cloud computing. >> thank you very much. farmer jim. >> small caps. let's keep playing for the broadening of the rally jenny. >> for dividend investors only ups 5.7% yield and still decent earnings growth ahead jeff. >> dekkers i'm not there yet but i like it. >> all right. you let us know what you do. i'll see you on closing bell. the exchange begins right now. >> thank you very. >> much, scott. and welcome. >> to the exchange. >> i'm kelly evans. >> here's what's ahead. goodbye, january. which was actually a good month for stocks despite that rough start. day one remember now historically good first month bodes well for the rest of the year, but this year could be different. our market guest tells us why and brings four names he says will do well regardless. plus, nvidia's ceo is at the white house meeting with the president this hour. our team is on the ground to figure out what this is all about. and we have the man who literally just wrote the book on nvidia. author tae kim is here. interestingly, he says, whatever happens today, there's no

question the u.s. will win the ai race. keep that in mind as we trade nvidia today, and tariffs on mexico and canada could take effect tomorrow. could. we'll look at the auto stocks potentially most at risk. you're looking at one of them. tweet me if you think you know it. it's our mystery chart. let's start with the markets though. dom chu has the numbers. and dom markets appear to be shrugging off the tariff threat. >> yes. >> and believe it or not, at these current levels right now kelly, after that crazy week we had, especially for the nasdaq and the s&p 500, we are actually fractionally positive on a one week basis. so not much. so just about maybe a quarter one fifth of 1%. but still the dow industrials so far today just about flat on the session, up a whopping four points to a basis of 44,886. the s&p 500, not far away from record highs. remember 6128. that level. we're at 6810 right now. that's up about 39 points. we were up about 20 points even at the lows of the session. up roughly 49 at the highs. so tilting towards the higher end of that range that's

2/10 or two thirds of 1% gain there. and the nasdaq composite the tech heavier trade the real outperformer doubling up the performance of the large cap s&p 500 up 1.25%. that's 245 points to 19,925. and again, both of these measures here are now positive fractionally. so for the week. and we're just about a percent half a percent away from record highs for each of these guys. so keep an eye on that. it's not all though positive. some earnings stories out there. and the outlooks in particular are dragging names like deckers outdoor and the apparel footwear side walgreens boots alliance down as well. so down 16% for deckers down walgreens 8% here. the two worst performers in the s&p 500. in an otherwise positive tape to end the week so far. and kelly pointed out nvidia it's got to be the stock of the day, the week, the month, the decade at this point. but nvidia shares right now on a one year basis are still, yes, a doubling. as you can kind of see here we are just at about above the 200 day moving average long

term trend line. and this dip that we saw here is now down 12%. after that 1,617% dip we saw on monday due to the deep sea concerns. and just to kind of give you a perspective on what a 12% drop is, we noted kelly on that monday drop. it was roughly $600 billion in market cap lost, which means it was roughly the size of bank of america. and again and some of these other names combined. right. but then you have nvidia now down roughly 400 billion in market cap, which gets you to the size of a lost home depot, relatively speaking. so keep that in mind that the relative moves here. yes they're big, but nvidia is still a massive performer over the course of the last year. plus i'll send things back over to you. >> all right, tom, thanks very much. now, in case you missed it, we actually got a crucial piece of data today, the pce price index. and it had some good news, up 2.6% year on year in december for the headline, but the three month rate fell to

2.3%. and the six month annualized rate dropped to 2.2%. that's almost a target. does it clear the way for a fed rate cut in march? our next guest says not yet, not quite. for more, we're joined by michael pond, barclays head of global inflation linked research, along with our very own steve liesman, who's here at the table with me. welcome to you both. michael pond, i'll give it to you first. how significant was it? look, the pce, this is the second least second month in a row. now it's come in pretty nice. >> it was. >> especially at. >> the core level. >> once you strip out food and energy prices. >> as you mentioned, it was the second month in a row exactly what the fed wants to see. i would describe it as a necessary, but not yet sufficient data release, and i think it's very helpful that it came along with very strong consumer spending. so this gives the fed a little bit of patience that they. >> can continue. >> to think about cutting rates, but they don't need to be in a hurry. >> so you're not thinking the next meeting i guess in march at this point you're thinking maybe june, what about. and we'll talk

more about this with our market guest in a moment. but what about whatever happens here on the tariff threat? look, if they're 25% in canada, mexico, if it's fully passed along, you could be talking a point, a point and a half on inflation this year. but those are a lot of big ifs. >> that's right. >> our forecast. >> is that we. >> end the. >> year at about 2.8% on on that core pce number, but that's with a decent amount of tariff induced inflation. if we end up getting no tariffs or no tariffs that are actually passed through to consumers, then inflation is likely to come in much lower. however, you make a very valid point that it could come in much, much higher if we get full on tariffs. as was discussed on the campaign trail. >> all right. let me turn to steve. steve bring you in on that. so what jumped out to you about some of the inflation numbers this morning and just in general? >> well, i like that. it was, you know, the core was was better behaved or well behaved. and i like that. austan goolsbee thought it was a good thing, because that's where you take your cue from. i will caution a little bit, those three and six

months, as you know, are very volatile. but more than that, the fed is going to make policy on the 12 month. the 12 month has got to come in line. we have some things working for us that i think when people talk about today's number, they're kind of incorporating the future or their outlook, which is we've talked about this, that some of those rent numbers have absolutely collapsed. and there you're looking at the three and six month numbers there for core pce annualized. >> okay. basically the more recent data has been more dovish. >> has been more dovish. so and that's part of the part two about this which is that we're going to have. remember we had that big residual seasonality pop pop last year. those numbers are going to drop out. so you have the 12 month should behave as we go forward. it's going to give the fed what you're positing i think is a great question, which is all things being equal, if the inflation numbers come down and let's say the president puts tariffs on tomorrow, we won't get any effects of that for quite a while. could the fed should the

fed move just because of the inflation numbers, or should its hand be stayed by the uncertainty of how tariffs work through the system. >> yeah, totally. mike you're about to jump in there. and i wonder if i could dwell on the shelter component of this for a second, because it's a huge part of the overall index. it's been running hot, but a lot of people have been saying it's going to cool. it's going to cool. anecdotally, we've seen rents starting to do that. is it cooling down here finally. >> so the chair powell has been talking about the expected decline in the shelter component for the past two years at least. and we really only started to see that within cpi and pce at the end of last year, even though we've been seeing it in private rent measures for quite some time. we think this year is the year. we think by the end of this year, we get to a run rate that was consistent with pre-pandemic. but more importantly, we think just given look, just looking at those private indicators that steve mentioned, we think that there's considerable downside risk at

the end of this year if shelter is different, if shelter inflation is measured in cpi is different from our forecast, we think it's closer to 1% than the 5% where it's been running of late. >> so what do you think the fed does michael does does the fed. if you hit target and you get to target and you're running in and around 2% or you're headed to target, i guess, do you just ignore the tariffs and do you cut because of that? >> well, again it depends on how much tariffs we get. we could see tariffs that that boost inflation by over a full percentage point. i don't think the fed looks through that because they've been concerned about the knock on effects, especially on consumer inflation expectations, which could then keep inflation sticky to the upside. >> this is a. >> potential we have very low tariffs at least as far as what reaches the consumer. if we have shelter coming down, that really opens up the door for more significant fed cuts than we're expecting. >> this is an important point because we had navarro on this

morning on squawk box and he said that look 2018, we did the tariffs and it was fine. the question becomes is this a different environment where you're running a little bit about potential? we've just been through a situation where there was high inflation. will those inflation expectations become unanchored. could you have a, you know, not a different reaction, a more severe reaction to tariffs this time around? >> i mean, what's so fascinating about this to me, steve, is that we're talking about very different kind of tariffs right now. you know, 2018 i think we started with maybe washing machines then steel. but it was very china focused and kind of ramped up on china that whole year. we're not really even talking about that right now. we're talking about canada. >> across the board, our two biggest trading partners. i think i've been told this, i have not checked it out, that they actually designed the tariffs to not hit stuff in the cpi. >> which tariffs. >> the first. >> one. >> 2018 1.0. right. as you just mentioned we did see tariffs but they weren't broad enough across a number of goods or countries or large enough from a percentage standpoint that it

actually hit the consumer. so we could see tariffs imposed, but it actually doesn't hit the cpi or the pce. again, allowing the fed to cut. >> i'm interested in this conversation that happened during the campaign. democrats would say the inflation rate is down and republicans would say, but the price level is way up. it's now reversed. they say, oh, tariffs won't hurt the inflation rate. they'll just raise the price level. which raises the question about whether or not president trump is flirting a little bit with a political problem in that he's tariffs will raise the price level again. and they won't it won't raise the inflation rate necessarily if they pass through. but the price level will be permanently higher. >> well and mike this is why so much is going to depend on the next 24 hours. 25% across the board tariff absolutely would have to have an impact on autos and housing and fruits and vegetables. and i don't think anyone's going to cry over, you know, beer, but it would absolutely. >> wait a second. i know people are going to cry over beer. >> apparently, like 80% of our malt for beer comes from mexico

or something. but but i think the question we just don't know if any of this is going to happen. >> at the at the top of the hour, you mentioned that we did get some announcements about march 1st, but the markets really are shrugging their shoulders. and the reason for that, at least so far, is that day one became february 1st, february 1st became march 1st. and now the market is saying, will march 1st actually be a date or will that be pushed further, further out to the year? >> yeah. steve, a quick last comment. >> i thought i had to be on tariff watch tomorrow. is he telling me now they've moved it to march 1st? >> listen, these. >> are conflicting reports. >> as things trickle out in different media sources about what may or may not happen. but even if you look at the wall street journal, they're saying maybe it's just going to be steel and aluminum. look at goldman's note this morning where they say, you know, it might be gradually implemented. it might if it excludes oil, obviously that would be a big one. you know, it could have ratchet up provisions or not. nobody knows. nobody is sure. >> whether i think the president would be well advised to listen

to business leaders who want to know just what the heck is going to happen. >> well, they're pulling him in two different directions. >> right now, and. >> the steel people want him to impose these tariffs on mexico and the auto workers and so forth. >> are you asking me for a quick last word? but i really want to throw this back to michael. michael, it looks like there are some things happening in the macroeconomic data that seem already to be tariff related, that we have had some pull forward in, in, in the, in the trade data and some pull forward even what looks like durable goods purchases by consumers. i don't know how much you're seeing that, but if we go on like this, it seems like. >> there's going to be. >> a cliff. there's going to be a cliff somewhere. >> i think that's right. and it does actually boost spending in the near term. whether it's steals from the longer term is a question. the other thing i'd point out is since last september, we've seen a pretty sharp rally in the dollar giving up some of that today. but what we know is that dollar appreciation lower tends to lower import prices. so we're already seeing a disinflationary

a disinflationary impact of tariff threats or tariff talk. even if we never get tariffs that push up inflation, we are getting a positive dollar move which can be disinflationary. >> a significant one as well. like 108 still floating around on the dollar index. mike thanks for jumping into the pond with us today. we really appreciate it from barclays. thanks for having me steve. thanks as always. steve liesman. with the day to go, the s&p is booking a 3% gain for january, which bodes well for the rest of the year, according to carson's group. ryan detrick, my next guest says, yeah, we're off to a strong start, but he's cautious because of, yes, tariffs, one of the reasons for the remainder of the year. let's bring in david katz. he's the cio at matrix asset advisors. good to see you david. so you're not not so i mean are you are you feeling bullish on the market overall here. >> we've been very bullish for. >> the. >> last two years. but after two years. >> of. >> plus 20% returns and a strong start to january, we think the upside is more limited. the market now is at about 22 times

earnings. that's at the higher end of a 14 to 22 range. so we just advise investors to be a little. >> bit more cautious, lower your. >> expectations, expect volatility. we wouldn't chase this rally. >> all right. since we just heard you know 27 different hypotheses about what might happen with tariffs i'm not going to ask you to necessarily weigh in on that because we don't know. but you often have a lot of interesting stock picks and ones that might be out of consensus, like a comcast, a little bit like a microsoft lately, dollar general, texas instruments. why these names? >> so a lot of names in our portfolio are working very well for new money. we're most excited about things that haven't worked well. comcast had a good quarter yesterday, but they did lose broadband subscribers more than expected. and the stock got taken out and shot. we think from the low 30s the stock has a great risk reward. it pays a 4% yield. it sells at about eight times earnings. so this is a good business really smart management shareholder oriented management at a great price. we think the move from 33 to 30 9 or 40 should be pretty simple. same thing microsoft had a good

quarter good outlook. the market we think overreacted sold it off 5 or 6%. microsoft had a great january of 24. since that time it's only up 5%. we think that's going to be a pause that refreshes. and we think microsoft is a very good place for new money. if you're looking for technology. >> we make a lot that nvidia. you know, the fact that nvidia has been flat really for seven months now. microsoft, you're saying it's basically been flat for 11. >> exactly. >> that's interesting. so a couple of the other names texas instruments i mentioned. i mean where else are you looking and what do you think the net net kind of tariff impact is going to be, just giving more buying opportunities or is it a real headwind? >> we think tariffs are a losers game. they're a loser's game for either china or europe or canada or mexico. but they're also negative for the us. they're negative for the global economy and they're negative for the us consumer and inflation. so we worry a lot about that. the market has ignored it to date, but one day the market will wake up and get concerned about it. and that's why we think you're going to have a lot of volatility this year. the market's pretty upbeat. it's

focusing on the good things with the current administration. we do think there's some possible negatives tariffs immigration policy. and as a result we think you're going to see volatility. you could see a 5% correction at any given point in time. we wouldn't chase the rally. we'd be prepared to buy into any weakness. >> all right. and some of those particular names you mentioned david thanks for your time. appreciate it. >> thanks a lot. have a great day. >> you too. david katz with matrix. coming up, president trump confirming plans to impose 25% tariffs on mexico and canada as soon as tomorrow, surprising the analyst community who expected china to be the number one target. instead, the big three automakers could bear the brunt if it goes forward. we'll break down their exposure and the fallout for consumers next. and apple is on track to snap a four week losing streak, which was its longest in over a year. our analyst sees plenty of upside and a number of hardware opportunities for investors in the wake of deep sea dramatic entrance. you'll be surprised at the old tech name. he expects to be a big beneficiary. it could be a guest. tweet me if you think you know it. the exchange

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the president reiterated his intention to pursue tariffs. and the suppliers are also at risk. my next guest says it could also mean higher, higher car prices for consumers. let's bring in tom narayan, the lead global autos analyst at rbc capital markets. it's good to see you again, tom. and yeah, i mean, listen, i don't know what you do at this point if you're one of these automakers because one second it could be 25 tariffs would be it would be a disaster for them the next second. it might not happen at all. >> yeah. >> it is odd right. >> it's a very binary situation. actually there's some news i think apparently. >> looks like it's. >> hitting saying that maybe it's been pushed to march. so you're noticing that i think gm is up like 4% on this just literally in the past like ten, 15 minutes. so and it was the stock gm was down like like you said, you know, 8%. since that news was announced on the same day, they reported a huge earnings performance and a guidance above consensus. so clearly the market is really worried about it. the negativity increased there. but what we

would do is highlight what happened. the first trump administration, which is there was a threat. then a deal was struck right between the us and mexico and tariffs were averted. i think the base case assumption people are playing is that that could happen because the downside is like double digit earnings hits. we saw the stock react to kind of absorb some of the negativity. and now it's rebounding because of whatever this recent news is. but so far the market doesn't seem to be pricing in a structural long term tariff hit. >> so because i find it fascinating mental exercise. let's talk about what would happen if these tariffs went into effect. you mentioned a double digit earnings hit. some say we should expect car prices here to go up by a couple thousand dollars. there's questions about i think you've made this point that even the evs i guess we make the batteries here and then we ship them to mexico to be assembled and then they come back in or something to that effect. so it's very complicated. >> yeah. i mean, the devil's in

the details of what actually winds up being called out in the formal announcement of what exactly how the tariffs are determined. you know, is it final assembly where, you know, because there's ways around it. also, you know, the oems like gm, they make pickups. sure in mexico they also make them in the us. so they could just increase production obviously in the us instead of mexico. but then what happens to the supply chain? right. most of the seats are made in mexico. those guys can't just change and make seats all of a sudden in the us. so those oems would have to source the seats from europe, which would cost a lot. so what would then happen? they would pass that on to the consumer, and you and i would pay more for cars, which are already very expensive. yeah. that's why i think most people expect if it does happen you'll have some inflation. but really, more than anything car sales would just come down. that'll probably be the bigger impact to earnings. >> i love the granularity to the

idea that it could be something like car seats, right? during the pandemic, we saw what happened when a small component of the supply chain is affected, like the chips for moving your car forward and back, and there's no supply suddenly. so, tom, can you back up for a second? what is the you know, the us auto industry would seem to be sort of something that the president is trying to encourage support. again, to your point. you know, maybe boosting production here, but i mean, it just feels like they would be collateral damage from if the effort is really to crack down on what's happening with the border, with fentanyl, with the trade deficit, the usmca is up for renegotiation, i think is called in 2026. do you think the auto industry needs to think about this as as a bigger existential problem or just a near-term threat? >> i mean, we don't know the answer, right? but what i would say is, let's look at what happened the first trump administration. right. these were used, not these tariff threats were not used because it was a way to generate revenue

for the government. right. they were used as a tool to get something totally separate. right? in that case, to your point, like immigration or drugs or what have you, is it any different this time around? you know, so that's i think, why folks are thinking ultimately this is just used as a tool to get some agreement. we saw what happened with colombia, right. so get some agreement on a non auto related issue. so yeah i do think the auto industry is thinking about it. maybe localizing more. yeah that could be happening. >> on that. on that note and as we're speaking so we're looking at some of the intraday charts and we're showing this effect where we've seen a lot of the automakers affected rebound on the reuters report that tariffs might be pushed back to march 1st. and now they're sinking again. and the reason why is that in the daily white house press briefing, the press secretary just denied that report when directly asked about it and said that the tariffs will be going into effect tomorrow. so now you're getting

gm is giving back much of that earlier pop. and go ahead. you were saying right. >> yeah. well i guess i was going to go skiing tomorrow but maybe not. >> right. >> can i have a busy saturday. yeah. so i mean the auto industry probably is. and they were already on this path. right. remember during the pandemic there was this big effort to localize more right. not be as globalized. so i think that trend was always going to happen, maybe localized a little more to prevent this from happening. but it's difficult to make such a structural change. what if this only lasts for four years? and then there's a new administration that changes it? so i think these oems are just waiting to see what exactly happens if a deal is struck like it was the first go around and then gradually, yeah, maybe localized more. but look, this is a global sector. you know, mexico is very critical for this industry except for tesla, which is ironic, right? >> i mean, mexico is into canada to some extent critical for the us auto industry, with the exception of tesla.

>> yeah, i mean, tesla was going to do giga mexico, right. and then i think they saw what could potentially happen and chose not to pursue that path. so it probably worked out there. you know, it could be working out well for them. but the reality is if there are tariffs, that is going to have a negative impact on on all these automakers, including including tesla and the other stuff that comes with this ira. right, or ev credits. et cetera. so i don't know if anybody wants to see this happen. i think they'd rather that a deal be struck, just like they were the first go around. >> well we'll see. the clock is ticking. tom, thanks for joining us to really cover this live tick by tick. tom narayan from rbc. we appreciate it. still to come, the ipo market is gradually opening up again, but tech companies are not in the top spot. we'll look at what's in the pipeline. and with the emergence of deep sea in china, means for silicon valley's startup landscape. don't go anywhere. we're back after this.

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no games. no fun. there's a great barbeque outside. but don't touch that. meanwhile, at a vrbo... when other vacation rentals make you share your turf with a host, try one that's all yours. not franklin templeton. we've been a firm in motion for over 75 years, always innovating. today, we're a leader in public and private markets, digital assets and custom tax management, empowering advisors with solutions to build the portfolios of the future today. franklin templeton, your trusted partner for what's ahead. >> welcome back to the exchange. let's talk utilities for a second. it was such a hot sector all of a sudden, but it ended the year with a whimper, down 8% in december. in fact, having its worst month in over two years. fast forward to today, and even despite this week's deep tech

related sell off, well, now it's up 3% to start the year having its first positive january. in fact, since 2020. dom chu has a closer look. in today's sector. nomics over at the cnbc data cube. >> all right. so welcome to sector nomics. and the focus today is utilities. and we are, as you point out kelly showing off our new cnbc cube. it's a new way to look at data and comparisons in the stock market overall using some of our kind of virtual reality computer generated image technology. now it's not common, but two utilities have been acting like hot tech stocks these days. in the past year, it's vistra and constellation energy. vistra, as you can see here, is up a whopping 316%, making it the second best performer in the entire s&p 500, next only to palantir. now, vistra's performances tripled that of nvidia. just to put things in context, over the course of the last year, so far this year, it is the second best performer, up about 28%. it is topped by another utility stock, and

that's constellation energy. the baltimore based company is up a whopping, you can call it now 2324 now. and this is now 34% gain in the last year. it's the sixth best s&p 500 performer, up roughly 150 some percent here, as you can see. now entergy entergy american electric power also starting the year strong outpacing the rest of the sector overall. constellation and vistra have both benefited from, of course, ai enthusiasm for data centers. both stocks were hit hard this week by the deep sea downturn. constellations down 12% for this week. vistra is down again. you can see this week as well. energy edison international pg and e all down roughly 6% this week. but most of the sector is still positive. but as you kind of look at the state of play right now, many of these utilities have traded like tech stocks. we'll see if that theme of volatility and utilities plays out for some of these names in 2025. kel, i'll

send things back over to you from the data cube here. >> i want to know what it looks like in there i want in i want in the cube. >> well, here's i'll give you a little secret. kelly, you cannot wear the outfit you're wearing. >> oh. >> in the in in my fortress of solitude, so to speak. >> it looks like a snow cave. tom. thanks very much. you got it. let's get to courtney reagan now for the news update. hi, court. >> hi, kelly. the defense intelligence agency has banned all celebrations related to black history month and other special observances, according to a memo obtained by nbc news. a total of 11 observances are now banned in response to president trump's executive orders to end any programs to promote promote diversity, equity and inclusion in the federal government. the dia has yet to comment. the mother of the michigan school shooter, who was convicted along with her husband after their son's rampage, has been in court for the past two days seeking a new trial after yesterday rejecting most of her request to overturn the verdict or order a new trial. the judge is hearing additional arguments today, and google is testing a new tool that lets ai call businesses to

ask questions for you. the ask for me feature collects information about pricing and availability of services, but it's only currently available for nail salons and nail salons and auto shops. when you enable the feature, google will ask a series of questions such as when you want to book an appointment or schedule an oil change. kelly, i've actually been having my kids practice asking questions themselves when, you know, adults are around because i feel like they never have to do that anymore, right? technology does it. you can call cell phones directly. they got to learn to talk to grown ups. >> yes they do. and nicely not stop yelling at me. >> yes. manners. no. now and lots of please. >> yeah. thanks very much. thanks. see? i'm being polite. still ahead, apple is on track to snap a four week losing streak with services revenue overshadowing weakness in iphones last night. we'll look at what's behind the bullishness and an under-the-radar hardware trade on deep sea debut. >> sector nomics is sponsored by sector spider etfs.

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i mean, i know how the fire affected me, and there's always a constant fear that who's to say something like that won't happen again? that's fair. we committed to underground, 10,000 miles of electric line. you look back at where we were 10 years ago and we are in a completely different place today, and it's because of how we need to care for our communities and our customers. i hope that's true. [joe] that's my commitment. [ambient noise] the things and the people that you care about are taken care of. >> create your estate plan at trust and worldcom. >> earnings season on cnbc takes you inside the numbers. and when the ceos have a big announcement, they come here first. >> a wild hour of earnings. >> earnings, season special coverage all this month on cnbc. >> welcome back. nvidia's ceo is at the white house meeting with president trump this hour as we close out a tough week for the stock. although big tech broadly has fared okay on earnings this week. let's talk about all of

it. bofa securities wamsi mohan is here with the key takeaways from apple's report last night, and some opportunities he now sees because of deep seat, the same upstart that roiled nvidia. also with us is the man who's literally just written the book on nvidia. author and barron's tech writer take him and he's not worried. he says the us will win the ai race regardless of this week's developments. deirdre bosa rounds things out for us as well. she's been on this story from the beginning and way ahead of the pack. deirdre, welcome to you as well. wamsi let's start with you. let's talk some apple and kind of get that out of the way. you like what's going on with the stock here? look, the revenue has barely budged in two years. >> yeah. >> kelly. >> thanks for having me. look, when. >> you look at apple. >> i think the three key things. >> that you learned coming out of this earnings season. >> was the. >> fact that. >> one. >> apple intelligence. is starting to move the needle. >> it's barely. >> but it's still. >> starting to move the. >> needle on. >> on upgrades. >> the second. >> thing is that. >> the install. >> base of devices. >> has reached a. >> record now of 2.35 billion units. i mean, that's a massive

number, which they're going to monetize on top using services and additional add on products. and the last thing is gross margins, right. like you just had a stupendous quarter of gross margins. and embedded within their guide is actually a huge hit of 70 basis points sequentially from a gross margin standpoint. so when you put those three things together, you understand that this company is built for earnings resiliency. you just have so much of momentum from services on top of this install base that keeps that those earnings estimates stable, despite any shortfall that you might see from iphones. >> and the buybacks of course, which rival, you know, the market caps of many large companies and size in recent years. wamsi, you know, you say and i'd like to pivot now and kind of talk about this bigger deep sync issue. you see a lot of opportunities in the hardware space because of deep sea. and i'd love to just hear more about that. >> yeah, absolutely. >> kelly, look, i mean, it's so interesting to see that now you have models that potentially could be trained on top of already existing large language models for a fraction of the

cost. and what that what does that really mean? it means that the cost of inference is actually coming down. and when we look at companies, we think, what is the big step function change that can be generated because of that? and that's really ai at the edge. and whether it be infrastructure companies or whether it be companies like apple that have provided provide devices at the edge, we think that the opportunity meaningfully increases because the amount of productivity that you can bring to your device now, it doesn't need, like incrementally a ton more hardware. you can run these languages on very light amount of hardware, and that just brings an immense amount of productivity to you in your pocket. so the way we think about apple as an investment is it's the lm in your pocket, right? you have the ability to now run extremely sophisticated models on your iphone. and that i think, just opens up all kinds of use cases for, for clients. and then secondarily, when you think about edge devices, same thing applies for mac and ipads, which apple participates in, and

pcs more broadly. right. but we think that the first end device to really adopt this would be smartphones, because that's kind of what we use the most. >> yeah. so corning, western digital, seagate, these are all names that you think could be buying opportunities. and i also want to mention hpe what is going on with this. then potentially blocking this hpe juniper deal. is that out of the new trump administration? >> well, i think that there is a lot of moving pieces over here. and it's still obviously the doj has filed a suit against for blocking this merger at the at the time being. now, when we think about hpe as an investment, i think that there is a lot of things that can be done. aside from this juniper deal. when we look at hpe, there's a tremendous amount of costs that can be taken out. we think that the company could earn north of $2.20 just purely from its own cost initiatives that they're taking, and we're in a server replacement cycle as well. so there are a lot of fundamental things that are going on, aside from the juniper deal that make hp a good investment as well. the juniper

deal is still a little bit in limbo, and we'll see where that goes over time. and if it does close, then obviously that creates additional opportunities for the company as well. >> yeah, no, it's kind of a i would almost say a contrarian kind of argument on a day like this. glad to have it. thanks for joining it. really joining us, i should say appreciate it. wamsi mohan with bank of america. there are lots of questions circulating around nvidia in particular this week after the emergence of china's deep sea, including whether deep sea skirted u.s. export controls to get access to nvidia's chips, perhaps via third party vendors in singapore, say. for more, let's bring in tae kim. he's author of the nvidia way and a tech writer at barron's, along with our deirdre bosa. tae first of all, this book really shows you that nvidia i maybe i'm stating the obvious here. this company is no accident. i mean the level in which jensen wong has had to go and reinvent it and shape its culture and drive it over the years is really incredible when you read about it. so i'm curious, first of all, if you have any insight on what may be taking place here

with the deep sea emergence. >> i mean. >> the funny thing is, jensen. >> said. >> last year. that we need to drive down the cost of computing. he specifically called out reasoning models and inference time scaling, which is exactly what deep sea innovated in the past few weeks. so jensen almost kind of predicted this a few months ago, and he did that with mellanox when he bought the company networking company in 2019, when he actually bought that company. he put in the press release that someday ai workloads are going to work on these massive clusters, and networking is going to be a critical component, which is exactly what's happening now with these 100,000 gpu clusters. so nvidia wants the price, the cost of ai performance to be brought down, the cost to come down. jensen has talked about ai inference. the cost has come down 1000 times in the last ten years, and they want that to happen over the next ten years. and if deep seeks ai model

optimizations actually are replicable by us companies, this is exactly what nvidia wants. >> but why do they want that? just because, you know, you'd argue, well, you know, the more that you have to spend on these big workhorse models, the more that benefits nvidia. >> so there's two components here the ai training side and the ai inference side. let's talk about the ai inference. so basically these deep models do mixture of experts number position precision. these are all techniques that have been used before. and they've kind of combined them in a very unique and innovative way. so the cost of inference have come down 90%. now if you think about it, the first blush you you react to that is thinking, oh my gosh, that's going to lead to a glut of ai computing power inferences serving the models. but actually over time, computing history has shown when you get more computing power and put that into the hands of developers, they figure out new applications, new workloads to

use it. i mean, there's that saying, oh, you only need 640 k of memory. and then obviously that proves false. so over time, like researchers, i mean, we have health care, drug discovery, trillions of proteins that need to be simulated robotics. there's these three mega trends that are happening this year right now, multimodal, where you analyze audio and video. there's ai agents. all of these things are happening that are going to require more computing power. so if you have these algorithms and optimization techniques that give you more power, researchers and developers are going to find a way to use it. and that's exactly what jensen wants. and this is this is actually a very bullish thing for the whole ai data center space. >> so that then brings us, deirdre, to the question of what the u.s. should do about export controls on nvidia chips. why don't you first bring us up to speed on what is the latest there. >> so i think what he's getting at, as well as jevons paradox, right, which microsoft ceo satya nadella brought up at the beginning of the week when all

of this broke out into the open, saying more ai basically means more ai. and what he's talking about is true at the inference level. there could it could require even more compute power, something that i think may be lost in this conversation, though, is the competition that is going to be coming online for nvidia. without a doubt, nvidia is leading edge. it has been the kingmaker in a.i. in that pre-training phase. in the inference phase, there's a lot more competitors they have. you have companies like amazon and google working on their own chips that are efficient, that could compete with nvidia's gpus, that are going to be coming online. and something that i think is really interesting, that's also emerged this week, is that big tech is just totally embracing deep sea. so while washington is talking about more, you know, export controls to make sure that these gpus don't get into the hands of chinese labs like deep sea, it's obviously, you know, proven this big breakthrough that our big tech companies are really

excited about and integrating into their own platforms. i mean, microsoft azure, amazon aws this week integrated deep sea in a way that isn't just taking deep seek, right, but taking the open source model and giving it to their customers in a safer way. >> yeah, dell is doing the same thing. you can use it on perplexity. so if you don't want to put it on your phone, you can still access it. so what do you think? i mean, if i could even put it that bluntly, the us should. do you say you think the us is still going to win the war here as part of the war? should we be doing more serious export controls or not worrying so much about that? >> i don't think you have to worry too much about it. there's no way they're going to. i highly doubt that the trump administration is going to raise the compute thresholds to let china get the current advanced chips. the reason why i think the us is going to win is that the current blackwell ai systems are these massive ai server racks with 72 gpus all tightly

integrated together, that have over 100,000 parts. they weigh one and a half tons. so in the past, a lot of this is backward looking. you could put like a small chip in your backpack and maybe smuggle it, but that's not. >> that hard. yeah. so let me just interrupt you there so people know what we're saying. there has been a lot of speculation that these things are these chips, these h eight hundreds or h one hundreds are being smuggled into china in suitcases. you say going forward that you can't even smuggle in the latest stuff? >> yeah. >> i mean, these ai servers that everyone's going to use because they're so much more performant and a massive computing density. every hyperscaler is buying it right now. they're so big and massive, and, you know, you can't ship a one and a half ton. it's like, come on, it's not going to happen. and these clusters, you know, deep sea talked about 2000 gpus. the llama three was trained on 16,000 gpus. now llama four is going to be over 100,000 gpus. and then meta. and everyone else is building 1 million gpu clusters like these. these are

massive clusters and performance power that china is not going to be able to get. you know, china's not going to be able to get a. >> and i apologize for running short on time here. could you still, you know, ship them to singapore quote unquote. and they make their way to china. >> not like these. these racks are so big and weigh so much. like i don't think these things are going to be able to be smuggled in any shape or fashion. >> yeah. it's fast. and as you say, if all this raises demand for this computing power, we have it and it will maybe be harder for it to kind of get there in the black market. it's we'll see. we'll see for sure. and i appreciate the points. thanks for joining us today. congrats on the book. it's a great read. deirdre. appreciate you joining us today as well. take him deirdre bosa and still to come, the white house press briefing just ended. an automaker stocks are on the move. the president doubling down on tariffs on mexico and canada tomorrow despite earlier reports it might be march 1st a live report from the white house next. before we go to break, check out shares of vertex up 6% after the fda approved its

non-opioid painkiller. you can see the 5.5% pop their first new kind of pain medicine in decades. although it's about, i think, what did they say? expensive, $10 a pill? something like that. we're back in a minute. stay with us. >> techcheck is sponsored by comcast business. powering possibilities. >> in the world of investing. a beast lurks between. >> the numbers. some watch from the safety of the sidelines, but others saddle up and ride that one ton rowdy ribeye for all. >> he's got. >> if that's you, join us on tastytrade. named best online broker for options trading. genius loves company. >> some people. >> thrive on. >> the edge. >> we are improving. lives by bringing intelligence to the edge.

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>> every day. >> i'm reading extensively. >> i'm checking the markets throughout the trading session, working the phones, talking to sources, and doing my own reporting to share insights, information, and all of the details that you need to be able to make money. >> welcome back. you saw the market dipping into negative territory there. the white house press conference just ended with the press secretary reiterating tariffs on mexico and canada. and china will go into effect tomorrow. let's bring in megan costello, who was in the room. megan and the president had last week mentioned that the 10% tariff could also on china could also go into effect tomorrow. there was some reporting top of last hour or this hour that

maybe the mexico canada piece would be kicked down the road until march 1st. what did you hear in the room? >> a lot of moving pieces here, kelly, but we've got some clarity in the room. so as of last night, trump said that he was thinking seriously about the canada and the mexico tariffs. but the china ones seem to be a little bit further down the road. he said he was still deliberating in the room. we heard it very clearly that 25% tariffs on canada, 25% tariffs on mexico and 10% tariffs on china are all going to be taking effect tomorrow. i asked specifically whether there would be any lead time as these were implemented, and she said no, they would be in effect beginning tomorrow. now, the press secretary, caroline leavitt, did not have any specifics for us on whether anything would be carved out on what an exemption process would look like, on whether oil would be impacted, she said. all of that would have to wait for the fine print, but that all of that should be publicly available, and we can start combing through it within the next 24 hours when we see that formally announced tomorrow. i also asked her whether these were meant to stay in place long term, stay in place permanently, or whether there was a scenario in which canada and mexico and china

could offer some sort of a concession to get the president to remove or lower them. she said anything like that would have to come from the president himself. she did not want to get out in front of him. but overall, a very defiant tone in there saying these were definitely coming, taking effect tomorrow. and she described them as promises made and promises kept to americans. >> kelly. >> all right, megan, thank you very much. we'll continue to watch some of these affected stocks. it's going to be a busy couple of hours into the close. megan costello and we talked about the close. we've also had the open us ipo activity picked up in 2024 by about 30%. just ten out of the 150 ipos were tech companies. compare that with the 112 and 2021. that was the bumper year. so what happens this year, especially now that we've learned from deep tech that ai startups maybe don't need billions of dollars worth of chips to train their models. joining us is scott rainey, managing director of redpoint ventures. they just launched their fifth omega early growth fund, raising $740 million. scott you know a little a little tight on time here with all the developments in washington

today. and we have an ipo next week don't we. but again i don't think it's a tech company. >> yeah. >> it's it has. >> been a slow market. >> we actually. >> only saw five enterprise. >> software based. >> ipos last. >> year, although one of them, servicetitan, performed extraordinarily well. i think there's demand in the market for these high growth companies, particularly those that can be impacted by ai. but one of the things i think a lot of companies are are considering, especially those that have the potential to go public, is what's the virtue of being public in this environment? you know, the reality is these companies have plenty of access to cash in the private markets to provide liquidity to their investors and to their employees. and given everything that's going on, given how dynamic the environment is right now, the opportunity to be private longer, i think some people regard it as a as a positive. >> yeah. the ceo of raymond james outgoing made this very point on the show yesterday. said more and more companies because you know this obviously they have a vested interest in this more and more companies. he said see private equity as an easier route. >> yeah, it's not only that. it's like if you think about the

databricks and what they've been able to do as a private company over the past year, how aggressive they've been able to move into ai through a series of acquisitions, which might have been difficult to do as a public company. you know, i think some people can regard it as a competitive advantage at this point to be private. >> yeah, you're out of the spotlight. you're allowed to do m&a. you don't have people looking over your. i hate this. how do we change this? it's impossible to even if it's a deregulatory administration. we're talking about changes that go all the way back 20 some years. and we're at an effort to crack down on fraud. >> you know, i there's not an easy answer, unfortunately. and i think given how dynamic this market is given, you know, the impact that ai is having. and just look at the news of the past two weeks, just how fluid everything has been. i think that you're going to you're going to see more companies choosing not to go public. >> scott, in the remaining seconds we have and this has been, you've packed a lot into a short period of time, a couple of names you've invested in that you're excited about. can you tell us about them? >> yeah, a series of companies. i think we've been very active in the ai space. more recently. we've been focused a lot on the

applications. i know there's been a lot of discussion this week about the, the, the how good something like deep sea can be in terms of catalyzing app development. we've got companies like a bridge that are transforming the healthcare space and the legal space and trunk tools, for instance, and construction space that are basically taking a bunch of manual tasks and turning them into software. and i think the implications are going to be very meaningful, that what's really compelling is just how profound these value propositions are. yeah, these companies are growing faster than ever, because the value that they're able to bring to the table is so compelling. >> no, i appreciate a glimpse into it and maybe we'll learn more. and it's a home builder next week. debuting sign of the times. scott, thanks for joining us. hope to check back in soon. thank you scott rainey with redpoint. and that's it for us. thank you for watching the exchange. join brian sullivan for power lunch right after this break. >> morning, everyone. >> ready for the. >> big meeting? >> i have to. >> write this. >> project plan. >> i just. >> need to.

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what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com >> power lunch alongside kelly evans i am brian sullivan. all right nvidia in the. spotlight and in the hot seat. shares crushed this week the us government getting involved maybe and the ceo is at the white house today. and more questions about where exactly all of its sales may be going. we're going to dig into it all. plus, trump wants to hit canada and mexico with bigly tariffs. will it happen. >> and. >> if so, when? well the new headline is monday. we'll talk about the impact of what it may