Squawk on the Street : CNBC : August 28, 2024 9:00am-11:00am EDT : Free Borrow & Streaming : Internet Archive (2024)

i like it. jacket works well. >> thank you. let's get a final check on the markets right now. i was paying attention. >> don't change, contessa. >> we love you just the way you are. dow futures down slightly. s&p futures basically flat. nasdaq, they're all basically flat. we're waiting to see what happens with nvidia. we'll also see you back here tomorrow. that does it for us today. now it's time for "squawk on the street." ♪ good wednesday morning, welcome to "squawk on the street," i'm david faber along with jim cramer. we're live from post nine at the new york stock exchange. carl has the morning off. let's give you a look at futures. jim and i like to call this humpday. being a wednesday. it's also nvidia day, of course, if you haven't heard already. half the bell, we're going to get the earnings from that bellwether. our road map does begin with that very name. we are on nvidia watch. we're going to have a countdown clock soon enough. the semiconductor giant set to

report, big implications for the broader market, for technology companies, for a.i. i mean, who knows what else could be at stake here? >> yeah. billionaire warren buffett -- billionaire? greatest investor of all time, warren buffett. come on, guys. unloading more b of a shares, berkshire parsing its massive stake yet yet. although they have a lot of shares. we'll have the latest read on the consumer, nordstrom, foot locker, pvh. >> i'm ready. you can hit me on that. >> i'm looking forward to hitting you on a lot. we'll start with nvidia, given it's due out after the bell, and we got a number of other earnings after the bell as well, jim, that are not insignificant, including salesforce. >> tonight is huge. >> give me your thoughts as we head in here. nvidia shares, you can kind of see what they have been doing over the last month. a nice move, and sort of hanging in there at that same level, let's call it, for the last few trading sessions.

>> i think there's a couple pieces out today. i'll just put the whole thing in. the rubric is that the smart guys are selling, and retail is buying. that is the kind of thing i keep reading. why i'm disturbed by that is that smart guys have been selling the whole way. what have they accomplished? retail is the one that owns it. now, there may be the zero option people come in, buy today, hope to win, but i think that we're at a moment where ben reitzes from melius, $2 billion beat this quarter must happen. $2 billion forecast raise must happen, and then a broader long-term arc of what's going on, including an upbeat jensen huang in the conference call. the triple lindy, not unlike what we saw from rodney danger feed in "back to school" with sam kennison.

>> how the market's reacted, certainly one key thing. the may report, nvidia was up 9.3%, even though interestingly, the broader market didn't really move. >> all we ever hear about is it's time to buy the russell. stifel has the last of the correlations too. we can get -- what happened? >> nothing. >> stifel has the correlations. >> and i was looking on the february report. nvidia was up 16.4%. that was, of course, the blockbuster when everything -- many things changed, and the broader market was up a lot. the ndx was up 3%. i thought we had that, but i guess -- >> look, this is the underperformer that's not underperforming, so to speak. i think that it has moved up. it's number one stock in the s&p. it rivals super micro, but that was the case. we get into that. david, i think that this became

the szeitgeist. that bothers people because it was a $500 billion company in 2023. then it goes to $3 trillion. no one likes that. i call it a parvenue. >> given the need for a triple lindy, are you confident it can pull it off, that it can get the scores needed to be on the podium? >> i think what you have here is the extension of when apple's late with a handset. >> there's what i was discussing, by the way. >> i think that blackwell is going -- >> wait. bring it back. i want to see that again. >> they're late with blackwell, but that just means you can extend very high margin product. i think that once again, remember, the two things that jensen always talks about are accelerated computing and the new industrial revolution, and he's not backing away from that. what has happened, i think, is he's -- i went to the racetrack this week. always a good analysis. >> sorry, you went to the racetrack? >> went to saratoga. >> the travers. was that this week? >> yes, and you'll see, i love

the racing form, because i was a horse racing junkie after i got out of college, took a handicap course. what's happened is you have these horses, when you look at the lineups, pulling away or going away or hung or tired. this one's pulling away. i happen to think that amd, great company, but the training part is what i keep hearing about, that people write -- what happened? >> we finally got that thing i was referring to a while ago. >> don't be upset about that. people right for nvidia. so, in other words, when you're the leader in handsets, everyone writes for apple, that's why they have all these companies, two million companies just from writers. the same thing is happening at nvidia. you have all this information continues to go to the training, and then when you buy their chips, whether you do it through dell or hpe, you get it. you have all this information already in. we can talk about salesforce, by the way, because they are one of the people that will tell you that they have the data. then, they keep your data, but you still get all the -- the

panoply of all the other information. >> let's talk salesforce since we're talked out on nvidia a little bit. not that we won't discuss it for the next eight hours. when are -- yeah. 4/20. >> that's the day the world stood still. mic michael renning, great actor. >> 4:20 eastern time is when we're beginning to get nvidia. but we're going to get salesforce, a company you know quite well, whose ceo, obviously, you know very well. last quarter, not good reaction in the stock market. >> no, and by the way, if you listen to when he was on the show, on "mad money," being the show. >> yes. >> he was not upbeat. i was trying to get him to be upbeat. you know me. but he -- what he said was, look, we didn't deliver. >> we have that sound from last quarter. >> get out. >> you want to take a listen? >> i saw what you did with the chart and i got nervous. >> i think we've got this. take a listen.

>> i can't predict what the stock market does, you know that. we've been through this how many times over a couple, i guess i've been doing this 25 years, but what i can tell you is that the most important thing remains the customer success, which is why, how are we going to make these customers totally transform themselves, more profitable, better customer success, using our incredible new a.i. technology? and that's what i'm really excited. >> well, i do know that the excitement is going to extend right into dreamforce, which is in a couple weeks. >> yes. are you going? >> i don't miss dreamforce. >> of course not. i just wanted to make sure. i'll miss you. >> no, i'll be on the whole time. i just get up at 3:00. i get up at 3:00 anyway. what's the difference? >> exactly. >> here's what marc's been saying. salesforce's new version of agent force, atlas, and don't shrug about this, resolves 90%

of all customer inquiries for our top health care, financial services, payments travel clients. he's saying he's taking share versus unknown competitors. i don't want to sell it ahead. >> i want to posit a question to you, because this morning, i was speaking to an investor in klarna. it's a private company >> i've used them. i've hired them for the street. >> private company with a large investor base. this is what we deal with these days in the secondary market. 500 people are on their conference call. >> i know. it's really -- >> they were asked, jim, about a.i. cost savings. the ceo was asked about cost savings, what you can see, what you're seeing in terms of across the board. this has been noted on, i think, by a couple, and i'm noting it as all. they say there are large ongoing internal initiatives with a combination of a.i. simplification.

as an example, we just shut down salesforce, and within a few weeks, we're going to shut down workday. we're shutting down a lot of our saas providers and we're able to consolidate and with the help of a.i. create a much more lightweight tech stack to operate more effectively with higher quality. that's gotten some people's attention this morning. >> that's the existential nightmare that you don't need salesforce because you don't need coders. marc has been -- marc benioff has been adamant that, yes, you can talk -- he likes the democratization of what's happened here. you can speak right to it, native language, but he comes back and says, along with servicenow -- i wonder if they're going to call it servicenow -- that marc and servicenow are saying, we figured out how to use it for you to sell more product. it's interesting that klarna says, no. workday is about human resources and finance. workday, in the previous quarter, set incredible forecasts, gave an amazing forecast. stock was down 20 and then they get the forecast from the

information. i'll get that to marc. >> you want to make some bets right here in terms of the aftermarket performance of salesforce and nvidia? >> triif hfecta. >> management would love us to turn into a betting show. give me your best picks, jim. what's the the spread? >> homey don't play that game. but you're going right into dreamforce. it's never been a great time to sell salesforce, but the stock does not act that well. nvidia is, please come down. please come down. >> because you want to buy more. >> and say, own it, don't trade it, because what will happen -- look, nvidia is about blackwell, and blackwell being pushed down, blackwell is about video. remember, we do not have the complete video,the put-in video of everything and then a robot. i mean, i wish we had -- could you go speak to elon? >> i'm sorry, i didn't hear

that. >> elon's got the best robots. >> you get me confused on all your robot chat. >> the next level that jensen huang's got is, remember, he's come up with the -- anything i can do, you can do better theory. about robots. >> does he make robots? or not? >> no, but -- >> he doesn't. >> he does. he can make -- >> does he make robots? >> yeah, he can make robots. >> no, does he? optimus is a product line of tesla. >> okay. >> nvidia does not have a robot product line, correct? >> no, he doesn't compete with his customers. >> okay. i just want to make sure. why are you always talking about robots having to do with nvidia? >> because that's the next generation. >> did they make that robot? >> that's a funny robot. it's not real. it's just for show. it's a "star wars" robot. it's not real. but he said it right up front that it's not real. what i'm saying is that you need robots to adopt blackwell. if they do it, then the robot can be human.

and remember -- >> blackwell chip will be in the robot. >> you can make it so that it's -- >> or it will be communicating with the datacenter. >> it's very good. >> it won't be on the edge or in the device itself. >> no, but apple -- can i mention vision pro without you laughing at me? the apple vision pro, when teamed up with blackwell, can make it feel like you're in a car if you want to buy it. carvana gives these away, okay? you vision the car, and that cuts down the numbers of cars that you send back because you don't like them. >> they're not giving them away. they're really expensive. >> no, you borrow them. >> oh, you borrow them. >> you borrow them. i've got this all worked out. >> you've got so many different business plans rattling around in that head of yours for everybody. >> i have a business plan. you can go to my new mexico -- >> nobody listens. no one. >> no one. do you know that no one listens? i have unbelievably good ideas. >> unbelievable. that's what you're up at 3:00 in the morning thinking about. >> you know what they listen to me on?

we have to go to a commercial. >> coming up, warren buffett's berkshire hathaway sells more shares of bank of america. berkshire itself is moving very close to a trillion dollar valuation. why don't you take a closer look at futures as we get ready to begin trading at the new york stock exchange? 16 minutes from now, a lot more "squawk on the street" straight ahead.

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berkshire hathaway moving closer to joining a lot of those mega cap tech names in an exclusive club. warren buffett's company now within striking distance of a trillion dollar valuation. separately, berkshire disclosing it sold an additional $982 million worth of bank of america shares, according to an s.e.c. filing. sales took place between august 23rd and the 27th. mid-july, berkshire has reduced

the stake in that bank by 13%, although it is still b of a's largest shareholder. it's got 36 million shares. it still represents as much as, what, 12% of the company's overall shares at some 928 million shares. so, important to put these things in perspective. >> right. >> berkshire itself, fascinating. i think we have a chart of it over the last ten years versus the s&p. you have absolutely wanted to own warren buffett's berkshire, without a doubt. look at that outperformance. quite nice. and you know, we talk a lot about how much cash they have there, and they continue to raise it by selling stakes. obviously, the largest of which has been basically cutting in half their most recent stake in apple. they now have 400 million shares of apple, down from what had been over 800 million shares not that long ago. >> i think that you're getting an opportunity to buy a high-quality bank at a nice discount with jpmorgan. bank of america's actually -- now, they're going to get hurt

in terms of earnings, short-term, from fed cutting, but they make it up in a lot of other things, by the way, just in lending. it will be very positive. and david, bank of america, remember it had that troubled bank portfolio, where the treasurys were. >> they had a -- they have a loan portfolio. they put on a large treasury position when rates were quite low, and obviously, as rates went up with the fed continuing to raise, the value of that portfolio went down. >> okay, now, well, it's rolling off. >> yes. >> it's running off, i should say. >> running off. >> and it also does better in this rate cut scenario. >> without a doubt. >> if that had been the principal reason why not to -- let's talk about warren buffett. warren buffett rang the registerer on a big portion of apple but kept a portion. >> it's still, you know, 400 million shares is still, you know, what, $91 billion worth of stock. >> right. i think that we forget that the immense numbers that he has -- now, i'm sure someone out there is saying, well, wait a second, he's not selling coca-cola or american express. he's always talked about the

bases being so low. >> what i do wonder, jim, is what he's doing to do with this $277 billion worth of cash. >> it is a great -- of great wonder. >> he turns 94, by the way, tomorrow, i believe. or in two days. friday. >> look, i think that, as many people are -- he's waiting -- i think he's waiting for better prices for heaven's sake. i mean, why not? although he likes the oxy. he loves the pipelines. there are plenty of pipelines that are still cheap, but i cannot get in his head any more than i can tell you the precise number of what i want to see from jensen huang tonight. we didn't mention jensen during this block, and we haven't super micro and the delayed form ten filing. >> you can hit that in your "mad dash" if you want or we can do it before the bell. let's get into that super micro a little more. think about what you want to do for your "mad dash."

>> i'll probably do super micro, unless you want to do foot locker. >> don't go anywhere.

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want to get to a "mad dash" here, jim and i working through some of the numbers on smucker, jim. they cut guidance, which seems to have been a surprise to some investors. >> this is the -- what i regard as being the -- i don't want to call it nightmare scenario, but what was the most concerning -- disconcerting part of this quarter is that, remember, david, the $5.6 billion acquisition of hostess, which happens to be anniversaried in less than a month. >> okay. >> well, in the research -- the actual release, get this. the sweet baked snack segment delivered net sales below our expectations of the first quarter, primarily driven by the macroeconomic environment and a slowdown in the convenience channel. in other words, this thing is not panning out. so, then, the question is -- >> interesting. >> -- is it really macro? is it really declining convenience center, like celsius would say that? or, david, is it the endless pin

the tail on the glp-1 that no one's willing to admit? >> that's interesting. that's an interesting point. >> there's also this -- there's this move, david. i know this is going to shock you, but you have kids getting in the sweet spot. to be healthy eaters. you and i were not healthy eaters. >> no. >> i would eat everything by soylent green. >> i basically grew up on hawaiian punch and pop tarts. they why i didn't grow. >> i do think this is going to be a sense of, wait a second, do you really think it's macroeconomic? maybe it's just that twinkies no longer have the allure -- philadelphia accent -- that they had when we were growing up. >> they lower bottom line guidance, softness across food. >> it's not good. >> we'll get to all the retail names we've got for you as well, reporting earnings. >> coffee was flat. wake up, starbucks. >> we're right back.

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indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. did want to come back to super micro, certainly a name we've discussed many times.

yesterday, when hindenburg, that research firm that puts out long reports as to why it is short a stock, did just that on super micro, which pressured the shares. although they did come back, at least the last i had looked. i'm not sure how they closed yesterday. it had been down a lot, but it rallied. you can see, though, timing is everything. this morning now, completely, perhaps, having nothing to do at all with hindenburg, though it was alleging certain accounting issues, i believe, it's fair to say. >> very serious. >> they do say, "additional time needed from management to complete its assessment of the design and operating effectiveness of its internal controls over financial reporting." that's as of the end of june of 2024. they haven't made updates to its results for the fiscal year and quarter, and therefore, they are delaying their 10k filing for

the fiscal year. >> i think if you go over hindenburg's -- the incredible work that he's done, and i want to immediately contrast that, because they have been on twice, with the jpmorgan defense of it. you come up with something that says, maybe -- maybe there is something new. jpmorgan says there's nothing new. but why would they delay the 10k if it weren't something new? >> yeah. >> the piece itself is very damning, and what it says, basically, is that they are -- i don't want to say they're a way to funnel chips away from -- to other countries, russia, maybe china, but you do get the feeling that ci is playing it way too close to the line. they do a lot of business with -- with microsoft. so, i think what you can say is they do have clients, but we're going to hear from michael dell

this week. >> yep. >> and that's when we'll know. michael dell is direct competitor, a very competitive fellow, as you know. hpe direct competitor. what we need to see, if you're short, is that smci has lost a lot of business to those few competitors. however, i also would point out that this is a sign, this news this morning, is a sign that i would say that you can't be oblivious to what hindenburg is saying. i have an unbelievable compilation of how hindenburg has done, and you just don't want to be -- >> well, we all remember -- i mean, they were nikola, right? >> they were grow generation, which i went head-to-head with them, saying, look, this thing, which is about growing pot, was like a -- at 15, i said, this thing is going to 50 before it goes to 5. he said, yeah, it does go to 50, but then it goes to 5. he's very smart. nathan erickson is very smart, and i don't like -- if i were in super micro -- and i have had them on twice, a couple times

when they've done secondaries, they did a secondary right after they got in the s&p. i don't like it. i don't like it because there are too many questions, but let's give them this. we need answers on all the charts. we can't have it just be that, you know what, these charges are old, because they're not old. they're current. >> okay. >> and jpmorgan says they're old. but i'm not buying that. and what happened this morning with the delayed 10k tells me that if you buy jpmorgan's view, you may be hurt. $35 billion company. >> it is certainly impacting investors, again, on the back of that hindenburg report and just to reiterate the news itself, file a notification of a late filing of their annual report, unable, as a result of meeting the prescribed time without unreasonable effort or expense. need the time as well, they say, to complete their assessment of the design and operating effectiveness of its internal controls over financial reporting. >> that's really -- the hindenburg's real analysis is that -- they don't have good internal controls and they have a history of not having good

internal controls. i think we need to hear from charles. we need to hear from super micro before we just decide this thing is a colossal whatever. i don't want to use the terms. but i would point out, david, it's going to be reflecting negative on nvidia, and that's a big mistake. it should not reflect negative on nvidia. let's move on to retail, shall we? >> yes, sure. was that bad? i did my best on it. >> you did very well. would you like know grade you in realtime? is that what you need? >> no, i did that with the lsat. >> with the who? >> with the lsat. i got a perfect on that. i memorized it. >> i don't know if you heard that because he mumbles. he got a perfect score on the lsat. they're so proud of you. was that an oral exam? did they have written paper back then? >> never mind, i'm bragging about something that happened 40 years ago. >> it never ends. the bragging never ends. >> i was living in my car, and i got a perfect score. come on, man. >> come on, man. all right, you want to talk about kohl's or nordstrom?

>> i want to talk about all of it. >> or foot locker or pvh or abercrombie? you have control of the board, jim. >> nordstrom, people initially said, you know what, not good enough, and then they decided, well, wait a second, the rack off price is really becoming a substantial part of the company, so therefore, you should be a buyer. they have 269 stores, 34% of sales, and we love off price. nordstrom is fine. anf is actually good, but the shorts are pressuring it down. they want to do that. the stock has been an incredible horse. van is doing a remarkable job. the shorts want it down. >> abercrombie, i've got comps up 18%. overall sales up 21%. but comp store sales up 18%. >> forecast is good. >> broad-based net growth across regions and brands. by the way, their commentary was quite strong. better than expected summer and back to school. why is the stock getting hit? >> because it's heavily shorted, and they're trying to color the trading. that's what's happening. >> okay. >> now, by the way, david, if you want an interesting one,

it's kohl's. now, this is tom kingsbury, whom everybody knows from burlington, who's so sensational, but i will tell you this. kohl's is about sephora, and sephora sales increased approximately 45% in q2, including comparable sales up low teens. what a genius to bring in sephora. i believe adrian shapiro -- >> they cut underlying sales and margins but raised their eps guidance, excluding the potential impact from credit card late fee regulatory changes. >> that distorted the earnings a little bit. >> okay. customers did exhibit more discretion in their spending, which pressured sales even as customers transacted more frequently. >> it's not a great story. i'm talking about -- i am moving away -- within the store, you know, kohl's has branded kohl's sephora, and people keep cutting numbers. ulta, which reports tomorrow,

now that i've read kiss, i believe that the problem is sephora. sephora is taking share from ulta. let's be aware of that. >> pvh. you want to do that one too? >> pvh is just a straight out kind of odd look. to tommy hilfiger did really good. we don't think it's going to do good going forward. it was very odd. they know more about it than i do. >> they guided their fiscal third quarter below a lot of where the street was estimating and there's the stock reflecting that. >> i can't make a case for that. >> i'm seeing some commentary. they do have a tendency to guide the quarters below. >> they do, but it's new management. that's nonsense. >> street estimates is wider than usual, and therefore, even if you say they're conservative, there's still some concern. >> this is stefan larsson, who's very good, but it's not m mami tirico who would come on

"mad money" and say it's been a tough one. going back over to anf, i want to -- europe is 16%. america is 23%. this is for sales. could they be worried about that, plus three? here's what i like, which is why i don't like to bet against it. we have gross margins up 240 bips. operating margin up 590 bips. you don't mess with a company that has that kind of gross margins. they're looking at q2 year over year. q2 last year was $731 million. now it's $921 million. the stock is heavily shorted. people want it lower. i'm not going to get in front of a freight train because i'm not playing the movie "the fugitive." >> let's finish this off by talking a little foot locker. we can get to bath & bodyworks if you want. these are tiny companies. $2.6 billion market value. >> i spent an hour and a half on them. >> you shouldn't.

it's a waste of your time. >> mary dillon, who turned around ulta, goes to foot locker. the turnaround plan is in place. listen to me. the gross margins are good, comp store is better, but she doesn't guide up. why would you guide up? she's got -- she's not making money. but the inventories are down very good, david. >> by the way, stock was up, what, 32%? >> it's had a big run. the inventories are down, and the gross margins are up, so what that says is a turn is at play. those are the things that you need. you need inventories lower. they're still too high but coming down. >> topline strengthened as we moved through the quarter, including a solid start to back to school. >> she highlights nike is back in a big way. asics is doing well. and david, new balance is so back, and adidas is coming on. so they've got -- and she won't even go into whether hoka and on are, but foot locker is down because it's up a lot and she

didn't guide up. she does have a new flapship store in midtown, and i would not bet against mary. >> you're taking the other side of a number of trades this morning. foot locker, abercrombie. >> i am. i think that's what it's -- >> i like it. finally, bath & bodyworks, bbwi, the symbol, about a $7.5 billion market cap. >> it's a mall store. you know -- >> net sales down 2.1%. >> it is surprising because if you're in a -- if you're in this a simon property mall like they are, they should be doing better. by the way, these stores that are in -- foot locker stores that are in a and b malls are doing incredibly well. she has to get out of some mall contracts, but i'm not betting against mary. she's very good. >> okay. >> she's better than very good. she's really good. do you want to do crowdstrike? we haven't done crowdstrike. >> sure, do it. >> i said it would bottom.

it reports tonight, and i think what they can say is other than delta, i don't think they lost a lot of customers. by the way, nikesh, i go to him, at palo alto, i go to him to try to slag george. he wouldn't do it. but sentinel one has no problem slagging george. >> sentinel one reported numbers that weren't bad, right? >> not good enough. >> let me look. >> weingarten was really slagging george kurtz, who, by the way, has won major races. you know that. >> you always come back to that. >> because he's in these races. >> nobody cares. >> he doesn't sleep. >> nobody cares. >> he doesn't need sleep, and he's in these races that go for 36 hours. >> that has nothing to do with anything. >> what is this -- what do you want, like, camus? that's a whine. >> that, i'll talk about all day. >> what, the -- >> i want you to have another one of those parties where you

serve the camus. >> and we are. but the fifth year is impossible to get. >> we're seeing a distinct rise in interest and customer appreciation says sentinel one. >> if it was as good as tomer said, they should have had better numbers. sorry, tomer. and i like tomer. >> one of the largest electric vehicle makers in the world is byd. a berkshire ownership stake. they own 4.9% of byd. they're making a lot of vehicles. delivered 426,039 fully electric vehicles in the second quarter. that was up 21% from a year earlier. >> yes, yes. >> didn't quite outdo tesla, if you remember, which delivered 443,956 units during the same period. but they're selling them all over the world. >> yes, they are. now, david, there is a back story here. >> not here. not here. sorry. all over the world but not here. >> are you following the back story of germany doing a huge amount of business with china in return? i think germany is a country that is of tremendous significance for not just what they're doing in terms of

cutting and how much money they want to give to ukraine, but germany's really -- china, great trading partner. and if china's really that rogue and being that friendly with russia, maybe germany's just getting a little too neutral. >> i don't know what germany's doing. closed all their nuclear plants. they're using coal now. what in the world were they thinking? >> meanwhile, we're thinking about opening a nuclear plant in the midwest, in detroit, in the area. in michigan. >> yes, yes. recommissioning and one of the -- there is some talk about one of the reactors at three mile island, not the one that almost melted down. >> we need to speak to patty poppe. patty is the ceo of pg&e. saved consumers, by the way, and really understands nuclear, knows the diablo canyon project. it's not a project. it was when i was growing up. she is very pro nuke and that

stock has been a horse. >> something on my radar, jim, and i know that you have talked about it a lot, i want to note walgreens, boots alliance shares. >> he's still got some stuff to sell. >> take a look at the ten-year. >> i'm talking about tim wentworth. >> tim wentworth is the new ceo. obviously, the deal in which they acquired boots, remember, it was back in 2012. they bought 45%. this was owned, in part, by kkr, which then ended up owning a decent amount of walgreens for a while. brought stephan into the company. in 2014, they completed that. it has not gone well. anything there. and obviously, you've talked often about the competition they're facing from the likes of amazon. so many pressures on the business. look at what's happened there to that company. we're talking about it below an $8 billion market value now. this company once had a 70, $80 billion market value. >> it was in the dow, but the dow i know is atavistic. >> there's still some -- some chatter about, will they do something with boots? could they take that public?

that's the european operations essentially, you know, is there some sort of exit that they can rely on there? >> things are happening so fast. >> we lauded him at the time as a great business guy, incredibly wealthy, still pretty wealthy, but -- >> wow. he is wealthy. >> quite a diminution of value. >> i think there's a couple things. they do have -- they've got a stake in bright spring health services that they can sell. >> okay. >> what? i'm just trying to give you a blueprint here. >> olympiakay, give me the blue. you've got some land in new mexico for them too in case they want that. >> 500,000 acres, they took an option on. that's not true. but i did isolate 500,000 acres. here's the problem with walgreens. it's too full. one, they have to figure out the difference between the front and the back, because what they need to do is instead of going through the cheetos aisle to get to the health aisle in the back,

they have to become really just a health care store. they have to get the other stuff out. but second, david, when you talk to amazon, amazon wants to do same-day batched, so let's say you put in an order, and you want colgate. you want toothpaste. colgate's quarter was really good. and then, at the same time, you want puss and boots, i don't know, dog food, cat food. so, what happens is they can batch those orders, accepsend i you, it's going to be there when you get home, so why would you shop at walgreens? that's the existential issue. >> that's just a one-way ticket. >> black and red. i don't -- i don't know. look, tim wentworth is really from the pbm, the pharmacy benefits side, so i think he's going to work out something there, but at the same time, the clock is ticking for anyone that amazon -- i mean, is it borders? is it borders? that is the question. >> i know. >> and i just -- to put that in with tim wentworth seems unfair.

>> richio died, by the way. did you see that? >> he was a great help to authors, and that matters. >> nobody reads, other than you and me, maybe. >> what are you reading? >> i'm reading three different things right now, but i'm having some trouble getting through a lot of things. >> i just finished "the last stand at caisson." people think it was -- >> i read that -- the last thing i read, the eric larson book about the beginnings of the civil war. really enjoyed that. >> i'm reading the survey book about world war ii again because we always have to be aware of what the origins of world war ii. >> you want to talk, before we go to a break, you want to talk chewy? i see the stock up 8.5%. >> yeah, well, chewy beat the quarter, and we have been recommending chewy ever since -- this guy comes on the show and the stock is $19, and he said -- i said, why are you on? he says, it's the bottom. well, i mean, this guy has never hyped his stock. he called it a bottom, and this is a great automatic -- this is

a company that is going toe-to-toe with amazon. and even my chief scientist and researcher, he has a dog named riggen, who is not named after the washington commanders, but he won't tell me -- >> john riggins was a new york jet, just so we're clear. >> there he is. a face only a mother could love. >> wait. who's that? >> that's riggins. riggins is like $79 a month in autopay to chewy. chewy made a great picture of one of our dogs, and nvidia, actually, i have a great picture of nvidia. r.i.p. oh, see? that's what he's saying. i just think that chewy is back, and there's -- they have a good model. you have to put it on autopay. >> we went through a lot there. >> but we're not nearly done with what we have to do. >> but we have to go to the bond market for a moment. because it is important. very large market.

let's take a look at how treasurys are faring this morning. of course, we've been keeping a close eye on yield ever since those comments -- well, always, but certainly since friday, powell talking about a rate cut. still some debate, 25 or 50. most likely 25 when we get the meeting in mid-september. there's a look at the ten-year at 3.833%. we're back right after this. hi, my name is damian clark. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on the plans available in your area, you may be eligible to get extra benefits with a humana medicare advantage dual-eligible special needs plan. all these plans include a healthy options allowance. a

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here are the laggards on the s&p excuse me the nasdaq. >> it doesn't stop. the sellers won't stop. correlated with nvidia and super micro correlated by itself. >> 20%. significant loss in super micro, delaying the filing of its 10k, internal controls. we don't like to read that. >> let's hear from the company

before drawing conclusions. >> what more are we going to hear? >> you're supposed to say that as a journalist. >> we have stop trading with jim coming up. with preconfigured hp devices making education immersive, accessible and secure. now, when researchers study elephants, kids learn from 9000 miles away. make amazing happen. hp and cdw.

so, you know, han is 22 years old, and we've been together most of my life. not often do you have a childhood dog that, that lives this long so i think it's really unique and special that we've experienced so many, so many things in life together. knowing that he's getting good nutrition and that he has energy is a huge relief for me and my dad. “such a good little bean.” we're so grateful to have had this time with him, so let's keep it going and make every day special.

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stop trading with jim. >> i want to talk about about a company that i think is emblematic of what people are buying right now. i talked about decking a while ago made of recyclable material. this morning "the washington journal" has lower rates buy stanley black&decker. the stock has been cut in half, people feel they haven't gotten their act together but you feel that way about home depot. so i really like the piece. i believe it's right. >> before we get to the program tonight, anything else? i can give you 35, 40 seconds. >> i want to tell you that you really, really have to stay focused on smci because it's correlative to nvidia even though i don't think it should be. they have real customers in meta, in azure, microsoft. but there's obviously a concern about where they're putting the -- all the -- >> of course speak of nvidia those shares are down another

1.5% ahead of -- we don't have the countdown clock i thought we would. >> we should. >> 4:20 we get the earnings. dan ives said not just the most important earnings of the year for the stock market maybe of years. >> but was he wearing the pink or yellow jacket? the yellow jacket -- >> yesterday i couldn't describe what colors they were. >> i don't know what club he's a member of. we have to get away from the idea this is the be all, end all. >> the berkshire hit the billion dollar mark, kudos warren buffett. what's on tonight. >> i have max levchin, from affirm, which is a buy now, pay later that everyone is doing now. and then i have marc benioff

from sales force. dream force is coming up, doesn't pay to jam the stock down to 230 if you think you're going to do that. david i'm out of breath. >> good. take a breath. maybe take a couple. >> i'm going to send you more stuff on something we talked about during the break. >> send me lots more stuff, please. more on what to expect with nvidia's earnings. if you haven't heard, 204: or something today. >> this is not a reflection. smci, no, don't draw any conclusions. okay? e is to play 9 holes without the middle of your bag. how does that sound? that sounds terrible. ♪♪ ♪♪ ♪♪ ♪♪ your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed.

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good wednesday morning welcome to another hour of "squawk on the street" i'm david faber with leslie picker and wilfred frost. we're live at post nine of the stock exchange. >> we are 30 minutes into the trading session. berkshire hathaway topping a trillion dollars in market cap.

more on this ahead. after a filing last night showed them shed about $5.4 billion of bank of america sales since mid july. a host of retailers on the move this morning, reporting results in the last 24 hours. super micro adding to losses on the month after delaying a 10k filing saying they need more time to assess quote the design and operating effectiveness of internal controls over financial reporting. this comes on the back of yesterday's news that hindenberg has a short position in the stock. those shares down about 23%, month-to-date losses of about 40%. berkshire hitting a trillion dollars in market cap. the eighth company to do so. i believe it's the first financials company to so in the financial sector. >> yeah.

geico and the insurers is considered a financial so to speak. and notable as well. for a long time it was an owner of wells fargo and bank of america. it still owns 12% of bank of america shares. but having sold another 25 million, relatively modest, less than a billion dollars so to speak given the size of the position. still $36 billion at berkshire. they keep selling. >> yeah. >> they had a lot more banks in general a few years back. bank of america is one of the last remaining holdings as opposed to to a long tail they used to have with the regionals and wells fargo as well. >> and they've held it since 2011, i believe. it's a long-standing position for them. bought around when the shares were about $5 a piece. and you know, they've obviously been selling. >> the headline of the profit when they sell makes it sound bigger because it's all profit. oh, booking another billion

dollars of profit. how much of the overall holding are they selling and it's basically pure profit? >> a lot of the original stake came during the crisis when they took a deal only warren buffett could get. >> yes. >> he used to do those converts in the warrants and they were incredible and obviously able to benefit enormously from that. that helped to build the position to the level it was over time. i come back to their cash position. as a percent of market cap it has to be up there. about 28% of market cap, $280 billion roughly in cash at berkshire. >> i love the annual results profits are up, because they've been holding treasuries and now interest rates are available to give them return. i was going to comment on how extraordinary it is that america has yet another trillion dollar company. this is more nuanced not to down play the significance of it, holding company type status,

double counting on a huge amount of cash as well. but again america's market capitalization puts everyone else to shame. where entire indices in foreign countries don't cross that. it's striking. what's also interesting is the holding in apple obviously has been a big, big factor in the last decades, gains that they experienced. it's amazing they crossed this landmark while talking about them reducing back the sizes of some of the hoddings that have gotten there. >> including apple that they took a stake in 2016, about 39 million shares and built that significant inially in 2018, i think 280 million shares. but as you know, they cut that in half to about 400 million shares now from an 800 million position in apple not long ago. >> which contributes to the cash pile you referenced. >> what do we get the update of the apple position?

end of the quarter? >> unless they do mid quarter. >> we just had 13s a couple of weeks ago so i guess november. >> the filings have to be more regular with bank of america. >> if you own more than, i believe, 10%. >> just be interesting maybe they're still selling apple in a way we get more regular updates on the bank of america action. trillion dollars congrats to mr. buffett. looking at the markets down a percent on the s&p, the nasdaq is the laggard down half of one percent and, of course, the market is watching nvidia today. the earnings coming out after the close and it's the best performer in the s&p this year up 160%. seema mody joins us with more on what investors need to know going into the print. >> nvidia chips have empowered big tech's a.i. ambitions with meta, alphabet, google planning to shell out billions of

dollars. when jensen huang speaks tonight investors will want to know what he's hearing from the hyper scalers on the spend and what that means for nvidia's bottom line. and the blackwell delay whether issues with the main supplier, taiwan semi are starting to ease. competition is riding, amd is ma making inroads and groq and cerebras with plans to go public this fall, the ceo telling me his chip and cheaper and faster. competition in gaming could drive nvidia stock lower if it shows it's losing market share. amd posted a 59% year over year drop in second quarter gaming sales, overall the weakest division. cnbc analyzed the performance of nvidia following the past six

earnings report and found the average one week return is 11.6%. today may be about nvidia but we are keeping an eye on super micro after saying the 10k report will be delayed. shares down 20%. let's talk about what's at stake for the markets as we approach the nvidia numbers, adam parker joins us. good morning. >> good morning. thanks for having me. >> before we get to the nvidia and effect of that, what do you think was the reason for the selloff we saw over the summer? is it easy to point to what that was down to or not? >> it's funny you say that. i just wrote a note saying -- last sunday saying, you know, i feel like i'm pretty good at knowing what already happened i'm not good at predicting what's going to happen. this time i'm not even sure i know what happened. i can tell you what institutional investors think

happened. if i ask 100 of them they'll all given slightly different answers from japanese carry trade to election change, to capex, there's a co*cktail of things that people pointed to. but the recovery was sharp. if i take a step back and say what do i care about as an investor? there's two things, perception of growth and rates. neither look better to me now than they did august 5th. i think despite the retail sales in walmart numbers the consumer is slowing. i don't see how you raise your 25 earnings numbers based on what you heard in july earnings. looking at fed fund futures, they're lower than they were six weeks ago. so i take it in and say prices, rates and growth, i feel worse now than i did six weeks ago. >> so you add vvising your clie to take profits after the strong

bounce. >> it depends. i go crazy and say, every value investor say i use mean reversion. i think we're in a pocket it's the opposite. growth guys use means, i got upper end of the range here, i don't think i'm going to get the next blast off or another 50% in growth stock right now. so maybe take the profits on stuff ripped from august 5th lows and see what nvidia does tonight. it's a bellwether but everyone expects they beat by 2 billion. it's pattern. the bogey isn't low. i'm wildly bullish on a.i. in the long term time frame but the next three months i think growth guys sell some soft stuff that bounced and value guys i don't think buying something that's cheap or down is a good idea. the market is right when they take stuff lower, the earnings get impaired and the economy

slows. september you get down with revisions, big conferences from the big bracket banks. i don't think you're going to get companies raising numbers in september. i think it's not great risk/reward at the current moment. >> how do you risk manage something like nvidia and that overall posture? >> so i think there's six or seven themes above growing themes, a.i., semis, software, housing, health care, i think you have to balance those themes, you lighten a little stuff on mean reversion that's ripped and maybe you go into some housing or building materials or services or things where the estimates aren't for a huge hockey stick and maybe economically sensitive but less so. if everything is working at the same time, that probably means everything is not working at the same time. so you have to have a balance in risk management. >> but you're wildly bullish on a.i. >> medium, long term. i'm finishing this a.i. course

for health care at m.i.t. it's an online course. we're at the age i don't want the technology to pass me by if i don't learn something. i'm not saying you do it. >> that's fine. i'll take good advice. >> and i'm learning a ton and thinking wow, the idea that people think this is over when it's 15, 18 months in, it's ridiculous. so many ways you can improve and be more efficient. i think the question is, will people believe that in the next three months in the stock market given how much the stock -- you know, the market is different than reality. i think we get tons of things that are productive from using doctors' time more efficiently. when guys at work see me in front of my computer i'm also embarrassed. what are you doing? i do that python in two seconds. it's the same thing you have a pen and paper? what are you doing? >> i write notes. >> no doctor should be writing anything down.

it's that world we're in. it's wildly efficient going forward. like everything you have this lightning bolt shape. are we near the first curve? probably. the prices are telling you that. i'm really optimistic in the medium to long term. at the moment am i back up the truck related to all things on that? probably not. >> sadly we're out of time. >> great to be with you. have a great weekend. here's the road map for the rest of the hour. new analysis on trump versus harris on the economy. and the latest from beijing when it comes to the auto sector. e arand nvidia shares up big on thye headed into the print but that said it's tougher to impress wall street. we'll explain that dichotomy when we return in a couple of minutes.

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university of pennsylvania's wharton school of business is out with a new report about the potential economic impact of a harris or trump presidency. some of the numbers may surprise you. let's get to meghan with the details. >> good morning, david. so the trump and harris economic plans come with a hefty price tag but trump the numbers are larger. the budget model shows the full cost of trump's economic plans would be $5.8 trillion that's how much they estimate would be added to the deficit over a decade. nearly five times more than the cost of harris' plan which they

say would add $1.2 trillion. but the economic impact harris' plan has the higher cost. for trump it's 0.4% drop over a decade. but for harris it's 1.3%. that's from baseline. for trump part of the reason the cost is so high he's not endorsed any pay fors to offset the tax cuts. tax cuts on individuals and social security would cost $4.6 trillion over a decade. and tax cuts including lowering the corporate rate to 15% would cost 1.2 trillion. for harris, the biggest cost is expanding the child tax credit costing $1.7 trillion. but raising the corporate rate to 28% would raise 1.1 trillion. this is all contingent on congress, if congress blocks the attempts to raise the rates and passes spending bills the cost for harris would go up. it highlights at least so far harris is talking about ways to

reduce the deficit impact and trump so far is not. >> am i right you said both of these plans see gdp declining? >> they do. surprising to me as well. i spoke with them about this. it's because of the impact on tax hikes on corporations under harris. by the end of the decade it's about even that 0.4% of the decline under trump because it outweighs theism impact of cutt taxes on individuals and corporations. >> i wonder, you know, so many of these tax plans would seem to be based on having control of both houses as well, in terms of the senate and the house. that's unlikely, we're likely to get divided government? >> we are most likely looking at a divided government. that gives both candidates a lot

of room to talk about this. they can talk about any plans they want to because there's a lower impact or likelihood they get passed. that means these are political proposals not economic proposals and they can talk about things like tax credits and down payment assistance that harris has been talking about here. if we get a democratic sweep which analysts think is more likely that changes the calculus, then we'll see bigger numbers especially on the spending time. after the break, new clues about the growth of chinese evs. we'll head to beijing for the numbers. don't go anywhere. you'll find them in cities, towns and suburbs all across america. millions of americans who have medicare and medicaid but may be missing benefits they could really use. extra benefits they may be eligible to receive

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welcome back. first numbers out of two of china's biggest ev makers this morning as trade tensions rise particularly around price and the use of a.i. continues to grow. let's get to eunice yoon, what are we talking about here? >> reporter: we're talking about auto and byd. the companies are both profitable, which is a rarity here in china in the ev world. but the companies both saw a

nice recovery after a rough start to the year. li auto beat on net and gross revenue. the first fully e electric pure ev didn't sell as well as it hoped. li auto is focused on not only family cars but extended range electric cars also. byd, the second quarter was the best. narrowed because of the competition. the ev penetration rate surpassed 50% in july on the mainland. the companies both seem to be much more optimistic for the second half of the year. li auto guided higher on delivery saying it sees stronger sales in the third quarter. byd is focused much more on the overseas market. it said that its overseas expansion would be driving its

growth and, in fact, earlier this week, a top byd executive head said the company aims to have half of its sales come from overseas. she didn't give a time frame but that would be a significant jump from where it is at currently 14%. >> what's the infrastructure like across china for evs? has the government sort of thrown everything at china trying to get people to transition or is it slow and buy an ev if you want to but we're not too much behind it? >> reporter: the government policy is definitely really encouraging people to switch over to evs. when you talk about the infrastructure, there are 3,000 charging stations, these are the public ones across the country. there are a lot of other ways that people are able to charge. for example, you could have a battery swapping station as well. so there's just so many different charging stations and

ways in which the government really tries to get people to make that switch. >> eunice, we talk obviously about the evs themselves but china controls the battery market. you may want to tell our viewers a bit about that. i believe that's a fair statement. >> reporter: yeah and a lot of ev companies have said this is the way in which ev makers here in china can benefit because time and again i hear that the battery cost is really the biggest one as of now. and byd, for example, has said that the cost of the battery is like a 30 to 40% of the manufacturing cost. and byd just happens to be one of the biggest battery makers for evs. so that really helps not only byd but a lot of other chinese companies because they can just locally source they don't have to worry about trying to get the battery from somewhere else.

>> thank you. let's continue the conversation about china with an investor who's joined us before, ben harper. good to see you. >> hello. >> in person. >> eunice is missing me. >> usually you're overthere, which i like to point autoas well. when you hear about the ev market share gained by the likes of these two companies and so many others competing what are your thoughts as an investor? >> we saw it coming we were one of the earliest and largest investors in neo we felt like china had supply chain superiority, huge government support, an abundant market. we hypothesized it would be 50% of the market and it is now. and really they're able to build more than their western competitors with better price points. >> when you say dominating markets what does that mean?

>> in the middle east, saudi arabia, three years ago, chinese automakers were about 1% of the market today they're 20%. and they're selling cars something that looks like a knockoff of a range orover but fifth of the price. and they're buying them. so i think you'll see consumers looking at byd, li, neo as they go global. >> is there another side you can short, for example, auto makers in parts of the world that may suffer? >> this has been a if you can't beat them join them approach with the europeans. so vw, bmw has set up in china as an effort to produce jointly produced automotive cars to compete. but those that are not are falling by the wayside. >> some kind of tariff response

from all western countries is likely? the u.s. has moved ahead in that regard. >> absolutely. it's coming and has already come. byd sell the cars double the price point in europe than can china even though the prices are the same. >> outside of multinational companies we saw byd give a fresh read on consumer confidence in the region. how are you thinking about exposure to the commerce in china right now given what appears to be headwinds. >> no surprise there. what shocked us was how big the market punished pdd this week, i think it was a little oversold. clearly high competitors in the market, compression on margins, supply chain constriction, overproduction and so that led us to believe there would be some resets but they've been doing so well for so long i think the market was shocked by

that and punished them. >> there's a question about how well the chinese economy is doing, are they giving the full picture, is this one of those moments it's bad under the surface and you have to watch out for that? >> i don't think anyone disputes it's bad. consumers are scared, there's $12 trillion in household savings. in the u.s. i think we only have 900 billion because real estate markets are collapsing. no one wants to go out and put the money to work, or even spend not knowing where the next may check comes from. that provides buying opportunities. there's plenty of consumer demand and money to be spent. >> that was a negative series of things you just shared, though. looking at stocks down right now as an investor particularly in that market. how are you approaching it and how are you managing to differentiate in terms of your performance? >> the way we think about it is america is trading on the highs and china trading on the lows.

so buying into china today has limited down side risk save for a few of these names we're holding up. but the chinese government can continue and starting to eke its way to stimulus, the household savings. the real estate picture is oversold. it's better than you think it is. >> it is? >> better than global investors are trading around it. it's not a leeman moment. still an issue but not one that's going to topple the economy. >> ben thank you for taking time. >> thanks for having me. coming up, nvidia set to report after the bell. we'll get you ready. stay with us. en ga threatens yor take a stand. , slow ga with syfovre. syfovre is an eye injection that was proven to slow damaging lesion growth over 2 years with increasing effect over time. it's the only fda-approved treatment to slow ga in as few as 6 doses per year.

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nate jones... steps up to the mirror... lines things up... towels off... checks his fidelity app... looks to outside analysts to get a second opinion. nate likes what he sees... same page? -[ dog barks ] and he places the trade... before anyone hears him talking to himself. [ dog whines ] buy u.s. stocks and etfs for as little as $1, with no commissions. talk about easier investing. zbleez welcome back to "squawk on the street" i'm silvana henao with your cnbc news update. israel launched an attack in the west bank.

a military spokesperson called it the first stage of a bigger operation. the pentagon said a greek flagged oil tanker attacked by houthi rebels appears to be leaking oil. the houthis released this video showing the attack last week. the tanker is said to be carrying a million barrels of oil but rebels have threatened to attack two tugs sent to help salvage the tanker. and the washington commanders are renaming the stadium, now known as northwest stadium after reaching a naming rights deal with northwest federal credit union. terms of the deal weren't disclosed. it's been known as fedex field since 1999 but the company told the franchise they were leaving after the change of ownership group. >> the countdown to nvidia's

earnings is on. >> how many hours? >> they won't give me the clock. >> i can't believe we didn't start the clockdown clock with 28 hours. >> i agree. >> missed opportunity. >> best performing stock in the s&p this year. up 160% but maybe getting tougher to impress wall street. bob pisani is here as well. >> the question now is it worth paying what the stock is. the a.i. ramp up is continuing, nobody is questioning that. the question is how much invests are willing to pay for it. so three big issues if you're an investor. first, nvidia's earnings are still growing, but look at this charge, the rate of change in the growth is slowing dramatically. you can see nvidia's peak change in year over year's earning

growth. the delta occurred towards the end of last year. dealing with 400%, 500% increases year over year, look how fast this is rapidly declining and in the coming quarters it's going to go down to double digits. it was triple digits. the second concern because price is still rising as the earning growth decelerates, the forward multiple has increased from 40 times earnings to 47 that's this fiscal year february 24 to february 25. and 23 to 33 from february '25 to '26. these are not stratospheric levels but a sign investors are paying more for a future stream of earnings. the magnitude of beats is getting smaller. they were beating by almost 30% a couple of quarters ago. every report coming out beating 30%, last time only 10%. this indicates analysts are

being caught offguard to a lesser extent than prior quarters. it's a sign it's tougher to impress wall street. none are killers by themselves but when you have this combination of high valuations, decelerating growth rates and narrowing earnings beats this is not a lot of room for error. i brought this up a couple of months ago, got all sorts of criticism because there's a messiness around the a.i. crowd and nvidia and the attitude was hey, bob, get with the program here, so what if it's 48 times or 50 times or 100 times forward earnings it's going to change the world. my point is, in 34 years at cnbc i have never seen a stock that defied the laws of financial gravity indefinitely. my point is you may not believe in gravity but gravity believes in you. when you see those things happening it doesn't mean the a.i. revolution is happening it

means you're paying more and more for that expected future stream of earnings and at some point that game is more difficult to play. what are we looking for, 65 cents today from nvidia? >> you hear they have to do 2 billion better and guidance has to be 2 billion better. >> to get close to the recent beats, 65 cents isn't going to do it. they have to come out with 71, 72, 73 on the earnings. the prior earnings and more likely provide a much stronger guidance than analysts are expecting right now. so the bar is high and wall street is hip to this game now so their expectations are higher. >> what would you say, bob, if some say it already faces gravity, already had a big bull pac. what number at 127 would answer the number it has faced gravity and pulled back sufficiently that it's a reasonable stock to buy again? >> the problem is, we don't know how much more growth is out

there. we're waiting for the new chip to come out. the expectation is it's going to be out sometime this year. there may amazing numbers that they have. they mail still be able to defy the gravity overall so we don't know where the growth trajectory still is. i expect there's still tremendous growth trajectory there. but anyone who says we're up 160% this year therefore the stock must keep going up, that's wrong. the fact it's up 160% for the year does not mean anything for the growth trajectory. the past does not indicate future performance. people make the mistake, up 160%, must still go up. that doesn't make any sense. i know of no stock that escaped any of this in the long term. >> i know about gravity every time i look in the mirror bob. >> and we're slaging slowly but

surely. >> yes. >> you're holding up well. stop staring at me like that. >> laws of gravity, you look great. glad you're here. let's change the subject. how about oasis, when are they coming back? >> bob, go study up on nvidia. >> basically the first album -- >> he does not care about oasis. >> things are going to get out of control here. let's find out what analysts are expecting from nvidia. a buy on the stock, $132 price target i assume you heard some of bob's discussion. i'm curious as to your reaction and, of course, what your expectations are coming into what is -- we kid, but is certainly a very important earnings print for the overall stock market. >> thanks david, thanks for having me on. we are expecting a beat and guide up from nvidia, no

surprise there. as we look at in a word bob mentioned going to 33% to three times, that's not too egregious if you look at this year, probably grow top 100% and eps 100. and look out to even next year, expectations of 50, 60% plus could go up as we go through the next year as they start ramping a.i. servers versus doing compute trades this year. so that's almost a big 4x, 5x jump in price for them into next year. but here we expecting a beat on the guide up. you had a nice recovery from a bul pullback a couple of months back. so that's something to watch but i think here definitely they're going into earnings after pretty nice rebound. >> so you had to handicap it,

what are your expectations in terms of infnvidia putting up earnings that not just satisfy but surprise the upside. >> they have a good guide. the street is what 31 billion for the next quarter. probably come out, maybe two, three billion higher than that. they are seeing many of the supply chain super micro to have pretty good numbers and the taiwan supply chain also put up good numbers. so we think on the book looks solid. the guide will be strong. what do you have to basically combine that with is rebound in the stock. the stock has had a nice bounce going into earnings here. so off that expectation is now imbedded in the stock as well. >> i was looking vijay, through your note and the difference in your bull case and bear case price targets. it jumped out you wrote for the bear case if nvidia is unable to

maintain strong growth in key markets we could see it trading closer to 27 times your forecast for earnings. surely if it goes x-growth or lower growth, 27 times is a pipe dream? >> yeah. i think what we have to kind of look at this, still dominated the a.i. market. but there's really no competition in the a.i. space for them. they are 95, 98% of a.i. spend. so because these markets tend to be cyclical, you would see at point a pause in the hyper scale cap x it's just a question of when. so when you see that hyper scale flashing out, you see slight moderation. but that doesn't mean nvidia is slowing down and nvidia is losing share. that's what we are really, you know, trying to look at from the down side for nvidia because it's not competitive. it's more of a cyclical nature

of capex, when the hyper scale guys need to take a pause. >> vijay, thank you. counting down, counting down. appreciate it. tnk>>ha you. after the break, how hedge funds are holding up in the market. we have new numbers and a special guest. don't go anywhere. s, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one. you didn't start a business just to keep the lights on. lucky for you, shopify built the just one-tapping, ridiculously fast-acting, sky-high sales stacking champion of checkouts. businesses that want to win, win with shopify.

oil prices are volatile dropping for a second day in a row after a head fake rally earlier this week. how one trader is using futures to manage that volatility around a key price level. tune in to our market navigator segment today on "power lunch" at 2:00 p.m. eastern time.

welcome back to "squawk on the street" checking in on the market at this hour, the dow hanging in there slightly in positive territory, the s&p down a quarter of a percent and the nasdaq down three quarters of one percent.

the dow posting the 24th record close year to date yesterday. joining us is ben snyder. thank you for being here. we were chatting about how you put together this basically summary insight analysis of how people trade during the quarters. and you have your latest one out on the second quarter, which just recently came out. i found it interesting in the report that you say in the goldman hedge fund vip list has returned 19%. that's outperforming the equal weight s&p as well as a basket of concentrated shorts. what were the key drivers of alpha that you saw going through this analysis? >> it's been a good year so far for the average hedge fund. not only are the long positions outperforming but the short positions are underperforming. we think of hedge funds as generating long and short alpha and they're doing that so far this year.

we look at the key, two things to focus on. the first is that, of course, the megacaps have continued to outperform this year. six of the seven mega cap tech stocks are the top six in terms of popularity across hedge funds. the other is hedge funds have added convictions to their positions. 70% of their portfolio is in their top ten stock. so they're getting the stocks right and putting conviction behind those calls. >> but crowding has gone down. net leverage has gone down. i'm curious how at this juncture how hedge funds are thinking about those big tech names because for a long time there was a lot of overcrowding into those names. you can't blame them because that was what was working and that was what was comprising so much of the index that they were kind of adjudicated against. at this point as you see the rotation and the broadening of the market are you seeing more

conviction and names outside of those mag six names that you identify as the mag 7. >> hedge funds have con jvictio in their own portfolios but they've become concerned with the crowding cross fund hedge portfolios. not just that but the extreme level of gross leverage assets on the long and short side. so one thing we've seen in the last couple of quarters is hedge funds moving away from big tech. still popular positions but less popular than a couple of quarters ago. that's part of the reason that hedge fund returns are so volatile. >> were you surprised not to see bigger issues come out of the yen carry trade, however you want to frame it. >> i spoke to investors look what happened aren't you concerned? >> we had the vicks rise above 65, a sharpdown down for the s&p 500, and yet the market is back

to its high basically. hedge fund and mutual funds return have returned. that inspiring. >> you're framing it as good. >> correct. >> it's not great in this market. >> i think often investors like to compare a hedge for the average person putting money into the hedge fund, you are not trying to generate smp return, but a steady and uncorrelated return. think of it like a bond rather than stock. from that perspective, 9% year to date is good for >> 5% guaranteed bond with the zero risk 39% seems pretty average. >> they risk adjusted everything. that is the marketing. it has worked pretty well. >> we appreciate your insights. thanks for being here. speaking of hedge funds, we do have some news involving one of the largest hedge funds in the world. you got a letter, as well. we have news about david siegel and john on the founders of two

sigma back in 2001 who founded this hedge fund and they are one of the leaders in algorithmic trading and what has been quantitative -- quantitatively driven strategies. they are breaking up and have been at each other's throats is purchasing for some time putting in question the leadership over all of the firm with what is 60 billion in assets. they are both out and a new leadership team coming in. >> they will be co-chairman and are not completely leaving, but this risk is interesting. it was for this co-ceo model for succession challenges and to be able to work together. this was something that was first disclosed in march 2023 in a filing as something that was material. how did you phrase it? they were at each other's throats. it was so significant that it needed to be disclosed to investors that was material enough to the firm.

after what i believe is longer than a lot of people expected, they ultimately did announce that they would no longer be in the roles and they found two others to be appointed co-ceos. >> part of it was a need to monetize some funds, as well, given the divorce of one of them. there is definitely that, also, which they were arguing about. >> went two founders go their separate ways, there is always hope that they come back together again. >> i knew you were going to bring it back to that. >> it might take a while, but there could be another tour to come with them back together. >> i think this one is over and done with. >> no wonder we are all here. maybe just a wall and not a wonder wall. still to come in the next half, the ceo of online retailer chewy raised in guidance this morning. what we need to know next. salesforce amongst the other

names reporting. we will be right back.

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welcome back, we are keeping an eye on a few other tech names with report cards

from salesforce and crowd strike. it will be crowd strikes first results since the blackout. the ceo will also be on mag tomorrow and will be on mad tonight after they report results. everyone is so focused on nvidia, but salesforce is probably a better check on the second derivative on nvidia's success . >> it's a whole spending thing. you talked about klarna and the fact that they have been able to scale that a.i. delivery. >> my reference to a conference call, klarna has a fairly large investor base, so they talked to them and i think we might have it for you, but they were asked about a.i. efficiencies and the ceo said, yeah, we are moving salesforce out, because of what we have been able to find. here it is. large going internal initiatives. we shutdown salesforce within a

few weeks and we will shutdown workday and a lot of our for buyers, because we are able to consolidate with the help of a.i. standardizing more lightweight tech stack. that was interesting and i'm sure jim will ask then about it, as well. >> he has been pricing in a fixed pie and as you spin and allocate more resources to a.i., what are you taking away from? >> we have more coverage of the markets and wa ialyss his return towards wealth. that is after this. ♪ ) because this game is for everyone. (man 1) we're standing up for our right to be lazy. (woman 1) by sitting down. (man 2) and reclining back. (woman 2) we work full-time and parent full-time. (man 3) we will be reclined until further notice. (woman 3) it's our right to let the dishes soak overnight. (man 4) and to mow the lawn... tomorrow-ish. (man 5) we proudly declare that yes, we are still watching that.

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good wednesday morning and welcome to money movers. i am leslie with wilfred today and the new york stock to change today and the dow coming off its 24th record close of the year and how with the pace of rate cut impact the rally? charles swab to cio omar aguilar helps us answer the question. the best smp stock is the reason to be cautious ahead of nvidia results and the iq risks to watch out for. >> jumping after earnings this morning and now more

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