The Exchange 5/13/26

Summary

Podcast Summary: "The Exchange" on CNBC

Episode Date: May 13, 2026
Host: Kelly Evans

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Overview

This episode of "The Exchange" dives into the day's most pressing business stories, headlined by persistent inflation, bond yield surges, and the outlook for Fed policy with a new chair incoming. The discussion is split across several expert interviews and thorough market analysis. Key topics include inflation and its effects on Federal Reserve decisions, the market’s AI-driven rally—especially in semiconductors, President Trump’s state visit to China (including the significance of Nvidia’s CEO tagging along), the state of the housing market amidst rising rates, and a preview of the blockbuster Cerebras AI IPO.

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Inflation, the Fed, and Market Reaction (00:57–12:21)

The Hotter-Than-Expected Inflation Print

Guests: Tom Simons (Jefferies), Andres Garcia Amaya (Zoe Financial)

• The producer price report came in “hot,” driving the 10-year yield to nearly 4.5%, a 30-year auction above 5% for the first time since 2007.
• Despite surging energy prices and headline numbers, Tom Simons notes, “It doesn't look quite as hot in terms of what the numbers the Fed is looking at,” citing softness in medical care services and portfolio management components. (02:11)
• Simons sees monthly “headline PCE… somewhere around 4:10” and “core in the 3:10 area,” less alarming than today’s PPI.
• The Fed’s preferred inflation gauge (PCE) is likely “well north of 3%, like three and a half percent, 3.3 somewhere in that neighborhood.” (03:24)

Fed Outlook

• Simons remains barely in the rate-cut camp but is now more cautious: “Rate cuts are much harder to justify and it's much harder to say that the current policy stance is really all that restrictive.” (04:00)
• Andres Garcia Amaya argues market direction hinges more on “reaccelerating earnings” than small Fed moves: “Earnings still matter significantly more… earnings are reaccelerating and therefore the market might have a hiccup with this, right. This changes a little bit the story, but it doesn't really change the direction of earnings in my opinion.” (04:42)
• Broader corporate earnings strength (not just tech) continues to underpin the rally.

Policy under Chair Warsh

• Simons expects Warsh to emphasize “interest rates in the context of the balance sheet, really,” pointing to the complexity of tightening policy via both tools. (06:24)
• “Fairly neutral” policy expected—Simons foresees only “50 basis points of cuts,” given regulatory and balance sheet constraints. (07:22)

Treasury Auction and Bond Market

Rick Santelli reports the first 30-year auction yield above 5% since 2007, but classifies the yield rise as “going up rather consistently” versus “surging.” (07:45-08:56)

• The recent Treasury auction was rated a “Charlie minus… C minus” based on weak demand.

Quote:
“I can't really say US yields are surging. They're just going up rather consistently.” — Rick Santelli (08:56)

Market Positioning and AI Influence

• Garcia Amaya suggests international markets, like Korea’s memory-chip-driven rally, present “better valuation entry points” for AI exposure outside the US. (10:29)
• Simons cautions it will be “difficult…to see how inflation is going to come meaningfully lower unless the labor market slips up a little bit more,” highlighting the loss of experienced senior workers as a drag on productivity and continuing wage pressure (11:12).

Quote:
“Millions of years of work experience…leave the labor market every year.” — Tom Simons, on the demographic shift (12:12)

Notable Segment Timestamps

• [02:47] PCE and inflation breakdown
• [07:45] 30-year Treasury auction analysis
• [10:29] International AI opportunities

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President Trump’s State Visit to China & Nvidia’s Strategic Role (14:38–22:09)

The Guest List Twist

Eamon Jabbers details the last-minute invite to Nvidia CEO Jensen Huang, who joined President Trump and Elon Musk aboard Air Force One after media coverage of his initial exclusion. (15:33)

• This highlights Nvidia's “strategic importance” in both tech and the ongoing US-China dynamic.

US Goals for the Visit

• Skepticism abounds over major deals, but possible “purchases of some aircraft, maybe some purchases of some soybean and some beef” are expected. (17:59)
• “It’s definitely a perk to ride on Air Force One… but it’s not a comfortable ride,” jokes Jabbers, adding color to the delegation’s experience. (18:10)

China’s Playbook

Eunice Yoon: China’s focus is on “Taiwan” and symbolic gestures of parity—such as having the vice president greet Trump at the airport.

• China is “likely going to try to press President Trump to change some of the language, the US Language around this island… from does not support Taiwan independence to opposes Taiwan independence.” (19:29)
• The US is not expected to agree to the semantic escalation. Eunice notes, “By changing the language to oppose, you are actually defining the status. You’re taking a side.” (21:31)

Quote:
“I can't imagine any US president saying that they oppose Taiwan independence…” — Kelly Evans (21:18)

Notable Moment

• President Trump’s outreach to Nvidia’s CEO—flying him to Alaska to board Air Force One—underscores the intersection of geopolitics and tech supremacy.

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Market Movers & Sector Analysis

Semiconductor Surge & Chip Analysis (24:49–38:41)

Dom Chu highlights chip stocks’ strong performance:

• On Semi up 10% after strong results and analyst upgrades.
• Dutch AI cloud provider Nibias Solutions up 19% on a 684% revenue surge.
• EchoStar gains approval for a $40B wireless sale to SpaceX and AT&T.

Vivek Arya (BofA), on semi stocks:

• Arya boosts price targets on key AI and semiconductor names:
  • Micron: from $500 to $950 (“still trading at a sub 10 times forward PE multiple”) (32:14)
  • AMD: to $500
  • Marvell: to $200
  • Nvidia: to $320 (projects Nvidia retains 70% of a $1.7T AI market by 2030)
• Memory chips are central: “That requires this infrastructure to remember a lot more things about you… and of course memory is a very, very important part of that.” (31:22)

Quote:
“I’m very amused when I hear talk of bubbles because I don’t remember the last time... some of the largest companies in that sector were trading at or below a market multiple.” — Vivek Arya (32:35)

Google’s chips (TPUs) discussed as competitive but largely internal; Nvidia remains dominant for flexible cloud needs.

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Housing Market Snapshot (26:14–28:21)

Diana Olek:

• Mortgage rates are spiking, now at 6.57%. Minor rate changes (whether closer to 7% or 6%) greatly affect buyer demand.
• Despite a revival in home showings and applications, rate volatility could stall the spring buying season.

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Breaking News & Trends Updates (28:28–29:31)

Angelica Peebles:

• US forces continue Iran port blockade enforcement.
• Walmart lays off or relocates ~1,000 corporate staff.
• NFL 2026 international games set for London, Paris, Munich, Australia, Brazil, and Spain.

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IPO & Software Segment Highlights

Cerebras IPO: AI Market Expansion (39:54–42:14)

Christina Parsonevolis:

• Cerebras’ IPO is the largest of 2026 so far, with a $49B valuation and 2025 revenues of $510M.
• Its AI chips (huge single-silicon designs) are highly in demand for inference—not training.
• OpenAI inked a $20B, three-year contract to lease Cerebras compute, reflecting a major wager on inference workloads.
• DA Davidson notes possible future threats from Nvidia’s tech advancements; Cerebras seen as “cool but niche.” (41:35)

Quote:
“There is a rising tide... Nvidia is best in the group. But because this is such a large market, I don’t think we need to necessarily try to make this a zero sum game…” — Vivek Arya (35:14)

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Software’s Quiet Comeback

Seurat Sethi (DCLA):

• While traders flock to fast-moving chip stocks, he prefers “well capitalized quality companies” (Intuit, Workday, Salesforce, Roper) for long-term “compounder” value.
• Highlights the misperception that “semis are going to eat software,” underscoring software’s defensibility and role in security and integration. (43:26–45:18)
• On the cybersecurity space: Still sees opportunity, but selectivity is key, given uneven performance in names like Palo Alto.

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Notable Quotes

• Tom Simons: "It’s difficult for me… to see how inflation is going to come meaningfully lower unless the labor market slips up a little bit more." (11:12)
• Rick Santelli: "I can’t really say US Yields are surging. They’re just going up rather consistently." (08:56)
• Andres Garcia Amaya: "If you like the AI play, there might be better valuation entry points outside of the US..." (10:29)
• Vivek Arya: "This memory cycle has a lot more legs to it because we are depleting supply at three or four times the pace at which it is being created because of this move into AI." (33:43)
• Eunice Yoon: "By changing the language to oppose, you are actually defining the status. You’re taking a side on the status and the fate of Taiwan..." (21:31)

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Key Timestamps

• [00:57] Show Start & Market Overview
• [02:47] Inflation Print Breakdown & Fed Implications
• [07:45] Treasury Auction Above 5% Yield
• [14:38] President Trump’s State Visit to China & Nvidia’s CEO
• [24:49] Chip Sector Surge & Analyst Target Increases
• [26:14] Housing Market & Mortgage Rates Update
• [29:31] NFL’s International Expansion & Corporate News
• [39:54] Cerebras IPO Breakdown & AI Inference Market
• [43:26] Software Sector Recovery & Strategy

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Tone & Style

The discussion is brisk, data-driven, and marked by a blend of expert skepticism and bullishness, reflective of both Wall Street concern and optimism. The interviews are peppered with light moments, especially regarding Air Force One anecdotes and market “froth,” but always circle back to the hard realities facing the banking system, global trade, supply chains, and the inexorable power of AI.

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Conclusion

This episode encapsulates a day where persistent inflation challenges the Fed’s path, economic optimism keeps markets buoyant, and the AI megatrend lifts both established giants and new IPOs. Meanwhile, geopolitics and the global race for technological dominance remain tightly woven into financial markets, from rate policy to the top floors of Air Force One.

For listeners, the episode offers a comprehensive but digestible scan of macroeconomic crosscurrents, sector rotation opportunities, global intrigue, and the relentless rise of AI.

Transcript

[Kelly Evans]

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[Kelly Evans]

You're listening to the Exchange. Here's today's show. Scott, thank you very much and welcome to the Exchange. I'm Kelly Evans. An awkward arrival for Kevin Marsh just as the Senate gets ready to confirm him next hour as Fed chair. We get another hot inflation print and surging bond yields. Stocks overall are mixed while that hot producer price report is sending the yield on the ten year to its highest since last July, just a hair under 4 and a half percent. Oil not helping either today with WTI up to 103 a barrel. Still, stocks are largely higher, record highs for the S and P&NASA. The chip trade remains strong and that's what's driving that outperformance for the tech space today. Memory names rallying from yesterday's sell off. Micron up about 4%, a little less than that now. We'll have more on that ahead. Before all that though, let's begin with the hotter than expected inflation print as the odds of a rate cut are virtually zero this year. Now let's discuss on our opening exchange. Tom Simons is chief US Economist at Jefferies and Andres Garcia Amaya is the CEO of Zoe Financial. Welcome to both of you.

[Commercial Announcer]

Thank you.

[Kelly Evans]

Tom, I said to you a moment ago, wow, that was a hot report. And I what was your response?

[Tom Simons]

You said, well, some of it was,

[Kelly Evans]

some of it was. So what do you mean by that?

[Tom Simons]

So you know, when we look at the ppi, the natural inclination is to try to find the little bits and pieces that translate into the PCE deflator because that's really what the Fed's targeting with its 2% inflation goal. Right. And when you look at the medical care services components and portfolio management of all things, like they're actually quite a bit softer. So it doesn't look quite as hot in terms of what the numbers the Fed is looking at, what they're really keying on. But you know, energy prices are obviously quite high and not going down anytime soon.

[Kelly Evans]

Do you have a numerical kind of gauge for what? If you strip out a few of those factors, what is it telling us for maybe the Fed's preferred gauge?

[Tom Simons]

Yeah, so yesterday after the CPI data, it looked like the headline PCE was going to be somewhere around 510 month on month. Actually after the PC, I'm sorry, PPI data it looked like it was going to be more like 4:10. And on the core it came down a little bit too. So like in the 310 area, which is quite a bit less scary than the 1.4% headline on PPI today.

[Kelly Evans]

Right. Because if you back up for a second yesterday we got the hot consumer report that said, I think the headline is 3.8. Year on year the core was 2.8.

[Tom Simons]

Yeah.

[Kelly Evans]

Again, that one is not necessarily the one the Fed's watching. But now based on everything we've learned, what do you think year on year we might be looking at for, for, for PC?

[Tom Simons]

Probably well north of 3%, like three and a half percent, 3.3 somewhere in that neighborhood. And I have to check my numbers on it. But you know, we're, we're not arcing back towards where the Fed wants it to go. We're, we're kind of stalling out and perhaps heading towards higher numbers for the next few months that like you said in the intro, are going to keep, you know, Warsh in a kind of a difficult position as he takes his seat.

[Kelly Evans]

And yet your own forecast, is it not, is that you still expect a couple of rate cuts, which is way out of consensus right now.

[Tom Simons]

Yeah, I have to admit that after the employment data that on Friday that looked a lot worse, you know, because I started to think that maybe the year to date data on the labor market actually looks like it's improved substantially from where we were in 2025. So just, you know, really simple metric, average monthly non farm payroll growth is like 75k this year. It was only 10k last year. Right. So that includes a pretty soft number in February and some weird weather effects and whatnot. But that feels like a substantial move towards that sustainable pace of job growth that keeps the unemployment rate steady. If that's happening and we're kind of concerned that headline inflation is going to stay elevated for long enough to bleed into the core. Rate cuts are much harder to justify and it's much harder to say that the, you know, current policy stance is really all that restrictive.

[Kelly Evans]

And obviously what you're saying is let's say that Warsh kind of came in with the same mindset. It means it's going to be a little bit more challenging for him.

[Tom Simons]

Yeah.

[Kelly Evans]

Andres, you think none of this matters?

[Andres Garcia Amaya]

Well, I think the magnitude of the movement definitely matters. Right. So maybe that's the way to think about it is if we were looking at a situation where we were going from a 25 bips cut to a hundred bips hike, I think it matters a lot more. If we're talking about potentially a 25 bips kind of adjustment on the upside, then earnings still matter significantly more and earnings are re accelerating and therefore the market might have a hiccup with this. Right. This, this changes a little bit the story, but it doesn't really change the direction of earnings. In my opinion.

[Kelly Evans]

It's a good thing earnings have been as strong as they have been, Andre. So just to follow up on that, if we go back to the rally from even 2022, yes, we had ChatGPT come on the scene, but we also had falling interest rates and it was what you talked to Michael Cantritz and a lot of people who say that's the most important factor supporting the rally is falling interest rates, falling inflation. So I am a little worried that this could put a dent in all of that. Although to your point, the market hardly seems to care.

[Andres Garcia Amaya]

Again, like if, if it was just tech, I would agree that this would necessarily might change the story. But if anything, earnings brought the reaccelerating in a fairly broad way. Right. Financials industrials are actually reporting better than expected numbers and adjusting in some cases their guidance upwards. So it's not just tech. Of course, on a GDP basis I still think a lot of the infrastructure build out is driven by AI. But do you think 25 bips increase would change that infrastructure story? I don't know. That's not in my opinion enough.

[Kelly Evans]

Curious Tom, how you expect Warsh to talk about all of this. You know what, what is, what is the war speak about this going to

[Vivek Arya]

sound like it's going to have to

[Tom Simons]

be interest rates in the context of the balance sheet, really. Right. Because if just cutting interest rates when inflation is clearly surging, even though it looks like it's a temporary supply Shock driven issue is pretty nuts, right? I mean that would be a very odd way to establish yourself and your credibility just coming into the seat as Fed share. So if it's this more holistic change, like look, interest rates really shouldn't be this high. We have to keep them higher than we would normally prefer because we've added all this liquidity, there are changes we want to make to the banking system. All that kind of makes sense. None of that has really been clearly articulated in the public discourse I think for good reasons. Right. I mean you don't want to kind of give everything away while you're not there and then create, you know, mal expectations in the meantime. But yeah, I mean it's a difficult

[Kelly Evans]

and quickly I want to go to these auction results but. So do you think given that he's going to do one thing with the balance sheet, another thing with rates, is the net position going to be more easy or more tight with monetary policy in say the next six months?

[Tom Simons]

It should be fairly neutral actually. You know, I'm only expecting the 50 basis points of cuts and I don't think that there's an argument to be made that there's like a big reduction in the balance sheet that could feasibly be made given the way the banking system is set up and regulated currently.

[Kelly Evans]

All right, let's bring in Rick for just a second here. We just had 30 year bonds which we know we're tracking above 5% today. And he's got the results over from the CME. Hi Rick.

[Rick Santelli]

Hi indeed Kelly. This is the first yield on a 30 year auction result above 5% or at 5% since August of 2007. The yield at this 25 billion 30 year auction 5.046 which is a half a basis point higher than a when issued market, higher yield, lower price. Government's a seller, you know how that works. So that's definitely a bit off on the grade. And if I look at the bid to cover it was the weakest since Thanksgiving basically. So we give this one a Charlie minus C minus that's in total 125 billion in treasury supply as I pointed out, first time since the summer of 07. A5 handle on that auction yield. And, and yesterday's close in the 30 year bond was a one year high yield. We know that the 10 year is at the highest yield on a closing basis since July. And I want to point out that even though yields are definitely going up, no doubt about it, and in certain places surging like the uk I can't really say US Yields are surging. They're just going up rather consistently. Kelly, back to you.

[Kelly Evans]

Rick. Do you think that's because of better growth, higher inflation? A little bit of both.

[Rick Santelli]

I think it's end users. What I'm picking up from many of my sources is that you have real money accounts, trading Treasuries, lots of the, you know, speculative side of the equation is just not present. They've been getting jostled around a bit with some of the two way moves that are counterintuitive, whether it was tariffs, whether it is the conflict in the Middle East. So I think that when you start to see treasury volume pick up, I think yields will go along with it.

[Kelly Evans]

Rick, appreciate it. Thank you very much. Rick Santelli. Just turning back to Andres Garcia Amaya. Yes, this is the highest yield on an auction in 20 years, Andres, but we've had yields for the 30, not the 30 matters that much. You know, levels above here just as recently as 2022. A little reminiscent of the energy story, I think where as high as things are, they were worse four years ago. And so right now we seem to be taking it in stride.

[Andres Garcia Amaya]

Yeah. If you look at yields, they are both affected by inflation but also real growth.

[Kevin Sarat Sethi]

Right.

[Andres Garcia Amaya]

And to your earlier kind of comment around that or question, I think it's a little bit of both. Right. It's impossible to not think that at some point AI will show up in productivity numbers. Right. And then you add the fact obviously that oil prices do affect inflation. Sure. You know, there's an upward pressure to nominal yields as a result of that.

[Kelly Evans]

Andres, just a quick final word then on, on kind of market positioning. Are you going with what's working, the chips, the tech space, anything else? You're leaning against it.

[Andres Garcia Amaya]

To my prior comments on this, I think there's a play here in international that's often missed is that international could also be part of the AI play but with better entry points. So for instance, I mentioned Korea in the past. Korea is up close to 100% year to date and a lot of that has to do with memory chips that the rest of the world is using because of AI demand. So if you like the AI play, there might be better valuation entry points

[Kelly Evans]

outside of the US even still with all of this. And then Tom, I guess I'll leave it with you, which is to say that the pickup we've seen in job growth and all of this and the kind of better prospects can we still get past this supply shock and have a scenario where inflation's coming down. And there's not that kind of worry in the back of our minds about it.

[Tom Simons]

It's difficult for me to now start to see how inflation is going to come meaningfully lower unless the labor market slips up a little bit more. I really do think that there's been a big change in labor market dynamics in the last couple months. And I think that we're also seeing as much as we can talk about how positive the shock of AI technology is for productivity. We're also still dealing with demographic issues that I think are actually working against productivity, which is that businesses, as they have more and more older senior workers retire, are losing their most experienced people. Right. And I think that's a big reason why we didn't see as much entry level job growth. And, you know, it's a very difficult market for college graduates. I'm hoping that that sort of, you know, evens itself out this year as demand in general picks up. But, you know, that could be working against us and could keep costs higher, keep a floor under wage growth that, you know, just doesn't allow inflation to come meaningful.

[Kelly Evans]

So many fascinating trend stories and what you just said there. But I just wanted to highlight the point, which is a lot of people think, oh, yeah, our older workers are being replaced by more productive younger workers. And, and you're saying it's exactly the opposite, that it's the older workers, millions

[Tom Simons]

of years of work experience that leave the labor market every year.

[Kelly Evans]

Yeah. Being replaced by those that need, that have much more.

[Tom Simons]

Essentially, none. Yeah.

[Kelly Evans]

Right. We're all just talking our bug now.

[Vivek Arya]

Yeah.

[Kelly Evans]

Thank you, guys. Appreciate it. Today, Tom Simons, Andres Garcia, Maya. Coming up, the semis are rebounding. Qualcomm coming off its worst day in six years. V of A Vivek Arya hiking his price target on several major chip names. He joins us ahead. But first, President Trump's state visit to China is now underway. Senator Daines telling Squawk Box this morning he hopes to see a trade deal involving Boeing, beef and beans. For now, the headlines are all about a surprising twist to the guest list. Those details are next on the Exchange. This is the exchange on cnbc.

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[Kelly Evans]

There's President Trump disembarking Air Force One this morning in Beijing. It's his second state visit there as president following his first trip nine years ago, and it was preceded by some controversy over the guest lists. As of yesterday morning, Nvidia CEO Jensen Huang was not listed among the executives traveling to China with the president. But a few hours later, after seeing the media coverage of Wang's reported absence from the delegation, a source tells CNBC that President Trump called Jensen Huang and asked him to join. The Nvidia CEO then flew to Alaska, where he boarded Air Force One for its final leg to Beijing. What does this tell us about Nvidia's strategic importance and where it ranks among the president's other objectives? We have team coverage from China's CAP today with Eamon Jabbers looking at Washington's goals for this summit and Eunice Yoon breaking down Beijing's playbook. Eamonn, let's start with you.

[Eamon Jabbers]

Yeah, Kelly, that's right. One of Washington's goals for this summit was to fill out the guest list at the last minute. As you saw, I was talking to folks familiar with CEOs and their schedules last week to get a sense of who's coming on this trip. And they were telling me that, you know, late into the week last week, US CEOs had not been invited to the trip and a lot of them were keeping their airplanes gassed up in a whole on their schedule in case the president did come calling. That seems to have happened to Jensen Huang very late. The way this works, Kelly, is this was a typically scheduled refueling stop in Alaska. That's standard operating Procedure. Wang flew his jet to Alaska, caught up with the President, boarded Air Force One, and we saw him disembarking here in Beijing when the President arrived several hours ago. The President is now at his overnight here, getting some shut eye ahead of a very big day tomorrow. We are expecting to see a bilateral meeting between President Trump and President Xi. That would be with all of their aides and entourage in attendance. You've seen pictures of those long tables with everybody gathered around on each side. That's what we're expecting to see tomorrow at the Great hall of the People just to the west of Tiananmen Square. We're also gonna see a state dinner, a giant banquet here in Beijing tomorrow night. That I think is where we'll see some of the CEOs come out in force attending that social event. But of course, very much a working social event. Then the President stays overnight here in Beijing one more night, and we'll see him have tea with Xi Jinping on Friday before he departs. So a busy but compressed schedule. Not quite the slam bang schedule that we saw back in 2017 when they called that a state visit, plus here in Beijing, but certainly enough time to get some work done. Expectations on the US Side of corporate folks I talked to for a trade deal here, pretty minimal, Kelly. I mean, a lot of folks said, you know, we just don't see a big logjam bursting here on trade. Some questions around whether anything can be done on Iran. And then of course, there are other issues such as AI, where, you know, it's sort of a wild card whether anything can get done there either. So, you know, we'll see what the deliverables are on the back end of this. But the expectation is maybe some purchases of some aircraft, maybe some purchases of some soybean and some beef, and that might be it, but you never know. And that's why we watch, Kelly.

[Kelly Evans]

Well, and certainly Boeing investors are excited. I mean, the shares have been doing great. Not because of this, just a lot of factors. The CEO, I understand, is there. Was it only Jensen Huang and Elon Musk who were with him on Air Force One?

[Eamon Jabbers]

Yeah, just those two were on Air Force One. The others took their own flights. I'm assuming they didn't take the same United flight that we took. I didn't see any CEOs on our airplane. They all have their own aircraft, but they were not on Air Force One. And that's the an interesting one. It's definitely a perk to ride on Air Force One. That's for sure. And, you know, a real honor to be seen descending the stair of the plane after the president, as we saw earlier today here in Beijing. But it's not a comfortable ride. You don't get a lie flat seat. You get, you know, a sort of a chair. Maybe you can curl up under the conference room table and get a couple of Z's. It is not super comfortable for those people whose last name is not Trump on that aircraft.

[Kelly Evans]

Right. What was it that Rubio did? He would put a blanket over his head so the president didn't know he was sleeping when he, when he passed by the White.

[Eamon Jabbers]

Yeah. The White House released a photo of Rubio on this trip in a sweatsuit, head, head to toe in his absolute comfiest outfit for the long ride. It's a look, it's a long ride. I mean, there's no question about it. And if you're stuck in a, in a chair, you can't even lie flat. And that makes it just that much longer.

[Kelly Evans]

All right, Eamon, thank you. We really appreciate it. Eamon Jabbers. Eunice Yoon has Beijing side of the playbook. Eunice, what are they hoping to achieve here?

[Eunice Yoon]

Well, Kelly, Chinese social media are very focused on the level of the official who greeted President Trump at the airport, the vice president. This is the highest level official who would be doing this. And people have been talking about how it really shows how warm the reception is and also that China is on par with the United States, increasingly so. In fact, this was the, the confidence that China feels, as was flagged in a People's Daily piece. It was quite a lengthy ess where it said, in recent years, facing tariff wars and trade wars, China has been willing to talk and dare to fight, adhering to principles and bottom lines. In other words, China, unlike other countries, has been able to stand up to the United States and by doing that, bring about what the Chinese describe as a return to rationality. Now, as fixated as President Trump is on trade, President Xi Jinping is very focused on his priority, and that is Taiwan. In fact, there's been a lot of expectation and, and rumbling that the Chinese are likely going to try to press President Trump to change some of the language, the US Language around this island that, of course, Beijing claims as its own. The expectation is that the ask would be to shift it from does not support Taiwan independence to opposes Taiwan independence. And today, the state media was much more explicit about that, saying opposing Taiwan independence should rightfully be a shared responsibility. Both China and the United States today, and indeed, it must be a critical consensus that both sides strive to forge. Now, indications from sources that I've been talking to say that President Trump would very likely not make those types of changes.

[Kelly Evans]

Kelly, I can't imagine any US president saying that they oppose Taiwan independence, although even just the, the statement that they do not support it. Is that, is that already a fact?

[Eunice Yoon]

Well, that would, the, the fact that they don't support it, that's already in line with the US's One China policy, which, you know, is, is basically saying, you know, the indication is, well, if, if the us, I mean, if China and Taiwan, you know, have some sort of kerfuffle, we'll just stand out, stand out of it for, for the moment, you know, but, but by changing the language to oppose, you are actually defining the status. You're taking a side on the status and the fate of Taiwan and also sending a message to other countries in the region about the potentially weakened commitment by the US for their security.

[Kelly Evans]

Right. And I think there are many who would actually say that the US wouldn't step to. I know this is what everyone is speculating about with President Trump. Would he or wouldn't he, if push came to shove on the question of Taiwan? So if the Chinese push on that, it would be fascinating to see if there's a response, especially if it's part of a deal, you know, and even any move towards softening further that language. Eunice, thank you for bringing that to us. Yeah. Appreciate it. Tonight, Eunice Yun in Beijing. Coming up, the housing stocks are down again today. It's the fifth straight session of declines. Now, Somni Group, that's the parent company of Tempur, Sealy and Mattress Firm, is among the worst first performers. It's down 18%, followed by Williams Sonoma, down 8. KB Home, Home Depot and Lowe's is down 5% today. Rising bond yields will only put more upward pressure on mortgage rates. These are the weekly declines, I should say. We'll have more on these moves next.

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Call 888-add-D dish or visit dish.com today. Welcome back. Record highs for the S and P and the Nasdaq again today look at the S and p almost at 7500 where we only crossed above 7000 I believe in mid April. Even the Russell's are now fractionally higher. But there are 44 stocks in the S&P 500, nearly a tenth of the index hitting new 52 week lows today. Dom Chu has a closer look at the biggest movers.

[Dom Chu]

All right, so let's talk about chip stocks overall which are all moving higher, but shares of On Semi are higher by 10% strong quarterly results are part of that story along with that bigger kind of move in that chip sector, overall shares again hitting an all time high. Can or Fitzgerald also raised their target price on those shares up to 100 per share from 95. So a slew of different factors here affecting On Semi. Then you've got shares of Dutch based tech infrastructure and AI cloud provider Nibias Solutions here soaring by just about 19% right now after it reported better than expected results including a massive 684% surge in quarterly revenues over the same time last year. It also raised its full year capital expenditures guidance. Nibius of course like many other AI plays is benefiting from that continued stronger demand for AI infrastructure. And then EchoStar will round out things with a 3% gain here after the FCC approved the company's $40 billion sale of wireless spectrum to SpaceX and AT&T. That breaks down roughly into $23 billion from AT&T for its 5G network capacity and 17 billion from SpaceX to boost Starlink's to device to device offering in its terrestrial space based and hybrid network architectures. So keep an eye on EchoStar shares up 3%. Kelly, some of the bigger movers, I'll send things back over to you.

[Kelly Evans]

Interesting Dom, thanks. Meantime we mentioned those housing stocks Having a rough time of it lately. Mortgage rates are on the move again. Diana Olek has the details. Diana?

[Diana Olek]

Yeah, Kelly, that exceptionally hot read on inflation earlier today sent bond yields higher and mortgage rates just followed along. Rates had already been surging higher earlier this week on news of more trouble in negotiations over the Iran war. So the average rate on the popular 30 year fixed mortgage rose today to 6, 6.57%, according to Mortgage News Daily. It is now 15 basis points higher than it was just last Friday and it's sitting at the highest level since March, which was when falling rates reversed course due to the start of the Iran war. Today's move was not as big as yesterday's, but Matt Graham, COO of Mortgage News Daily, says bond yields are also assuming a corrective drop will come after the war is over. So that's kind of factoring in now. The move comes just as the spring housing market, which stalled in March due to those higher rates, was finally beginning. See some new life Mortgage applications to buy a home rose 4% last week despite a small move higher in rates. They are, however, just 7% higher than a year ago. And last year at this time, rates were about to touch that 7% range. National association of Realtors said data from CenturyLock, which is those lockboxes real estate agents used on for sale properties, they recorded home showings in April were up 8% year over year. And that's in all four regions of the country they saw increases. So, Kelly, it's just these tiny rate moves within that 6% range. Is it closer to 7, is it closer to 6? That's really affecting buyers.

[Kelly Evans]

Six and a half percent now. People are gonna be in for some sticker shock if it stays around here. When does, when do we think of the spring selling season as ending or winding down?

[Diana Olek]

Oh, that is such a tough question, especially because, you know, we tend to think that sometimes it gets pulled forward. If you had a bad winter, which we did, and we had a very cold January, so then it was really starting to get moving in February. People said that's the start of the spring market, even though it's not clinically spring yet, and it tends to go through the end of June. But because of that, we think that demand was pushed further into the future. So maybe the spring market kind of took off in May and it might go into July. It's impossible to say. But clinically it would be kind of March to June.

[Kelly Evans]

Yeah. Some friends looking and they said we'd look into the summer. We think we can have a quick close.

[Diana Olek]

Yeah, it's just how the consumer's thinking about it.

[Kelly Evans]

Yeah, exactly. Diana. Thank you. Diana Olek to Angelica Peebles now for the CNBC news update. Angelica.

[Angelica Peebles]

Hey, Kelly. U.S. said American forces have redirected 67 commercial vessels, vessels since the start of its blockade of Iranian ports last month. Central Command said in a post on X it has allowed 15 ships to pass that were supporting humanitarian aid and disabled four vessels to ensure compliance. The military said enforcement of the blockade remains in full effect and it fired warning shots earlier this week to turn two vessels around. And Walmart reportedly laying off or relocating about 1,000 corporate workers as it looks to simplify its operations. People familiar with the matter told the Wall Street Journal the retailer is trying to combine more of its global technology and product teams and ask workers to move its headquarters to its headquarters in Arkansas or offices in North Carolina. And for some sports news, the NFL's 2026 schedule is set to feature a record nine international games. The league announced its full overseas slate today, including games in London, Paris and Munich. It previously said games would also be played this year in Australia, Brazil and Spain. Kelly, back over to you.

[Kelly Evans]

Australia would be Australia. Wow. These guys are athletes just to make it that far and compete. Angelica, thanks. Coming up, stay the course. That's what bank of America is telling investors after yesterday's chip sell off. In fact, they are boosting price targets across a number of names where they see the biggest upside next. And as we head to break, check out some of the names hitting those 52 week lows including Nike, Domino's, Charter, Lululemon and Best Buy along with Hormel, nbr, IBM, Tractor Supply and Home Depot. For Hormel, we're looking at 13 year lows. We'll be back right after.

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Foreign.

[Kelly Evans]

The disparity there. Nasdaq up a percent while the Dow is lower. The semi stocks resuming their rally after taking that breather yesterday. The stocks ETF still up more than 33% over the past month. And in that same time frame, micron is up 85%, 87 in fact. Our next guest is upping his price targets on key names, including Micron, where he still sees nearly 20% upside. Vivek Arya is a senior semi analyst at bank of America. Vivek, it's great to have you and what spurred the move.

[Vivek Arya]

Thanks, Kerry. I think what we have seen over the last month or so is kind of a stronger line between the spending of the cloud companies and the monetization of their AI infrastructure. Right. So we are moving From a phase where there was just a lot of deployment to now that deployment, creating real growth, real monetization. We are seeing this in some of the best growth rates in search, in E commerce and cloud services. We are seeing this in kind of the 3-5x year on year jump at some of these private companies. OpenAI anthropic. So there is, I think this very strong line that is being created from deploy the right infrastructure and drive a lot faster and more reliable and more durable growth. And a key part of that is of course the semiconductors and that is compute, that is memory, and that is networking. And then finally the point on memory that I think has become more interesting is that the first phase of AI was a lot of chatbots. And now those chatbots, as they start becoming more intelligent assistants, do what is called agentic AI that requires this infrastructure to remember a lot more things about you, remember that context. And of course memory is a very, very important part of that. And look at Micron. I mean even with this move, it is still trading at a sub 10 times forward PE multiple.

[Kelly Evans]

You raised your price target on micron from 500 to 950. And as we were talking about yesterday and has been the subject of discussion all week long, the PE is still about 8. Is that justified? Because as some argue, we're nearing end cycle. And so, you know, this famously cyclical business deserves to trade at a low multiple. Or do you think that's insanely cheap?

[Vivek Arya]

Yeah. You know the one interesting thing, Kelly, is that the three largest companies that I cover, Nvidia, Broadcom and Micron, they are all trading at or below a market multiple. So you know, I'm very amused when I hear the talk of bubbles because I don't remember the last time we had a bubble when some of the largest companies in that sector were trading at or below a market multiple. Right now, to be fair, you know, I take your point on Micron. It is of course a very cyclical company. And the way we came up with our price target is to kind of separate the non AI and the AI parts of Micron and said that okay, on the non AI part, let's put a price to book, which is the historical way one can deal with the cyclical businesses. And then on their AI part, where the growth is a lot more durable, let's put a reasonable AI growth multiple. So I think that sum of parts valuation kind of captures both the cyclicality and now this new growth part of memory. But, but I think this memory cycle has a lot more legs to it because we are depleting supply at three or four times the pace at which is being created because of this move into AI.

[Kelly Evans]

Right. And obviously the worm is going to turn at some point. But for right now, an eight times forward multiple means the stock would have to fall what, 60% in order for that to, you know, to justify something that cheap in the next 12 months.

[Vivek Arya]

Yeah, you know, historically the stock has, you know, kind of traded about 10 times because throughout its history it has always had this combination of cyclical parts and kind of the growth trend at that moment. So about 10 times is been the historical trend line for Micron. Now one can argue that it's different this time. AI adds a lot more durable drivers. And as these companies sign longer term supply agreements with their customers such as Nvidia and the AMD's of the world, that provides them greater visibility of growth much further out. So maybe 10 times is too low. But even if one looks at a 10 times price to earnings multiple applied to an earnings which could be over $100 next year, there is still a lot more upside to Micron. It's never a straight line with memory or from semis. There are of course a lot of speed bumps and constraints in between. But we think fundamentally you have a very good mix of both the fundamentals and the valuation working for you and

[Kelly Evans]

just want to make sure so we don't overly dwell on it. You are taking AMD to 500 from 450. Marvell 200 from 125. Nvidia goes to 320 from 300. Is it coherent? You're still neutral on that. Still goes to 400 from 365. And do you have an opinion on this IPO that's coming? It's said to be a big Nvidia competitor.

[Vivek Arya]

Sarah Bress so no specific comments on the ipo, but what I will say is that look, there is a rising tide. We took up our overall AI industry forecast towards 1.7 trillion by 2030. And we think Nvidia will keep close to 70% of the value of that 1.7 trillion. But that remaining 30% is still about a half a trillion dollars. That can be enjoyed by a lot of other companies. Right. Whether it's Broadcom, whether it is amd, whether it is Cerebras, whether it is others. So there is a rising tide. We think Nvidia is the best in the group. But because this is such a large market, I don't think we need to necessarily try to make this a zero sum game that if one wins, the other one is necessarily has to lose. We think that is more than enough for suppliers other than Nvidia to do quite well in this market.

[Kelly Evans]

Should Google be in your coverage? If they make the chips that go into Gemini, which is now what my predominant usage of an AI chatbot, should we think of that and its chips, these TPUs as true competitors and an important part of this space or no.

[Vivek Arya]

So no, I think TPU is an amazingly well designed chip. What we have yet to see is if Google is able to sell it to customers outside of Google. Right. You know the TPU came out in 2016. That year Nvidia AI revenues were about 300 million. Now I think they will be close to 500 billion. So the point is that there has been a strong growth. What the TPU has done is it has created a lot of of focus on AI and that has motivated Amazon, Microsoft and others to also invest in their technologies, but at the same time deploy a lot of Nvidia products in their public cloud infrastructure also. So no, I think TPU is an amazingly well designed product. We cover Broadcom, which is one of the key designers of the tpu. But if you go back to Google's last earnings call, I think they use the word TPU and GPU about the same number of times. So I think both of them are very strong competitive option within Google's infrastructure.

[Kelly Evans]

Yeah, And I saw could sort of be that, whatever you'd make of this. But Amazon is, I don't want to say what is calling you. They're putting Rufus down Vivek, and they're going to go with Alexa on the way, which makes sense. That's the consumer brand. But in any case, I take your point about Google and I suppose at a minimum it just means they don't have to be a big major buyer of Nvidia's chips, which you say are still going to be 70% of the market by 2030.

[Vivek Arya]

Yeah, I think that, you know, most hyperscalers that we see, they have a range of internal workloads. So Google has, you know, search, they have YouTube, they have maps. Right. They have several other internal workloads, but they also have Google Cloud and same thing with Amazon. Right. A lot of internal workloads and then a public cloud business. And when you are in a public cloud, you need infrastructure that is very, very flexible and that can deal with a lot of different kinds of enterprise workloads. And most enterprises are building applications based on Nvidia. Scuda infrastructure. So that is why you see this mix of silicon at most of these hyperscalers, because depending on their internal versus external workloads, you know, external workloads, they would mostly prefer that flexible Nvidia GPU infrastructure.

[Kelly Evans]

That's a great point. And that's why Nvidia goes to 320 for you, which is still a good deal of upside if you're right. Vivek, really appreciate it. Thanks for joining us.

[Vivek Arya]

My pleasure, Kelly.

[Angelica Peebles]

Thank you.

[Kelly Evans]

Vivek Arya with Bank of America. Speaking of tech, Cisco is on deck to report after the bell and the options market is pricing a 7% move on that print as the shares hit another all time high today. They're up 60% in a year. And we have an exclusive interview with Cisco CEO Chuck Robbins tomorrow morning on Squawk on the street. That's around 9:00am Eastern. Coming up, as hot as things are in the chip space, seems like perfect timing for Cerebras to go public. And its IPO tomorrow is expected to be the biggest so far this year. They are one of Nvidia's competitors and we'll have more details on their offering next as as we head to break. Here's a quick look at names hitting new all time highs today. Flip side of what we saw earlier. HP, eBay, CBO, Apple and Datadog. Welcome back. The chip maker Cerebras is expected to price its IPO tonight. It is shaping up to be the largest public debut so far this year. And while Jensen Huang may be over in China, Nvidia is likely to be keeping an eye on this one. Christina Parts and Evilis has more. Did I do it right this time? Christina?

[Christina Parsonevolis]

Yes, because yesterday I accidentally said Sarah's bras and I really got reprimanded for that. So let's just talk about this because the price range has been hiked twice, demand is more than 20 times over oversubscribed, I should say. And at the top end, we are looking at a $49 billion valuation for Cerebrus on revenue for 2025 that came in at $510 million. So what is driving that kind of demand? Cerebras is betting entirely on inference, not necessarily training. Inference is, you know, the part of AI where models actually respond to users in real time and how agents all talk to each other. It's also quickly becoming the bigger share of AI compute demand. The company makes a chip the size literally of like a dinner plate with memory built directly onto the silicon, eliminating the bottleneck that slows down GPU systems. Cerebras also runs its own cloud so customers can access compute on demand. And that is exactly why Nvidia is watching CEO Jensen Huang spent about $20 billion to acquire a startup called Grok or acquired the IP from Grok just late last year and it was specifically for its fast inference technology and is building it into Vera Rubin, Nvidia's next iteration of GPUs. DA Davidson In a note today is skeptical, calling Cerebrus quote cool but Nichi and noting that once Grok is fully integrated, Cerebrus speed advantage could shrink. Meanwhile, OpenAI did commit $20 billion to lease inference compute from Cerebrus over the next three years. One is an acquisition, the other a customer contract, but both are massive bets that inference is becoming the dominant AI workload and that GPUs alone may not be enough.

[Kelly Evans]

Kelly that's a great piece of analysis from DA Davidson. It kind of reflects the the discussion with Vivek just now. I wonder, Christina, they've already upsized the offering, is that right? So they seem to be seeing very strong demand.

[Christina Parsonevolis]

Oh, incredibly, they've upsized it twice. The pricing right now is 150 to $160 a share. We're going to get a new pricing at 5pm or just a little bit after 5pm Eastern time. There's been incredible demand. The valuation, the the fundraising rounds that they've had has just skyrocketed just over the last three months. So there's incredible demand for this company.

[Kelly Evans]

Yeah, you know we like to say here make companies public again so we appreciate here they come.

[Christina Parsonevolis]

Let's so we have stuff to talk about legally, right?

[Kelly Evans]

Yes. And people in their 401ks can have fast growing, hopefully things to invest in anyway they make it into the S&P 500. Christina thanks. Christina Parsonevolis Remember the SaaS apocalypse. Well, software has been slowly making a comeback, but it hasn't been a broad based one. We're going to look at the names that have been quietly outperforming next. And don't miss an exclusive interview with Treasury Secretary Scott Bessant tomorrow morning on Squawk Box. He's already had a busy week with stops in both Japan and South Korea ahead of the President's Summit in Beijing. We'll get the latest on those trade talks tomorrow at 6am Eastern. Welcome back. Chips may be stealing the spotlight, but software is slowly and quietly making a comeback. The IGV up 12% over the past month. Our next guest says you have to be selective in the trade though Seurat said he is managing partner and portfolio manager at dcla. Seurat, it's great to have you and what is important to you about this? I mean I think people would say all right, fine, so I pick up a little bit of a turnaround but I'd still rather go chase the, you know, the double in, you know, in Marvell or whatever. Based on our conversation with Vivek Arya, I'm curious to hear more.

[Kevin Sarat Sethi]

Well, I think Kelly, you just hit the nail on the head there. A lot of it investors and traders are now moving away from what we think are well capitalized quality companies to the quick trade to hey, why don't I go to the drams, why don't I go to semiconductors that I'm getting this quick pop in. And as we get more and more news on it now that China stuff, everything's going up but our view and you know, you know us for a long time, we're more longer term value oriented compounder investors. When I look at software that was trading at 20 times cash flow just a year ago is now trading at 10 to 12 times and really earnings are still growing 8 to 10% with almost no debt on their balance sheets. And what's happened is a sassification that semis are going to eat software. The more and more you talk to companies and say yeah, we might have some issue in terms of seats but we need the software companies, we need the security, we need the interoperability, all that's still existing. And it's not like the software companies are sitting there. Ideally they're using AI, they're using engineers to make their products better. Whether it's companies like Intuit, Workday, Salesforce and even other companies like Roper. It's really affecting kind of anything that's affected by. So people will either sell or short the software and go somewhere else.

[Kelly Evans]

So are those four names? Because you said you have to be selective here. Although we've seen, I mean a number of different companies have these really strong bounces on better than feared earnings. Intuit, Workday, Salesforce, Roper, any others you'd put on the list?

[Kevin Sarat Sethi]

Well, those are the four that we actually own in our core portfolio. So I mean I like those, I like them 40, 50% higher. But I do like them at these points. And the question is going to be these are going to be execution stories they have to deliver and I do think they have moats around their business, you know. But right now the benefit is more on the other growth year, semiconductor and DRAM names which you know are just commodity plays at this point when.

[Kelly Evans]

What about the cyber area which has been hit as well by AI disruption fears? It's kind of software but it's also, you know, something that has to be used to defend against the likes of Mythos and everything else. So I'm curious if you've done any work over there and to see any opportunity.

[Kevin Sarat Sethi]

We've looked there. We've already kind of made our bed with these talks. But I think, you know, the Palo Altos and others are really good companies as well and they've all been hurt on this. You're going to need cybersecurity, you're going to need a lot of other things that these companies provide. You know, at this point it's not like any of them are trading above the others. And you know, ServiceNow is now down as well. So I do think you need to be, you know, careful as to where you are even on cyber security names because they're not all alike. Software names, they're not alike. So I think finding the ones that have some of the moats around their business, some of the ones that have forward looking managements as opposed to those which are just going to sit there and kind of slowly see their cash flow.

[Kelly Evans]

Right, right.

[Kevin Sarat Sethi]

Yeah.

[Kelly Evans]

You don't want, I'm curious and I know you own still a number of the chip names and exposure there as well. Do you want a piece of the Cerebras ipo?

[Kevin Sarat Sethi]

None of these valuations, I mean when you look at. And we're actually just concerned now about Qualcomm, you know, Qualcomm's are value semic if there's any value in semiconductors. But that stock's, you know, almost doubled just in a few months and really it's more about can they provide the chips. Even though we know for the next year earnings aren't going to be as strong as the rest of the semiconductors. So today when you see all these stocks trading in tandem and ETFs with double correlated semiconductors, it kind of gives you pause, especially as a long term investor to say hey maybe there's a little, I would say and you know, I can't wait to get the emails. The froth on the semiconductors.

[Kelly Evans]

How dare you. Surat, thank you very much for joining us today. Appreciate it. Good to see you.

[Tom Simons]

Thank you.

[Kelly Evans]

Kevin Sarat Sethi from dcla. That's it for us. Thanks for watching the exchange. I'll go join Brian Sullivan for power lunch after this.

[Angelica Peebles]

Quick.

[Kelly Evans]

You've been listening to the Exchange. Make sure you're subscribed to get each episode every day, same time, same place.

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