began the show. Don't fight it.
- [37:55]
C
Don't change.
- [37:55]
B
Fight it. No, no, no, you don't fight it. You don't fight the effort, the earnings power, right, that we just learned about. Number two, cash on the sidelines. Understand something. This technological innovation is being funded by the world's financially strongest corporations. Don't give me this nonsense. This is 1999. We're funding the Internet that was funded on debt.
- [38:14]
C
Well, it could be 1996.
- [38:16]
B
No second look at the utilities. I don't want to give up my Constellation. I don't want to give up my vistra. You and I, we don't want to.
- [38:23]
C
Give up our e. I mean I was going to go Steph next, look.
- [38:27]
B
Look at those three. Look at what Constellation is doing right now. Look at all three of those. And lastly, Vertif's up open air. Have we ever had a trillion dollar ipo? Because I really think that's what's coming.
- [38:37]
C
Well, I mean you're trending in that direction. You're, you know, $500 billion post money valuation, I think a week ago, two weeks ago was it. Now you've got this investment from Nvidia. You've got to believe that given the compute power that Sam Altman himself just told John Ford that they need, this is along the beginnings, not the endings.
- [38:58]
A
Steph, to Bren's point about the grid, 75% of the grid is over 25 years old. We have not upgraded the grid in 50 years. So we have to do that. And if you believe in this whole thing, which we all do, you have to have the data centers, but you need a grid. That's a big part of it. And that's why the industrial companies have done so well. So it's the money that is being spent by the hyperscalers Capex going higher and is likely to continue to be very strong for years on end. And it's also the increase in ASIC adoption. And so that's where Broadcom comes in too, right? Custom asic. So you could play this so many different ways. And that's why I don't think that this is a bubble because so many different industries are being impacted from this. And then let's just throw in cybersecurity because AI is not safe and you're going to need cybersecurity companies. So there's so many themes to this one big powerful AI theme.
- [39:49]
C
Well, Morgan Stanley, by the way, was talking about that today and of course they, they like many of the names that we talk about all the time. Palo Alto CrowdStrike did throw in. Excuse me, Microsoft and Sailpoint as well. But Bryn, there are many, many ways you can play it and you really can play it. Excuse me. Outside of the queues.
- [40:11]
A
Yeah, I mean there's so many, there's so many names to play it. I mean, you can look at Palo Alto. I mean, I own. You can look at Palo Alto CrowdStrike, Fortnet with AI also. I mean you have Dell, you have Oracle. I mean there's, there's just really an interesting time right now. Plus, don't forget we have all these IPOs coming that I'm sure we'll have more and more cybersecurity IPOs down the pike coming shortly. So once again, as I said earlier, we are in this like special moment in time. I agree with. I don't know if it's you or Joe that said it's not 99. It does very feel like, to your point, 96. And, and one more thing on margins, you know, in the, in the late 90s, the net margins on the S and P are about five and a half. Today, net margins are ten and a half. So I were at peak valuations, margin margins have doubled because of the type of companies and the construct of the s and P500.
- [41:01]
C
Yeah. Hey, how about that broadening trade, whatever, right.
- [41:07]
B
It'll be.
- [41:08]
C
This is one of the reasons why, why people continue to say stay with this. You, you may be able to get some wins here and there in other parts of the market, whether it's small caps or whatever. But I think it's why there aren't a whole flood of believers in what like the, the greatest degree of a broadening trade.
- [41:31]
B
And that's why most people are underperforming, because it's very difficult. Seurat and I had this conversation before the show. It's very difficult to concentrate in the direction of, of five or six names that are building out this innovation. Nearly impossible to do that. And I think that's why as the calendar moves towards the end of the year, you are going to have this chase. I mean you look to look at year to date. Health care is down Staples 2%, energy 2%, real estate 2%.
- [41:57]
A
For reasons.
- [41:58]
C
Right.
- [41:58]
A
For reasons.
- [41:59]
C
Right.
- [41:59]
B
So, but, but if you're looking at.
- [42:01]
A
But there's other parts, financials who's lending to these companies, right. So the financial should do well. I just listed a a whole bunch of ways to play but financials are 12.
- [42:09]
B
It's still lower as a total of the market. So but no, no, I'm not disagreeing with you because that's kind of where we play.
- [42:17]
C
But it's hard to get.
- [42:19]
B
You get defensive more often than you get offensive.
- [42:21]
C
Let me squeeze a break in because the breaking news that we had. Let's go ahead and do that and we'll come back. We do have a lot more to get to. We do have our calls of the day. We have a move from Brin that I know you're going to want to hear about. We'll do a it all coming up.
- [42:38]
A
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- [43:39]
B
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A
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- [44:37]
C
Eduardo. All right, let's talk about this move from Bryn Talkington. Bryn, you trimmed some IonQ once again. You bought it first on May 19th. You sold half on May 22nd. It's up 79% in a month. Of course, we're talking quantum computing. Staying on the theme of what we've been discussing, the CEO is on Mad Money with Jim Cramer tonight. Tell us why you trimmed it again. Is it just six? Simply wow up a lot. Need to, need to get out of here a little bit.
- [45:24]
A
Yeah, I think, I think Joe would like it if you showed a one month chart. I think I'm going to get a nosebleed if it goes any higher. It's just gone completely vertical over the last one month. And so once again, this is a flyer. I've never been shy about owning some VC type companies that you can buy in the public market. But once again, they're going to do probably 170 million next year for 2026 and it has over a $20 billion market cap. So it's a young company, it's an old company. But I just like, I'm here to make money. And so when it's up this much, I'm just going to take profits and I'll, I'll wait when it comes back down. I'm sure I'll get right back into it. Yeah.
- [46:01]
C
All right. I know Al Michaels is listening intently to, to what you're saying here. I know that for a fact. And he's a shareholder now because of you. So, so we'll see what he does from here. But I have that. My sources are telling me that he was watching that, that segment. Let's do some calls. Netflix reiterated outperform. Joe, 1375 is the price target at Evercore. What do you think?
- [46:27]
B
I think it's the pause that ultimately will refresh itself. It's been in a consolidation range since the end of June. What's interesting about it is Spotify, Spotify and Netflix are trading with a very high correlation. Spotify peaked out June 27th. Netflix peaked out June 30th. And the analyst community on both 66% buy rating just have to be Patient stay with these trades. The momentum though is not there in the near term.
- [46:53]
C
Okay, let's hit GE Aerospace. Steph, you have that too, right?
- [46:57]
A
I still do.
- [46:58]
C
So the target. So I'm sorry, hold it, hold it on just one sec. My apologies. Target go. Well, because every. We talk about Vernova all the time. I know GE Aerospace is up 79% this year. So their target was raised at 350 from 320, reiterated by it Jefferies. So now you tell me what you think. Sorry.
- [47:18]
A
I still like it. It's up a lot, but it's humming. I mean, every reason why I own it is the reasons that are coming to fruition. Free cash flow is the biggest one though. To me, it always trades on free cash flow. And I think that the guide is for like 8, 9 billion for fiscal. By fiscal 28. And I think they could get easily to 10 billion. It's a leap aftermarket play. The services business is humming. It is 70% of total revenues of services and that also carries higher margin. So I still like the story very much. Would I buy it right here? Probably not, but I'm just holding it.
- [47:47]
C
All right. What do you do with Autodesk here? Joe reiterated overweight today. 373. Piper Center Sandler is the firm that makes the call today. What do you think?
- [47:54]
B
I think what you need to do is wait for the earnings to come out at the end of November to determine if in fact it can confirm a further breakout here. I think it's getting a little bit stretched on the upside. Last quarter that was delivered was a very good one, but I think there's. In terms of sentiment, positioning, we're pretty full, man.
- [48:12]
C
There are a lot of charts that look really good in this market, including that of gold. It's been on a record run, as you know. We'll tell you how to play it coming up.
- [48:26]
B
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- [48:58]
A
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- [49:13]
C
Another all time high today for gold, a record breakout drawing big interest in the ETF market as you might expect. Dom Chu is following that in today's ETF Edge domino.
- [49:23]
A
All right, so Scott, alternative assets becoming a lot more popular in recent years. But now that the Fed has more.
- [49:28]
C
Or less laid out a rate path.
- [49:30]
D
How are all of these alts and.
- [49:32]
C
The ETFs that track them changing? Joining me now is Paisley Nardini, managing.
- [49:36]
D
Director and head of Multi Asset Management Asset Solutions that simplify funds.
- [49:40]
A
Scott mentioned gold.
- [49:41]
D
Is gold one of those alternative type assets that is in your mind either.
- [49:46]
C
Over or under owned at this point.
- [49:48]
A
To hit the question directly on, I would say gold is under allocated to right now. A recent fund manager survey came out and majority of allocators have less than 5% in their portfolios to gold. We're starting to see some of those tailwinds. Gold has obviously done tremendously well this year for a couple of reasons. Uncertainty in markets and questioning around is it becoming the new ballast in the portfolio. And so as an alternative as we think about in relation to bonds, I think gold is starting to become a bigger part of investor portfolios and you.
- [50:17]
C
Specialize in that alternative asset type structure.
- [50:21]
A
And those types of investments.
- [50:22]
D
Where else do you see investors flocking.
- [50:25]
C
A little bit more to in terms of that alternative structure?
- [50:27]
A
So same underlying premise as to why alternatives are becoming a bigger part of portfolios is the need to diversify from bond risk. Bond volatility has actually been quite low the last few months. I think with the the rate cut that we saw last week and expectations for the back half of the year, bonds could start to see volatility pick up other parts of the portfolio that are getting some of those traction and flows trend following long short type strategies, currencies. All of these are in various ways ways that investors can think about diversifying beyond their bond exposure and potentially hedging.
- [50:59]
D
Equity risk and some of those commodity.
- [51:00]
F
Trading advisor or CTA type strategies out there.
- [51:03]
C
All right, we're going to continue this.
- [51:04]
A
Conversation because it's an in depth one.
- [51:06]
D
Over at ETF edge.cnbc.com Paisley is going.
- [51:09]
A
To be joined by Todd Rosenbluth, the.
- [51:11]
C
Director of research over at Verify.
- [51:13]
D
So a big conversation 1:15pm Eastern Time. Scott, I'll send things back over to you guys.
- [51:18]
C
Dominic Chu, thank you very much for that. We'll step away, we'll come back, we'll do final trades on the other side.
- [51:46]
B
Welcome back.
- [51:47]
C
Before finals, let's show you the stock of the hour. There it is. It's in video. Up 4% on that extraordinary announcement on this network at the top of our hour today with John Ford and Jensen Huang. Certainly Sam Altman there as well that Nvidia is making a $100 billion investment into open Air and Nvidia hitting a new all time intraday high on the back of that announcement today. We'll follow it of course course throughout the remainder of this day and beyond. We'll do final trades right now. Bryn, talking to yours is what BMNR.
- [52:19]
A
Take advantage of the volatility. You can buy it today, then sell the November 80 calls and get $6.10.
- [52:26]
C
Thank you Surat Intuit just affirmed and.
- [52:28]
B
Confirmed their expectations for earnings growth.
- [52:31]
A
Stephanie Link Coinbase I like the exchanges for crypto.
- [52:34]
B
The Jyoti Uber new intraday all time high morning, more to come.
- [52:37]
C
Alright, we'll see you on the bell in a little bit. The exchange begins right now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [52:53]
A
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer@ Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo.