growing. and with the help of financing from capetus, you can meet all of your business goals because at capetus we finance the legacy builders, the creators, the freedom chasers, the opportunity seekers. at capetus, we finance small businesses. >> welcome to power lunch alongside kelly evans. you're going to see in just a second here i'm dominic chu. we've got a major tech sell off today nvidia getting crushed. china's deep sea says its large language model was developed cheaply and quickly. so maybe companies don't need to spend quite as much money on some of those nvidia chips. maybe marc andreessen calling this ai's

kind of sputnik moment, the beginning of the ai race between china and the us. we're going to talk about the dangers. if the us does fall behind this race against china. and as part of the unwinding of that ai trade today, investors are pulling the plug, so to speak, on energy names. some of the last year's biggest winners are now taking a massive move lower on all that nuclear power generation kelly. >> to the tune of 20% or so. tom, thanks. let's look at the broader markets. the dow is actually falling into positive territory, up a third of 1%, but the s&p is down nearly 2%. and the nasdaq is tanking by 3.5% today. let's look at where nvidia worst day since march 2020. it's shed about half $1 trillion in market cap today losing the 3 trillion mark. and as the session continues, interestingly enough, it kind of continues to pick up steam in the sell off. it's down now more than 17% now those energy names as well, which had been big winners on hopes we need massive power for the ai boom. while

investors are rethinking that today, this dress down 28%, constellation 20%, talon down about the same amount. tom. >> all right, well, the markets lost in deep thought over deep seeks claims that it built an ai model in just a couple of months for less than $6 million, not a b million dollars. it's a tiny fraction of what u.s. companies are spending on artificial intelligence. build out. most of the pressure is hitting nvidia, as kelly points out, but, but scale. a icu ceo alexander wang told squawk box just last week from davos that the chinese startup has more nvidia chips than it's willing to admit. >> my understanding. >> is that is that deep seek has about 50,000 a100s, which they can't. >> talk about, obviously. >> because it is against. >> the export controls. >> that the united states has put in place. >> and i think it is true that, you know, i think they have more chips than other people expect,

but also going to go forward basis. they are going to be limited by the chip controls. and the export controls that we have in place. >> all right. so with that in mind, are the doubts around the ai trade justified or is today's sell off just a buying opportunity for some of these names? joining us for more is dan ives, the global head of technology research at wedbush. also here with us for the whole hour is nancy tengler, ceo and chief investment officer at laffer tengler investments. thank you both for being here with us right now. let's talk about dan, the epicenter of all of this, and you've been a notable bull on many of these companies. many of the technologies that are at the center of the meltdown today. does this worry you? >> i mean, to. >> my in my view, it's a top. >> three. >> buying opportunity that. >> i've seen in the last decade for tech. and the. >> reason i'm saying that i spent. >> the whole. >> weekend talking to. >> tech executives. >> cios. individuals that i know that are going down, the sort of ai arms. race or going. >> through use cases in. >> no way of really. >> 25 companies. >> does this change. >> their sort of plans.

>> and a lot of these could be seven. >> eight. >> you know. >> even upper. >> eight figure type budgets. >> i just continue. >> to. >> view this. >> as it's. >> a model. >> and a. >> lot of the details. >> i think. >> still need to be vetted out. >> in terms of 6 million. do they actually. >> have the. >> h100 how they actually built it? but this is something we're going. >> to look back on. >> and i think the. >> street and. >> the market got. >> this way wrong. >> in no way. >> does it dent our ability. so that's what we've been telling clients really. >> since the weekend. >> these are the times you own these names. >> not all of the companies at the center of the sell off today are necessarily affected the same way chip stocks. nvidia kelly mentioned it, a half $1 trillion in market cap lost. that's more than the size of exxonmobil. that's roughly the size of unitedhealth group in terms of an entire company lost in market value. some are affected more than others. mega-cap technology not as much so across the board as, say, nvidia per se. when this is a buying opportunity, how much of a buying opportunity and how

specific do you have to be? >> well, first, on. >> nvidia. >> that continues to be, i think, the. >> golden goose in terms of. >> what jensen. >> and that company are. ultimately. >> there is one chip in the world. >> there's one gpu. >> that's fueling. >> ai and it's nvidia. and when you think about these build outs, when we talk about the enterprise, the 2 trillion. >> of. >> ai capex in the next three years, that doesn't change. >> from. >> deep sea. we're talking about 1/1000 of ultimately the build out that you're going to need for a lot of these enterprise use cases. you look. >> at names like. >> palantir, you look at the hyperscalers. >> i could argue with inferencing. if you actually. >> think costs are coming down, it's. >> actually bullish. for even some. >> of the software players names like salesforce, servicenow. oracle and others. i just think this is one, when you look at nvidia, i think we. >> sit here. >> six. >> nine. >> 12 months from now. look at this as a moment. it was a golden buying opportunity and in. >> no way. >> changed our bull thesis for where. >> this is all headed. >> nancy, let's bring you into the discussion as well. this is one of those situations where

the markets have sold off, but they're not tt far away from record highs. this has been not that debilitating at all. it's for yes, nvidia for yes, broadcom and others but not everybody. right. so does this change the market thesis. people are wondering right now whether this is the beginning of a larger scale sell off in the in the broader market. >> no i don't think it is. and i think one of the things i've learned. >> in this business is. >> you have to know who to. >> listen to. >> and dan has been 100%. >> right on this space. and in his coverage. >> he's also lived through. >> previous periods like. >> this, like i have. and what. >> you. >> learn from that is this is driven by the algos and the hedge funds in the short term. and i pointed out in my notes that, you know, the average hedge fund total return over the last decade is 8 to 10% annually. that is well below the average active manager. so you use volatility as your friend of the long term. >> investor. >> which is what i am. so i would say today it's traders and we've got a buying list. and we were planning to add to nvidia

anyway. so we will be adding my one of my five for 25 is broadcom. i can't explain to you why it's getting hit as badly. >> as it is. >> more so than nvidia. and it's half software. so it's a 50 over 50 company that's got probably one of the best ceos in the world. >> and don't they do custom silicon? i thought part of this whole shift was that we'd ultimately go from these massive training models that require a ton of these nvidia chips to something more specific and more inferencing based, where you're working with companies. and that would favor broadcom. so i find it so interesting that again the market clearly knows more than i do. so i'm just wondering what that is. >> not on a minute by minute basis. it doesn't or on a day to day basis. and i think that's the difference. dan's doing the research. i don't pretend to be as expert as he is in this space, but i do know the management teams think it's stit old economy companies that are pivoting to the new technologies and then the suppliers. and you and i talked about shifting to software, i don't know, a couple of months ago. and we've done

that. and yet i still think you want to. >> and to your point, 80 billion that nadella and microsoft spent 65 billion. that's not changing from this to something that i could argue you could almost increase. so it just speaks to as. >> in what way would it increase? because like you said, whether you love or hate what's happening there, people are starting to build more deflation into these capex models. but you think maybe we could even see the opposite? >> yeah. >> so you have 4% enterprises in the us, remember, not. >> even around the. >> world that have gone down the ai path. if inferencing and the use cases get cheaper, that's more for the hyperscalers. that's more chips for nvidia. that's that's our view of the. >> but here's the one of the issues being brought up today specifically, and the reason why some of these stocks, chip stocks specifically are moving the way they are. server companies, data center type companies is how much money do you actually need to spend? and by the way, if do you need blackwell right to be able to do this, could amd have a product

out there that could do something better? could other chip companies in china could huawei is this going to be a commoditization story where this is about finding the least common denominator, having a model that's good enough to do some kind of a job and doing it for a 10th of the cost of what's being anticipated right now. >> and to. >> that point. >> look, i'm playing in the super bowl next to saquon, the same chance that they spend 6 million. so the point is like it's my view that like this is much. bigger than i think they're talking in terms of ultimately the hardware and actually the build out i can tell you from hundreds of companies in terms of what they're willing to spend it. those nvidia chips, that's the new gold or oil. i'm not saying there's not going to be alternatives. amd and others that will come, you know, competitive wise. but i just think the. street is taking these numbers and going with it. and i can tell you someone has spent basically the whole weekend checking with across silicon valley vcs. i just think the market's getting it wrong in terms of where this is going to

where this ultimately is headed. >> they're getting wrong. there's a couple of green spots, apple and meta. everyone seems to think they benefit both in the long run from the deployment of ai. but microsoft is a little bit more of a battleground name. so it's almost like, are they also getting those pieces right? and if so, does that translate for you across the. >> sure. those are and those are great points because those are right in terms of apple, because we've always said the app store, you know, like they will own the consumer ai revolution. you look at meta and i mean nancy talked about that. that could be bullish as well. i think what they're getting wrong is just what this could mean for the hyperscalers, which is going to be bullish. we'll see that this week, but especially nvidia. and we've i this is one to take them out of this equation i mean they're the foundation of this whole build out. >> you know nancy i remember i can remember maybe six seven years ago at this point i was out in tennessee at oak ridge national laboratory sitting down with jensen huang, then ibm ceo ginni rometty, and then energy secretary rick perry talking

about supercomputing and the race against china to create the biggest and most powerful supercomputer. now it's el capitan out in lawrence livermore national laboratories. back then, it was summit out at oak ridge. this is going to be the secular theme for decades to come. the us versus china. if this is just a blip, how exactly would you be strategizing as a long term investor about how to position for that ai us versus china trade? >> yeah, no, that's a great point, tom. and i think dan said it earlier that the spending is going to increase. and i think we can we can infer that from a cio study that was done by bernstein. that said, only 8% of cios have large language models in their budget. and so if that's true, and we think it is as important as you just stated, then you want to you still want to own the industry leaders because they will find a solution. they will either, you know, look what elon did by cutting electric vehicle prices. he drove his competitors to some extent out of the business. yep,

it hurt his margins. but he claimed market share. so i think, you know, a couple of weeks ago apple was downgraded and left for dead. and now it's up today. so you have to step away from the noise and from the algos and take, you know, take your shopping list, look for the industry leaders because they're going to find a way to win quickly. >> any other names you want to drop on that list? we've talked about this in the past, but software specifically or anywhere else, dan. >> said it. >> servicenow and palantir. >> you know that can. and then you look at names like. >> oracle where. >> are they even playing in tiktok situation, this is just more and more strength for us and trust right now. and the 2 or 2 area code, they're watching the story front and center in terms of those chips, as those export controls ultimately take, you know, take in. >> you know, kelly, you notice that he did drop the saquon penn state line in this discussion. right. >> listen i mean we're talking about the best of the creme de la creme. and i. >> decided dan's the bob dylan. >> of oh. >> i like i like that. >> great. he doesn't need any more you know come on nancy you

stay dan thank you. really appreciate you coming in today dan ives on this sell off. the ai led moves here are rattling investors. but remember if you look at the s&p it's not all red. the indexes are a little top heavy. but the question is whether this is the first domino in a larger market rout or not. we will get an expert take on that after this. stay with us. >> power lunch is sponsored by brighthouse financial build for what's ahead. >> with a shield level annuity from brighthouse financial. your portfolio can benefit from growth potential with a level of protection from market volatility to help you follow. >> your. >> plans wherever they take you. brighthouse financial build for what's ahead. >> in a world of uncertainty and disruption, how will your investments stay resilient? we've been navigating change for 125 years, always looking

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>> where do. >> terrorists fit in? >> they are an economic tool. they're an economic weapon. >> the question is how. >> they get used. >> we've reduced our china. exposure from 50 to 25%, and we've been working to reduce it even further. >> it cannot be about removing all the rules. it's about all of us operating together. the partnership with. openai to us. >> is. >> a. critical partnership. we love it. it's working. >> if you use the us estimates. >> of how much. >> power we're going to for all those making it big out there... ...shouldn't your mobile service be able to keep up with you? get wifi speeds up to a gig at home and on the go. introducing powerboost, only from xfinity mobile. now that's big. xfinity internet customers, cut your mobile bill in half vs. t-mobile, verizon, and at&t for your first year. plus, ask how to get the new samsung galaxy s25+ on us.

>> that's my secret. >> to. >> better. >> odor. control everywhere. >> welcome back. we are watching shares of nvidia down 17% on the arrival of chinese app deep seek and its latest r1 model onto the scene. it was the talk of the weekend as everyone was messing around with it. nvidia itself has now come out and made a comment about this. they say deep seek is an excellent ai advancement and a perfect example of time test scaling, adding that the work illustrates how new models can be created using that technique. it goes on

and says inferencing requires significant numbers of nvidia gpus and high performance networking. and it concludes by saying we now have three scaling laws pre-training, post-training, which continue, and new time test scaling dom. this comes from a spokesperson trying to emphasize that even as we shift from training to inferencing these models, they will be at the center. >> and it's not just that this idea that, you know, they are right now, you can argue the only game in town with regard to the processors that it takes to perform this kind of work. we had just had the discussion with nancy and dan about what does this mean? if you can find a low cost solution, can you use other people's chips, whether they're chinese native companies or whether there are other companies here in the us that are not named nvidia? well, this is nvidia's way of now saying, you know what? ours are still the best product on the market. they are still the backbone, the infrastructure, the building blocks, the mortar, if you will, of all of this ai revolution. yeah. and so that's that's what they're trying to i mean. >> biggest one day loss of market share in history. >> in history. by the way, we

mentioned that before that that the half trillion dollars in market cap loss this now does with the number crunchers rank as if it holds the single biggest market cap loss in market history. and by the way, again, for perspective, half $1 trillion is like losing a mastercard or a unitedhealth more than an exxonmobil. and by the way, you tack on a couple of hundred billion dollars more, and it's like losing the entire jpmorgan off of the off of the face of the earth. market cap wise. so this is a big deal. >> still near session lows as well. our next guest says deep sync is a legitimate disruptor. he's out with a new note highlighting three bad signs for the market that could even push the s&p into a correction later this year. barry bannister is chief equity strategist at stifel. he's got the lowest year end target on the s&p across wall street at 5500. nancy tengler still with us as our guest host. all right, barry, i think you and nancy, i mean, you are like two very different points of view here. so this could be fun. but give us the i hate to call it the glass half empty take, but explain to us how you see a path towards a significant correction here.

>> yeah. keep in mind that. even on. >> a good. >> micro story. >> macro. >> sometimes rules and. the market's pretty much ignored the. macro on the. ai hysteria. >> the last. oh i don't know. >> year. >> but the macro. >> is starting to catch up. >> inflation is sticky. >> i don't think the fed's going to cut rates again. frankly the ten year yield is too low. if inflation proves very sticky and the fed doesn't cut. >> and price. >> earnings multiples. >> just got too high. >> and i. >> think we had to let some air out of the balloon. >> and we. >> come down on the side of about 10%. lower by the late 2025. >> so barry you don't look at this and go power stocks 30% off. you know, leading chip stocks 20% off. this is a top three, as dan put it buying opportunity. >> no no. >> it's. >> definitely not a buying opportunity. >> you know i. >> have some trouble with the way that the big tech companies

with monopolistic cash flows are redeploying. >> the cash. >> into a from a high roic business to a low return on capital business, even if it has the unit sales growth and the initial build out of the models to the s&p 500 type companies, it's going to have a very competitive landscape. and are they going to earn this capital return that they need, or should they have just given us the money back instead of spending it? >> barry, it's dom, one of the big questions facing many investors today is this fear that this could be the triggering of a larger sell off, one that we haven't really, really seen in quite some time now, aside from the 5% pullback that we got over the last couple of weeks entering here, is there anything that would suggest to you that anything else could trigger any kind of a broader market decline at or near record highs, like we are right now?

>> well over 30 years ago, we used to joke about how technology was such a displacement event business, where new competitors would come in and destroy the entrenched stocks that it deserved a lower multiple. because of that, it's a short life cycle business that's got a very short competitive advantage, period. but investors. >> forgot. >> about that. they bid up. the stocks. the growth relative to value, large cap total return one divided by the other on a ten year compound basis, reached the absolute outer limits of. the past 90 years. and that exact limit line is exactly where it peaked the price earnings multiple and the outperformance of growth. so for us, it's just a very bubbly, ebullient market that's just kind of take some air out of it. >> curious nancy, if you want to respond to any of that. and also to add this was a point of view barry's had where he says, you know, we have risks from amid the euphoria, the trump bump,

american exceptionalism mag seven and a lot of people are wondering if we've all gotten a little too excited about these themes this year. >> i mean, maybe kelly and, you know, barry and i were both in the business in the 90s when you had a fed funds rate above 5%, you had inflation above 3%. and yet the productivity driven growth that was produced by the internet, just the internet. and, you know, john chambers has since come out and said and he was he was the ceo of the poster child of overvaluation. cisco has said that generative ai is more powerful than the internet and cloud computing combined. so i do think that i don't think this is a bubble. i don't think the valuations have gotten way out of whack. nvidia was trading at a price earnings to growth ratio just a little above one one times before the sell off. so we're going to look for opportunities. i mean i don't think you chase it tomorrow necessarily but let it settle. and then i do think this is a buying opportunity. so barry i guess that's what makes a market when i'm on one side and you're on the other. but i think this is an opportunity for long term

investors to add to holdings. >> why isn't she right, barry? >> well, let me put my economist. hat on for a second. if you look. >> at what's. >> called nonfarm output per hour labor productivity, there have been 13 recessions since 1942 13. we think that 20 2223 was a recession. if you look at every measure, income, production, sales, fixed investment, even employment, some of the data, like the som rule on permanent unemployment did trigger. so when we had this recession that we never really acknowledged, we emerged from it. and productivity, as it always has in the postwar period, every single time popped about five percentage points from minus two to plus three year over year. the important point on that is that productivity is set to slow this year, slow sharply. that keeps unit labor costs and inflation

high and keeps the fed very unhappy. so you can buy the long term productivity argument. but i think in the near term it's going to be very disappointing for the market. >> and barry, anything you'd add in terms of okay, now we have this ai particular kind of problem for the market to contend with, but anywhere else you'd be looking for froth. >> froth. >> no, but we are favoring what's called a defensive value positioning for this year. this is health care staples, utilities. some of the food, beverage and tobacco stocks and so on. and that would be an anticipation of a pullback in the market, a drop in everything cyclical from, you know, machinery cyclical to a technology cyclical like a semiconductor and a rise of defensive. yeah we're we're definitely on that trade. >> all right barry appreciate it today. thanks for joining us. different view barry bannister of stifel. >> all right. the selloff is

extending beyond the technology players directly involved. we're seeing declines in the secondary and tertiary ai plays the derivative ones. for example check out utilities and the power space. details on power lunch straight ahead. keep it lunch straight ahead. keep it right here. [alarm beep] you make it through security so fast, ♪♪ the agents applaud. your travel itineraries are so well written, they're on the best seller list. and you have access to lounges that don't officially exist. that's why you rent with national, where you can skip the counter and choose any vehicle on the emerald aisle. because travel isn't a competition. except that it is. and you're winning. to 40 emails. >> linda. >> oh, their.

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cnbc.com slash get pro now. >> welcome back to power lunch. tech stocks are selling off today. as you can see the nasdaq composite is down by 3% right now. we're also seeing a pullback in bond yields as well. so let's bring in rick santelli for that side of the story. there's a bond auction. there's the flight to safety all kinds of things putting upward pressure on prices rick. and downside pressure on yields. >> yeah you know you bring up a good. >> point dom. >> and that's the. >> lesson to learn today. every market even when they get ugly viewers there's lessons to be learned. and the lesson today is that equities moving down in a very aggressive fashion still makes fixed income. treasuries a flight to safety harbor. >> many have. >> wondered if we're. >> going to. >> see that relationship. you know. >> we've seen it over the last 25 or 30 years. it was. >> really cemented. >> in 1987 during the market crash when treasuries. well, they locked up limit pushing yields down very similar to

today. let's look at a two year. >> on a 24. >> hour chart. >> with s&p futures. >> and you. can see exactly what i'm talking about. they're exactly the same. now if we pull a ten. year on a 24 hour along with the dollar index. you see the same relationship. but with this one. dom, i want to put some asterisks right now. the dollar. >> index is not down much. >> on the session. >> and ten year yields are. >> down about eight. >> basis points. so even. >> though the pattern looks similar they're starting to diverge as you see. why. >> because the dollar index. >> is a confusing it has a confusing role in a safe. harbor trade. many would like to buy that or. >> maybe buy the yen, but in the end, it. >> also seems to follow. >> interest rates. >> that go up, the dollar. >> goes up, and. >> vice versa. so these relationships are something to. >> pay attention to. and just remember that in the end, many markets historically get over their skis. it doesn't mean the trend is no good, it just means the trend was a bit carried

away. kelly, back to you. >> trend is your friend until it turns against you. rick. thanks. still to come on power lunch. president trump's first term focused on being tough on china. heading into his second trade and tariff tariffs remain key. but he has seemed to back off on china specifically. could deep sea change that? more next. >> on the bond report is brought to you by pimco, a global leader in active fixed income. no matter why you started your business, your goal is to keep on growing. and with the help of financing from capitas, you can meet all of your business goals.

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three, four, five decades and beyond. this kind of adversarial relationship between the us and china. so what exactly does today tell you, and what exactly are you telling your clients about how to take china seriously about. >> dominic since 2015 season? ping said, i want to have a china 2025 policy. >> he then looked. >> at 25. basic technologies. >> one of the most. >> important was. >> ai. and he. >> said back then and has been pointing out that. by 2030. he wants china to be the most. predominant country. >> in the. >> world in the ai field. and i think this is really the opening salvo. >> is the trump administration going to be open enough to understand how business leaders need to tackle the ai threat from china in order to craft policy that keeps america competitive and ahead of china? >> well, what the. trump administration has done so. >> far is to say, let's talk

about tariffs. >> but i think. >> this. >> is greater than tariffs because in the long run, the interest. >> of the united states is to have. >> the. >> leading technology in the world today. if you take technology. maybe two. >> thirds of it is western, one. >> third of it is chinese. >> it's clear to. >> me that what the chinese want to do is to move the needle. >> so there. >> are at least 5050. and what this means, dominic. >> in the future. is you're going. >> to have a country that's going to have to say, what kind of technology do i want to adopt? is it technology from the west or is it technology from china? so i think this is a. strong opening salvo of the chinese to the us saying, if you want to put tariffs on me, this is the way we're going to go. >> dennis, it's also interesting we were talking to a security expert last hour who reiterated that whether it's tiktok or deep sea, you download this onto your phone. it can collect what you're doing, your activity, your english language activity to train its ai models and the more up to date info it has, the better. so i deleted it. i was like, forget it. i couldn't log in anyway because of the

problems they're having this morning, but it does seem a little odd that at the very moment we're cracking down on tiktok, along comes deep tech, and we're all doing this all over again. and it's an ai app. >> i would. >> on my phone and i have deleted just. >> like you, kelly, because in the long run, their ability. >> is not just to collect information. tiktok is maybe a bunch of teenagers looking. >> at something. >> you know, making. themselves more attractive. >> but when. >> you're downloading information. >> on an ai. >> source, which is business or government related. >> think about the fact that you're opening the. >> door to the chinese saying, well, here it is. if you want to take a look at it. >> that concerns. me very. >> much as. >> an american. >> and somebody who advises not just u.s. companies, but companies around the world. >> dennis, this is nancy tengler. i wonder if you find the timing at all curious or strategic, perhaps in this announcement? i mean, many have known about it. in fact, cnbc broke the story a while ago on on deep tech. but what's your thought about that and how the

chinese are using this as a tariff rhetoric rhetorical device, if you will. >> i think you used the perfect word, nancy. it's strategic. >> as the trump. >> administration over the last, what, 4 or 5 days has had like 100 presidential announcements. >> china has been. >> interestingly in the back. so i think that the chinese have said, okay, this is a good time for me to step forward, saying, here's a product. it's much less expensive and equally effective to large western companies. take a look at me. >> i think they're. >> essentially saying to the trump administration, we're serious, and you. >> better understand. >> that it's all just a big, big game of very complicated chess here between the us and china. dennis unkovic of meyer, unkovic and scott, thank you very much. we'll see you again soon, sir. >> thank you. >> dominic. >> let's get the perspective from china now on the ground. eunice. eunice live in beijing with the reaction eunice to deep sea. and our reaction here about it. >> hey, kelly. well, the talk

here is that deep sea may be having some capacity issues. users tonight have been complaining that the service has been stalling. and this is after the company had issued a statement earlier saying that it's being subjected to large scale malicious cyber attacks. now, the company has said that it's temporarily halting some of its sign ups, that some of its registrations would be slow otherwise, though, as you guys were kind of suggesting, the country here, and especially in state media, has been really hailing this company as a national triumph. state media has been describing deep sea as china's dark horse in ai. they've been pointing out that the company has staff that has almost no experience overseas. so all home grown talent and company. xinhua, the state news agency, said that china's ai has managed to thwart the us tech curbs. and what's also interesting is that images of the founder, liang feng. he is

on state media meeting with the chinese premier, among some of the other chinese entrepreneurs who were able to meet the premier last week. so a lot of good feelings around this particular individual. >> eunice, as as we kind of digest that, how do you think they're going to react if the us ends up having to crack down and say, okay, americans, we advise against you downloading this app. and also this big question about export controls. yeah, perhaps they backfired, allowed them to train a little bit more cheaply or with inferior technology. but it's still the feeling here that a lot of chinese would like to get their hands on a lot more of the leading edge nvidia chips, and it's worth keeping those export restrictions in place. >> yeah, absolutely. i think that the country and especially the government would react very badly to the idea that export controls are going to get even more fierce, especially because what was interesting about the discussion tonight that we're hearing about the capacity

issues is that this is one of the reasons why the founder has said that, that they need more chips, that they need more of this american technology. so it wouldn't be something that would be looked upon or welcomed at all within the business community. and then also, of course, within the government as well. >> all right. eunice yoon, live in beijing. thank you very much for that. we'll see you soon. >> and let's get over to kate rooney now for the cnbc news update. kate. hi there kelly. >> both engines of. >> the. >> jeju airplane that crashed last month in south korea contained duck remains. that's according to a preliminary report released today. but there is still no final conclusion on why the plane overshot the runway to make an emergency belly landing before it crashed into an embankment and killed all but two of the 181 people on board that flight. the head of the public integrity unit. meanwhile, the justice department has resigned. that's according to nbc news. it comes after reports last week that

corey amundson was among the doj officials being reassigned to take legal action against so-called sanctuary cities. he played a key role in both of the doj investigations into president trump, which were dismissed after he won reelection. and a federal judge dropped restrictions today. on some january 6th, defendants from entering washington, including oath keepers founder stewart rhodes. the order was initially put in place last week after rhodes visited capitol hill days before to defend his actions on the day of the riot. president trump commuted the extremist group leaders 18 year sentence as he took office earlier this month. kelly, back over to you. >> all right, kate, thank you very much. kate rooney cnbc is accepting nominations for our 13th annual disruptor 50 list. you know, i've heard deep seek quite a disruptive app for private venture backed companies. are there any qualifications that it's an american one. scan the qr code on your screen to learn more or go to cnbc.com slash disruptors

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table on this one for ages, and i'm certainly not going to stop now. >> mad money weeknights 6:00 eastern on cnbc. >> welcome back. the big story today is the chip sell off following china's deep sea success, which is changing the narrative around chip demand. nvidia is down almost 18% now. and what about power demand? was that overstated as well? vistra, constellation and others are down by even more 20 to almost 30% in the case of vistra. brian sullivan joining us on the phone right now. i would say calling in on his day off, but it's not even really a day off. brian. you're just not here with us. and what do you make of these moves? what are you hearing about them? >> yeah. >> thanks, kelly. i'm down in florida. what a day. >> giving a speech. and everybody's. >> talking. >> about this, and i want to call in and thank you. >> because here's. >> the reality. >> you mentioned vistra. >> energy vst. and i've. >> reached out to all these ceos, by the way, and getting some comments some not. >> this was down. 29% to your point. >> okay. >> constellation energy is down.

>> 20% ceg. >> now if you believe. that this new. >> deep sea is going to. >> wipe out. >> demand for power. >> for i. >> buy by. >> 1,520% and thus reduce. power processing needs, then maybe. >> i don't. >> want. >> to say this. >> is. >> the correct move. it's not. >> my decision to decide whether or not a stock or a move is correct. but i think what we have. learned is that many of these stocks may have been priced to perfection. in other. >> words. >> these are supposed to be boring old utilities. that barely move. >> but yet. >> have moved huge. on this ai power demand story. >> the one thing i wanted. >> to add. >> kelly, is that it's not. just utilities. take a look at the companies that are going to pipe. >> gas to the utilities. the wme, cme. >> kinder morgan. >> et, energy transfer lp. >> landbridge. >> those what. >> they call pipeline or midstream stocks. they're also down. ten. >> 13, 14%. >> what i mean. so brian, when people say, well, is this a moment like in the 90s when what

we thought we needed for the build out of the internet, we actually didn't need or at least the valuations that were applied? is this that kind of moment? >> i think. >> we're going to find out. >> because i think to your point. >> i know that, you know, you and i get some of the same emails and your frequent guest, john. >> spallanzani. >> and some others, you know, the. >> idea is sell first. learn or. >> ask questions later. >> and you. >> look at it okay ge bring up. ge as. >> your stock. >> ticker i'm on the phone so i can't see it. that stock. it's a power company. >> they're down. >> 22% okay. >> broadcom avgo. chip stock. i don't know much about it i know christine. >> and others do. >> it's down 18%. here's the point. >> i think wall. >> street today is selling. first and asking questions later. >> we're going to have a lot. >> more comments from the ceos. i will remind viewers that we had the ceo of nextera energy on power lunch. i think it was on friday. kelly, i'm getting old, so the time is. >> going pretty quick. >> yeah. and the reminder. >> that he made and their stock's not down much. i think it actually might even be higher

in e is the ticker. is that what he said to us. was that they expect 5 to 6 times times an increase in power demand across the united states. some of that is ai and data centers. kelly. but a lot of it is just the re onshoring of manufacturing and the electrification of the american economy. >> it's not. >> just nvidia and i. >> great point, brian. appreciate it very much. as always. we'll see you tomorrow. >> thanks. >> brian sullivan. >> you know kelly it's interesting. vistra is down 30% right now. yeah it was up 233% over the course of the past 12 months. >> anyway stock last year i think maybe this year in the s&p. >> anyway coming up on the show on a down day for stocks overall, nancy tengler will offer some of her top picks for 2025. what's on her shopping list? she alluded to it. that's coming up next in three stocks. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate

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so, what are you waiting for? come and say g'day. (♪♪) i'm not happy with the way that pg&e handled the wildfires. yeah. yeah. i totally, totally understand. we're adding a ton of sensors. as soon as something comes in contact with the power line, it'll turn off so that there's not a risk that it's gonna fall to the ground and start a fire. okay. and i want you to be able to feel the improvements. we've been able to reduce wildfire risk from our equipment by over 90%. that's something i want to believe. [skateboard sounds] >> that's my secret to better. >> odor control everywhere. >> welcome back. it's three stock lunch time. nancy tengler is going to give us some of her top picks for 2025. and the first one is highly relevant today because it's broadcom down almost 20% in this tech sell off. having its worst day since march 2020 nancy, why is it is it still a top pick for you this

year. >> yeah. well i think you know, i wrote this on december 29th and i was a little reluctant because the valuation was was high ish and not super high but high. and so i think what you want to pay attention to is how does this company act over the long term? we bought it with the ca technologies acquisition. i was actually on set down on the new york stock exchange. wall street hated it. the stock sold off dramatically, and that's when we initiated our position. and over time, the company has had a very powerful capital allocation plan back to shareholders. but most importantly, you've got a ceo in hock tan who is disciplined, who can take an acquisition and make it accretive very quickly, and who recently came out and said with existing customers, we see a 60 to $90 billion revenue opportunity with ai. that's with existing customers. they've added two very large customers since then. i don't think deep seat changes that. and i think you're getting an opportunity to buy in at much lower levels and

then get paid to wait. they just raised the dividend 11%. so you're just going to continue to get paid to wait as the company continues to evolve. >> i also appreciate the fact their ticker is still avago right now. the legacy company, hock tan's company. anyway, next up is goldman sachs. lower today but on pace for its third positive month out of the last four. nancy, you say it should benefit from a more friendly regulatory environment. and as m&a trends start to accelerate in this new administration, take us through why. >> yeah. and i think what we haven't heard today, dom, is anything about the administration and what is likely to happen with with regulatory relief and potentially corporate tax cuts. so even if the trump administration 2.0 doesn't get to 15% corporate tax rates and 18%, it adds 4% to s&p earnings. so what's a likely beneficiary if companies are not getting leaner cond. it's m&a and goldman's going to lead in that. plus they are adopting ai in

many aspects of their business. which is why i think we're just in early innings as we were talking about during the break. so i think this is a name at 13 times this year's earnings and 12.5 times next year's, that you want to own it for the long term. also a nice dividend getting paid to wait. >> and we'll see if we get really a bigger and bigger deal. boom this year would be interesting. let's move on to spotify, which is on pace to snap a four session win streak. so it's actually moving just slightly to the downside. but you're sticking with this as a as a big growth story. >> yeah it's been in our portfolios for a long time. we just put it into our 12 best ideas portfolio in the fourth quarter. daniel ek said 2024 was the year of monetization. they did just that, generated earnings, and now we've got 58% earnings growth off of albeit low numbers this year, 28. it decelerates to 28% earnings growth trading at an attractive price. earnings to growth rate. and i think a recession proof name. if you think the economy is slowing even if you don't, this is an area that it's a very stable. it's like a technology

staple. >> it's crazy though because you think there's apple music. there's all these other there's youtube competitors. how does it keep its moat? but it does. >> it's better. and the joe rogan, you know, the offering it up on other platforms that was brilliant and showed their ability to pivot. so advertising is growing very quickly as well. >> afraid. all right nancy. thanks. remember you can oh you can tell. >> i can remember and can you remember. >> yeah. >> you can always hear us on the podcast. speaking of spotify and everything else, please be sure to follow and listen to power lunch wherever you go. power lunch and audio format. podcast format. we'll be right back. >> meet venue on the nyse. american symbol venue disrupting. >> a. >> multibillion dollar live music industry. venue owns and operates upscale music venues, outdoor amphitheaters with seven revenue sources, $166 million in assets. luxury suite sales of

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the lows we were down roughly 720 points. and that's pretty much a stone's throw from where we are right now. >> i know, nancy, we're not supposed to watch too many of these movements, you know, day to day or moment. but i will be very curious what kind of bounce we get or don't get tomorrow. you know, are we going to come back and make up 10% ground on some of these names, or is it going to be a holding pattern for a while? >> i don't think we're going to bounce. i think you're going to have time viewers, to be deliberate and thoughtful as you as you accumulate names. but let's not i mean, if this was a disaster as it's being really projected to be, the nasdaq would be off 10% and we were down over 1000 points pre-market. i think it's settled in. it's the algos. you wait, you see what the news is. and i think you have to look with skepticism at what we're being told about. >> does it also make you feel better that we're not seeing a massive wholesale led selloff? that means it's not leverage based, right? it's not people having to force sale. all of these things. >> even some of these widely held momentum names, the staples

are doing quite well today. i know, i don't know, you know, it sounds like barry bannister over here playing up the defensive portfolio, but those are parts. >> to watch. but there's not. but they are trading at lofty valuations with very low earnings growth. >> so nancy thank you so much for joining us this entire hour. it was awesome. thank you very much. >> for that. thanks for having me. >> thanks for watching power lunch everybody. >> closing bell starts. >> right now. >> all right. let's do it. welcome to closing bell. i'm scott wapner. live from post nine here at the new york stock exchange. this make or break hour begins with. what else? one of the worst days on record for shares of nvidia looks to be the largest ever single day market cap loss for that stock. we will follow it into the close hammer today on fears about ai competition and cost. both issues sending shares of many tech companies sharply lower today. coming up, top chip analyst stacy rasgon on what all of it means for your investments. in the meantime, take a look at the majors here. with 60 to go in regulation, nasdaq, obviously, where the action is today. many of the mega-cap