The Exchange (CNBC) | Episode Summary

Episode Title: Next for Nvidia, "AI-washing," and a Software Bounce?
Date: February 26, 2026
Host: Kelly Evans

Episode Overview

This episode of The Exchange dives deep into several major themes shaping today’s markets:

• The dramatic reversal and underlying drivers in Nvidia's share price after blockbuster earnings, with a focus on the broader AI investment narrative.
• Questions around "AI-washing"—companies citing artificial intelligence as the reason behind mass layoffs.
• The resurgence (or not) of software stocks amid major reversals in the tech sector.
• The growing appeal of “hard assets” in the old economy, from sports teams to energy, in contrast to tech's volatility.
• Significant regulatory standoffs—specifically, the Pentagon’s unprecedented demands from AI firm Anthropic.
• Insights into the evolving nature of AI—from chatbots to “agentic AI”—with high-level impacts on both the investable tech landscape and workplace productivity.

Key Segments and Insights

1. Nvidia’s Stock Selloff After Earnings: Bubble or Opportunity?

Guest: Gene Munster, Managing Partner at Deepwater Asset Management
Time: 00:40–08:37

• Nvidia's Paradox: Despite delivering a “blockbuster” quarter and robust guidance, Nvidia shares saw their worst day since April.
• Market Context (02:10): Munster attributes the reaction to profit taking and fatigue, not fundamental weakness. “Shares of Nvidia are up 8% since early Feb while the NASDAQ is about flat... A lot of this is just buy the rumor, sell the news.”
• Comparison to Cisco in the Dotcom Era (04:28): Munster argues this is “a very different dynamic. Dotcom advertising firms grew 100–200%, but AI-first companies are showing 1000% growth. Jensen [Huang] cited Anthropic’s 10X (1000%) growth.”
• Sustainability of AI Growth (05:28): Munster references Nvidia CEO Jensen Huang’s detailed commentary:
  • “It really comes down to...do you believe these [AI] tools are having the kind of power that people who are using them...are seeing? We’re still in the second inning.”
• Investment Punch Card (06:10):
  • Nvidia remains in Munster’s portfolio, but he’s also bullish on Google, Apple, and a basket of sub-$500bn tech names.
  • “Feel really good about a mix of kind of those smaller cap versus the large cap.”
• Apple's Under-the-Radar AI Position (06:36):
  • “Apple still hasn’t played their AI card…they’ll get that multiple expansion when they do show that they’ve got the chops with the new Siri and personalized AI.”
• Software Stock Call (07:50):
  • Munster is cautious: “Some software companies, usage-based, are going to do great. The ones that are seat-based are still going to have a headwind…until we see better than expected seat growth, the jury is out.”

Notable Quote:

“At the end of the day, this whole question...really comes down to a fundamental question which Jensen talked about...do you believe.” – Gene Munster (05:28)

2. The Rotation to “Hard” Assets and Old Economy

Guest: Charles Bobrinskoy, Vice Chair and Head of Investment Group, Ariel Investments
Time: 08:37–15:43

• Hard vs. Soft (09:03):
  • “Hard assets, companies with real assets that are not going to be knocked around by AI, is where we’re finding opportunities.”
  • Example: MSGS—owner of the Knicks, Rangers, and Madison Square Garden—is splitting up, and Bobrinskoy sees real-world value tied to scarcity and in-person experiences.
• AI-Driven Demand for Live Events (10:28):
  • “The rise of AI actually propels investments like those in sports...people are meeting and watching things in real life, 100%.”
• Skepticism on Memory Stocks and Korean Rally (11:31):
  • “It’s just too hard to pick winners in memory. Warren Buffett’s greatest contribution was ‘too hard’-baskets.”
• Energy and Old Industrial Names (12:29):
  • Anticipates rising demand for energy (particularly natural gas) thanks to AI-driven computing needs. “That’s an out of favor sector trading at less than 7 times earnings.”
  • Also bullish on auto/industrial plays (e.g., Finia).
• Macro Themes: Tariffs and Geopolitics (13:22–15:43):
  • Warns about the market's dislike for tariffs and adds, “If in the next couple of days we bomb the nuclear sites [in Iran], that’s going to have a big impact on the oil market.”
  • Longer term, he foresees natural gas and oil demand growing, contrary to past expectations.

Notable Quote:

“MSG owns the Knicks and Rangers. We can do all we want with AI, it doesn’t affect the fact that people still want to go watch basketball.” – Charles Bobrinskoy (09:03)

3. “AI-Washing” and the Real Impact of AI on Jobs

Guest: Peter Capelli, Professor of Management, The Wharton School
Time: 17:54–22:58

• AI as a Layoff Scapegoat (18:29):
  • “More than 54,000 layoffs last year did cite AI as a reason...but are companies just using AI as an excuse for job cuts?”
  • Capelli identifies three scenarios:
    1. Announced layoffs never happen.
    2. Cuts are made in anticipation of AI, not because of it.
    3. Using AI as performative cover for pressure from investors.
  • “36% of [executive] AI efforts were performative. They weren’t really doing anything.” (19:39)
• Actual AI Workforce Impact (20:13):
  • “It’s a ton of effort and a ton of upfront money to try to get these tools, AI tools to work...Payoffs are going to come down the road.”
  • Anticipates reduced hiring, not mass layoffs.
  • “What you will see is reduced hiring in the future...We would like productivity in the US to go up...We want it to happen slowly and gradually so we don’t get a lot of layoffs going forward.”
• Comparison to Past Tech Shocks (21:41):
  • Unlike prior waves (e.g., Internet/search engines), “You just don’t hear stories about...millions of jobs lost. It created jobs and companies.”

Notable Quote:

“There’s pretty good evidence that some of that [AI excuses] is going on because at least one survey of executives reported that 36% of their AI efforts were performative. They weren’t really doing anything.” – Peter Capelli (19:39)

4. Anthropic and the Pentagon: AI Supply Chain at a Crossroads

Guest: Kate Rooney, CNBC Reporter
Time: 26:39–28:58

• Key Issue: The Pentagon has delivered an ultimatum to Anthropic: grant broad access to its AI model (Claude) or be declared a supply chain risk—a label usually reserved for adversaries (compare to Huawei).
• Potential Outcomes:
  • Forced compliance under the Defense Production Act;
  • Losing potential contracts due to being blacklisted.
• Investor View: Called a “lose-lose” for Anthropic’s CEO—the risk of alienating enterprise customers vs. angering the federal government.
• Contract Value Not Immense (yet): At $200m, but the “chilling effect on future enterprise business” could be significant.
• Larger Context: Foreshadows escalating government involvement in AI and its suppliers.

Notable Insight:

“This is a very touchy situation…other companies are likely looking to fill the void here and moving in for those government contracts.” – Kate Rooney (28:58)

5. Is the Bottom In for Software? Technical and Fundamental Debate

Guest: Javid Mirza, Technical Strategist, Raymond James
Time: 31:19–34:35

• Sector Rotation Observations:
  • “We’re seeing this rotation out of software and into hardware...but big technical support is around 10% lower and now we’ve hit that.”
• Turning Point Signal:
  • “We’re seeing signs of support...institutions stepping in and buying. At the very least, we’ve got a short-term low.”
  • If the S&P Software index breaks 6500, “that would confirm a new uptrend...potential for an intermediate-term rally, 15% upside.”
• Case Studies:
  • Salesforce (CRM): “Putting in a low…seeing institutional buyers step in.”
  • Oracle: Under pressure, “trying to re-accelerate” at support levels.

Notable Quotes:

“What clients care about is where we’re headed...I think there’s a compelling reward/risk ratio for adding exposure to software stocks here.” – Javid Mirza (31:19)
“Technically it’s bottoming and fundamentally we like it as well.” – on Salesforce (33:10)

6. The Rise of “Agentic AI”: Market Effects & User Experience

Guest: Deirdre Bosa, CNBC Tech Correspondent
Time: 35:17–40:22

• “Agentic AI Inflection Point” (Nvidia CEO’s phrase):
  • The AI competition is shifting from chatbots to agents—AI tools that can autonomously run tasks, operate software, and manage workflows.
• Market Implications:
  • “OpenAI dominated the chatbot era…But growth has stalled. Meanwhile, Anthropic’s Claude, Perplexity, and others are surging as the market moves to agents.”
  • “It’s not enough if you’re winning the wrong war.”
• End-User Perspective:
  • Deirdre describes the shift: “It went from like a chatbot to like a full-on producer...helping me create documents and as a result, I’m just doing more.”
  • She endorses Claude’s accuracy: “It’s more intuitive, more accurate, and there’s fewer hallucinations...especially Opus 4.6.” (39:28–39:31)
  • Acknowledge concerns: Users remain wary of ceding too much control to AI agents.

7. Market Wrap and Leadership Churn

Host: Kelly Evans, Dom Chu
Time: 41:30–44:51

• Intraday Market Reversals:
  • Dow briefly turned green after being down 245 points, a sign of volatility and uncertainty.
  • Ongoing tug-of-war between software (bouncing) and semiconductors (sliding).
• Value vs. Momentum:
  • Speculation about whether battered software names may represent deep value compared to the momentum in hardware.
  • “The stock price reactions after some of these major reports have not maybe been as...indicative...given the stronger fundamental stories.”
• Credit Watch:
  • Noted divergence in junk debt—higher quality high yield holding up, but the lowest credit tranches starting to underperform.

Notable Quotes & Moments

• On Nvidia vs. Cisco’s Past:

  • “This whole question...is this house of cards? Really comes down to a fundamental question which Jensen talked about...do you believe.” – Gene Munster (05:28)

• On "AI-washing":

  • “There’s pretty good evidence that some of that is going on...36% of [executive] AI efforts were performative.” – Peter Capelli (19:39)

• On Hard Assets:

  • “MSG owns the Knicks and Rangers. We can do all we want with AI, it doesn’t affect the fact that people still want to go watch basketball.” – Charles Bobrinskoy (09:03)

• On Agentic AI:

  • “It went from like a chatbot to like a full-on producer…helping me create documents and as a result, I’m just doing more and more.” – Deirdre Bosa (39:28)

Timestamps for Key Segments

| Segment | Speaker(s) | Time (MM:SS) | Topic | |---|---|---|---| | Nvidia Selloff & AI Investing | Kelly Evans, Gene Munster | 00:40–08:37 | Post-earnings dip, long-term view, Cisco comparison, Apple’s quiet AI strategy | | Hard vs. Soft Assets, Old Economy | Kelly Evans, Charles Bobrinskoy | 08:37–15:43 | Value in sports/energy, live events, tariff/watch on Iran | | AI Layoffs (“AI-washing”) Debate | Kelly Evans, Peter Capelli | 17:54–22:58 | Are layoffs really caused by AI? Performative AI, productivity impact | | Pentagon vs. Anthropic | Kelly Evans, Kate Rooney | 26:39–28:58 | Pentagon ultimatum over AI models, “supply chain risk” status | | Software Sector Technicals | Kelly Evans, Javid Mirza | 31:19–34:35 | Software bottoming, Salesforce/Oracle, value rotation | | Agentic AI & Next Wave | Kelly Evans, Deirdre Bosa | 35:17–40:22 | From chatbots to agents, market reset, user workflows | | Market Wrap & Value vs. Growth | Kelly Evans, Dom Chu | 41:30–44:51 | Intraday reversals, credit market divergence, earnings reactions |

Recap & Takeaways

• Nvidia’s volatility is less about fundamentals than about narrative fatigue and technical profit-taking. Long-term AI growth appears much more explosive than previous tech cycles—at least for “true” AI-first companies.
• Caution on “AI-washing”: Many companies may be using AI as cover for broader cost cutting, with real productivity impacts yet to materialize fully.
• Strong rotation into hard assets and energy suggests investors are hedging against both AI hype and geopolitical uncertainty.
• AI regulation and geopolitical risk (e.g., Anthropic and the Pentagon) are rapidly becoming central to the investability of AI firms.
• AI shifts: The market for generative AI is quickly moving from chatbots to agentic AI, changing the competitive landscape and required business models.
• Software’s short-term pain may be a setup for longer-term gain, especially for usage-driven names, but full leadership rotation remains in flux.
• Classic investing dichotomy: The market’s current uncertainty (regarding tech leadership, macro outcomes, and the true impact of AI) is producing volatility, but also deepening value opportunities in both tech and old economy sectors.

This summary covers all core discussion points, speaker perspectives and the episode’s natural transitions—delivering a comprehensive guide for listeners and investors tracking the intersection of AI, market cycles, and sector rotation.