Nvidia Drops as Markets Look Past Forecast; CDC Firing Uproar

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1:02Fox Sports Radio News. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with earnings from one of the magnificent 7NVIDIA, the world's most valuable company, gave a tepid revenue forecast for the current period. It's a signal that growth is decelerating after a staggering two-year boom in artificial intelligence spending. The chipmaker says it expects sales to be roughly$54 billion in the third quarter. That was in line with the average Wall Street estimate, but some analysts were projecting more than$60 billion. Matt Bryson is managing director of equity research at Wedbush Securities.

1:43Something to think about here is that NVIDIA almost always leaves over the last few years. They've left something on the table, and that something has consistently been$2 billion,$3 billion. So when the guy to$54 billion, what it seems like they've been telling the street is more like they can do$56,$57 billion. I don't think anyone's going to be disappointed if at the end of Q3 they're coming in at those type of numbers. Matt Bryson at Wedbush Securities has a$210 price target on NVIDIA. Right now, the stock is trading at$178. dollars. Nathan, NVIDIA says that Trump administration's plan to charge a 15 percent commission on its AI chip sales to China has not progressed beyond the early stages and could pose legal risks.

2:28The company said it excluded as much as five billion dollars in possible China sales from its projection because it can't be sure whether geopolitical tensions will allow it to fill orders. Meanwhile, NVIDIA CEO Jensen Wong says they're still pushing to bring their most advanced AI chips to the Chinese market. So I think the opportunity for us to bring Blackwell to the China market is a real possibility. And so we just have to keep advocating the sensibility of and the importance of American tech companies to be able to lead and win the AI race. NVIDIA CEO Jensen Wong ended his conference call by saying, quote, opportunity ahead is immense and a new industrial revolution has started and the AI race is on.

3:17Well, turning to the broader market now, Karen, despite the NVIDIA pullback and uncertainty over the future of Federal Reserve Governor Lisa Cook, stocks are trading near record highs this morning. Amanda Aghadi of PNC Bank explains why markets have been discounting the Trump-Cook saga. I think the equity market is really largely ignoring it. One, because it's starting to get conditioned to a lot of this purple haze of policy uncertainty. But two, because I think the bottom line is rate cuts are more likely than not, regardless of what ultimately happens with Cook. And I think that is the most important thing for the equity markets path forward.

3:55PNC Bank's Amanda Aghadi says expectations for rate cut could get murky if inflation surprises to the upside. The Fed's preferred read on price pressures, the core PCE index, comes out tomorrow. Nathan, U.S. companies are planning to buy back shares at a historic pace. And we bring in Bloomberg's John Tucker for the very latest. John, good morning. Good morning, Karen. It's a sign of corporate America's confidence in the economy. Announced buybacks surpassed a trillion dollars last week. That's a record. Over the last few months, corporate heavyweights, in particular the financials and technology, they have given the green light to large share repurchasing programs.

4:33Back in May, you'll recall Apple announced it would buy back$100 billion in stock. Alphabet, JPMorgan Chase, Goldman Sachs, Wells Fargo, and Bank of America have also announced buybacks of at least$40 billion. And the latest just last night with the NVIDIA announcing a$60 billion buyback. Barini Associates says earnings are good, they have enough money for capital expenditures, and this is a nice way to reward investors. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thanks. Let's head to Europe now. Our French spirits maker Pernod Ricard's been updating sales in the wake of U.S.

5:06tariffs. Bloomberg's Ewan Potts joins us from London with the very latest. Ewan. Nathan and Karen, Pernod Ricard shares one of the biggest gainers in Europe this morning. The company behind Absolute Vodka and Jameson Irish Whiskey has topped earnings expectations and forecast a pickup in demand in the second half of the year. On U.S. tariffs, including the 10 % levy on U.K. exports, Perno says the total impact on a full-year basis will be€35 million. The company says it will partly mitigate the tariffs by some price increases in selected markets. In London, I'm Ewan Potts, Bloomberg Radio. All right, Ewan, thanks.

5:42Well, Japan's top trade negotiator is visiting the U.S. to press for lower tariffs. And Bloomberg's Amy Morris has more from Washington. Japan's top trade negotiator, Ryosei Akazawa, will push for the tariffs agreed to in July, including lower duties on cars and auto parts. Japan wants those duties cut to 15 % and to end the stacking of previous duties on 15 % universal tariffs. Look for Akazawa to urge the Trump administration to implement these changes as soon as possible, but the U.S. wants to see a promised$550 billion investment mechanism up and running. Details of how that fund will operate are still not known.

6:19In Washington, Amy Morris, Bloomberg Radio. Amy, thank you. And speaking of Japan, Warren Buffett's increasing his bet on the country. has Berkshire Hathaway's raised its stakes in Japanese trading houses Mitsubishi and Mitsui. Buffett first revealed stakes in the trading houses in 2020. Berkshire has holdings in Japan's five biggest trading firms. Nathan, the White House is ramping up pressure on India over its purchases of Russian oil. In a conversation with Joe Matthew on Bloomberg's balance of power, White House trade advisor Peter Navarro called Russia's conflict with Ukraine Modi's war. The road to peace runs at least partly right through New Delhi.

6:54Modi's war. I mean Modi's war. Because the road to peace runs in part through New Delhi. I mean, that's a lot of money. White House trade advisor Peter Navarro spoke after the U.S. doubled tariffs on India's exports to 50 percent as punishment for its Russian oil purchases. China remains the world's largest Russian crude buyer, but the White House has extended a 90-day trade truce with Beijing. And Karen, there has been another major shakeup within the Trump administration. The White House has fired Centers for Disease Control Director Susan Monterey just weeks into her tenure. Her attorneys say Health Secretary Robert F.

7:30Kennedy Jr. is targeting her because she refused to, quote, rubber stamp unscientific reckless directives. And now at least three senior CDC leaders say they are resigning in protest. All this comes weeks after the CDC was targeted in a shooting that killed a police officer. Current and former Health and Human Services employees wrote an open letter after that attack blaming Kennedy for spreading vaccine misinformation.

8:00Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. A vigil was held last night for the victims of yesterday's horrific mass shooting at a Minneapolis Catholic school. A shooter opened fire during mass at the Annunciation Catholic school, killing two children and injuring 17 other people before dying by suicide. Speaking at Lenhurst Park, Minneapolis Mayor Jacob Frey depleted with the people in attendance to speak up and call for gun control. While thoughts and prayers are great, they are not adequate.

8:39These children were literally praying at this moment. Mayor Frey, the dead, include an 8-year-old and a 10-year-old child, Minnesota Governor Tim Walms. We often come to these and say, these unspeakable tragedies, or there's no words for this. There shouldn't be words for these types of incidents because they should not happen. Minneapolis Chief of Police Brian O 'Hara spoke about the shooter. The coward that shot these victims took his own life in the rear of the church. That coward has been identified as 23-year-old Robin Westman. No prior criminal history. Minneapolis Police Chief Brian O 'Hara says while they are searching for a motive, the shooter is said to be a former student.

9:27The injured children are between the ages of 6 to 15. There were also three adult parishioners all in their 80s attending the mass that were also shot. All of the wounded are expected to survive. Authorities say a mass Russian drone and missile attack on Ukraine's capital has killed at least 10 people and wounded 48. The attack early today on Kyiv was the first major Russian combined attack on Kyiv in weeks. The immigration detention center President Trump called Alligator Alcatraz will be closing up shop according to new details. Last week, a federal judge in Miami ordered the center to wind down operations.

10:08Alligator Alcatraz, located in the heart of the Florida Everglades, was rapidly built, capable of holding up to 3 ,000 detainees. The facility has drawn public backlash over its location and living conditions. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barnes. This is Bloomberg. Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Aaron Hewitt. Ryder Cup captain Keegan Bradley filled out his roster for the upcoming Ryder Cup at Bethpage on Long Island. Did not pick himself to play. Picked Justin Thomas, Colin Morikawa, Ben Griffin, Patrick Cantley, Sam Burns, and Cam Young.

10:50Tommy DeVito, the quarterback released by the Giants the other day, has been claimed on waivers by the Patriots. The Mets, with a 6-0 shutout of the Phillies, the rookie Nolan McClain pitched eight innings. He's the first Met pitcher to win his first three starts. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Bloomberg Daybreak U.S. edition is brought to you by OTC Markets Group. Thinking about joining the exploding overnight market space, but unsure where to start? Designed to meet the needs of a growing international investor base, OTC Markets Overnight Platform for Exchange-Listed Securities, Moon ATS, provides access to global securities in U.S.

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12:17Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Well, it wasn't the blowout quarter many investors have come to expect from the world's most valuable company. NVIDIA delivered a more muted revenue forecast for the current quarter, raising some concern, perhaps, that the breakneck growth we've seen in AI spending may be tapping the brakes. But NVIDIA CEO Jensen Wong is thinking longer term. Over the next five years, we're going to scale into with Blackwell, with Rubin and follow-ons to scale into effectively a three to four trillion dollar AI infrastructure opportunity.

13:01And that was NVIDIA CEO Jensen Wong at the conference call last night. Joining us this morning, Dan Ives, Global Head of Technology Research at Wedbush Securities. Dan, good morning. I know we've talked before about expectations for AI spending in the longer term. But when we hear$3 to$4 trillion in the next decade, is Jensen Wang continuing to set the bar too high? Good morning. Yeah. I mean, look, I think these are jaw-dropping numbers. And the reality is there's no one that has a better view of what's happened when it comes to AI revolution than the godfather of AI, Jensen himself. And I think this is just not just a bullish forecast.

13:42I think it shows we are just early days in terms of just what's really going to be a fourth industrial revolution. Now, in terms of the current forecast,$54 billion in sales in this quarter, that was in line with estimates. A lot of investors have been expecting that NVIDIA will continue to go above those in-line estimates. Is$54 billion enough to keep the momentum going for this company? Yeah, look, I think you have to also look at China because this excludes any China revenue. When you think about age 20, that could be two to five billion. And then you look what could be really 50 percent growth over the next year.

14:26I think that's really the call here is that at first, yeah, you could say it's conservative. But these are jaw dropping numbers. When you look at the growth and now China getting added back to that, given the green light that we're seeing from the White House. Look, there's one chip in the world fueling the AI revolution. It's NVIDIA. Is it really a green light, though? I mean, we got the 15 percent revenue sharing agreement that the White House says it's imposed on NVIDIA. The company itself sort of raised some questions about that. How green is that light for China penetration? Look, it's essentially a pay-for-play model, right?

15:07And obviously there was going to continue to sort of be some noise around the situation. But the reality is that China market is going to be reopened for NVIDIA. And NVIDIA wants not just to factor into China, but they don't want to give on a silver platter Huawei,$20 billion,$30 billion a year. And I think the White House, you've seen now the path is there. So I think when you start to factor in with China revenues combined with what the company is seeing massive demand that's really off the charts, I think there's a stock that's going to be green. Does China want NVIDIA? There's been a lot of motivation from the Chinese government to grow its own AI accelerators and concern raised about, you know, they say that there could be trackers on NVIDIA chips as well.

16:02Does China want NVIDIA? look there's going to be a back and forth right this is a political you know obviously continued game of chess being played between dc and beijing but the reality is nvidia chips are years ahead of any other chip so when you go to chinese big tech companies that's chip they want so it comes down to there could be some political grandstanding but nvidia continues to be the chip that chinese players want. And I think that, look, as this all plays out, it's just going to continue to show that there's one chip fueling the AI revolution, whether in US or China, and it's NVIDIA.

16:46Just got 30 seconds left, Dan. Your colleague at Wedbush, Matt Bryson, has got a$210 price target on NVIDIA. It's not there yet. Are you making any changes to your price target after these earnings? No, Bryson and I have to talk,$210, but we ultimately believe this is a$5 trillion mark cap as we go into early 2026. I think, you know, it's only second inning of a nine inning game in terms of AI. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen.

17:28You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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