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[ America. I'll be with my friends. I'm just trying to make you a little bit of money here. My job is not just to entertain, but put everything in context, including tonight's trading. So, call me at 1800743 CBC. Tweet me at Jim Kramer. Hype cannot destroy the hope of artificial intelligence. Even though many investors have begun to turn on the entire concept of machines that you can talk to or even replace your workforce with.
But perhaps hype has taken stocks involved with artificial intelligence too high versus reality. Have expectations at last gotten too high to be equal, let alone beaten? Well, you know what? That is tonight's quandry. As I survey the battlefield, the negative drum beat kind of lurking like white noise in the background, wafted center stage this afternoon as Nvidia, the king of AI, reported earnings the market didn't like.
While the averages mattered with the Dow gaining 147 points as to be advancing 24%. NASDAQ edging up 21%. The looming Nvidia quarter dominated the market share in a very negative way. So when Nvidia actually reported it to the close, it's kind of a climax. The company reported a healthy top and bottom line beat with robust guidance for the current quarter.
That's excluding any new Chinese business now that they can sell decent chips there. But Nvidia's all important data center sales came in a tiny bit light, surprising, and frankly fitting the negative wrap that we've been hearing. So the stock got dinged in after hours trading. I think that's mostly because it was up 35% for the year going into the quarter and expectations were indeed skyhigh.
But that's the charitable explanation. the dam things are slowing and perhaps the $4.4 4 trillion dollar emperor has I don't know fewer clothes than we thought. All in all though in reality it's a good quarter. It just wasn't decisive enough to settle the biggest conundrum of AI which is a sense that perhaps companies aren't getting the return the bang for the buck that they should when they're buying Nvidia stuff.
Mind you I am not talking about China. That also remains a quandry for the company. I am talking about the giant spend that has boosted Nvidia's market capitalization to the biggest of land $4.4 $4 trillion and maybe that so-called peak. So, tonight I want to explain why even after this poorly received Nvidia quarter, I think AI is worth every penny.
Even as many seem to believe that it's nothing more than a parlor game brought to you by some high-tech husters who buffaloed the entire world. First, in the wake of these Nvidia numbers, let me just give you the negative briefs. You know what I'm talking about? Which is often expressed by younger people as reminiscent of the dotcom bubble.
Something that occurred, by the way, while they were in their Dr. or dentons or maybe they're huggies if not their respective mother's wombs or even the proverbial twinkle in the eye. In the late 90s, we discovered that we could plug our computers into phone lines. They would make this really funny noise and then bring you something called a website.
Some people really got it. As someone who could actually arguably be described as an internet pioneer, I actually suggested to the Wall Street Journal that they could post the whole thing online. They laughed me out of the room, so I decided to do it myself. It was called the street.com. No one really knew what the heck they were doing back then.
people were just throwing nearly as much money as least in 9090 as was just thrown in uh now. Okay, I got money from a bunch of venture capitalists. We had worked for a couple years, put about $75 million to work and voila, the stock opened at an insane $1 billion valuation. Now, that was a bubble, especially because we went to $2 not that long after.
330 companies went through the same process as we did at the street. At least we stayed alive. Those didn't. Most of them ultimately went under. Very few came through the other side. uh like Amazon. But people remember the losses. The worst losses came from the fiber optic companies that laid the track that powered the internet.
Okay, get that cuz that's the latter day Nvidia. The second worst came from the search engines. The third came from the phone companies. A huge number went bust. Why didn't uh what didn't go bust? Okay, Amazon, Cisco, Google fortunately hadn't come public yet, so it didn't get to go bust. They joined the previous winners of the PC revolution, Intel, Microsoft, and Apple.
The others never saw the field. The losses were staggering, but those winners, they were amazing. They were run by the smartest people who took advantage of everything you could ever take advantage of. And they made their shareholders fortunes as they grew. We heard at every turn that they were just parts of the bubble.
And then when the bubble burst, it would just be a matter of time before they would burst, too. A matter of time, a matter of time, a matter of time. Well, it the time mattered. Nothing happened. Sure, Intel and Cisco didn't soar like the others. Cisco is still very much alive. A mismanaged Intel needed President Trump to get the money to be able to stay a survivor.
Right now I'm hearing that what we call the hyperscalers, the companies spending on fortunes on Invid, you know, the ones are writing the checks to Nvidia are part of the AI bubble that was just like 2000. Okay. Uh Microsoft's like 2000. Amazon's like 2000. Google's Oracle which missed the internet well but is all in the data center.
Meta and even Tesla which wasn't around to birth the internet. They are all writing these checks and it's wrong that they do so. And that's what tonight's quarter showed. I don't know. Did they all go wrong buying accelerated computing and generative AI chips? It's the equivalent of all the companies that participated in the making of the building blocks of the internet.
Tonight, people are wondering whether the money being spent on Nvidia is finally peaking and petering out. Now, I want to stipulate some things. First, the companies I just mentioned, the hyperscalers, are run by the smartest people on Earth. Second, they have the better balance sheets than any country in the world.
They have incredible revenue growth. Apple is the only one of these heavy hitters that isn't writing news checks to Nvidia simply because they don't have an AI strategy. Apple stock, by the way, is the poorest performer of big tech stocks. Will that change after tonight's numbers? Will Apple turn out to have the last laugh while all the others fall flat on their faces?
Is is Nvidia fooling everyone? Is Jensen Wong fooling everyone? Are the valuations all way too big there? Listen, we heard the same thing about the do survivors at the turn of the millennium. We who like those stocks were called clowns. I was considered, yes, a genuine legendary Wall Street funny man for supporting them.
Then I came up with this ridiculous thing called fang. And people really laughed me out of the building. Thank you, Bob Lang, for helping me on that when he was from the street. You know what's ironic? I often hear from people far younger than I am that we've heard this before and all these companies are delusional and so are their CEOs and the buyers of the stocks.
These young skeptics tell me that we're looking at the biggest bubble in history with Nvidia, the backbone of Gener AI, being as overvalued as Cisco was in 2000 when it was worth $550 billion. It's true. Cisco was overvalued at the time. It's now worth a little less than half of that. But here's what I have to say to them.
I don't care about the seemingly sky-high market capitalization that these stocks have. I'm simply trying to put a valuation on a company that makes what you need to become one of the serious players in AI. I learned not to question Amazon or Microsoft or Google or Meta or even Tesla, the big customers a long time ago.
They know more than I do. They are run by people much smarter than I am. Much much smarter. I'm just grateful they let me along for the ride. So feel free to dismiss AI as a bubble. But the bottom line during the three or four years of the dotcom bubble, people did make fortunes who had faith. As long and some, yes, you had to ring the register for.
Even when the.com bubble burst, there were a handful of fairly obvious winners that eventually came roaring back. You did have to be courageous to buy them. If you gave up on Amazon in 2001, you missed the $2 trillion boat. If you give up on Nvidia now, I think you could miss a boat that's not sinking, just resting before it reasserts itself.
So, I say own it, don't trade. Let's speak to Ian in Florida, please. Ian. Booyah. Jim, how you doing? I am doing well, Ian. How about you? I'm doing excellent, Jim. Thank you. All right. Fill me in. What do you got? Man, you know, I'm a fivetime caller and investing club member. Thank you. Absolutely.
I take you from Jeff, too. Jeff right now is working on uh he's doing a little work on the on the crowd strike there with the George Kurds. How can I help you? Well, Jim, I want to get your opinion on something. Um, it's been looking at a stock. It's it's almost 50% down for the year from the the 52- week high.
Uh, Nvidia has a pretty big stake in it, too. They're highly affiliated with Nvidia. What do you think about getting into at this point? Um, Cororeweave. Okay. Look, I like Cororeweave. The problem is it's I like in Trader Lives. Here's the problem with it. You know, people kind of like are saying, you know what, h it's moved up so much it going down.
Here's what you do with a stock like coravee. I learned a long time ago sometimes stocks tell you what to do. This one is going to stop tell you what to do when it stops going down and that has not happened. Now do not count today because today was a bounceback day. Let's see. This stock is going to tell us.
I need to say that because it's losing money. When you have stock that's of a company that's losing money, you have to let the stock tell you. And I can read. What can I say? I'm a stock whisperer. That stock is not yet done coming down. But I like your concept. I just think there are other better stocks in this market.
Sure, there are a lot of do losers in the do bubble. I'm I know 330 of them, but if you think we're in an AI bubble now, I think you got to go back in the history books. You got to do some work. Don't listen to the people who are in their Dr. Dens at the time. Maybe they were in pampers. Oh, man. Tonight, the fast casual stocks have fallen out of favor in Wall Street.
So, I'm checking in with one of my old favorites, CEO Chipotle. get a better sense of what the company has in the pipeline. Then CSX has caught the eye of the activist. Is it this or is it this? I don't know. Why don't we go straight to the source to figure it out? Get the company's response. You don't want to miss that.
And then Snowflake. Hey, how about the star of the night been on this show? Can you believe it's David .
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