good wednesday morning, welcome to sid"squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. adp becomes the latest in a series of soft economic prints this week at 152,000. ten-year drops to 4.31%. that's a two-month low, although oil does bounce a bit off the lowest price since february. elon musk confirming the cnbc.com report which says he redirected nvidia a.i. chip shipments meant for tesla to x,

and xai. speaking of a.i., shares of nvidia, yes, they continue to move higher, narrowing its valuation gap with apple and marching toward a $3 trillion valuation. also ahead, right here, s.e.c. chair gary gensler is going to join us, here at post nine. we're going to talk crypto regulation, meme stocks, any number of different things that we have in mind for him. let's begin this morning with tesla, now about a week away from that big vote on musk's pay package, and separately, elon musk did confirm cnbc.com's story that he diverted thousands of nvidia chips to his other companies, x and xai, as we said in a post on social media. musk said, "tesla had no place to send the nvidia chips to turn them on, so they would have just sat in a warehouse." jim, i know you've seen the morgan stanley report from adam jonas saying he's not bluffing about taking his talents or some sort of energy elsewhere.

>> well, i think that we got to divide this thing between the actual issue of the pay package and the vote versus what jensen huang wants. now, jensen's a ceo of nvidia. he's very different from most ceos. he actually wants to know where his product's going. he doesn't want his product hoarded. we know from the hpe, we'll get to tonight, earlier today, what happens is that there is a very close, let's say, understanding about what chips are going to be done, and david, you cannot take jensen's chips and put them in a warehouse. other people need them. so, when musk talks about how he would have to put them in a warehouse, tesla has no place to turn the nvidia chips to turn them on, that would violate the, let's say, the immutable law that jensen has. >> well, it's just an understanding, isn't it? it's not in a contract.

if he's selling you the chips, can't you do what you want with them? >> yes and no. it's conditional. it's conditional. >> conditional on what? >> that you -- >> i paid you the money for the chips. what's the condition? >> it's different. it's a contract. it's a contract that allows them to work with you to develop this, so it's not just you and i ordering and then we say, you know what, we're going to put them on ebay. >> because the relationship goes on because there's a lot of other things that go along with the chips. >> remember, if we go back to a time when jensen was selling game chips, there was a lot of -- there was just a lot of stockpiling, and then the market fell out, and it was catastrophic. jensen those that he's got gold here. he's not trying to scalp. but he is saying, look, there's so many people that want these chips, you can't just put them in a warehouse. now, i do think -- and you can tell me, david -- but musk is inartful in the way he tells this. it's almost as if, look, this is what i had to do.

at the same time, i want this vote. >> x is not the best place to provide context. we've said that many times. it's one of the reasons, frankly, why i don't really engage on the platform, because it just -- you never really convey what you mean, fully. >> i think that's true, but when you read through his statement, it does -- there are people who say, oh, give me a break. he just wants to win the vote or else he's going to hold the whole company hostage. i'm saying that's not necessarily the case. >> that may not be the case. as for the vote, as you guys know, i've been focused on it, we're going to continue to focus on this vote because it's eight days away, and my sense at this point is it could be something of an uphill battle for them to win this. >> really? >> yes. in part, because the index funds are not -- now, again, i'm not -- this is speculation. i don't want to -- they haven't made their decisions. many institutions have not made their decisions. you heard from ron baron this morning. we may have a bit of that to share with you, but they voted

against an 18. corporate governance -- the contract was disallowed by a delaware court. it's going to be an uphill battle. they've got to get a lot of retail to show up here, and the expectation is if retail does show up, they're going to be enthusiastic in terms of musk and vote in favor of the pay package. so, we'll watch it closely in these days now where decisions are going to begin to be made by many of the holders of this stock. but you know, they know they've got their work cut out for them when it comes to getting the "yes" vote on the compensation. it does not include the shares held by either musk or his brother, kimbal musk. it's the unaffiliated shareholders, and we'll have to wait and see. take a listen to ron baron earlier, of course, always been an enthusiastic supporter of mr. musk and as you might expect, believes he does deserve that what is roughly $45 billion worth of stock that was voted yes on back in 2018 but

disallowed by a delaware court. >> it's a legally binding contract, and who sued? you had an individual who was a shareholder for hire with nine shares. nine shares. sued. and it took them five years to get the derivative certified, but the class action wasn't, so he doesn't really represent all the shareholders. i think that, you know, it's really unfair the way they're addressing this, and i think that, you know, he earned it, and he deserves it, and he should be paid it. >> won't be the case, but there is this focus on, well, we know he's doing other things as well. this story that we've been talking about is an example of it. there's xai, x, spacex, and you know, if you're an investor today, the question is, how do you view it, regardless of how valid that contract should be? >> that's the whole point of

"the journal" piece today, the case against the pay package is, why would you, as a more recent shareholder, accept this kind of dilution? >> i understand that. it is hill time. ron baron's right. that guy fought to get it, but if he had gotten it initially, he would have lost. it's kind of a buyer's remorse. there's one thing that i think we should point out with these -- the not bluffing note from tesla. in jensen's keynote at computex, he spends a lot of time, probably the most of any -- for any client, talking about these chips going into autonomous machines that mr. musk will run. now, are they developing autonomous machines at a.i.? are they? >> wait, where? i'm sorry. >> the other company. that could be -- >> xai? >> yes. >> i don't know. i don't believe -- i mean, i don't know. >> is there a clause? is there some sort of noncompete

against xai? >> i don't know. >> i'll tell you, if i were -- >> there's relationships between them, you know, we know that they're obviously going to use a lot of the data from x, which he's not allowing other a.i. models to use, to power the large language model for the g generative, so that's helpful. you've got a lot of money going into xai to build a datacenter, potentially, to run their generative models. >> meanwhile, the actual car business, remember that? we had guggenheim cut delivery numbers yesterday. mary barra on nbc news saying they're all-electric commitment is going to play out over decades. >> right, right. >> what happened to 2030? remember? >> there was 2030. i'll tell you what's really devastating is yesterday, phil talked about the evs from ford wiping out perhaps the quarter. now, i don't think that's the case. when you check with ford, there's definitely a -- i try to

get my notes from anywhere, david. >> anywhere. i know. that looks like -- >> were you at an italian restaurant? >> is that papier mache? this is literally the scribblings of a madman. look at this nice ribboned -- it's so pretty. >> it's a place mat. when i get the information, i write it down. >> what do you got on there, einstein? >> okay. all right, da vinci, here we go. >> jfk. >> i want to know. i can't read it. >> ford would be saying, look, that's -- pro's doing well. all the ford hybrids are doing well. ford truck's doing well. maybe don't focus on the ev. the ev may not be the achilles heel that people think it is. that's interesting. my travel trust owns it. but ford, if you put ford against gm, you will see that ford has lagged badly. a lot of people believe farley

has not been able to get control of the ev, and i think he has control and that's a false narrative. >> we did talk to governor whitmer yesterday at our ceo council about evs and what accounts for the stumble in the adoption curve. i think we might have it cued. let's listen. >> why do you think evs got politicized? >> because everything's politicized in this moment. you know? i mean, it is an unfortunate part of where we are right now as a country. and -- >> isn't that kind of crazy? >> it is, because we should be able to say, r&d is a good thing, and trying to set the pace for the world is uniquely an american shared value that we should be able to say that. it's complicated right now just like everything is. >> meantime, jim, first four months of the year, ev imports to europe, one in five are

chinese. >> look, there's a pretty good article today about china opening a plant in brazil that had been an old ford plant. symbolic too. the president has made it clear that you have a 100% tariff. it is absolutely true that china could come in well under that if you put 100% tariff on a $10,000 car. then you're still getting the ev that you want, this chinese ev, so i don't know how -- unless you renegotiate nafta, but that's not until 2026. then i think that the u.s. has every right to fear. every right to fear. it doesn't do enough. he misjudged. >> yeah, speaker johnson spoke to that yesterday as well. coming up after the break, the s.e.c. chair, gary gensler, is with us right here at post nine. futures looking steady as we worked our way through adp. big number will be ism services coming up in about 50 minutes. i can't believe you corporate types are still at it.

just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

yeah. >> just having a conversation. >> well, when we come back for a commercial, we can have a conversation all we want. maybe we should go right to it, what do you think? >> how many people view this? >> millions. millions. >> all right. so, joining us here, as millions watch at post nine -- holy cow. it's nice to see gary gensler. mr. chairman, good to see you. >> really good to see you, jim. >> all right. let's get right -- >> i like your real estate here. it's a really nice set. >> you've never been with us here. >> you can rent it out. >> how much -- i mean, your landlord's sitting over there. jeff spreker from the new york stock exchange. >> i don't know. we're moving to texas. i don't know if you knew that. >> i don't think he wants you to move to texas. >> no? i thought that was so good. there's really a lot of freedom there. >> cancel the plans to go to dallas. >> remember the alamo, okay? >> i got it.

>> all right. dallas. all right. maybe even to more serious things than that, you're up here to talk about something that i think we all wish had happened a long time ago, which is t-1, and i thought you should explain because it means a lot to our viewers without them knowing it. >> look, this is a really good thing. if you sell your stock on a monday, you will get your cash on a tuesday. that's the easiest way to think about it. and in the past, just a week or so ago, it took two days. if you sold your stock on a monday, you got it wednesday. so, we worked at the securities and exchange commission on a rule to shorten that settlement cycle, because today's technology allows that. but here's the interesting thing. we're just back to where we were in the 1920s. there was actually, if you sold your stock on a monday in the 1920s, you got your cash on a tuesday. and because of everything going on, they lengthened it all the way to a week, and we've had to slowwalk it back.

but everybody worked well together. the stock exchanges, the custodians, the clearinghouses, and this thing worked smoothly. mexico and canada, argentina, jamaica, all joined us. i'm really proud of the work of the s.e.c., but it was a collaboration across industry. >> the one thing i worry about is i'm very close to nvidia, and nvidia created me, very easily, created my voice, my face. >> so, are you human or just artificial intelligence? >> we wonder sometimes. >> david, am i human or am i -- >> it's unclear. you may be a simulation. >> i'm a dollar sign represented by a man. >> that, we know. >> mr. musk once said i was a simulation, so i can't be sure. what i think is interesting is you are very worried about a.i. and the power of it, and i know -- >> i would say this. i think that artificial intelligence is the most transformative technology of our time, and i talk about the

1920s. then, it was the automobile, electrification of the whole economy. but now, we're taking human decision-making and more and more putting it in the box, in the algorithm, so i think that's transformative. it's a good thing for capital markets, but it's also raises real risk, risk of conflicts. what if the algorithm is, in essence, trading against you? risk of fraud. what if the algorithm is trying to defraud you or mislead you? and also risk, if we're all reliant on one or two models, then the whole capital markets might basically, you know, drive off the cliff together. >> but you're aware of that, and you can protect us. >> jim, fraud is fraud. somebody shouldn't be doing fraud, but these are more difficult challenges, more real challenges, and the conflicts are real too. >> okay, well, let's say -- let's try to figure out what fraud is fraud.

let's say i buy a lot of contracts. random stock. i buy contracts, options on gamestop. i then publish -- >> this is a hypothetical? >> totally hypothetical, because i don't want to -- i don't want to really try to hurt anybody. >> why not? can't we just ask about roaring kitty? why wouldn't we? >> you ask about a specific thing, i want to talk to your viewers for a second. the s.e.c. runs a civil law enforcement agency. we're a cop on the beat, and you would expect us to investigate where we investigate, but we don't talk about it publicly, because we follow the facts and the law, and only if we think there's something to bring in front of a court do we then talk about it publicly. >> hence a hypothetical. >> understood. >> let's say we're -- you're paul, my lawyer. i say, i want to put up a cryptogram, and it's of a chair leaning up, which we know from video game playing means, come on, this is the ninth inning, get ready. and we know that i'm a person

who happens to like the stock of gamestop. this is the signal. come on, get ready. is this something, hypothetically, that is the -- that the s.e.c. should worry about? >> look, again, it's not so hypothetical, because you're describing things that are in the public domain, and in the public -- and the public is, you know, interested in. so sh-- but generally speaking, you have to make sure that you don't mislead the public and that you don't, in any way, do things in the markets that may be manipulative or misleading, and so that's the key thing in our capital markets. >> no, the key thing is if you can cure it with disclosure. this is brandeis. you know if they disclose it, this is something that they -- a call to action, then you can't go after them. >> disclosure is one really key part of our capital markets. when you buy the stock of a company you expect that they give you full and fair disclosure. that's, by the way, not what

you're getting right now in this crypto field. so, i just, you know, cautionary tale there. that disclosure. but disclosure doesn't necessarily protect a bad actor if they're manipulating a market. you can't just simply disclose that away. you're misleading the public. >> not cured. disclosure, not cure. very good. >> can i ask a broader question about the public markets? it comes up a lot now, in particular sometimes from those that are very active in these very large private markets, but the idea that our public markets are broken, that we have seven companies that represent 30-plus percent, for example, of the market cap. that we have far fewer public companies than we did 10 or 20 years ago. i'm curious how you think about that, and whether you agree or disagree with those who would argue that the public markets don't work the way they should. >> i think -- i believe deeply in competition, and we in the u.s. benefit from very large capital markets, which are five

times our banking system. $23 trillion banking system, $110 trillion plus capital markets. not europe, not asia. that competition. but i also believe in competition between public markets and private markets. maybe it's because my dad had a small business of 30 people. maybe it's because i did work at goldman-sachs, that when i was there, and jim, you were there. >> yeah. >> you were on a different floor. >> i was on a different floor. i was on a better floor. higher pay. >> don't lose track. >> i really do think that public and private can compete with each other and benefit the american public. the key is to make sure that there are standard rules that people get the proper disclosure if you're investing in something, that basic bargain, they get full and complete information on material aspects of the companies. but also that the capital markets like this here, are operating free of fraud and

manipulation. >> but what about the private credit markets? i mean, they've grown enormously, for example. there is, you could argue, a lack of transparency, but that may go along with it, because you have typically a contract between one borrower and one lender. >> but there, what we have is we have competition between private provision of credit and the banks, and generally, that's a competition that we, you know, promote. now, at the same time, do we have to make sure the investors in those private credit funds are getting, you know, the disclosure they need and they're not getting misled and so forth? >> you have a really active following on social media. you posted yesterday you'd be on. tons of replies. >> did it help your viewership? >> we'll see. >> that's why we're talking. >> the two issues that i saw they wanted to learn most about was the timing of the ethereum etf approval and -- >> i think that happened a week and a half ago. >> yes, yes. and what pressures you felt to

make that happen. and second would be, trading patterns among members of congress. can you talk about the two? >> we have, in the u.s., already, a way that you can invest in various underlying securities and underlying commodities called exchange traded products. in january, we approved an exchange traded product on bitcoin. and about a week and a half ago, similar filings to list on the new york stock exchange, list on nasdaq and the like, exchange traded products on ethereum. ethereum had been traded on the chicago mercantile exchange, futures, for three-plus years, and the staff looked at that closely, and that was approved. now, the underlying exchange traded products still need to go through a process to have the disclosure about that. that will take some time, but they're working on that right

now. >> how about congressional trading? >> well, look, everybody in the markets, 330 million americans, should understand that they have to play by the rules of our capital markets, and one of those things is that when you trade, you don't trade on what's called inside information. information from a company that has not made disclosed to everybody else. but the same rules apply to all of this to make sure that we do right by the law. >> so, we could conceivably investigate someone for inside information who's in congress? >> well, historically, that has happened in the past. >> okay. now, polka dot, cordana, cosmos, immutable, osmosis, sushi swap, my neighbor alice have all traded millions, i'm talking about millions of dollars this very morning. should we have a sushi swap etf?

the proprietary kind? i would think that bonk is a natural, and osmosis, these are trading -- gary, these are millions of dollars, these things are trading. shouldn't we have it -- shouldn't we have some sort of product? >> let me say something more broadly about the crypto markets. right now, without prejudging anyone, these tokens, whether they're the ones jim listed or other tokens, have not given you the disclosures that you not only need to make your investment decisions but also that are required by the law. it's a basic concept in our securities market. we, the s.e.c., tomorrow, are turning 90. happy birthday, s.e.c. 90. and what president roosevelt did is created this commission to oversee that you, the investors, get disclosure, and in the crypto markets, they aren't giving you that disclosure, and secondly, that exchanges like

here, this floor of the new york stock exchange, get properly regulated to protect against fraud and manipulation, and they don't trade against you. and these crypto exchanges, jim, are doing things we would never allow this new york stock exchange to do. our laws don't allow you to trade against your customers. and so, you've seen the bankruptcies in this space, and there are some of the most leading lights in this field are either in jail, about to go to jail, or waiting extradition. >> okay, that's a suboptimal situation for them, but i'm looking at the -- >> but it's a suboptimal situation for investors. you're investing in a field right now that you're not getting the proper disclosure. >> agree. there's securities for people actually i know. i mean, their names. and there's nothing -- you know that too. >> it's funny. >> i mean, some people even in this room have their names attached to a coin for no reason. makes no sense. >> i'm sorry, you guys have coins? >> no, we do not.

>> there's a cramer coin? >> there should, but there isn't. >> i hope it's properly registered. >> i wasn't going to bring it up because now it's a pump and dump. cramer coin. >> chair gensler, we have only a little bit of time. >> the s.e.c. versus ripple labs. >> dave, what do you want to ask? >> i got the floor. >> thanks. >> what i want to ask is, i used to text a lot of my sources, and now they say, please don't text me at that number because we've already been fine d by the s.e.. it's the use of personal devices for work. many describe it as a money grab. it's tens of millions in fines you guys haveleveled at this point. >> it's actually something quite different, dave. >> it frustrates a lot of people who say, come on, this is ridiculous. especially during covid. how could you have expected us not to use our personal devices for some work? >> dave, it's very simple. for the s.e.c., for your cop on the beat to do its job, companies need to keep proper books and records, and this goes back to the 1930s. this is not a new thing.

and when banks or brokers, investment advisors are not keeping those books and records properly, then we can't be that proper cop on the beat, but what's more, the broker-dealer can't actually manage its risk. it can't properly manage its risk. so, even when i was on the wall street, and jim and i were both at goldman-sachs, we knew that they actually recorded the phone calls, you know, and they kept the books and records. that's what this is. and we found a lot of the big broker-dealers and banks were not doing that. they were doing off-channel communications, and i'll tell you this. when i was at -- in the served president obama over at the commodity futures trading commission, one of the big things that we saw, there was manipulation in the foreign currency markets, and people were doing it in off-channel communications. >> all right, well, look, i hope you'll come back, because it's a delight to have you.

you're very clear and clean up a lot of things that i know i didn't know. i want to thank you, chair gensler, for coming on post nine for "squawk on the street." >> thanks, jim. >> good to see you. let's get the opening bell and the cnbc realtime exchange. at the big board, it's centuri, utility infrastructure services company, celebrate a recent ipo. at the nasdaq, it is nyc pride celebrating pride month, jim. >> yes, yes. >> proud. we didn't really talk about, last few days of dovish data, adp, the latest after j.o.l.t.s. and ism manufacturing. >> it is going the way of the bulls just when a week ago we had all given up. and here's a pattern. all the march data seems to be way too hot, and now it's being walked back. so, maybe even -- maybe chairman powell will look at this and say, you know what? maybe it was a false hot streak, false hot -- it was a -- i

almost said the wrong thing. it's a moment that was way too hot. and it turned out to be not as hot. >> sure. >> sure. you have more -- you have a lot of time for gensler's question, but for me, i'm just, sure. >> it's getting very hot in here. >> take your jacket off. why don't you take off all your clothes? >> did they cut back on their air-conditioning in nyc? >> it's going to be hotter in texas. >> jim is referencing a story in "the journal" today that texas is trying to create an alternative to the nyse. >> musk, texas. there's something going on here. >> there are a lot of companies based in texas. obviously, as we've said, tesla wants to reincorporate in texas as well. it's already based in austin. >> well, look -- >> what else you got written on your menus here this morning

that you want to share with us? >> cirrhosis of the liver, 1.5 to 6.5% of the people have nash -- have the -- >> that's a lilly scrawl? >> may i just say that -- annette ashkenazi, who is a genius, by the way, and has understood lilly better than anyone, is going this morning to alphabet, and that only matters because periodically, you see a general counsel that is so powerful and so smart that she will be missed. >> mizuho today -- >> cfo, cfo. >> some may question the decision and the motivation, but we do not. the google ceo gave one of the best in corporate america and california versus indiana seems like an okay idea. >> i went back and forth with her, congratulating her. i did not mention that -- i'm not -- i'm not going against the heartland here, and i like the colts. i think the colts look really good this year. i don't -- this is -- but the

fact is that hispthis is a huge positive for alphabet. they've lacked a ceo. >> has she been doing both jobs, ruth porat, essentially? >> yes, and she can handle another five jobs because she's very smart. >> very smart lady. do we want to talk -- one of the bigger potential transactions -- >> not if it's paramount. >> we're not going to talk paramount. i can talk it all day, but i don't have a lot to say. i'm talking dollar tree. >> let's go there. >> let's talk about this, because we do learn this morning -- and perhaps not unexpectedly -- that dollar tree has initiated what they're calling a formal review of strategic alternatives for family dollar. >> amen. >> as it wants to continue what they say is the transformation, of course, unlock the value of that and unlock, perhaps, the value as well of dollar tree. they bought this thing for $9 billion back in 2015. >> remember how much they overpaid? >> i would point out that mantle

ridge, significant activist, paul halal, they took a significant position back in 2021. he's on the board. you got to wonder -- and they've got a new ceo. he's been in for a little bit now. >> he's smart. >> and jim, the belief is that you can refocus family dollar. you can get dollar tree. the numbers this morning that they also gave us, though, actually didn't look that great on the comps for dollar tree. 1.7% was the gain. that was below expectations. >> looking for 4.8%. >> right, whereas, actually, family dollar, strangely enough, actually did a bit better than some of the analysts had anticipated. this was not, perhaps, unexpected. we'll see what they end up with. we don't know if it's going to be a sale, a spin, how they'll dispose of this asset, but did p did pose of it, they do seem to want to do.

>> this merger was a merger from hell. my family dollar sucks. my dollar tree is killer. and that's how everybody feels. the family dollars are really hideous. they have never kept up. carl, every time they redid one, it did not necessarily up their game. dollar tree is superb, and they never made them into dollar trees, and it was ridiculous. dollar tree's brand is so much better than family dollar. >> it's been a nice flurry of m&a, whether it's this, hanes brand selling champion, tapestry-capri, right? >> ftc get that one. >> nothing particularly large. obviously, some announcements of potential things. back to your point on family dollar. 8,000 stores generate $37 million in operating profit for the current quarter, which implies each store made $4,500 in the quarter. >> that's not -- >> annualize that, each store makes $19,000 a year. i'm reading from a note from morgan stanley.

that's not exactly a high level of profitability. >> chipotle makes $3 million, just so we have perspective. they make $3 million, trying to take it to $4 million. >> would private equity want to buy this? >> are you kidding me? they can merge everything that's bad, bring it forward, make it public, and buy a sports team. that's america. >> that's america, baby. >> that's america. and you get the city to pay for the stadium. >> who to pay for the what? >> the city. i just gave you the whole arc of what f. scott fitzgerald subtly predicted. >> we did hear from josh harris yesterday at the ceo council. the very similar story to what you just described. >> upset things in philadelphia. he's not a philadelphian. he's a washington guy. so that allows wapner to like him and allows me to watch because he runs the sixers and has wapner's team, the commanders, and he's the coolest guy in the room. frankly. >> dollar tree did talk a bit, jim, about a soft easter. >> yes. >> although a lot of notes today

defending the consumer, barclay's, excess savings is still robust. pce was largely about amazon's spring sale payback, things like that. >> i think the most important one of the quarter so far is best buy. best buy is all about what's going to come out this week. you know, it's going to come out worldwide developers and it's the a.i. pc, which i would tell you is, david, the a.i. pc is lurking everywhere. 40% of them's going to go to best buy, but the a.i. pc is the biggest refresh in history, because who doesn't want a pc they can talk to and say, book me -- >> september is when the a.i. pp pc -- it's an "it," not a them. it's not yet. >> position calls all the way out, gme. >> and then do you ask the pc what it thinks about your decision? >> it's like when you go to

chatgpt, i mean, chatgpt -- the chat was down yesterday for about two hours. >> was it? >> i was suicidal. >> really? >> yeah. what are you going to do? you want a narrative? you want to compare hpe versus -- versus dell, right? >> right. >> you're just going to google it? it makes you buy a dell, and then it sends you to hp for help, and then it sends you to four other sites that are completely meaningless, and then maybe you get it. if you go to chatgpt, it's got this really concise thing, much of which is right. >> hpe is the s&p leader right now, up 11, and by the way, jim, wwdc is monday. >> i know. >> another positive note out of city today about apple china. >> boy, the apple china note is very interesting. i've been doing some work. it's got the service revenue. now, you have to understand that if you go on the site, apple, they have service revenue of every single country. it does have the least service revenue because china does not allow them to do everything, but it will still count and help them very much. i don't care about the

discounting. this story of apple continues to be a story, carl, of the few analysts that didn't dump on it before. and they don't have it. but the man i'm waiting for is the guy who really got it right, tony saganagi. he got it right. he threaded the needle. >> you've turned a little bit on -- turned positive on tony. you were -- >> you always say, own it, don't trade it, but apparently you can trade it. >> you were slagging that guy for years. >> well, i'm mercurial and arbitrary, and i have every right to be. didn't you hear i was at goldman? >> i heard many times from chair gensler. >> on a better floor. >> my wife said that on the first day. she talked about harvard and goldman. untrue. >> i heard it about so often, i didn't want to hear about it anymore. >> let me tell you about the three-headed monster that is paramount. >> i'll talk to you about paramount all you want. i'll do it offline, though.

i want so talk about softbank, because elliott is back at softbank. it's an "ft" story. they're there with a $2 million stake, pushing for a large buyback. will they get it? maybe not to the $15 billion tune that they want, but there is a hope that they will get them to pay some attention here. they were there back in 2020, our viewers may recall. then they owned about $2.5 billion, similarly pushing for a large buyback. they got a good amount of that as well or some of it, at least, at that point. softbank, a different company now. so much of its future really is based on its ownership of arm. remember, there's only a small percentage of arm that trades. the rest is owned by softbank division fund. we don't talk about nearly as often any longer. a lot of the holdings there being sold over time given what was a lack of real performance. >> right, right. >> and you can see arm holdings is up. but softbank, also up rather substantially, on this story,

again, of the pressure being f applied to some extent by elliott. we'll see whether and how large any potential buyback is. that's crowdstrike. it's very nice. >> by the way, all over that. i know we're going to talk about that. i'm busy sending a memo out. >> they triggered the charts ahead of time, knowing that you want to mention it. >> they have a.i. they were in my head. but what matters, can we just go back to your story trfor a seco? >> which one? >> the story about softbank. i actually listen when you talk. i know it's shocking. what happens here is -- i didn't mean it that way. what happened here -- people have to understand that rene haas, the ceo of arm, was pictured this weekend with jensen. >> okay. and that's all it takes? >> oh, that is all it takes, my friend. in the same way that hpe said they're close to jensen and then just to completely transition, george kurtz, crowdstrike. >> once he puts his arm around

you, you're a made man? is that what it is? you're a made man. >> pretty much. but rene is selling tens of millions of chips that go with them and that is going to continue. that's why that stock is still a buy, even up here. incredible that arm is still a buy. >> nvidia's market cap is $2.9 trillion. up yet again this morning. it is closing in on apple. we like to keep track of these things as jim shows me that picture. there they are. >> that's worth in its weight in gold. i have pictures of jensen with people. there's a picture of jensen that's also suboptimal. >> reuters today cause it jensanity as he makes public appearances in taiwan with photos going viral. >> i did everything i can to try to touch this up. >> are we going to look back on jensen one day and say, there's the guy who planted the seeds for the destruction of our universe? >> no. >> no? we're not? >> jensen's a phenomenally great man. >> i don't dispute that.

i just wonder whether or not these chips that he is -- that they are creating and designing and are powering this next generation and the generation after that of a.i., i mean, back to the long-running discussion here, guys. >> it's an issue. >> although -- >> chairman gensler did not -- i mean, he didn't seem to worry that much about someone imitating you. >> i think that's got to be a concern. >> i think so too. >> has the ability to create deep fakes that are very difficult to discern from reality. >> very. >> become more and more possible. but beyond that, people worry about bioweapons and the development of that. they worry, obviously, about, well, so many different things. >> can i just -- back to this notion of wanting to be with jensen. i mean, jensen has the chips that work. now, we can create false horse races. it's a false -- you're going against secretariat, and you've got, i don't know, poseidon's warrior is going against secretariat. >> you're referring to this chatter today to intel or amd

even are making stands, getting competitive. apollo with the equity stake in an ireland plant. >> that finally got announced. it's been reported on. these are large numbers, again, from these enormous alternative asset managers. carl's referencing an $11 billion investment by apollo. they're going to own 49% of a joint venture related to intel's fab 34, largely complete, high-volume manufacturing of intel core ultraprocessors, an their ramping on granite rapids, also under way. intel doesn't want to have the cash all invested, because they need it badly. >> thank you. the balance sheet of intel is in question here. >> they've ngone to an asset-light model, in a sense. brookfield is a partner. apollo is a partner. these same kind of structured deals in terms of when the

private equity -- or the alternative asset manager owns 49% of and receives 49% of the revenues as well of these fabs. >> well, the government is owed lot of money. >> the governments are partnered too. >> i think it's worth it to have as many partners as they can so they can repay the government. peopl people, when they talk about the program, to pick winners, so to speak, i think it's where they're actually helping us fend off what could happen in taiwan, always has to be aware that some companies don't have the balance sheet to do what you're supposed to. so, i commend pat gelsinger for raising this money. >> the only two names, jim, i would mention that we haven't gotten to are cpb with a beat and a raise on the full-year sales and ollie's too. >> i looked at olly's this morning. one of the great things is, david, when you get your newsletter, i know it comes probably really early for you. >> yeah. >> but they'll tell you, i mean, for instance, they were talking this morning about some mattel toys that are in long supply.

when you go to ollie's and see something there, unless it's damaged by fire, which a lot of times i buy damaged by fire books, what you see is something that is -- you could have nailed from day one. they were constantly selling newel stuff. i'm just saying that if you look -- >> when you see what's there, you can say a company has not done a good job managing its own inventory if it ends up at ollie's? >> my line this morning had kellogg's, nutter butter and marvell figures -- marvel, not marvell. that would be really bad. i'm telling you, when you see the store locator, get there fast but don't be long the stock. i'm not sure who i'm -- toys are in long supply, carl. toys. >> let's get some fresh pmis out from rick santelli. morning, rick. >> good morning. yes. s&p global service pmi, these

are final reads. they take the place of the mid-month reads, but it remains at 54.8. that's the best since may of '23. let's call it one year. now, if we look at the composite, 54.5, an improvement of one-tenth over the read. that happens to be the best since april of '22. and you see interest rates moving around a bit. they're not changing much, a little volatile. that might be due to the bank of canada. the first of the group of seven to cut rates from 5.25% to 4.75%. something to pay attention to, especially considering that they also have a target of 2%, but they considered 3% kind of their upper band, but they are cutting even though the inflation rate hasn't truly gotten to the 2% level. "squawk on the street" will return after a short break.

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time for jim and stop trading. >> i under estimated how much business hp has that is incredible. $3 billion backlog for data center. which is incredible. tony saying why can't you deliver 3 billion a.i. systems by next quarter but a very impressive quarter. i think the stock can go higher. i didn't think they have the power that is not like dell.

they have products that make it so that jensen feels they're strong. it's a breakout quarter for them. not reflected in the stock. crowd strike had another amazing quarter. they attacked microsoft throughout the quarter, throughout the whole conference call, one reference on broad com. they never missed the number. they are the cloud native and do a lot of stuff. >> you have them this evening. >> i'm george kurtz. and then i have snowflake, it's been a bad stock and we have to see if they can turn around. i had data bricks on last night, it's a competitor, i like them, they're private but i'm devoted to jensen huang with no one else. >> what does that mean? >> no. the more you talk about him, he's like elon musk at one

point. my wife priced out the jacket, can't get it for less than a g. >> a g? >> yes. >> people visiting the restaurants he visits in taiwan. people want to be where he ate. >> in taiwan, employees want selfies with him. we do not have a lot of ceos in the country where employees want selfies. most ceos are not recognized in this country, except they make 35 million. if you don't make 35 million you don't know what you're doing. >> and you have to have use of the jet at all times. >> i have to buy sushi and osmosis. > you do that. >>see you at 6:00, jim. >> what a show. ism services when we come back after a break. ailored educ. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders.

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good wednesday morning welcome to another hour of "squawk on the street." i'm sara eisen with carl quintanilla and david faber live as always from post nine of the new york stock exchange. stocks are pushing up higher, minus the dow. there's weakness in consumer staples, real estate, consumer discretionary, energy, health care, financials, materials as well. that's why the nasdaq is doing the best up .8%. aztec as tech leads the rally again. nvidia up again 2.3%. that helps. micron is up today as well. lam research, applied materials. look at treasuries, the trend is lower yields. buying of treasuries, 10 year 4.32%.

seeing the lowest we have seen in weeks now. the two year below 4.8. here are three big movers we're watching. consumer facing names pbh, campbell soup, dollar tree, ollies, more, we'll bring you the headlines. shares of hewlett packard enterprises popping. beating on the top and bottom line after a.i. revenue more than doubled from the prior quarter we'll speak with the ceo of hewlett packard later this hour. and watching apple today, the eighth straight day of gains inches from the highest close of the year. the key level to watch, 195 and 18 cents. so we are surpassing that right now. >> looks like a solid ism services. let's get to rick santelli. good morning, rick. >> solid with a capital s. 53.8 for the headline services ism pmi index. why is it a big number?

in the regulatoar view mirror w 49.4, the first time in months under 50. a nice reversal, 53.8 the best level since august of last year when it was 54.1. prices paid, 58.1, less than expected, less than 59.2 in the rear view mirror and 58.1, which is the lowest level since march. so it reversed from 59.2, been there done that. on the services, the employment index, which is important given adp disappointed a bit. and friday is the big jobs job report. this remains under 50. 47.1. a sequential improvement but remains under 50. finally new orders, sequentially higher 54.1, 54.4 was march.

once again the comp doesn't go back much but it was an i improvement. to summarize it seems the prices paid number would be to scrutinize and why the services number combined not getting much push back on the rates. back to you. >> important to see the prices paid come in below consensus. take any better below inflation print. rick mentioned the adp coming in light, 152,000 jobs added during the month of may and that was less than the expectation of more than 170,000. you can see where it's happening in services, 149,000. remember the expectation for the jobs report friday from the government is 180 to 190,000 if you pull out where the weakness was, it's interesting.

manufacturing, lost jobs in the month of may. also leisure, hospitality only added 12,000. that's the lowest number of jobs you have seen in some time. it's been one of the strongest parts of the economy. i'm just trying to get that. lowest since november basically on leisure and hospitality. you can see where what was strong, education, trade and transportation, professional and business services cut jobs this month. kind of a soft number and we look at the wages because that tracks with inflation. and adp breaks it out to job stayers and switchers. the good news for the fed on this front is the numbers are coming down. the wage growth is slowing. job changers look high at 7.8 but that's a decrease and 5% for job stayers is the lowest since 2021. it fits into the narrative the

job market is cooling not collapsing and that the fed can move closer to the rate cut. >> it's nice when the data makes sense with each other. it was the professional and business services lowest since january of last year. >> in the job openings. >> yes. >> so one thing on the cuts wanted to mention. watching the canadian dollar because bank of canada just cut rates. the hint here is there are more potential cuts on the way that's why dollar spikes and the canadian dollar weakens. cuts hurt your currency making it less attractive because of the lower yields. so it's something to watch but the job openings coming in weaker than expected. and then also, i look at the quits rate because it gives you a sense of how comfortable people feel quitting their job. and we are pretty much back to

pre-pandemic levels on those who are quitting, are feeling comfortable quitting. it spiked up after covid because there was so many options and jobs were so tight, that's come down another sign of cooling. >> the question is how cool we're getting how quickly we're getting. a lot of data points we talked about, seem to point to softening but are we getting the soft landing or are we going to -- > >> it points to soft landing not recession. >> where are we on gdp? >> it's come down a lot but still above 2% in terms of tracking growth. even the jobs numbers, even if they're cooling, first of all we're expecting almost 200,000 jobs added in the month and still an unemployment rate around 4%. it's still below that number. it's not significant stress it's sort of the natural lagged

impact of high every interest rates and inflation rates. it's something you hear across the country. ollie's bargain outlet for instance we picked out this quote saying consumers clearly remain under pressure and are seeking value making their purchases. we continue to benefit from the trade down effect we have seen over the last few quarters and seeing strong retention from the customer cohort. trade down is what i heard from campbell soup's ceo. they're benefitting from their sovo oacquisition, which is the tomato sauce. but mark did note during the quarter they saw snacking slow down and it's because low and middle income consumers were trading down to private label on things like pretzels and chips and being more cautious. snacking is a strong resilient category he expects that to

continue over the coming quarter. and then on the high end too, luxury has been pretty resilient. but we had the sak ceo yesterday and here's what he said. >> you have the emerging luxury consumer. i think that's where we're seeing the pullback. it wasn't as much the fact that they're worried about interest rates or they're worried about the stock market or not worried about the stock market depending on the month. it's more that things have gotten more expensive, that's normal in luxury. inflation in luxury is there, that's not eggs or milk or gs, it's something that happens every year. it's also their lifestyle, taking ubers, getting blowouts, things they weren't doing. so we're seeing the goods services flip in. that's where we're seeing the pullback. >> the pullback is in the

emerging luxury consumer not the core. and the way he defined that, the core is someone who wears bruno to walk their dog and the e emerging is those who are treating themselves. he also said -- i thought of you because i know you're interested in the glp one -- >> i thought you were going to say because i know you're on ozempic. >> he said it's a tailwind for the business. why because people switch sizes? no they feel better, they want to go out. >> they feel more trim want to wear something that fits them well, looks good. for sure. >> so tailwind despite slower economic. >> more on what the data means for the fed and the road ahead. steve liesman is here to talk about it. we have canada waiting on ecb,

j. w j j.o.l.t. >> it's amusing how ever report is an inflation report. nobody cares how service sector is doing, jobs are doing. it's what it mean for the fed? look at adp. going along good along with the government's private sector job report. a blowout in june, that's the spike on the left there, but not done a bad job predicting where it is. maybe the private sector this month comes in weaker. look at what that meant for probabilities. david and sara were talking about the slower data. all of that seeped in. first i want to show you the change in probabilities. down after the ism report this morning. we did update them but they were higher. y but they're all up from say last friday when we got what data we have for the month of june -- or for the month of may has come in on the weaker side.

one other chart i want to show you is the probability of that second cut. able to dissect this data and say what is it saying for november and december. low probability for that second cut in november but it rises to two thirds right now for december. so that's where we are guys all of this has come in. and then i asked the question, whether or not hey, is this the end of the period we've been in? the historic part where they're finally done hiking, staying higher for longer and now we get a few rate cuts from canada, tomorrow does it put pressure on powell? >> steve, as far as nfp goes i see goldman sticking with 160. i know jpm is at 150. what number conotes job creation given supply? >> well, i think that the 150s, 160s is still a good number but the -- remember the average is 190 right now. i've seen some 200s out there.

and part of that, by the way, i think we'll take with a grain of salt because what we're looking for is a restoration of state and local hiring that took a dive for reasons unclear in the past month so we'll look at the private sector and i believe we'll see slowing out there. you asked me, sara about the soft landing. i've been thinking about if nasa was giving advice to the fed what they would say is, if you want a soft landing, you have to deploy the parachutes. and you got to do it before we hit the ground. so that's my advice. >> is that now? what are you saying? are you july cut? >> i'm saying the parachutes are rate cuts and i think there's a enough slowing out there that might suggest -- if the ecb can do it aligned with the fed on inflation, not far-off, canada can do it, their inflation rate

is not too far. i think it might be worthwhile to put the parachute out. >> good debate their growth isn't as good as ours. >> fair enough but we had a decline in inflation with growth remaining higher. >> atlanta is at 18. they were at a 14 weeks ago. >> there's more concern we're not going to have a soft landing. that was part of my question to sara some of these data points are pointing to something different. not to mention the market didn't react to rates coming down, the ten year, until today. >> talk to real estate folks, there's concern about the knock on effect of that into the banking system. we've seen real incomes come down, real spending in the prior month was down, was actually negative. i think there's enough here the fed can take out some insurance and guarantee the soft landing

and sort of allay some of those concerns that are out there. >> something for viewers to ponder, thank you, steve liesman. it's called private capital's most senior gathering. leslie picker is in berlin talking to top investors. morning, lease lee. >> good morning, carl. i have the perfect segue from that discussion you were having i sat down with the co-ceo of fortress, josh pack, he is a acutely focused on commercial real estate and the fallout for regional banks. he believes it will play out in a multi-year cycle instead of past cycles where there's more of a v-shaped recovery because of fed intervention. pack said this time around the fed is ham strung, those were his words, and he doesn't think they'll get involved this time around. >> i think cre is kind of on its

own and needs to fix itself. we think that this cycle is going to look more like a traditional distress cycle used to look before you really saw this kind of central bank intervention of the past two cycles. what does that mean? that means it's going to take a few years to process through, it means that asset prices for commercial realestate, maybe they've levelled out, maybe they're not going down. we don't think they're going up over the next year or two either. >> does that mean you think it's bottomed? >> maybe we're close to the bottom. i can still see a little bit of down side as some of the product that the banks hold today actually comes to market and gets sold. >> in terms of how they're seeing opportunity and kind of playing this situation, pack said they're focused on distressed assets as well as buying some of the nonperforming

loans on the balance sheet that's how they're putting capital to work given what they're seeing in real estate. guys. >> good stuff, leslie, thank you. we'll see you in the next hour. as we head to break, the road map for the rest of the hour. the american housing market, we'll talk to fanny may's chief economist. and boeing is set to attempt another launch of the starliner with two astronauts aboard. tomorrow spacex looking to test their megarocket ship. and hpe we will talk to antonio neri and find out how much the a.i. boom is expected to benefit profits from here. "squawk on the street" is back in a minute.

mortgage rates continue to weigh on demand, total application volume falling for the second week in a year. the next guest says the waning demand is the likely lest lever to improving housing afford affordability. joining us is doug duncan. great to have you. >> great to be here. >> we were thinking we might see some action in apps. is it too early? >> i think there's a 7% hurdle in people's minds as rates have gone above 7, things have slowed

down the last couple of weeks, both purchase and refinance just because of where rates are and how many people have locked in low rates. >> what do you think the magic number is? >> probably 6.5. we did see for a period last year we saw rates get down in that range from 7%. there was a pick up in application activity one of the things going on since rates first rose up to that 7% level. we had about two years of income growth in that time period. if you look long term at what's a normal interest rate out to 2000, it was about 6%. so we're just above what would be a long-term normal number it's just incomes need to adjust to accommodate that. >> what about the sales listings? i note those have come up relative, is that because we haven't seen as much pleasure on the upside of rates. >> we survey consumers, a thousand a month using the federal statistics properties.

and the sales side is more optimistic than the buy side. so you have people who currently own a home seeing with house prices where they are, this might be a decent time to take value out of the house but on the buy side people thinking about buying a home -- >> because prices have held up so high, it makes sense. >> that's right. we see sort of a floor on the level of existing home sales even if economic times are difficult of around 4 million unit given our demographic profile and right around that for existing homes. now listings have come up a little bit, but they've gone from about three month supply to three and a half month supply the number of houses has also been rising on the existing home side. >> are you seeing anything reliable in the cracks of, say, asking prices in austin or parts of florida or other areas of texas? >> you've seen a pick up in the listings in both of those states.

i actually live in southwest florida, cape corral that had the biggest increase in homes for a couple of reasons, first insurance rates because ian visited, that's destroyed a number of homes in that area. so supply is coming up there. some people are revisiting do we want to stay for another hurricane or whatever? still a good market. the listings that are coming on the market are usually aspirational, and then you see a little bit of a down -- them relisting at a lower price. >> that's why we get a tick up in price cuts yes? >> that's right. a slow down. >> my other question. are you worried about rates impacting the longer term pipeline of multifamily let's say? things to worry about in '25? >> actually there's about half a million units that will come on the unit this year in the

multifamily, and so that is holding rents down below the rate of inflation. we think maybe about 1.5% appreciation this year and inflation is running at about 3. but the other thing that's happened is the rise in funding cost for the multi-family builders has suggested a dropoff in construction starting in '26 or '27 we might be hearing lack of supply again on the apartment side because of that adjustment in the cost of construction. >> overall, are you optimistic we can get to the 6-5 magic? >> our forecast doesn't have it this year it does have it next year. we think when the fed gets inflation where they want it and start to ease, what we're telling mortgage companies is, looking ahead, if you're budgeting, i would say over the housing cycle and there is a cycle, mortgage rates are likely to run from 4.5 to 6% with a median of about 5.25. that's what i would be thinking of where the sweet spot for a

normal quote housing market would be. something in that range. one thing to note, the first time that when mortgage rates passed 7%, there was a little bit of a pause in the new issue mortgage backed security market because investors did not believe that mbs would exist when the fed eased. so what you saw was mortgage companies offering 2% buy downs for the first year, 1% buy down for the second year and then full price. but more importantly you saw builders offering permanent 1 and 2% buy down. that showed you the imbalance in the market between existing home sales and new home sales because the problem for a first-time buyer is financing. and a bigger share of the builder's business is first-time buyers so they were going to the finance, not marble counter tops and finished basements and that. >> different incentives. >> the markets are still

imbalanced in the space. next hour, ken moelis is with us, and an impact on rates on the mma market. money movers, in an interview you do not want to miss. the broader markets, dow is down 100 points but the s&p up .3%. nasdaq up 1%. within 1% for all time highs for the nasdaq and s&p. a higher trade largely on the back of technology. we'll be right back.

welcome back to "squawk on the street." the head of major exchanges and trading platforms gathering in new york today to talk about trading trends heading into the back half of the year. bob pisani is there with highlights and headlines for us. >> this is the annual conference where the heads of the exchanges like nasdaq and robinhood all get together to talk about trading trends. how is the business? here's the topics. first is the macro set up headed into the back half of the year especially with an election

coming up. how much volatility can be expected. second what's the pulse of retail trading. what's the latest data on the explosive growth of trading in the options and futures, particularly zero data expirations. third is the mini-memos e stock rallies. has behavior changed, feeling is it has. fourth is the a.i. revolution. this is a big topic. how it might affect trading and the development of algorithms that guide a lot of the broader trading, a.i. is going to influence that. fifth is the state of ipos, how are the exchanges and the investing platforms expanding investments in companies that are still private. so getting into private equity is another way to expand as well. finally the industry's response to increasing regulatory oversight. remember gary gensler has been

actively hostile to many trading platforms and crypto as well. we'll speak to them on halftime report at 12:35 today. finally rostin benham is giving the speech here. he's going to be talking about possibility where we stand on crypto legislation. the house passed a bill giving more regulatory control but president biden has indicated there's still gaps in that, not indicated he would sign the bill if it passed through the senate. and finally a quick thing on the texas stock exchange being created today, a news report in the journal and most people are viewing that skeptically. i think the nyc and nasdaq have a monopoly on listings and it's likely they'll keep it for some time to come. >> we'll chat soon. more to come from bob pisani

later today. hpe one of the gainers this morning, surnggi, fueled by a.i. demand. we'll check in with more on the road ahead as s&p tries to recover, back to 53-11. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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welcome back i'm con sessa brewer with your news update. prosecutors are expected to call hunter biden's ex-wife today. prosecutors have spent hours trying to prove the president's son had an ongoing drug problem when he filled out a form to buy a handgun in 2018. a bomber joined in a south korean training mission today, dropping a precision weapon in that drill. it's the first time it's happened in seven years but tensions have been rising.

north korea floating huge trash filled balloons. and a delicate deal in place since 2018 to prevent military crashes seems now to be suspended. amanda knox's bid to clear her name in italy failed today. an appeals court reconvicted her of slander saying she wrongly accused a bar owner. the conviction confirmed her three year sentence which she had already served. shares of hewlett packard enterprise surging. the company said growing demand for servers helped boost the quarter. joining us the company's ceo, you've been telling us for quarter after quarter this is an a.i. play and the street has not been on board or believed you. you did prove it with the revenue, talk about what you're seeing in terms of demand. >> good morning, thanks for having me, yes. we posted a very solid

performance where we beat revenue and earnings per share guidance. and that was the back of the a.i. system revenue which more than doubled quarter over quarter and we see strong demand continue to take place. now the demand is no longer what i call the mobile builders of the service providers which have been built in these models but extended to clouds and enterprise of any size. in fact, our enterprise a.i. system order represents more than 50% of our cumulative order so far. so hp has been an underappreciated story. i think the market is waking up to the order that hp has unique ip and capabilities to be able to play in this amazing inflection point. >> talk about the sustainability of this as wall street trying to figure out the trajectory and whether the growth rates can continue. especially because the backlog wasn't as strong as some

expected: i think i see three unique segments of the market. the demand for computing in the service providers and the companies building service, continue unbaited. i think continue to do more computing power as the growth with billions and billions and some cases trillions but what i'm really excited is the up tick in enterprise. and the use cases and they're doing actual deployment, with those models and the unique data and generate with the talk and inference. for us it's important as we think about 25, 26, a lot of demand will pick up in that segment of the market. >> there were questions about the margins on a.i. servers. how do you -- how do you characterize that versus some of

the other product margins the rest of the segments. >> we have solid profitability in our a.i. systems which is captured in our server segment. if you look the revenue grew 18% and operating profit was 11%. which was the guidance we have been given to the street between 11 and 13% operating profit. the reason why that's the case, number one is because we are incredible, business about it, we focus on the deals where we see path to profitability. but the reality is we see a s significant pull through of services. not just the infrastructure side but the value around it. in fact, many of the deals we deploy not only sell the server or the infrastructure but we actually deploy and manage it on

behalf of customers which is an important point going forward. >> you talk about the enterprise -- it's david. >> hi. >> hi. north of 15% you said on your a.i. orders. can you give us a sense where the trajectory is of that, where it's been and may be going. >> when i think about the type of use cases we deploy in our company we are using a.i. in our value chain whether it's supply chain or services and also the functional side. it comes down to use cases you can use a.i. like chat bots which is well under stood but a decision making tool, in addition to productivity whether it's employees or r&d, we expect it to grow rapidly. think about it this way, on those three segments the large service providers, few customers

think tens of customers. the sovereign clouds maybe hundreds, right. and when you go to enterprise go to thousands and thousands, and the number of gpu goes from high to lower. so we see number of deals in enterprise in the thousands. but also significant smaller footprint. we are under estimating them because we run the life you see hp discover a series of announcements and jensen with will be on stage with me. >> another tech conference featuring jensen huang. thank you, we appreciate it. ou thank y. coming up after the break, a read on the markets with the head of goldman's assets and wealth management business. you do not want to miss that when we're back in a moment.

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as you were return international is under way in berlin, our own leslie picker joins us from there with a special live guest. hey, leslie. >> thank you so much. i'm joined by mark, who runs asset and wealth management for goldman sachs. great to have you here at super return. we should kick off with private credit that's a focus of the for direct contact. -- why is this a marriage that makes sense? >> sure. thanks for having me. so private credit is one of our big asset classes in alternatives. we think we have a lot of expertise in the business we started the business back in '96, it was our first mezzanine fund. we're now on five.

we launched our direct lending platform that's the platform we just raised $21 billion for. so we have a unique business. not only are we veterans in the business of having done this for so long but we also have a way of combining what we do on the investment banking side with leverage finance with our private capital business. so we tend to go to clients with both options and say here's what the market looks like, private credit looks like and shows people the pros and cons of the two and clients can differentiate what fits most so we can offer both solutions to clients. from an investing perspective we can offer our investing clients great returns and funds. >> it's important to point it out. so much has been made, there's a narrative that private credit is

stealing business from the banks. and there's this whole intermediation in the industry. jamie dimon was recently on the record talking about you know what to pay when the cycle turns to private credit when you know what hits the fan if this industry sours. are you worried this hasn't seen a true cycle at scale and how do you think about traditional banking versus private credit? >> i think in our business given we've been at it for close to 30 years we've seen cycles and seen cycles in the business and our investors have seen cycles so we're mindful of it. in our direct lending strategy we're focused on large cap, and defense of industries, good cash flows, noncyclicals for that exact reason. i think there are a lot of newcomers who have not necessarily seen the cycle. obviously the cycle will increase the falls. and some losses in private credit.

it's not a riskless asset class. i think the interesting part about private credit is it's a pre-distributed model and the actual funds are not highly levered. so from a systemic perspective you have something that is, you know, broadly distributed. so i think that some funds will perform less well than others. we will see dispersion over the next ten years. we haven't seen much over the years given how benign the credit environment has been. but we'll see credit dispersion. >> in your seat, goldman overseas has $3 trillion in assets, what are clients telling you about the current macro environment and how are they shifting their allocations given the uncertainties out there. >> clients ask questions i think one of the big changes in a sense is you're going to go into

environment where interest rates will be higher than they have been in the past decade or so. so that has resulted in clients shifting assets into fixed income. fixed income is an asset class you can make good returns again. so clients are asking how do you think about portfolios where rates are going to be higher than they have been in the past ten years. i think moving to fixed income, private credit. we see clients moving a higher percentage of their portfolio to alternative assets. i think we will continue to see people entering different alternative asset classes as we've seen higher returns. but i think the mix between fixed income and equity will shift a bit. >> shift more towards -- >> fixed income. >> fixed income. >> so i want to highlight for our viewers kind of your role within asset and wealth

management. been in the seat for 15, 16 months now, at hthis point and lot of headlines have been out about you being david solomon's fix it guy, the guy to turn around this business and be more predictable revenues for goldman sachs as a whole. there's been talk about turnover in the ranks and other aspects of the culture. how are you thinking about success within this division and what it means for just the bank as a whole? >> sure. i think this is a team effort and we have an amazing team working in asset and wealth management. we laid out at the beginning of investor day, some gross objectives, financial objectives and what we're focused on is executing against them. that's the key focus of the whole partner group in the business and everybody in the business. so i feel good about the progress we've made. we've had a number of quarters

since the investor day last year. and so we're marching along that path that we set for ourself and we continue to execute on the things we outline. >> i believe this is your first cnbc interview. we appreciate you taking the time here at super return in berlin. thank you mark, the head of an s market cap. of course, as you might imagine, as it closes approach to that $3 trillion. also, if it were to approach that or exceed it, might exceed the market value of apple as well. an outcome that might have been hard to imagine as little as six months ago, let alone a year ago, but nvidia shares are up 8 841%. certainly worth keeping in mind. microsoft is the only company that exceeds $3 trillion, $3.1 trillion in market value. nvidia shares are up yet again. >> it's lifting the entire technology sector.

again, you just heard hewlett-packard enterprise, which is the star of the show today on the ai servers it managed to sell, up 12.5%. mentioned his event in vegas in two weeks featuring nvidia's jenson wong. >> and if you have to brace jenson in a photo, for your own price. >> did you see he signed a shirt -- >> he signed more than a shirt, from what i saw. >> really? >> under the shirt. >> oh,. >> that definitely went viral. meantime, boeing is trying for the third time launch its "starliner" spacecraft. this would be historic with humans onboard. morgan brenna is here to prbrea it down. >> we have docountdown, could b an historic moment for boeing, for nasa, for human space flight, as this would represent

only the sixth inaugural crewed spacecraft flight with boeing for the first time ever with "starliner," ten years in the making. two astronauts, nasa astronauts onboard, poised to send them to the international space station. bush wilmore, sunny williams. this is basically the third time we've seen this attempt to launch in the last month, with those astronauts onboard. and it's poised to happen here any second, it looks like. maybe one minute away. not sure if my camera is a little off here. but guys, this would add a second commercial spacecraft to the roster for nasa, alongside spacex's dragon capsule, which has been carrying astronauts to the international -- there we go! it's launching.

>> commander bush wilmer there calling down to mission control here in houston as the spacecraft has begun rolling into the right altitude for its asset. >> the point of dynamic pressure where the air frictions are highest, will shortly be passing past mach 1, or the speed of sound. >> and there we have it. so far, a successful liftoff for boeing's "starliner" capsule. first time with astronauts

onboard. nasa astronaut bush wilmore and sunny williams, it is being carried to orbit right now via aunited launch at llas 5. this is the first time this rocket has actually launched people to space as well. as you just heard a few moments ago, reaching max "q," which is always the riskiest part of one of these space launches. and now they're headed to the international space station. so this will be a 25-hour journey to get there, and you will see a docking process that happens, with this capsule attaching to the international space station for what will be essentially a week-long trip. the whole point of this mission is to test this capsule for future human spaceflights. if all goes according to plan here over the coming days, guys, this is going to put boeing in a position to finally be certified to do contract admissions to the

international space station for nasa. it goes back to a contract that was first awarded in 2014, to the tune of $4 billion. boeing has taken quite a number of charges, upwards of $1.5 billion in recent years to get this off the ground and to make this moment possible. there have been a lot of delays and a lot of hiccups, but here we are, all of that hoard work right now, paying off. >> morgan, pretty historic. they'll spend about eight days on iss before coming back in the capsule. what does it do for boeing's ability to catch up, i guess, to spacex? >> so spacex actually has been carrying astronauts to orbit since 2020. they've done 13 crewed missions so far. they've sent 50 astronauts, both for nasa and privately to space now. and that number continues. they have also extended their contract with nasa. now, boeing currently has, after this, assuming all goes according to plan, boeing has six contracts to do something

similar for nasa, bringing astronauts to the international space station. what happens beyond that is still an open-ended question. for the government, it offers some diversity in terms of -- and diversification in terms of how it decides to do human space flight and conduct missions, moving forward. but don't forget, spacex has a key launch as soon as tomorrow, too, with star ship, which is its mega-rocket. that will not have people onboard, but that is going to usher in a whole new era, including, once that gets operational, carrying astronauts to the lunar surface. >> and real quick, morgan, remind us, starship's last attempt -- i know they keep it rating on it and it keeps getting better, but what are they looking for tomorrow? >> it's going to be very similar to the last attempt we saw. it's about achieving orbital velocity. not necessarily going to orbit, but achieving that rate. and the real focus is this fourth mission, this fourth

test, is going to be about re-landing that megabooster, and doing that in an orderly fashion. it's going to be a very similar process to what we saw in the last test, and what's perhaps most interesting is that the faa license is a little different in allowing for different outcomes with this scenario. >> morgan, thank you. morgan brennan. and that does it for this hour, but we have a lot more market coverage ahead for you with the s&p up.5% and the nasdaq having a good morning, up over 1%. just type wt.com. weathertech has hundreds of premium products that will keep dad's vehicle looking its best. like laser-measured floorliners, cargo liner and seat protector for extra interior protection. sunshade blocks harmful uv rays. the cupfone perfectly secures his phone while driving. order these american made products or a gift card at wt.com. happy father's day.

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good wednesday morning. welcome to "money movers." i'm carl quintanilla with sara eisen live at post nine. today, holly newmancroft, one of barron's hall of fame financial advisers on this narrowing evaluation gap between the mag 7 and the rest of the market. >> and billionaire investment banker ken moelis is with us. nvidia gets all the headlines, but one top tech investor says there are plenty of under-the-radar ai plays and he'll lay out some of his top picks. meantime, some