his -- no, if he had a question for rory. >> you can ask him tomorrow. >> i'm going to ask him tomorrow. we -- >> we can ask him tomorrow. >> we can ask him tomorrow because that will be three straight days. get some sleep tonight. and andrew, you got -- man, you're working. you got a lot of people out there. that's a good -- it's a festival. i called it a conference. it's a festival. >> it is. it is. we got a lot more we'll bring you tomorrow, absolutely. >> excellent. "squawk on the street" coming up right now. good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange. faber has the morning off. futures are under some pressure as yields bounce on some hot inflation reads around the globe. canada, yesterday. australia, today. that said, several upgrades today for names like apple, depot, shopify, and more. our road map begins with nvidia today, extending the rebound, returning to that $3 trillion

valuation club. fedex surging after posting that q4 beat, reversing six straight quarterly sales declines. and there's rivian, soaring on this volkswagen plan to invest up to $5 billion in the ev start-up. let's begin, though, with the markets. the dow is coming off the worst session of the month. nvidia shares continue to rebound. jim, are you thrown by australia's cpi running hot? is that what this is about? >> i do believe that what we're stuck with is this endless running hot. there's always some component, and it's wearsome. this is a $12 billion company, but it's just reverberated throughout housing, throughout everything in a house, out a house, if it weren't for the fact that you had carnival, you would say the consumer is in trouble. now it looks like the consumer

narrative is not spending on their house. they're spending on trips, but they can't sell their house, don't want to sell their house, because they can't buy another house with a low mortgage. we still have inflation in the system around the globe, and central bankers, if they talk to each other, are going to say, no, not yet. >> that said, we do have mortgage rates at a three-month low today. >> right. >> we did get d.a. davidson upping depot back to hold. >> i thought that was a good piece. it did say you have to buy it at this point, at this juncture. it just usually doesn't have this discount to its high, and discount to its all-time high. look, i like the piece, because i like home depot as a concept, but i don't think that this market likes for you to buy a stock that isn't at its last bad quarter. you don't have it. i think yesterday's pool corp. was devastating for home depot. there's too many aisles of home depot that get hurt. >> mohawk. the list went on and on yesterday. >> furniture brands got hurt.

so, what you found is -- this is part of the nvidia problem. okay, you want me to go beyond nvidia? well, let me go into housing. head cut off. let me go into banks. whoa, man, the regionals are in trouble. let's go to foods. oh, general mills misses. you have to have something to -- you can't just say, oh, it's going to broaden. >> that's why fedex was such a story last night. >> fedex was like a gift. it just said, wait a second. before you throw away everything, before you decide that what matters is a southwest number cut, this was a tour de force. raj subramanian is thinking about whether to prep the freight business because the freight business is selling at six times, maybe he can get 13 times. i don't think we have to make too much of that. the analysts were shocked about that. what you have to make too much about is how much this company can make with a little bit of

revenue growth, so let's say you get 2 to 3% growth, get mexico kicking in and india kicking in in a big way. you got a stock that's not going to be 2022 for earnings. it's going to be 27, 28 for earnings. i love the story. i was jealous of it. really saw it coming pabecause j is so great. >> jpmorgan goes to overweight. they go to $359, jim. and then this freight stuff. can you explain how it rhymes, if it does, with the u.p.s. move the day before? >> okay, i think that the u.p.s. move was done out of desperation. i think that that was a -- in the logistics business and they are selling it at a trough. i don't think fedex would disagree with me at all about that. they want to look at the freight business without this because the disparity is so great about what they can sell it for. so, you have -- this would, i think, be what fedex would say. you've got u.p.s. selling a business at its trough. you have raj considering selling

a freight business at its peak. and raj is enough of a financial guy to say, you know what, maybe it's just worth it to monetize it somehow, but the way this man thinks is extraordinary. without ever compromising on the unbelievable, and i revere, fred smith vision of the mote, what he's doing is taking out airplanes, say. he's got enough flexibility in the system that he can get rid of these very expensive planes, including boeing 757s, and be able to use the slack to -- look at this -- to be able to get in and save some money on the planes. now, understand they're going to lose the post office contract. that was agreed. there's going to be 500 million coming out like that. everyone should know. there's a couple fewer days next year. everyone should know that. he's buying back stock, which shows you that the balance sheet is in terrific shape. i think he's taking very big share. u.p.s., by the way, apparently has kind of slowed down as many

days rural america. you don't get the same level of service in rural, i think, that this is the rubric of the industry. fedex gives it to you. europe is a big cost takeout. change in management at europe. europe is going to be incredibly good. there are no flies on this story, and this drive. i call it overdrive. i know that raj calls it the drive, reformation for fedex. it's the overdrive reformation. he is consistently underpromising and overdelivering. it's a thing of beauty. it is one of the best transformations i've seen in my lifetime. >> it's a -- it is a far -- it's a big leap from where they were, what, maybe three, five years ago, jim? >> all we ever knew was that in revenues went down, earnings were crushed. you had a 1% decline in revenue. you swing the loss. now, you get a 1% increase in revenue, the delta is incredible. and by the way, not going to have -- it's going to be 2%. it will be 3%. this is at a trough for revenue

growth. e-commerce, still very strong. >> by the way, today, b of a takes amazon to $220, reiterate top pick in their view, jim. their five efficiency metrics, they think the company's got a lot of runway ahead. >> wow, that was an important piece, because they basically said, look, before you think that amazon's done everything it can out of retail, there's going to be more coming. now, the margin leverage -- brian, the cfo, he's fantastic, people don't talk about cfos enough. we have a cfo council that seems to have decided who's going to be president. let's hold off on that. when uh you look at what they'r doing at amazon, they are bringing down the cost of a package, which means they can do more same-day, which means, look out, cvs. look out, walgreens. what they're trying to do is make it so that every aisle you have in those stores, you can get same-day. they're able to do a tremendous number of units. one of the things i'm shocked about amazon, right now, there's 17 different old spices for

deodorant, teton mountain, everest, captain morgan, these silly names, but every one of them is covered by amazon. i'm being facetious, but what amazon had told me is we don't just have the basic costco. we can do all these units. if they can do this same-day, why would you go to the store on the way home when it's at your door? that's what this is about, at your door, more cheaply, same day. that has been the holy grail for amazon. they're pulling it off. >> jim, i'd love to get your reflections on nvidia's day yesterday, best since 2021. today, kanter goes to $175 from $140. upgrade of apple over at rosenblatt. >> that's barton crockett. i always enjoy him. ex-journalist, so he always gives you kind of a -- a literary approach. i like good writing, so to speak. and he's talking about conversational a.i. subscriptions can grow, but he's got -- he's very matter of fact. 15 new features are going to make it so you want the

smartphone. really? 15? tim cook doesn't know there are 15, for heaven's sake, ceo of apple. i like the piece. one of these that tim told me that's driving me crazy, i said, do you think you did chatgpt, is that it? he said, stay tuned. i've been staying tund, and nothing happened. but don't stay tuned much longer because he says they're in talks with anthropic and alphabet. they're getting the best of all these guys that are spending money on datacenters. when you have two billion customers, it's worth giving your product away just to get them interested. >> the point out of rosenblatt is, a, two things, one, that consumers want privacy in a.i. >> thank heaven. >> and apple's push there will give it leverage. and then this notion that they are immune to some kind of cost pressures from the hyperscalers. >> yes, well, one of the things, again, i reference my conversation with cook, because we were both kind of flabbergasted the stock was down

on the wwdc, because the emphasis was privacy. one of the things that cook has said is, listen, that's what this whole new generation wants is privacy. why weren't people talking about it? crockett got religion and talked about it. that was very important. i think that that's probably the most important story that people don't realize, versus joanna sterns' piece today about, you don't have to buy anything this summer. i disagree. you can buy the pro max, the 15, and get all this a.i. i like that story. but i think that there's -- this thing's got legs at $165, they hated it. >> maybe the most important story this morning, jim, is what micron will say. there's a lot of chatter about a name up 70% for the year and implications for nvidia tonight. >> i think that -- all right, let me just say this first of all. sanjay is the most unsung ceo in semiconductors for non, you know, obviously, jensen's not unsung. but look at what sanjay did. back in the summer, he called

the bottom. the way he calls bottom is say, listen, there's inventory at a low. then he reiterated that in december. you still could catch a double. i think he's going to reiterate again. i think he's going to say that business is accelerating and the high bandwidth memory -- now, they corrected me when i said that was going to be the whole company. remember, high bandwidth member is one aspect, but hbm will be considered a proxy for what they think nvidia is going to do. a lot of people are saying that, maybe today, jensen huang at the shareholder meeting, might say something. >> yes, yes. >> now, typically, shareholder meetings have not meant much. >> i was just talking can santoli about this. when did we start making a big deal out of meetings? >> if there's a robot in a leather jacket, i'm taking my numbers up to nvidia. but jensen is -- by the way, there are a lot of people who are saying, how many jensens are

there? jensen's at every conference. >> he is everywhere. >> he's at snowflake. i heard he might be virtual. he was at servicenow, at hpe, at dell. how does this man do it? when i was out there, there was little jensen. they had jensen. they had little jensen. but can jensen be in all these places and be at the shareholder meeting and say great things? if there's one person on earth who can do it, it's jensen. >> there's going to be a lot to watch at the meeting and with micron. >> but he has sanjay. everyone loves sanjay. if you don't like sanjay, come see me. i'll set you straight. >> we'll see what happens. nvidia has lost some of its premarket bounce. after the break, there's rivian, shares surging some 40% today following the big volkswagen investment. we're going to take a closer look at that and see what it means for the auto business as we do await some delivery numbers out of big players next week. futures are still in the red. "squawk on the street" is back in a moment.

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volkswagen planning to invest up to $5 billion in rivian, sending shares of the ev maker soaring today. volkswagen is going to begin with an initial investment of $1 billion. the word game-changer being used a lot today, jim. >> look, i think that one of the things that people -- i read a lot of financial notes today, but i think that they're missing the point. there were a lot of people after the cancellation of the georgia plan or on hold in the georgia plan started thinking, what am i going to do buying this if there is no rivian? why would i buy -- they say a little north of 50,000 beautiful vehicles. you can test drive one, by the way, locally, in brooklyn. it's terrific. >> really? >> yeah. absolutely -- we went. i just thought it was great. but the objection has been, look, you can't buy a car if there won't be a network to fix it after. we see, by the way, how hard it

is to fix a tesla, as we know from hertz. well, that's off the table. no one's going to say now, well, wait a second, i can't buy a rivian. i think the stock is not up enough. now, be careful. it's a convert. people shoot against converts. that happened once before to rivian, meaning they sell the common and get -- short the common, go long -- i will make this point. you take the -- if you take the survival of rivian off the table, which is what you had to do -- you were worried because where was amazon backing them up? they needed to find someone to replace amazon, and they got a company that i think the shareholders of volkswagen may not be all that happy because they got a very good deal, rivian. >> yeah. i think vw is down. >> yes. but rivian, survival -- off the table. that's going to really help sales. >> a little bit of a halo for names like lucid today. aptiv, jim. it's down nine as volkswagen might not need a lot of third-party software. >> one of the things that the --

the first thing they said was that the iteration of the software they use at lucid is going to be -- the result is the -- mr. ben, the chief software officer of rivian, they do talk about how this stack, the -- there's a terrific software stack, and i'm presuming what he's saying is from now on, that's going to be volkswagen. it's a very, very positive conference call, by the way. this was one of the -- this was one of the great kept secrets in the world. i was dealing with these guys, and i was like, panic. we were going to go to georgia to do the show. >> really? >> what are we going to do? go see the falcons? no, thank you. come on. check me out. i don't want to see the falcons. if i want to go see a bad team, there's a lot of bad teams. i'll go to chicago. >> big implications for their suvs all the way into '26. meanwhile, jim, cybertruck now over at tesla, this is the fourth recall. this is a plastic rim that can come off the car. next, there's been some stories

this morning on how they may lose their majority in the u.s. next week as delivery numbers come out. they make -- they sell more in the u.s. than all others combined. that may change, finally. >> wouldn't shock me. by the way, the f-150, which a lot of people were comparing cybertruck to f-150, i think that's wrong. you should compare it to a lamborghini. f-150 sales are fantastic. there have been a series of raids done on ford saying the f-150 sales have weakened. completely untrue. >> you said this yesterday. >> i saw it again. i saw it again, that ford is having a weak summer. my travel trust owns it, i'm going to talk about it tomorrow at our investing conference, but this -- it turned out to be a real tough market anyway, and you go in, and you're musk. why -- you got -- if you shoot the king, you got to kill the king, and the king is f-150. that's not happening. i mean, they don't even make the -- i used to have a super duty. after 15 years, that's their time. but anyone who has an f-150 is

not looking at the cybertruck. the cybertruck is for very rich people who work in silicone valley and don't go anywhere. >> we did get another month of deflation, year on year, new cars. we're going to talk more about -- >> it helped cpi. >> we're going to talk falling prices as we look at southwest's warning today. pricing at general mills. we'll get cramer's "mad dash" and countdown to the opening belln mont ia me.

time for cramer's "mad dash" as we downtown down to the bell. >> i know i sound like a throwback defending ford. now i'm going to talk about gm. yesterday, gm cruise named former xbox executive, by the way, also worked at sonos. the guy has been terrific. and i think that his -- his name is mark witten. you may not know him, but i checked in with mary barra this morning. you know i'm a big barra fan. her stock is up 30%. by the way, tesla stock, down 27. that makes me a fan. i'm pretty abject. if you like the playoffs, i like you. if you don't, i don't like you. i'm excited that mark is joining cruise. he has the leadership and expertise to lead cruise, advance technology and deploy it, improving the safety and convenience of how we move. he is the right person." why is this so important?

it was when kyle vogt left, there was a belief that maybe cruise was really foundering. but they're back. they're back. supervised driving in phoenix, used in dallas. mary barra is not going to lose any more money, from my point of view, for cruise. they've spent a great deal of money. remain convinced that she will continue to buy this stock, because she thinks the multiple's ridiculous. i'm convinced that ford must do the same thing, but this has been the hot stock, is gm. we all seem to act as is, wait a second, let's talk about the hangnail, tesla. how about the major -- look at this. if david were here, he would see the reverse head and shoulders. >> best-performing oem of the year. meanwhile, i saw a headline that waymo is offering rides to basically anyone in san francisco. you just open the app and go. >> why would i want to do that? just kidding. waymo is a very good company.

i remember kidding ruth porat, now the president, when are we going to be able to buy a share of waymo? waymo was the one that had the most mileage. where? what are they doing? you know, alphabet gets no heat whatsoever, and why is that possible? well, you see, you don't get heat, but your stock is like this. >> exactly. >> love waymo, love waymo. i was going to take a waymo to the super bowl but you had to stop at glendale and hail a regular cab. no, i would like to go straight to the super bowl. didn't happen. >> we'll watch that. a lot of car news today. the opening bell is coming up in just under five minutes. don't go anywhere. ♪ ♪ [ speaking minionese ] no. no. no. no. no. no. [ gasps ] [ chuckling ] good job, junior. way to go. [ chuckling ] [ speaking minionese ]

>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. southwest shares are moving lower in the premarket as the airline cuts its q2 guidance, revenue per available seat mile. they did say, operationally, 99% of flights are completed, even with the weather. that was the only bit of good news. >> all i can think of is what's going to -- what are they going to do at l.a. partners? you got to -- a company that

still feels like you can't shoot straight. when you go into -- yesterday, phil lebeau -- did anyone see the delta interview? darn, man, delta's profitable. they're doing everything great. i can stay at the lounge. i got southwest, and it's, well, everything's great. don't worry about the financials. what? look, i'm not a travel agent. carl, we should buy southwest because i really got a good deal on that houston fare? no. it's about profitability. that's, unfortunately, still a part of the problem. it's not just about running an airline. it's about profitability. >> this is about actual pricing models. given that the backdrop of travel is still incredibly robust. >> they did -- minus four. we were looking for minus 1.5 to minus 3.5. you just can't screw up when you're in there and elliott is staring you down. i just don't get it. but i do think that -- i don't want to buy it. i don't want to sell it. >> you haven't called for jordan's dismissal, have you? >> no, no.

i think that his -- there's still a lot of issues. i wish -- let's put it this way. if you think he should go, then you should say the whole board should go, because he's fulfilling what the board wants. you can say, wait a second, the rubber hits the road. not a great quarter. >> let's get the bell here. at the big board, sound point meridian capital celebrating a recent ipo. at the nasdaq, it is aerospace and defense contractor aerovironment. >> they're going to be on "mad money," and i felt that one of the things that has really been -- the people behind the scenes in the pentagon, they say the same thing, which is that we're still geared toward really expensive drones versus, say, iran can produce drones for nothing. aerovironment is producing drones for very little. i remember going on their site. i wasn't trying to use a, you know, switchblade. all of their drones were priced very cheaply, and yet they were

really fantastic. cheaply versus, say, a javelin, which is a very inefficient weapon versus what aerovironment has. but they weren't getting the orders. the pentagon seems to be biased toward big hardware. nothing new. nothing new for decades. that's the way the pentagon goes against our enemies. and by the way, i don't mind calling russia an enemy. they are really addicted to the cheap. and you can always win a war if you've got cheap and good versus really expensive and okay. >> well, doing state visits to north korea, that's your general -- >> that was very important. >> speaking of some of that, jim, oil hovering close to two-month highs, even though the api inventories were not bullish. >> right, and again, war. war premium was $5 in the south. now it's dwgoing to be $5 in th north against hezbollah, and i think israel feels they're going to -- this was one of the decisions not to be too in the weeds about israeli politics, but the supreme court did say

that the people who are -- have not had to serve because of religious reasons will have to serve. all i can tell you is, you do not get that kind of thing if you're just going to have calm in the north. >> yeah. >> i don't see that. >> and sort of in a related note, dollar close to some highest levels since november. >> yeah. >> which generally isn't a sign of great stuff. >> no. yesterday, i saw proerkcter & gamble down. i said, they're going to raid the darn thing because that is the most dollar sensitive of the big packaged goods companies. general mills is not the most dollar sensitive, but holy cow. i don't know. there were a lot of people who told me that it would be saved by yogurt. but yogurt's only 7% of the company. yogurt is the food that you want to eat more of with glp-1 i'm told. >> organic down six. street was looking for down three. the only unit that had positive organic was north american food service. >> i know. and you know, i thought that jeff harmening was really -- the stock had been doing better than most in that cohort.

coca-cola has been the one to watch in that coheort, because people say, who has snacks, salty stuff, stuff that people aren't going to eat, pepsi versus coca-cola, first time, very big disparity. i think that general mills -- i was counting on them. you're selling something with almost a 4% yield. but pet was bad. and i was thinking that pet was going to be good. >> now we're building a list of positive macro, negative micro. general mills pricing, southwest, as we said, mortgage rates, three-month low. target cutting price. >> we haven't heard from the federal reserve of kalamazoo, and i'm waiting for the fareder reserve person in big sky, montana. let's hear from montgomery county, not delco. i find that what happens is you're going to get this compilation -- this group of stories versus, say, what happened when you listened to the lennar call, the kb home

call. they're not building a lot of homes. we need to have something happen with this mortgage problem that makes it so that, like, if one-third of things go up by cash, and if nobody wants to get rid of the 3% mortgage for a 6% mortgage, that means we need so have a -- we need to have homes. what was interesting, by the way, that kkr buying more homes. >> some multifamily. >> i think that makes a ton of -- it's harder -- hard to fault kkr. >> we did get the 30-year fixed down to 6.93%. that's three weeks down. >> i don't care. i need supply, not -- i do not need lower mortgage rates. i need supply. what should happen is we should get to a point where you build a marginal house and then suddenly, you realize, i don't care. i got to sell my house. the price is too great. that hasn't happened. that defies what, i'm sure, jay powell was sitting there saying, we'll have a tipping point. we always have had a tipping

point. this is the cycle that has not been like any other housing cycle. >> yeah, yeah. >> it's just not. it's confounded the fed. >> yeah. you mentioned general mills. we did get an upgrade of campbell today out of jpmorgan. they go to overweight. >> when i spoke to mark clouse, and he's a terrific ceo, by the way, and huge eagle fan. he had the jason kelce stew, which, very good. i didn't want to open it because i liked the can so much, but then i was in a jam because my wife wasn't around. man, that stuff was great. here's the stuff with campbell's. this rao's acquisition is working. and i had some -- by the way, the line extensions, i had the rao's chicken soup the other day. it tastes like coming home, which was the -- which was like the pittsburgh beer saying that i like. but yeah, it tastes great, and i think that one of the things he's done is say, listen, this rao's acquisition, it's going to pay off in the first year. most acquisitions do not do that. witness the hostess twinkie acquisition for smuckers. >> speaking of m&a, it looks

like cedar fair and six are going to get that closed. then there's this reuters piece about whirlpool. stock was up 15 premarket. >> let me say something. when i went to get the whirlpool, how did i get a low price? i footballed with the guy. i said, willisten, i'm going toy the wash if you don't give me the whirlpool. if i'm playing them off, do you think that the ftc is going to bless that deal? i mean, that's got to be the least likely deal that has come across since kroger-albertson's, even though i could make a case for kroger-albertson's. don't forget capri ctapestry. you have to have competition when it comes to toe cleavage, up and that, speaking of jimmy choo. and the metric there is toe cleavage. >> there was this piece in reuters about doordash and that they had looked at this deliveroo in the uk as a possible takeover target. but you're right, jim, a lot of

these things get looked at and then just sit in the wings. >> well, look, i remember when, like, when you see these different companies, like halliburton baker, companies want to get together. that's the bankers assuring them and the hired gun lawyers ashiring them that they're fine. now, you see, in the old days, i would tell you that these are charlatans, these lawyers and bankers. now, i just say, you know, ill-advised. >> speaking of banks, tonight, stress tests. lot of chatter about how the industry managed to bend some of these rules to their advantage. >> and yesterday was a big throwback day. holy cow. they really -- they went after the wells. bank of america today, net interest income may not be what you want, but bank of america has been the horse right now. isn't that interesting? and about time. brian moynihan has quietly done a great job. i have to be his promotion man. i never thought it was going to come to me to do that, especially during the period of

2008-2009, when we had a screaming match every day, and i now regret that. i didn't handle myself well. >> there is a stable of ceos whom you wish were more promotional. i'm thinking of pinterest. you mentioned b of a. >> oh. oh. you know, it's funny. i want to promote raj, but i don't have to. he's raj super-manian. look, there are people who i just -- mary barra, i've become her press agent. it's very difficult. she has no press agent, so i fulfill the role. i'm taking no money, by the way. >> i'm sure not. >> no money whatsoever. these of you who think that's -- no. these people are -- some of these people are so great. i think, look, for ten years, i was jensen's press agent. >> that's a good point. >> everyone laughed. they thought, like, what makes sammy run? >> you're like broadway danny rose. >> yes, yes. i was burt lancaster. how unctuous and horrible was he

in that? >> i know you saw this wells note about disney cruises. they've doubled capacity since '19. >> after -- in the wake of -- i like that -- in the wake of carnival -- i just a thought of that -- in the wake of carnival, when you see disney, and you see that they have a huge number, what, huge number of ships, eight ships, it becomes the experiential company. and maybe you have to reserve for the rides. you know what should happen right now with disney? i've been thinking. what would be great? well, what i would do is i would have hugh johnson come out. >> this is like three days in a row. >> well, because it's a great story, and now people are saying the quarter's going to be good. good. get an upside surprise. i guess i have to be on that call too. i'm going to be one busy fella. >> wells thinks that cruises could be 10% of experiences operating revenue by '26. >> if you go back on the carnival call, which, by the way, was a tour de force of -- they were, like, tarkking numbe

up for 2039. that was one of the greatest calls. but josh weinstein is saying there's not a lot of ships coming on. that has been the bull case for a long time. disney's got it. disney's got three of them. disney has to stop talking about anything that it was talking about. >> yeah. i mean, if you can answer some of these longer-term legacy businesses, then you can really turn your attention to dtc. >> i can worry about experiential. i can say, oh, experiential is terrific. i don't have to worry about movies that are that horrible anymore. they had a hit. the disney story is coming together, but disney itself, with a ceo, like a permanent ceo, that would be good. >> jim, we spent a lot of time sort of wringing our hands about the labor market. the paychex quarter was kind of in the middle of the range, yeah? >> yeah. >> guidance, little bit above the midpoint. >> well, i mean, this has to be the first time that the stock isn't down four after they report, and then they have to come on "mad money," and we have to take the stock. look, remember, this is small and medium-sized business and

that's been a very good sweet spot of the economy. it was a good number. you know, this is one that -- it's not a light company. versus, say, automatic processing. people love adp. it doesn't matter what happens. adp, they take the stock up. but i think paychex is undervalued. >> interesting print if you look at chipotle today. your eyes do not deceive you at $63. >> this is really important. chipotle is what i'm talking about. initially, people get excited. the stock was up 60 cents in premarket. the whole morning, was up 60, 70 cents, but what i'm telling you is that when you get 50 shares -- you're going to sell ten of them. and that's okay. you have a churning process. did we not have a churning process in nvidia? some say that it overly churned. nvidia should be down by now. let me see where it is. yeah. okay. that's what happens. yeah. you can't have these giant moves and people not take profits. >> yeah. interesting headlines out of the

ntsb regarding norfolk southern, that the company threatened the board, sought to manufacture evidence regarding this derailment in ohio. >> well, i'm going to manufacture evidence. i'm going to say that there's going to be more class action suits. every -- anybody who has even like a rash is going to sue these guys. that was horrible. as my former -- my lawyer, bruce, would say to me. he would say, jim, bad set of facts. bad set of facts. that means, basically, let's start writing checks. >> we thought it was bad before. >> oh, geez, and yet we had an activist in there. allen came on and defended himself pretty well, and i thought that east palestinian might be in the rear view mirror but that was one of the most damning press conferences in the world. >> the ntsb report is an important read today. nice chart out of b of a on utilities, jim, where exposure between long onlies and head funds, 14-year high.

>> at the same time, they talk about the concentration and how most of the 40% of the funds have just a handful of stock. it's kind of like -- it was like a barbell. on the one hand, let's own american electric power. on the other hand, let's own amazon. i thought that the -- i always thought that the megacaps were underrepresented in these big funds, and maybe something's changed. that certainly didn't say that. the utilities have been terrific. they're a growth story. >> do you consider them a defensive or an offensive point? >> they're offensive. well, it depends on whether you have low-cost power. constellation is barely a utility. that's the one that's all clean, and i am still waiting, by the way, for a mega cap to buy a nat gas company. it doesn't help them in terms of -- the sticking point has been, it doesn't help them toward their zero emission goal, but i think that utilities are in play as exciting. >> right. whether it's the heat today or the energy demand tomorrow, there's a couple of big stories for utilities overall. >> there's a lot of rotation

about who's doing well. i know that you get to really cheap power when you go to do minu dominion, but i think con ed is doing well. but that's not datacenter. exelon may be an interesting buy because it's at 4%. i have had calvin butler, i think it's a good story. ci >> we mentioned campbell's apple, depot. the two me we missed were hood shopify as citi adds it to the focused list. >> accelerated revenue growth, they said. when we had harley finkelstein on, it certainly was not the case, and harley was talking about, there were issues with gross margin that they were spending more to get goods. it seems like that's over. shopify is probably -- i don't want to say that stock is cheap. but that's a decent buy. i do like robinhood. they have to broaden out from just being options and crypto.

if they could do that, then i think the stock would go to 25 points. >> then, jim, we have moderna today, i think, down about five. the company says the rsv shot, which we've talked so much about, 50% effective. >> 50%. yeah. >> at 18 months. 47% effective at 24. >> that's heads or tails. i want a little more than that. that moved the stock up very, very big. that's going to -- stephan bedsal is not going to be loved today. >> the general take has been that they were able to leverage the post-covid environment and sort of production base better than pfizer. >> yes, but we didn't want vaccine -- flagging vaccines for things that are not lethal. the goal is -- this is stephan told me when the stock was at 17, 18, personal vaccines for immunology, so if you had a certain kind of cancer, or you had genetic exposures, you get a vaccine and that was the holy grail, and that's what we want.

we don't want a me too -- we don't want rsv. we want lives saved. he can say, jim, people die of rsv. but no. the idea was this company was going to make it so that cancer was maintenance. that's what we want. that would be great. >> little bit of a setback for moderna's data. >> i'm a believer in the idea that they're smart people, obviously, and remember, at the end of february, in the year of covid, they actually had the vaccine, but people want -- they want this immunology, targeted,let say you get a certain kind of cancer and it isn't stopped immediately, then you don't want to go to conventional chemo. you want what moderna is supposed to have. they made it so it would never mutate. but that hasn't happened. i like stephan very much. it's really hard to do what he was talking about. but he says this is what his goal is. >> overall, jim, kind of a challenging tape. not many sectors in the green. some chatter today about this russell rebalance on friday, what's going to happen as it

maybe gets a little less tech heavy. >> when have any of those rebalancings been any good at all? >> yeah. >> i don't think -- you need micron. is micron reversed big? please don't reverse big. yeah, it reversed big. micron was up 4 and now it's down, so people are getting a little nervous. they're getting nervous. i don't know. there was enough positive research that the market should have been up today. >> yeah. at least half a dozen upgrades. >> yeah. >> at least a bit of a soft open here. >> yeah, it is. let's hope that -- it's funny. you started today with fedex. does fedex really have this few legs? i guess so. i guess it doesn't have any legs. no pin action. when i was bowling, unless you hit the lead, the number one pin, you're not going to get anything. >> yields may have something to do with this weakness for equities. you got the ten-year -- >> the auction's coming up. >> we're pressing back up against 4.3% here.

>> where's frost when i need him? my treasury guy. >> there is, 4.3% on the nose as we do look for new home data coming up in about 13 minutes. and as jim points out, a busy week for auctions overall. back in a moment.

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take a look at caterpillar in the red today, but citi initiates with a buy. talks about solid exposure to secular stories. >> i like that story. i do believe right now that people will say these stocks have moved up and look at my stimulus coming. just getting out of the states into the roads. there's a sense when you see steal prices going down, there's a fwgloom involving the heavy

metals that can't be related to the data center. cat is less than 5% but jim would tell you, jim, you should remember data centers are one of our biggest. i know that mining has been okay. copper mining will be good. i just feel like this home is fed rate cut or else. >> apple is the number one dow name. we'll get stop trading with jim in a minute. pgim investments. shaping tomorrow today. (aaron) i own a lot of businesses... pgim investments. so i wear a lot of hats. my restaurants, my tattoo shop... and i also have a non-profit. but no matter what business i'm in... my network and my tech need to keep up. thank you, verizon business. (kevin) now our businesses get fast and reliable internet from the same network that powers our phones. (woman) all with the security features we need. (aaron) because my businesses are my life. (kevin) man, the fish tacos are blowing up! (aaron) so whatever's next we're cooking with fire. let's make it happen! (vo) switch to the partner businesses rely on.

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it's time for jim and stop trading. >> ollie's as being -- ollie's bargain, i'm a member of the ollie's army, as being the best place to buy closeouts. matthew boss who does a terrific job over retail at j.p. morgan reminds me he put out a story about big lots with a huge amount of overlap, more than 1,300, that could be a huge opportunity for ollie's to expand overnight. >> in the way of share donation. >> yes. and perhaps the growing concern about closures. i think the ollie's story gets better and better at a time people think it's the reality that the rich -- one of the

things of the ollie's school is people who make 150,000 are going there? are you kidding me, people make a lot of money going there because it's ridiculous how cheap it is. it's interesting, appliances, be careful whirlpool are for sure. air conditioners are for sale in the most recent flyer. >> interesting. >> you have to read the flyer. if it's available at ollie's it's in trouble. >> what's on tonight? >> the water damaged books at ollie's are dynamite. tonight i have paychecks and levie. michelle gass has been on fire, denim is hot, she's exploiting it to the fullest. and paychex slow and steady wins

the race. >> up for the year. >> yeah. look out jensen. >> between that and gap. >> there's people doing great things all over the place and i have to be everybody's press agent? i'm getting tired of that. iless talking about the phli, bryce harper in my late job. >> see you at 6:00, jim. "mad money". coming up we have home housing data coming up after the break. don't go anywhere. today is all about you. (♪♪) (♪♪) this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?!

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goods wednesday morning, welcome to another hour of "squawk on the street" i'm carl quintanilla with leslie picker and mike santoli. david and sara have the morning off. decent stories regarding equities whether it's fedex up upgrades but the ten year has created some small opening reversals. keep an eye on that with the dow

down 150. >> we're 30 minutes into the trading session here are three movers we're watching. fedex popping double digits. big cost cutting efforts paying off more with one analyst who calls the stock a buy here in just a moment but you can see shares up nearly 13% this morning. rivian, also on a tear. surging more than 32% right now. the ev securing up to $5 billion of investment from volkswagen. we'll speak with one analyst who just raised his price target there. watch whirlpool gaining after a report saying germany's bosch is considering a takeover bid for the appliance maker those shares up 13% as well. >> housing data crossing the tape right now. let's get to rick santelli. good morning. >> good morning. this a may read on new homes sales expected to be on an

annualized unit basis around 630,000 coming on the light side, 619,000 and that is the smallest month over month rate since november of last year. and, there's some big features in the market. quickly the two year versus the one we optioned yesterday the new one is six basis points lower in real so the spread went from almost minus 50 yesterday to minus 43 today. and watch the dollar yen over 160. it's only traded intraday above 160 twice since the late 80s and closed above 160 in 1986 was the last time. so you want to pay attention. >> pay attention to diana olick who's going to give us more color on today's new weak home sales. >> reporter: you're right a disappointment down 16 1/2% year over year but i would note there's a major revision to

april's numbers up to 699 from 644,000. so there was a roll up in april and a disappointment in may. but mortgage rates were high in april and dropped off sharply in may and came down to around the 7% range coming down from 7 1/2. they did, by the end of the month, get back to the 7.3% range but these numbers are based on signed contracts during the month. so people out shopping and basing their decision on the mortgage rate at that time. you may see the disappointment as rates got higher again, although they dropped in the middle of the month but not long enough. we saw a price drop 1% year over year, not huge. builders have been buying down mortgage rates but talking about concessions we've seen that. and then supply we went to a 9.3 month supply to a 1.3, and so

supply is building. basically the builders are said people are interested but look ahead to sales over the next six months. that came down in the builder sentiment report. they're seeing people out looking but not signing on the dotted line as more and more of these reports come in we're seeing the housing market is really stalling this summer. back to you, leslie. >> housing affordability is a key consideration there, diana. thank you. let's get to fedex shares on pace for the best day since june 2022, reporting a beat on the top and bottom line. fedex also forecasting a stronger than expected fiscal year in 2023. let's get the street's take, joining us is brandon with a price target on fedex. your note says four key results were as good as one could ask for. where's the upside that gets fedex to 350 or a 12 month price target from here.

>> thanks for having us here. fedex is in the middle of a transformational change, they're meshlging their overlapping express and ground operations and they have trucks going to almost every location in the u.s. today. two of them. whereas ups has better profitability, sends one and expands out beyond that to numerous overlapping facilities. so as they go through the process the company is becoming more efficient from a cost standpoint but also more capital efficient too. i think the real reason or a big driver of the share upside today. management and the board announced they're looking at a strategic assessment of their freight ltl trucking business which we think could be worth 30, maybe more, $30 billion of a market cap that's 65 today. so significant news there. i think a step in the direction that says the company is becoming much more shareholder friendly. >> you think that would be a potential sale then? if so to who or do you think a

spin out is a likely scenario. >> it could be a strategic buyer. a merger might be difficult because fedex freight is the largest carrier out there. $9 billion of annualized re revenue. but a spin might be favorable look at most ltl carriers trading at 20 times. so more time there. >> the financial engineering seems to work we know spin offs are good investments once they're done because of the focus and the surfacing of the earning stream. is there a risk that fedex is backing away at a low. it seems they want to simplify the story, their business, how investors view fedex core. is there a concern about that at all? >> great question. but i know freight transportation has been effectively in a recession now for almost two years.

but within the ltl sector i'm sure you know, a unionized competitor, yellow went out of business last year. so pricing and margins have been up. fedex freight put in record profitability we see market capitalization near all time peaks right now. this is what shareholders want, buy low and sell high, that appears to be what they're doing with the portfolio assess m lt here. >> and maybe what some investors are doing here today with the stock up about 13% after struggled the last few months or so. brandon thank you. >> thank you. getting breaking news out of the supreme court court. let's get to amon jafers. >> a win in the case of murphy verse missouri.

this was a question whether the biden administration was influencing social media platforms in terms of covid-19 and election disinformation and the subjects that have been so hot on social media for the past several years. the states argued in this case the biden administration was improperly influencing the social media companies and should not be reaching out to them. the biden administration instead argued this is normal course of business, we communicate with the media all the time. here the supreme court is saying they're throwing out lower court ruling that did favor louisiana, missouri and other parties saying that's on standing grounds. so this one is now moot and that's a win for social media companies including facebook. back to you. >> so that means it's not necessarily a judgment on the merits of the argument? it's saying they don't have the proper legal ability to bring this action? >> yeah. that's correct.

there's a whole lengthy write up here from the supreme court in which they're talking about some of the weaknesses in the states' case so they are going after some of the arguments that were made by the states in here. and we're going to go through this ruling as we get a couple of minutes here. this is hot off the presses. but they are addressing some of the substance here of the arguments but saying ultimately this one is moot because of the standing issue. >> scotus watch is a big story in the next few days. we'll talk soon. turning to the broader markets once again. scott is here with us, raised his target year end from 5100 to 5600. greet to have you here. >> great to be here. >> you say the list of concerns is getting longer, yes? >> the higher we go, the greater the list gets right. >> name some of them. >> we have the dlaeks elections coming up so the platform for

each candidate is going to be visible beginning this week. i think what we're most focused on, apart from some fraying around the edges from an economic perspective is what's happened with implied growth expectations. we like to look not at the valuation but the growth as you looked at the index higher what you've done is set a high bar for what companies need to deliver beginning with the q2 reporting period. what this sets up for is we have to be prepared for a pullback as we go from the summer months to the fall and set up for a better opportunity into the end of the year. >> you think 9% is a reach on this q2? >> i think it's probably a reach on the q2. look, the way the numbers are setting up, we have, essentially, three markets going on. we have nvidia, the rest of the mag seven and the 493. the 493 are stuck around 6% earnings growth with some back half loading to it.

some of that is at risk of being pushed out into 2025. with the mag seven and nvidia we're expecting a continuation of a -- let's call it a beat and raise from that cohort so you have a balancing act in terms of the way they all interplay into the action. >> it's a month after everything else and comes in as the ringer to say we put you over the edge of whatever we thought you could do. at least that's the past few quarters. i wonder about how the market itself is trading in exactly those terms to a comical degree. the past couple of days it's nvidia day or anti-nvidia day. and whether that tells you, okay, people want to stay exposed to the market and they're going to move around the edges because the macro scene is okay or is that creating some fragility? >> i think it creates fragility. you saw how quickly nvidia pulled back, 14, 15% without

much news flow. i think all of this kind of sets up, it's clearly a momentum tape, right, and where the market is getting very, very comfortable that that cohort of companies is going to continue to deliver a beat and raise, we're not concerned so much with the next year or so for nvidia and the rest of the mag seven but what happens is you begin to price in the current growth and that's where it gets a little bit unnerving. and we have to be prepared for volatility around that segment. it can be triggered by any number of forces. >> and crowdedness too is a factor given it's now seen as the most crowded factor in the market whereas value is the most underweight. this has happened at an exacerbated pace. is that something that also concerns you, the group thing surrounding this? >> yes. the crowdedness as it pertains to nvidia and the mag seven it's

a conversation for some time and it's going to play out differently for different investors. there's ans a pet if you're not involved from a portfolio management perspective, you're going to have your own relative performance issues. at the same time, a lot of portfolio risk management is going to say take it off the table with the rally. so yes, the rest of the market is acting in fits and starts p we saw industrials kick in last year. energy kicked in. utilities have been an outperformer in the q2 time frame. so lots of moving elements around the new growth driver in town, courtesy of generative a.i. we have to be prepared as that cycles through there's the fundamental momentum that comes with that that we think is in good place it's time frames that

become relevant how much is priced in short term versus the longer term setup. >> what about the added notion since macron called for elections that u.s. head winds with eu tailwinds. u.s. stocks look great, right? >> that's a different discussion, carl because it wasn't that long ago looking at europe saying gosh, yufrp is an easier set up here, less expensive, you have underlying economic growth improving, you have central banks easing. what's not to like about this. and all of a sudden you insert the political circumstance into it and now all of a sudden that money you thought might be flowing to europe suddenly has a different place to go. another reason to come back to the u.s. valuations aside, we have to be attentive that what you're getting with the u.s. now versus the rest of the globe is this growth is defensive play, as we work our way through the

economic and political circumstances where what you're getting from the mag seven in general is still supportive of why you want to be engaged in u.s. equities. >> that's good stuff, scott. we'll see what the next few weeks bring in earnings. thanks for coming in. >> thank you. rivian shares are a big story soaring after securing the multibillion investment from volkswagen. we'll talk to one analyst who just raised his target. >> nvidia rebounding getting a price target raise as the chip giant gears up to meet 'l.reholders today wel speak with the analyst behind the calls. >> and the fed's stress test results out later today. we'll get you ready. more "squawk on the street" is after this break. don't go away. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed.

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. welcome back. southwest airlines today take a look at those shares. down about 1% after cutting its guidance, the carrier now expects revenue for available seat mile to fall between 4 and 4.5% more than the previous guide of being down 1.5 to 3.5%. that said southwest still expects to set a record for operating revenue during the quarter. rivian soaring more than 30% this morning, the ev maker securing up to $5 million from vw starting with an initial investment of a billion dollars expected through 2026.

joining us is jordan levy who just upped his price target from 10 to $15. that price blowing through your price target. talk about what it means if for rivian to fund the existing strategy and what else this joint venture might be building toward. >> yeah, absolutely. i thisty the key f-- i think th key for rivian specifically, the biggest question is where is the capital going to come from? we projected 5 billion in capital leads to reach free cash flow in the end of the decade time line. this really addresses where is the capital coming from question. that's huge positive for rivian and big to be paired up with one of the largest in the world in volkswagen. going forward, i don't think we

should expect to see the fruits of labor outside a capital perspective. you know, the next year and a half two years with the launch of r 2 and the launch of volkswagen's future platform i think that's when we see it come through in the 2026, 2027 time frame. outside of that, the ceo yesterday on a call talked about the ability to expand the other opportunities to other oems once you get through the initial platform in the 2026, 2027 time frame. so it's very early. >> so you have still amazon as the largest shareholder of rivian with also that agreement for future deliveries. and now volkswagen. is it an endorsement of the platform or is it just kind of an opportunistic way of, you know, latching into a player that's approaching some kind of scale?

>> i would say one, certainly it's a validation of rivian's technology. look, rivian has, since the company's inception, kind of talked to the investment it's made in the software side of things and the electronic architecture side of things. that's a big talking point for rivian. you see that value come to fruition and i think it's an admittance on volkswagen's part, this isn't easy to do. the legacy of oems hasn't been built to have the vertical integration that tesla has been successful with. in this case specific to the software and hardware of the electronics. there's plenty of other ways that can go. but certainly volkswagen is seeing the value in what rivian has built here and i think that shows a lot about the difference between a pure play ev like rivian and sort of an oem. >> to the degree there's more

partnership like this, jordan, in the industry, what does it mean for the third party and this reaction on active today, is that overdone? >> yeah. i mean, i wouldn't say we looked closely at that, but what i would say is, there is, you know, structural inefficiencies in the legacy oem model and as we've seen it's difficult to realize profit on the ev segment. especially if you're built on an arrangement. so i think we'll see more sort of in-house whole integration built out, the likes of which tesla and rivian have kind of started with. so i think we'll see that more as we go forward for sure. >> quite a move in rivian shares. worth remembering it hit 150 a share in the excitement of late 2021 when it came on the scene. we'll see where it goes from here.

jordan levy thanks so much. still to come. we'll break down what both sides of the aisle are planning ahead of tomorrow's presidential debate and what it means for your wallet in a couple of minutes. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

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shares of moderna down about 5%, trials of the rsv vaccine showed it was 50% effective at 18 months and 47% effective at 24 months. stock has been rallying this year around 40%. but efficacy numbers some investors wished had been higher. >> absolutely. president biden and former president trump facing off tomorrow, one of the key issues in the race, whether you can cut taxes and still raise revenue. robert frank joins us to breakdown both sides. counter to what i learned in econ 101 but perhaps you can shed lights. >> the democrats said the 2017 tax cuts cost trillion in lost revenue.

republicans say the revenue has hit an all time high and the problem is democratic spending. so i dug into the data. look at the chart in the year after the tax cuts revenue from individual and corporate taxes was flat. it then fell in the 2020 pandemic and started to rise in 2021 with all that fiscal and monetary stim pus. in 2022, when revenue hit the all-time record that republicans talk about. individual tax collections topping 2.7 trillion. corporate income taxes reaching 440 billion. the main reason as our viewers know, the stock market in 2021, that was up 27%. we had the ipos, the spac, record sales by the insiders creating record capital gain. since then revenue falling back down. individual tax collections are flat compared to 2018. so they haven't moved in either direction even the gdp had grown

by 2 trillion. the best measure is you look at tax revenue as a share of gdp. in 2018 it was 17% now, 16%. so revenue did not collapse, as the democrats claim but it has declined relative to the growth of the economy. so this is important for the debate over how and whether you extend those 2017 tax cuts because the republicans would like to do that saying it won't really cost or add to the deficit. this really says it might a little bit but the real issue is spending. >> the reason that we have to renew or allow them to expire, the tax cuts is because the cbo math said if you prolong it, it increases the cost, net cost. and they wanted to make it seem deficit neutral or close to it. so it's like there's a third party out there saying this is kind of revenue negative on a longer term basis. >> it was an accounting trick that has become a political

nightmare when they decided the only way to make this work under reconciliation is to say it expires. and now the question is, i think one of the if not the most important issue what does congress look like? if it is divided will you get a consensus on what it costs because you can dynamic score it and say growth is x and it makes up the difference. even with dynamic scoring, dynamic scoring growth only accounts for maybe 20% of the cost. so still talking 80% of the costs are feeding through on lower revenues. >> i think back to mnuchin's hearing, we went through the debate about the number of irs agents is that material to this discussion? >> they got $80 billion in the latest sort of negotiation, they rolled back 20 of that. so the irs still has 60 billion to work with p. for every dollar you spend in the irs they say you get 5 back.

the estimate on the tax gap could be 50 $50 million. you won't get it all back. but you're going to cost revenue that's the target what you do with that 60 billion to the irs. >> fascinating. you see tomorrow is important regardless. >> going to be fun. >> yes. welcome home. after the break, nvidia shares rebounding yesterday, best day since '21 but still in correction territory as the shareholder meeting kicks off this afternoon. we'll keep our eyes peeled to see what jensen says and how the street positions. stay with us.

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i'm bertha coombs with your cnbc news update. results are coming in from primary election result con tests across the country tuesday. jamal bowman lost the most expensive house primary ever in the u.s. to west chester county executive george latimer in. in colorado, nbc news projects lauren boebert won after switching districts. wall street journal reporter evan gershkovich went on trial

in russia yesterday, 15 months after being arrested on espionage charges which he, his employer and the u.s. government denied. the journal called the trial shameful and ill lillegitimate. and wikileaks founder julian assange returned to australia overnight as a free man after reaching a plea deal with the department of justice. he pleaded guilty to conspiracy to disseminate classified information in one of the largest breaches of classified material in u.s. military history. carl back to you. >> appreciate that. , in fact,'s shareholder meeting kicks off in an hour. what to expect after the barn burner of the day. >> the annual shareholder meeting begins virtually at 12:00 p.m. eastern, discussion points are the re-election of 12 board directors, approval of executive compensation,

including ceo jensen huang's compensation looking for a 60% increase over the prior year. nvidia's stock was up more than 200% from that period. and investors will be eager to here from jensen, the latest survey shows robust entry in the blackwell. it was found to be the dominant choice for training and inference workloads, amd's product gained traction for inference but not quite where analysts were expecting. others are focussed on the growing cash pile anticipated to reach $270 billion over the next three years. analysts there arthat nvidia can't spend it all on r&d and acquisitions due to the regulatory environment and therefore will have no choice

but to give back a lot to shareholders that's why they upped their target to 160. leslie. >> seema, there's been a lot of that going on appreciate you monitoring that for us. sticking with nvidia our next guest raising the target to 140, saying he's katieconfident that nvidia will remain the top force. cj joins us now. in terms of the price target how many times have you raised it the last year or so as nvidia continues the upward trajectory? >> good morning, leslie. probably two or three times. and, you know, i think the great thing was a year ago, when you had the massive beat in august and i think since then, you know, data center has continued to surprise. when you take a step back and think about acceleration inside data centers looking forward,

we're only about 8 or 9% penetrated and jensen's view is we're going to 100%. if that's right there's a long runway ahead and i would surmise the street would be raising the price targets many, many times over the coming years. >> do you think at these levels the pace of innovation that you describe, the runway you described is priced in or do you think it's still misunderstood by the market? >> i don't. i think the seismic shift last year was the announcement of moving to an annual cadence in terms of new technology releases. and it's a very powerful change statement where, essentially, i think jensen is saying to everyone else that he competes with, catch me if you can. and his wholistic view of the data center one large gpu means he's not only investing in core

gpu but cpu, the overall networking fabric, the connectivity and i think if we had do what he has done in the prior decade over the coming decade that the gains that he will offer in the reduction in the cost of commute will truly make a.i. ubiquitous. >> what companies, cj, or whole sections of this industry therefore, are effectively dinosaurs. if that's what's happening and they're taking over these other functions and creating a new galactic computing platforms there has to be net losers who would otherwise get this capital and investment. >> i think broad com did a job talking ability nvidia's mainframe strategy over best of breed. i think nvidia is securing the training market but the inference market will have an opportunity for many other players whether it's custom,

silicon by broad com, marvel, or amd with their own gpu. so i think there's a big enough playing field for success for all those companies but if i think about the company that's going to grow the fastest and hold the dominant share, i continue to think nvidia. >> you say in your note, quote, a.i. roi remains an enigma today. what do you mean by that? what are you hearing from your channel checks on that front? >> when you step back and think about nvidia's data center business going to a billion or two a quarter to $25 billion now and moving higher over the coming quarters and years it begs the question what's the return on this investment. i think today we're in such early innings that it's going to be hard to see. what we tried to outline in our note this morning was, you know,

give certain use cases, whether it's in biotech or walmart or things like that. and it's, you know -- i'd say it's the rightful question mark but i think it's hard to truly get a bottoms up vision to the benefits of the investment ms. but obviously that's the key question. if there isn't an roic then at some point the investments have to stop. >> absolutely. thank you cj, really appreciate it. >> take care. still to come this morning, a look at the demand for evs and the pulse of the csur enonmewh it comes to the travel economy. the ceo of the largest peer-to-peer sharing marketplace turo joins us with his read in a minute. (aaron) i own a lot of businesses... so i wear a lot of hats. my restaurants, my tattoo shop... and i also have a non-profit. but no matter what business i'm in... my network and my tech need to keep up.

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welcome back. watch shares of general mills today. that stock dropping after the company missed revenue estimates and issued soft guidance for the year, net sales fell with the

ceo pointing to a quote more challenging operating environment. shares are under performing on the year, currently down more than 5%. rivian is a story today, surging after securing the investment from vw. our next guest has incite in theden demand for travel, ceo of turo. thanks for joining us. >> thank you for having me. the street is it looking for case studies to explain where the ev adoption curve is right now and one of the most vivid is hertz and their disposition of electric vehicle. do you think there's resistance we are not accounting for? >> we're excited about the state of ev demand as far as we can tell at turo, it's growing faster than the rest of the

platform we have 1,500 makes and models from combustion engine to hybrids to evs. but we see evs gaining penetration on our platform. we're excited about evs. >> we got new car figures out of europe, for example, for the last month. evs are down double digits do you think it's waiting for cheaper models or wider assortment of models or the charging network or range anxiety. >> i think there are ups and downs thinking about the numbers on a monthly or quarterly bay spips but the long term trend is clear given where we go from an emissions standpoint we have to move forward with more hybrids and evs. and the technologies have been rapidly -- i think the next step is more affordable evs. the current offering on the marketplace is still quite pricy so you have a lot of early adopters part of the market that

can afford to buy one or rent one. and i think the next step is more affordable evs that will be more mass market for all. >> what is the typical consumer for your service looking for? what's the use case? is it just same as it would be for a regular car rental or is there some other element of it that would lead them to look at your platform? >> well, you know we're reinventing the car rental experience. as you know we've been at it for years. we have tremendous performance the last few years, our business performance has grown in the last three years in the context of disruption, you mentioned evs. there was the pandemic obviously. there was a lot of disruption in travel and transportation but we're pleased with the performance of our business. and we have a lot of use cases, there's the traditional, i'd say, airport rental use case but a lot more. we see people in particular

using turo as a place for them to test drive cars before they buy them. that's been one of the big drivers of ev demand. we see a lot of people going to turo booking an ev for a weekend or few days to see if that vehicle with all of its new technology is a good fit for them but we see people using turo as car enthusiasts. we're just announcing this week that we're bringing a revolutionary new way to search for vehicles on turo. instead of entering a destination and a date, which is the traditional rental experience can you start your search by specifying a particular brand, make or model, and we'll show you everything available. so if you want to rent the cyber truck or that rivian you were talk about earlier. we can show you all the rivians and cyber trucks available on turo. >> more specificity. given that your business has grown 400% the last few years you say you're pleased with the

performance of the business you've filed to go public for a few years now, but what's keeping you on the sidelines. >> we're excited to go public in the right conditions. the last few years have been challenging for the ipo market so we're waiting for conditions to become more favorable and we're ready. >> finally, i wonder, you know, all this talk about robo taxi and mobility that wamo and cruise continue to chip away at that picture. what do you think that does to the long-term model of car ownership in general? do you think americans are going to want to always have their own ride or can we envision a day one day they don't. >> we believe strongly that car ownership is here to stay. obviously all of these great technologies will be included and the vehicles that people will buy in the future look at what's happening with mercedes, tesla, others that are bringing

self-driving or some level of self-driving to their vehicles. but we think the love affair of americans with cars is not ending because of the autonomous vehicle technology available. >> it's hard to envision how that would happen although a lot of runway from the results of the fed's annual stress test for the banks. we'll get you ready, next, wn quawk on the street" returns after this. brands speak for themselves. we are so excited to welcome you to our community. today is all about you. (♪♪) (♪♪)

we've been talking about this name all morning long. aptiv is the worst performer in the s&p, an automotive tech supplier downgraded to underweight at piper, cutting their target to 63 from 78. considered to be one of the losers in this rivian vw partnership, as vw may ostensibly have less of a reliance on third-party software. >> in about five and a half hours, we will get the results of the fed's annual stress test. which is where regulators devise an economic scenario and model what that would mean for the 32 al largest banks' hypothetical rises. this shows an increase in market volatility and widening corporate bond spreads, a 36%

decline in housing prices, and a 40% fall in commercial real estate prices. it's noteworthy for investors, because the results of these tests dictate the minimum capital levels banks must hold before engaging in, say, further buybacks and dividends, and those specific capital return announcements will come as soon as friday after the close, but in the meantime, the results have a tendency to be market moving. and banks stocks have risen and outperformed the s&p in the day following those results in each of the last three years. however, there was a clear dispersion among those banks that performed well on the test, and those that didn't. however, jeffries says that more important for the long-term, capital return plans will be the basel-3 end game revisions. this is the proposal from last year that would hike average capital requirements by 16%. headlines suggest this week that regulators are considering lowering that hike to 5%, but nothing has been decided. jeffries notes that the market has been increasing its

expectations for buybacks, given the expectation for a watered down basel 3, higher loikelihoo of a soft landing, weaker loan demand, which could lead for banks opting for buybacks as an alternative use of capital. you have this cornucopia of tailwinds, and whether banks will engage in it, given that there is so much at stake with these new regulations. it could be more of an optics things that they're focused on, rather than in regular times, just kind of returning that capital. >> and 15 years in, or thereabouts, right, to the stress test exercise, it's always this annual reminder that kind of shareholders sit behind regulators in a way, in terms of when they're going to have access to any leverage that these companies have, to growth, to essentially the growth in the economy. i think it's an interesting thing, where it's become this -- it's this perpetual cultural mode of operating for banks to say, first thing we've god to do is make sure we're good with the

stress -- it's exactly what people wanted after the global financial crisis, but it also suggests to me, the next big one happens somewhere else, that's the point, you don't want the banks to own the hub. but it reminds me of, we required companies to have derivatives disclosures after the early '90s blow-ups in derivatives. has that helped? i don't know. >> right. and this is something that was brought up during the regional bank mini crisis, some would call it, last year, the fact that the three banks were not subject to the stress test, and by the way, last year's stress test actually tested for a declining interest rate environment, which was also something that some took issue with in terms of, are these stress tests really adequately testing for the environments they need to be. this year, those 32 banks are in that lower band. it's a broader range of banks every every other year. they test those with 100 billion in assets or more, but that's

an-over year kind of thing. the tests are not perfect, some would say they're too easy, but it's something that has a direct implication for capital returns -- >> we should call them stress tests, at all, just tests. >> open-book tests. >> graded on a curve. >> we're just a few weeks out from earnings. >> jeffries reporting tonight, early preview. >> "money movers" starts after this. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. the all new godaddy airo. put your business online in minutes with the power of ai. - "best thing i've ever done." that's what freddie told me. - it was the best thing i've ever done, and-

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good wednesday morning. welcome to "money movers." i'm carl quintanilla live with leslie picker. today, stress tests for the financials. what to expect from the banks as regulators consider these capital rule changes. >> plus, rosenblatt upgrades apple to a buy this morning, bullish on its privacy-focused ai offering. the analyst behind that call joins us this hour. >> later on, we're going to walk you up to nvidia's annual shareholder meeting, set to kick off in about an hour. we'll tell you what to expect next. stocks right away, though, somewhat of a mixed picture at this hour. the dow is down about 0.2%. the s&p, that one down