Squawk on the Street – Tech's Rough Ride, Nvidia Earnings, and Tesla's Market Value Drop

Date: February 26, 2025
Hosts: Carl Quintanilla, Jim Cramer, David Faber (CNBC)
Podcast: Squawk on the Street
Episode Focus: Tech sector volatility, upcoming Nvidia earnings, Tesla's slide out of the $1 trillion club, and shifts in investor sentiment across major stocks.

Overview

This episode delivers a real-time, floor-of-the-NYSE breakdown of a volatile period for tech stocks, headlined by anxieties and hopes surrounding Nvidia’s imminent earnings, Tesla’s fading trillion-dollar status, and the resilience (or lack thereof) in other market leaders. The hosts blend investor insights, sector breakdowns, and personal anecdotes, peppered with sharp-tongued industry commentary suitable for active traders and market watchers.

Key Discussion Points & Insights

1. Market Mood: Tech Volatility and the “Momentum Reversal”

• S&P 500 tries to shake off its first four-day losing streak this year.
  (01:05) Carl Quintanilla:

  "S and P is trying to reverse that first four day loss of the year...some optimism about Nvidia and Salesforce earnings tonight."

• Tech stocks are under particular scrutiny.
• Tesla’s market cap dips below $1T, sparking concern but muted panic.
• Wells Fargo dubs the recent pullback as a “mo-mocap-ellipses” (momentum reversal), suggesting perhaps the worst is behind us.
  (02:09) Carl:

  "Jim Wells calls it the mo mocap ellipse, the momentum reversal which they think is kind of coming to an end."

2. Tesla & “Stonk” Trading Dynamics

• Tesla’s struggles provoke broader worries about high-flying “OG” stocks and their correlation to Bitcoin.
• Algos may be selling off related stocks simply because Tesla and Bitcoin fall together.
  (02:36) Carl:

  “I thought that Barclays note was that terrific.”
  (02:49) David:
  “The piece was so brilliant because it has to do with the zeitgeist ever since the election... there was a trade that went on...and that is reversing...”

• Discussion of Palantir and other “zeitgeist” equities, with how sentiment drives group sell-offs independent of fundamentals.

3. Meta’s Massive Data Center Rumors & Denials

• Rumors swirl about Meta considering a $200B data center project, which would bolster Nvidia demand, but the report is denied by a spokesperson (per Reuters).
  (03:55–12:04): Back-and-forth over the credibility and market reaction to "The Information" report.

  • David Faber:

    “Immediately that in video is going to be up 5 but it’s only up 3. And that’s just about the... workday trade.”

  • Jim Cramer:

    “A spokesperson denied the report...anything on that’s pure speculation. So I don’t even know if I would not say that's a denial, Jim. Typically...that’s prospect they’re not ready to talk about it.”

• Broader theme: Even the hint of such megaprojects drives tech enthusiasm; any wobble chills markets quickly.

4. AI Infrastructure and Energy Tensions

• Utilities like Sempra plunge after concerns that mounting data center electricity needs could provoke higher rates or political backlash.
• California’s regulatory battles, electricity demand, and whether data centers harm ratepayers or are “off-grid.”
• Winners in a tough market: Utility yields dwindle, with standout sectors being healthcare, staples, and real estate.
  (05:03) Jim Cramer:

  “Your point being that, that electricity, that electricity prices may go up as a result of this...”

5. Retail Outperformance: TJX, Consumer Guidance, and Value Play

• TJX beats expectations; discount and value retail thrives despite pessimism.
• Tactile story:
  (06:38) David Faber:

  “This belt is 14 bucks.”
  (06:40) Jim Cramer:
  “It’s beautiful.”

• Coca-Cola and AB Inbev (“Bud”) also noted for resilience.
• Contour Brands (Wrangler) surprises with cautious forecasts, prompting hosts’ confessions of missing guidance signals.

6. Nvidia Earnings Preview: Hype and Risks

• Enormous anticipation, but Blackwell chip shortages and delivery lags tempers expectations.
  (08:29) David Faber:

  “I think Nvidia has to do beat and raise. Traditional beat and raise. The problem is that their major product Blackwell is still hard to get...”

• Explosion in “zero-day” options trading makes Nvidia’s moves even more volatile.
  (10:02) Carl:

  “The straddle is almost 10%.”
  (10:04) David:
  “Yeah, 8%... made it so it’s actually in control of the actual underlying.”

• Discussion on the need for Nvidia to show diversified demand beyond the “five-client syndrome.”
  (41:27) David Faber:

  “You got to get away from this five client syndrome...if it’s just going to Be Oracle and Microsoft and Alphabet, you know, and Meta Tesla. We’re all going to just keep saying are they ordering? Are they ordering?”

7. Automakers: GM’s Big Capital Return & Trade/Tariff Anxiety

• GM hikes its dividend and launches new buybacks to court investors, while the auto sector overall lags.
• Tariff uncertainty (US, Canada, Mexico, China) keeps investors cautious on auto stocks. (16:27) David Faber:

  “GM has been executing rather well. I thought this was a very gutsy move...But I don’t know. We haven’t heard more about the Mexican tariff...The only ones that I feel is definitely etched in stone is the steel from China.”

8. Robinhood’s Evolution and Market Impact

• Jim Cramer lauds Robinhood for maturing away from “meme” status and building serious products for wealth transfer and options trading.
  (23:09) David Faber:

  “The bigger picture of Robinhood is one of great maturity...They have a fantastic 3% IRA match...their options pages are magnificent and really simple.... That’s what Vlad understands.”

9. China’s Rebound and “Billionaire-itis”

• FXI up 20% YTD; big call-outs for Alibaba and billionaire investor temperament.
• Comments on billionaires being both relentless and often negative; host musings about “luck” vs. skill in wealth. (25:49) David Faber:

  “They are relentless and that's an important predictor of success. Money making success.”

10. AI Assistants: Amazon Alexa, Apple, and the Search for Value

• Hopes for upgrades to Alexa, possible new paid models to unlock “real” AI assistant abilities. (29:19) Jim Cramer:

  “There’s some hope around a presentation later today in terms of new functions for Alexa...perhaps a subscription model in some way that gives you more AI functionality.”

• Frustrations with current voice assistants’ limitations; hosts share gripes about incorrect music selections and lack of true “assistant” skills.

• Speculation that Apple is benefiting from being a “free rider” on data center capex (not spending, but stocks outperformed).

11. Energy & Industrial Power: The Data Center Buildout

• Announcement: NRG, Vernova, and Kiwit to build four new natgas power plants to feed escalating data center demand.
  (32:31) Jim Cramer:

  “An announcement this morning between NRG Vernova and Kiwit accelerating new generation capacity...over 5 gigawatts...What’s the power going to be for? You can guess.”

• Broader theme: The AI boom now solidly drives energy infrastructure investment.

12. Tesla Backlash and the Politics of EV Demand

• Talk of buyer's remorse for Tesla and a growing narrative that "liberals aren't buying" Teslas any more. (34:48) David Faber:

  “Liberals are not buying it. David.”
  (34:51) Jim Cramer:
  “Liberals are not buying what?”
  (34:51) David:
  “Tesla?”

• Barclays and Washington Post pieces drive home the shift in Tesla’s market perception.

13. Healthcare/GLP-1 Expansion: Eli Lilly’s U.S. Factory Investment

• Eli Lilly will commit to $27B in new US capital for manufacturing, hoping to meet demand for GLP-1 (weight loss) drugs, expecting 3,000 manufacturing jobs and 10,000 construction jobs. (36:26) David Faber:

  “Right. But it might be this is about the pill form is going to be.”

• Commentary on how facility builds give jobs, but operating data centers and factories employ far fewer long-term.

14. Intuit and Axon: Standout Earnings

• Intuit impresses: “Fantastic” quarter with strong consumer and small business performance.
  (42:52) David Faber:

  “There was a thought that maybe Intuit was not going to make the quarter...but credit karma was magnificent...fantastic situation.”

• Axon (formerly Taser): “Magnificent quarter” and advancement in law enforcement tech via body cameras.

Notable Quotes & Memorable Moments

• On Meta’s Data Center Denial:
  “…Typically in my experience that's somebody saying that's prospect they’re not ready to talk about it. But it doesn’t necessarily mean that it’s wrong.” —David Faber (11:06)
• On Nvidia Dependence:
  “You got to get away from this five client syndrome...If you have an order book that includes say many countries, that’d be great.” —David Faber (41:27)
• On Tesla’s Waning Enthusiasm:
  “Liberals are not buying it. David.” —David Faber (34:48)
  “Those who have them are letting their leases expire and not buying a new.” —Jim Cramer (34:51)
• On Billionaires and Luck:
  “We never grade them because if they’re billionaires we think that they have to be genius...timing and luck are such an important part.” —Jim Cramer (26:02)
• On Digital Assistants’ Immaturity:
  “Right now she’s dumb as wood. I mean, plywood. I mean, sometimes I argue with her.” —Jim Cramer re: Alexa (30:19)

Timestamps for Important Segments

• 01:05 — Market overview and NVDA/TSLA sentiment
• 02:22 — Discussion of momentum stock sell-off (“mo-mocap-ellipse”)
• 03:55–12:04 — Meta’s rumored $200B data center, market denial, energy tension
• 06:24 — TJX outperformance, value retail anecdotes
• 08:29–12:49 — Nvidia earnings preview, options frenzy, “not the fulcrum quarter”
• 16:08 — GM’s dividend/buyback move and auto sector uncertainty
• 23:04 — Robinhood’s evolution, platform strengths
• 25:02 — China, Alibaba, “billionaire-itis”
• 29:06 — Alexa upgrades, AI assistant frustrations
• 32:31 — Natgas infrastructure for data centers
• 34:31 — Tesla’s perception shift and cultural politics
• 36:26–37:19 — Eli Lilly’s capital commitment, jobs, and GLP-1 expansion
• 42:52 — Intuit’s earnings surprise and Axon’s technology leap

Overall Tone and Takeaways

• Candid, fast-paced, and occasionally irreverent: the hosts share analysis intermingled with playful jabs and personal stories.
• Cautious optimism: Amidst concern for tech’s “rough ride,” there’s underlying belief long-term opportunities persist, especially around AI and infrastructure.
• Deep skepticism of hype: Particularly visible around big rumors (Meta’s projects) and faddish groupthink in stocks.
• Macro shifts count: Politics (tariffs, digital taxes), energy, automation, and evolving investor base all interact to shape the new market dynamic.

Summary prepared for listeners who want a deep, engaging picture of market sentiment, major company narratives, and evolving investment themes – without the noise of commercials or corporate platitudes.