The Exchange (CNBC) – “AI’s Big Shift, Crushed Confidence & Retail’s Best Buy”

Aired: November 25, 2025

Episode Overview

This episode of The Exchange dives into three critical themes moving the markets and business world:

• A major shift in the artificial intelligence (AI) landscape led by Google’s emergence as a new AI powerhouse.
• The sharp decline in consumer confidence and what it means for the economy and the Federal Reserve’s policy.
• A close-up on the best retail plays for the holiday season, with a spotlight on Best Buy’s outperformance.

Through in-depth reporting, expert interviews, and real-time analysis, the show unpacks how these trends are reshaping tech, investing, and consumer behavior.

1. The Big AI Shift: Google’s Rise, Nvidia’s Challenge, and Meta’s Conundrum

Google Moves from AI Laggard to Leader

[00:52–04:40]

• Dominic Chu introduces fierce market moves spurred by Google’s leap forward in AI, leading to a major stock rally and repositioning in supply chain partners.
• Deirdre Bosa details how Google, after lagging behind, is now “shipping AI at a Google scale” by deploying its Gemini 3 model and its own custom Tensor Processing Units (TPUs):

  “It went from broken to beloved in a matter of months. Not even because the business changed that dramatically… Now because it started executing Gemini 3.” (02:18)

• Google’s ability to control distribution and infrastructure puts it closer to a “full stack” AI leader.

The Implications for Nvidia, AMD, and Competition

[04:40–07:58]

• Christina Parts Nevelis reports the stock moves: Nvidia is down on concerns over lost share to Google’s TPUs, while Google suppliers like Broadcom and TerraWolf rally.
• The market is reassessing the value of Nvidia’s dominance as companies like Meta consider buying Google’s chips, challenging Nvidia’s “winner take all” narrative.
• Investors are watching closely to see if shifts in infrastructure (like Meta potentially moving to TPUs) are short-term sentiment trades or a real, sustained pivot.

“The real fight isn’t Google versus Nvidia. It may actually be Google versus the other hyperscalers.” (Deirdre Bosa, 02:57)

Where Are Amazon and Meta in the AI Race?

• Amazon’s AI chips (like Trainium) are lagging, with little traction compared to Google’s TPU ecosystem.

  “You’d be hard pressed to name Amazon’s family of AI models… but they’re not climbing the leaderboards.” (Deirdre Bosa, 03:55)

• Meta is under pressure:
  • Capex is soaring (up to $72B projected for 2025, or as much as 37% of revenue), raising concerns about returns.
  • Flagship AI model Llama 4 “has been called underwhelming.” (Julia Boorstin, 08:44)
  • High spending on VR, AR, and metaverse initiatives without clear potential for high returns.

“Meta’s massive funding has been weighing on the stock… analysts are asking when investors will see a payoff from all this spending.” (Julia Boorstin, 08:22)

Full Stack Advantage: Google’s Vertical Integration

[11:33–17:26, Low Tony Interview]

• Low Tony (Plexo Capital) details why Google’s vertical integration is a game-changer:
  • “Google is the only hyperscaler that really has integrated across all three: infrastructure, models, and applications.”
  • Broadcom partnership has enabled custom TPUs for Google’s search, YouTube, ads, and now Gemini.
  • Capital efficiency: “Google Alphabet is the most capital efficient of all of big tech right now… that’s not the case with Meta.” (Low Tony, 13:12)
• However, vertical integration can create closed systems, historically leading to business risk.
  • Hybrid environments (GPUs, TPUs, other chips) will be necessary for enterprise customers.
• Meta’s Path Forward:
  • Lacks the internal product suite of Google/Amazon.
  • Meta's AI investments may need to focus on services (ads, consumer products), but hardware and infrastructure remain a challenge.

2. Consumer Confidence Hits the Skids

[19:16–25:37]

Data Dump: Mixed Economic Signals

[19:16–21:14]

• After a government data delay, new reports show:
  • Inflation unexpectedly soft, but
  • Retail sales and consumer confidence are both disappointing.
  • Conference Board’s confidence measure has hit its lowest level in seven months.
  • Recession worries are ticking higher.

Steve Liesman:

“It sets the expectation or the level that we expect consumer spending a little bit lower than for the fourth quarter as well… The Fed is on track [to cut rates] because of concern about weakness more than they're concerned about inflation.” (20:51)

Jobs: The Dominant Concern

• Dana Peterson (Conference Board Chief Economist):
  • Consumers report “jobs are hard to get,” and see fewer future opportunities.
  • Layoffs are limited, but those let go (esp. in tech/finance) are finding it hard to find new work.
  • “Absolutely, the Fed’s going to be focused on employment over inflation.” (21:40)

Cautious Holiday Spending Expected

• Multiple surveys (Deloitte, Conference Board) show >50% of Americans expect the economy to weaken in 2026 and plan to cut back this holiday season.

  “They are going to focus on buying gifts and items that their friends and family need over want…” (Dana Peterson, 22:29)

Potential Fed Pivot and Political Moves

• White House reportedly eyes Kevin Hassett as a new Fed chair, presumably for a more dovish (pro-rate-cut) approach, per Bloomberg “rumors.”
• The bond market is not reacting as if aggressive rate cuts are certain, but dollar weakness reflects some uncertainty.

Dana Peterson, on 2026 Outlook:

“If you work for an industry hammered by tariffs, [you may fear for your job]… By the end of the year we will see cuts in government spending that probably will impact more Americans.” (25:05)

3. Retail’s Standout: Best Buy and Discount Stores

[43:09–48:36]

Best Buy: A Bright Spot in Holiday Retail

• Shares up 5%+ on strong Q3 results and raised guidance—tech upgrades trump wider spending concerns.
• Anthony Chikumba (Loop Capital) breaks down the strength:
  • Three product categories are driving demand:
    • Gaming: “Very strong initial sales of the Nintendo Switch 2.”
    • PCs: “Tailwind from the shift to Windows 11… BBY has about one-third U.S. PC market share.”
    • Smartphones: “Very strong sales of the iPhone 17.” (44:17–44:57)

“Consumer electronics are just becoming so ubiquitous… folks are going to prioritize [them] over a lot of other product categories this holiday selling season.” (45:12)

Discount Retail: The Case for Five Below

• Five Below is a top pick—merchandising has improved under CEO Winnie Park, higher prices on part of the assortment, and easy YOY comps.
• Five Below’s focus on trends and discretionary items positions it better than traditional dollar stores like Dollar Tree or Dollar General.

“[Five Below] is really targeted towards teens and preteens… there’s no other retailer that has all of those products for that target customer base.” (46:51)

Home Furnishings: Split Picture

• Williams Sonoma (higher-end, more gifting) “being managed better” and preferred for the holiday.
• RH (Restoration Hardware): No real holiday business, less optimistic.

4. Market Rotation & Investment Strategies for 2026

[30:23–41:19]

• Paul Christopher (Wells Fargo Investment Institute): Tech and AI stocks have more room to run long-term, but valuations are stretched.
  • Rotating funds to ancillary trends: utilities, industrials, financials, and emerging market tech/hardware plays (e.g., Korea, Taiwan).
  • Utilities favored for lower valuations (PE ratio ~20 vs. high 30s for tech).
• A rotation into defensives (health care, consumer staples) is already visible.

“We think there are years left to go as AI and other technology continue to evolve… we’re still in the early innings.” (31:03)

• Financials: Benefit from falling short-term rates and steady/firm long-term yields. Tech firms issuing more debt may also boost financials.

5. Housing Market: Uncertain Momentum

[41:24–43:09]

• Pending Home Sales up nearly 2% in October, but listings are being pulled as homes grow stale (marketed for 60+ days).
  • Sellers are waiting for spring; winter housing season expected to be sluggish.
  • Data is mixed, driven by rate changes and supply constraints.

6. NHL Team Valuations and Local Economics

[49:45–52:24]

• NHL team values up 15% YoY; Toronto Maple Leafs lead at $4.3B.
• Large market teams with stronger local TV deals outperform Sun Belt champions (e.g., Panthers), highlighting importance of media revenues and arena control.

Notable Quotes & Highlights

• Deirdre Bosa (on Google’s AI acceleration):

  “It went from broken to beloved in a matter of months… now it’s on top because it started executing Gemini 3.” (02:18)

• Julia Boorstin (on Meta’s capex dilemma):

  “Meta’s capital expenditures are growing far faster than its revenue… that would mean capex as a percentage of revenue could be as high as 37% this year.” (08:28)

• Low Tony (on Google’s capital efficiency):

  “Google Alphabet is the most capital efficient of all of big tech right now… we know that’s not the case with Meta.” (13:12)

• Dana Peterson (on labor and confidence):

  “More people said that jobs are hard to get, and also prospects for future job opportunities as well as income and finances were worse.” (21:16)

• Anthony Chikumba (on Best Buy):

  “Consumer electronics are just becoming so ubiquitous… folks are going to prioritize [them].” (45:12)

Key Timestamps

• AI/Tech Power Shifts: 00:52–17:26
• Consumer Confidence & Economic Data: 19:16–25:37
• Market Rotation & Investment Outlook: 30:23–41:19
• Housing Market Update: 41:24–43:09
• Retail Deep Dive (Best Buy, Five Below, Williams Sonoma): 43:09–48:36
• NHL Team Valuations: 49:45–52:24

Summary Takeaways

• Google emerges as a new AI leader thanks to TPUs and deep vertical integration, with major implications for Nvidia, AMD, Amazon, and Meta.
• Consumer confidence and retail sales are weak, overshadowing lower inflation; the Fed is tipped to cut rates with political considerations in play.
• The market is rotating from tech to defensives, utilities, and financials, but the secular AI trend is far from over.
• Best Buy and Five Below are standout retail picks for the holidays, bucking the overall belt-tightening trend.
• Housing remains in flux, with sellers pulling back and data remaining volatile.
• In sports business, local media deals crown hockey’s most valuable franchises, not championship wins.

The episode delivered actionable insights for investors, executives, and anyone tracking today’s top business, market, and tech stories.