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You can tweet me at Jim Cramer . You come to work. And you find out that the Chinese have targeted all the leading AI models, Anthropic and OpenAI, and you wonder if they can get their intellectual property too. Maybe not, because the Chinese also have cheap memory, at least we think so, or maybe not.
But if we could access it, that would be great. But if American companies do take advantage of Chinese technology, won't they become targets for Chinese open source models? And what does this mean for token value, the Jevons paradox, and national security? Did you understand any of this? Well , I don't.
I can't fathom how this will ultimately affect Nvidia, my two main assets in the Chapple trust. Could this delay OpenAI's IPO, affect their deal with Oracle, or continue to lift AMD? After a day when the Dow fell 307 points, as did the Nasdaq, which fell by more than half a percent. After what , by the way, was a very powerful discovery.
All this worry about competition from China in AI is making me turn away from technology and just find quality companies like Goldman Sachs and Wells Fargo, or take on FedEx and FedEx Freight, or maybe buy shares in Honeywell Aerospace and Boeing. Do you know why? You see, because if you have too many tech stocks, you'll just get wiped out.
And you won't even understand what happened. Okay, not today. And we were quite touched here, as you will see if you stay with us. But I don't want to be that journalist who only criticizes when things are going badly. Maybe we have some momentum. But if you own the kind of non-tech stocks that I like and they go down, you know what you can do?
You can confidently buy more of them because Goldman Sachs or FedEx understand and they are not dependent on rumors or Chinese publications. In many ways, this is precisely the problem of our market. I mean, right now, for example, if SK Hynix, the high- bandwidth memory maker from Korea, or SpaceX, Musk's satellite company, or Oracle with its weak bonds and stocks really went down, believe me, they would drag everything down with them, including a lot of tech stocks that don't deserve such good fortune.
Peterson, director of derivatives analysis at CFRA Financial Research, and Kevin Gordon, head of macro research and strategy. Good morning, gentlemen. Thank you very much for your time. Kevin, let's start with you, given all the data we received this morning. PCE, durable goods , GDP. I think ultimately this shows that inflation remains stable and the economy and its growth continue to move forward with some stability in production.
I mean, is that how you would characterize it right now, or what are your main takeaways? Yes, inflation is still stable. I think there are two ways to look at the inflation data right now: first, what are the underlying impulses and are we seeing any upward movement right now? And so far, this doesn't necessarily apply to July.
I really think that PCE, even at the overall level, while being a little higher than expected, didn't necessarily match that at the underlying level. So, overall, the report is not too alarming. That's still not consistent with 2 % inflation in the near term, but at the same time, I'm not sure that most FOMC members look at this report and say there's a good reason or basis for raising rates in September.
So when you combine that with relatively strong economic data, whether it's the GDP revision or the corporate earnings data, which was pretty exceptional in the second quarter, we still have the same picture of a relatively resilient economy and persistent inflation issues. But, again , we don't see much momentum, at least from the energy side or, say, another wave of tariffs.
But it's kind of the second component that's obviously going to be in the spotlight in the next couple of months, given everything that's going on with Canada. Of course, of course. Okay, and Nate, let's move on to you. I mean, in terms of market reaction, it feels like we're caught between two major catalysts today, but the S&P is completely calm right now .
What would you say about the market reaction at this time? Oh yes, good morning, Sam. Yes, generally yes, we're just holding our ground. Let's hear what Nvidia has to say. And you know , I know Nvidia gets a lot of press, and in terms of the demand for the AI story , which is very important to the market and our EPS growth trajectory, it seems to remain unchanged.
So I think those are the expectations. It shouldn't be, you know, I wouldn't expect any surprises if margins start to come down, or given the memory element in some of these chip companies, as Nvidia has said they might raise prices. This may be important. More important is Jackson Hole. What is the Fed's position?
Bestin's decision last week, how, if at all, does it affect what Warsh will comment on Friday. But Sam, I think between now and when we start the reporting season in mid- October, there seems to be a number of potential landmines, if you will, whether it's a war in Iran, or the economic sanctions that they're imposing, or any kind of reaction from China.
The yield on 30- year bonds has fallen, which is good. But within the AI complex, there are still many questions about the ability to build these data centers on the schedule that everyone expects. So, VIX is at 15. I know we're holding right now. We're entering September, a kind of hurricane season for stocks, midterm elections.
I think we are probably underestimating the potential for some pullback in the period up to mid- October. Good. So, maybe there is a bit of seasonality here. Uh, back to you, Kevin. I mean, you're done, uh, talking about tariffs. So, obviously, we have tensions with Canada again. We even mentioned China this week with 7.5%.
Returning to the data and the sustainability of the economy and production now. I had a great conversation here yesterday with Peter Scheer, who made the argument that the timing for all of this is questionable, when obviously with building data centers and all of this capital expenditure, you probably need a lot of materials that you're importing into the country for all of this.
How do you assess the impact this has had so far, and what do you think the outcome of all this will be ? Uh, you know, well, I think the Canadian tariff story— Nvidia just caused another massive shockwave in AI commerce. But before we break down what happened, subscribe to our channel because we're tracking the biggest changes in AI, semiconductors, and the stock market as they happen.
Now here's what makes Nvidia's latest results so interesting. The company didn't just exceed expectations. The company posted such strong performance that Nvidia added about $442 billion to its market value in a single trading session. So, this is one of the biggest daily gains ever recorded by a stock, but the main news isn't how much Nvidia made yesterday.
And how much, according to Jensen Huang, Nvidia will be able to earn in years to come. For years, investors have been waiting for Nvidia's growth rate to finally slow down. After all, Nvidia is already one of the largest companies on the planet. The argument is that at some point the numbers simply become too large to continue growing at an extraordinary rate.
But Nvidia's latest forecast calls that assumption into question . The company reported quarterly revenue of approximately $96.2 billion, beating expectations of about $92.3 billion . Data center revenue reached approximately $89 billion, also above expectations. And then management gave investors something they rarely get from Nvidia.
A much clearer vision of the long-term growth trajectory . Nvidia expects revenue growth of about 17% in fiscal 2028, well above the 45% that Wall Street had forecast . And that changed the whole discussion, because the question is no longer simply whether Nvidia can outperform next quarter. The real question is how long can this AI investment boom last ?
And Jensen Huang is essentially saying that we are much earlier in the cycle than investors think. Why? Because AI is moving from experiments to real economic activity. AI models are becoming more useful, and businesses are willing to pay for them . The demand for data output is growing, and the number of tokens generated is increasing.
And as models become more complex, the amount of computing power required to run them increases. This creates a problem for the industry. There simply isn't enough available computing power to satisfy everyone who wants it, and this shortage is one of the main reasons we retain pricing power, and the situation gets even more interesting.
As the company's growth becomes less dependent on a few hyperscalers, these projects are expanding and corporate adoption is increasing. New cloud providers are emerging, AI startups are attracting huge capital, and companies working on robotics, automation systems, and physical AI could eventually become a significant source of demand for computing.
This diversification matters because if Nvidia's future growth comes from many different customers and applications, it will become less vulnerable to fluctuations.
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