Closing Bell Overtime: Nvidia Faces a New Crisis 11/9/26

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0:42The 1818 Collection. Italian crafted suiting for your important occasions. Explorer suit separates. Crafted from lightweight wool built for travel and ease. Brooks Brothers. Tailored for the moments that matter. The Bells bringing an end to the trading day at the NYSE. Avantis investors ringing the closing bell. And at the Nasdaq, Jazz Pharmaceuticals doing the honors. Welcome to Closing Bell Overtime. We're live from the studio. We'll be at the Nasdaq Market Site. I'm Melissa Lee along with Mike Santoli. Stocks soaring today. The Dow gaining 1 ,100 points. It's a third thousand-point move in just the last four sessions.

1:15S &P 500 rising 2.5 % roughly. And the Nasdaq shaking off the NVIDIA concerns. The Composite up almost 3 % here. Those huge gains coming as NVIDIA falls 4%. CEO Jensen Wang admitting to an affair with an alleged Chinese spy. What this means for NVIDIA, it's China business, and his tenure as CEO will dig into all those angles ahead. What really drove the market today was the return of the AI trade, especially big gains for companies which might be able to take advantage of NVIDIA's troubles. AMD up 13%, its second double-digit gain in a row following a huge post-earnings drop last week. Those gains spreading throughout the AI trade.

1:53Memory stocks, networking, energy names also with huge gains. Caterpillar, which trades basically like an AI stock these days, adding about 200 points to the Dow all by itself today. But the stock's still down 25 % in the past month. Markets also helped by a drop in oil prices, down 4 % to$87 a barrel. More on what's moving that market coming up. And it's another big hour of earnings. A new look, Skydance, such a report. We'll hear from Occidental Petroleum and Take-Two Interactive ahead of the release of Grand Theft Auto. And we'll get you ready for Corweave reporting tomorrow, the stock at the center of the recent AI sell-up.

2:29But before all that, we want to get the first take on the close. Nice bounce back here, pretty much. For sure. I mean, the market at least responded to some, you know, pretty washed-out conditions, especially in the AI trade. We just listed a lot of things, though, that went right for this market with oil down. We also got the good jobs report Friday. That's still part of the story. So I think you have to respect the breadth and the magnitude of this bounce without saying that it changes much. We closed about a quarter of a percent off of where we finished on Election Day. So we've essentially done this sort of one week round trip.

3:03Along the way, though, probably did shake out a lot of those concerns. And we tested the bottom of this multi-month range along the way. For sure. And that move in oil. I mean, just think just 10 days ago, Brent was at 113. And here we are. I mean, like, it's a much different story there. And what did better than information technology in the S &P 500 today? Consumer discretionary. That's right. We had all those big, you know, those names making some big moves in today's session. It was not one of those familiar textbook deals where, oh, the NASDAQ 100 was up and everything else was weak. It actually was pretty inclusive, except for the pure defensive areas of the market, much like last Thursday was finally a comprehensive downside day.

3:39So maybe, you know, again, we might have sort of reset the clock a little bit on this. But, you know, if I could squint, I could say, you know, Alphabet was a big underperformer. And you can find things to say, you know, it's got more to prove here. Because, again, we haven't really escaped this zone we descended into. Right. Well, the markets today getting their first chance to react to the Jensen Huang bombshell. And the reverberations are being felt far from Wall Street. We've got Eamon Javers in Washington, Yunus Yun in Beijing for reaction. We start off with Eamon. Yeah, Melissa, that's right.

4:11President Trump last night offering some cautious support for NVIDIA CEO Jensen Wang after that extraordinary series of media revelations about sex and spying through the weekend. The president said he hopes that everything is fine with the technology executive who's been at his side time and again over the past two years. Wang admitted, as you said, the affair with an alleged Chinese spy and apologized for it yesterday. Nvidia's board signaled support for him and said it doesn't have any information that U.S. national security or Nvidia secrets were compromised as a result of the situation. Meanwhile, Republican-controlled congressional committees have asked for Wang to testify behind closed doors on Capitol Hill, which will make just one of as many as four simultaneous investigations into the company, including a reported inquiry by the Department of Justice, a known investigation by the U.S.

5:00intelligence community and the NVIDIA board's own inquiry into the matter. Lawmakers had a classified briefing from the intelligence community today, and House Democratic leader Hakeem Jeffries said that NVIDIA did come up in that session, and he suggested that more chips export controls are going to be needed under the law. And it's that political dynamic, guys, that could be more damaging to NVIDIA over the long run. And last week's election results mean that Democrats will be taking the gavels of key committees on the Hill in January. And they will surely want to launch their own probes into Jensen Wang's relationship with President Trump and how the Trump administration handled the NVIDIA information that it had and when it had it.

5:41So that means this story is not likely to die down for months at the least. Amy, it'll be interesting because being anti-China or conservative about China and what we export to China has been largely a bipartisan effort. But with the midterms happening, I'm wondering how much more can we be cautious in? And is it in the cards, perhaps? Is there a possibility that all exports will at least temporarily be halted? That's certainly a possibility. I think, you know, there's the possibility of dramatic action from Washington. Look, my sense, Melissa, as of this afternoon, is that there are a lot of Republicans who'd be willing to participate in an investigation into Jensen Wong and this alleged Chinese spy and what did NVIDIA do and did it do anything wrong.

6:31But Democrats would like to go a lot farther. They would like to really explore the Trump administration's handling of this, what President Trump's relationship with Jensen Wong was like. did the president let Jensen Wong off the hook in exchange for donations to his ballroom, that kind of thing. That's not an investigation that Republicans would necessarily get on board with. So I think you're going to see sort of a weird two-pronged effort because of the election and the power takeover date. You're going to see Republicans leading sort of a stripped-down effort between now and January and then Democrats leading a much more robust and much more political effort starting when they take the gavels in January.

7:10Yeah, Eamon, a lot of the staked out positions get a little bit scrambled here to some degree. For example, you know, a lot of the folks maybe in the administration who don't want to look too hard at whether NVIDIA was selling through a backdoor to China things that were not approved to be sold, you know, are also saying we need to build all the data centers here because otherwise China is going to pull ahead of us on AI. So it's all kinds of back and forth and maybe some blurring of the lines. Yeah, look, Mike, I think the biggest question for investors as we sit here today is, is there a meaningful percentage of NVIDIA's sales that have been going to Chinese entities, you know, sub-Rosa, right, to date?

7:51And is that percentage material to NVIDIA's earnings? And that's an unknown right now, but there are allegations out there by some of these short sellers and other investigators who are looking at this who suggest that, in fact, there are quite a few of these entities that are fronts for China, pass-through entities for chips to get to mainland China or to be used by the Chinese offshore. and all of that business. If there is new management that comes in at NVIDIA, they're going to have to look at all of that business. They're going to have to get on the right side of U.S. law on that. And that could be a meaningful restriction of NVIDIA's sales.

8:27And they might have to eliminate a number of entities that had heretofore been significant clients of the firm. It goes both ways, though, Eamon, not just NVIDIA chips and where they go, but also who NVIDIA allows to become partners with them in terms of systems that they create and, you know, they say that so-and-so is an approved, you know, LiDAR system, for instance, that works with our systems, et cetera. I mean, to the extent that there could be scrutiny on all sides of this, it could just be constraining to their business, even at the margins. Yeah. I mean, any CEO will tell you dealing with one investigation, let alone four, is a daunting task, right?

9:05And you've got to marshal battalions of lawyers. People have to give testimony, their depositions. All of that takes time and mindshare away from building this giant AI enterprise, which is what Jensen Wang has been doing until now. From here on out, if Jensen Wang remains CEO of this company, he is going to spend a lot of time practicing and rehearsing for depositions and hearings. And that is going to be a drag on the company, no doubt about it. Eamon, thank you. Now let's get the reaction from the Chinese side of this story. Eunice Yun live in Beijing for us. Hello, Eunice. Hey, Mike. Well, probably not surprisingly, the Chinese government denounced the allegations of Chinese spying and the link to Huang's affair, calling it slander and smearing.

9:54The Communist Party paper, The Global Times, had also warned American news organizations from engaging in what they describe as hype. And a pro-China commentator who's followed closely here for his take on U.S.-China affairs had suggested that this is perhaps racism against Asian Americans. Now, this is a very common playbook by the Chinese government to try to present itself as a defender of Asian Americans against racism in order to try to neutralize criticism in the United States of the Chinese government, when in reality, Asian Americans can sometimes be some of the most vocal critics of the Chinese government.

10:39From an investor standpoint, it's still very unclear what the impact is going to be of these developments on NVIDIA's relationship with China, on its prospects for growth in the China market. Jensen Huang is still very widely respected here. He's affectionately called Leather Jacket Huang. And the belief is that he has a lot of influence over President Trump. President Trump had decided to grant approval of H200 chips. So these are more advanced chips. And this is a bit of an easing of the Biden era to 2022 export controls. So that was in some ways seen as a win for the Chinese, especially of the companies here.

11:26At the same time, the government here, as you guys well know, has a very conflicted relationship with NVIDIA. On the one hand, it understands that its companies want these what are perceived to be superior chips to the Chinese ones for their AI training. But on the other hand, they want to encourage the Chinese companies here to continue to use homegrown chips in order to try to quit NVIDIA. So the foreign ministry had actually declined to comment on a Reuters report that had said that there are 600 ,000 H200 chips sitting on the Hong Kong port because the Chinese government was not granting approvals for the importation of those chips.

12:08guys. So, Eunice, even before the specific revelations about Alice Wong and, you know, Jensen Wong's admission of the affair, there was a lot of reporting about, you know, the outside sales by NVIDIA to Singapore entities and a lot of suspicion that that that that equipment was getting to China. I mean, to what degree do we think that this was an acknowledged avenue through which some of these sales were happening? Well, there's definitely a lot of reporting that there are indirect ways in which these NVIDIA chips come into China, that companies are also able to access the chips overseas by renting those services.

12:57But as Eamon said, it's still very much unclear exactly how big a part of the business of NVIDIA's businesses that belong to this type of trade. All right. Yunus, thank you. Yunus Yun in Beijing for us. Well, as you mentioned, NVIDIA investors now wondering what the executive bench looks like at the company, as well as potential worries around hidden China revenue exposure. Joining us now is Mellius' head of technology research, Ben Reitz. It's Ben, great to see you. Hey, great to see you, Melissa. So the first question, let's say at the minimum, what if you took out every single penny that NVIDIA has made by selling to China or to Asia, let's say, what would that be as a percentage of revenue?

13:40I don't think it's very significant. And they have said that there's a de minimis amount to China, and I'm going to have to take their word for it right now. What does that mean? Like less than 10 percent or 5 percent? I mean, very close, closer to zero than 10. In fact, they said that last quarter it was less than 1 % of the data center business. I think the thing in question here is that folks are talking about these entities that are, say, they're Singaporeans, and they buy chips and then direct them to China without NVIDIA's knowledge. And this has made there be a lot of speculation that those are probably bigger than they are, because this company and this woman was suspected to be one of those entities.

14:27So that has brought back this speculation that there must be more sales into China than people think. But as far as they've told the street and as far as I know, it's a much smaller number than people are speculating. Why, Ben, then is Jensen Wang been such a staunch and vocal advocate for essentially more open sales to China and essentially not closing off China as a, you know, as a market for his products? Well, you know, as I understand it and the way he's spoken to me and other investors is that it's better that the world is on a U.S. stack and rather than a Chinese stack. And then China could import it to the rest or export it to the rest of the world.

15:10For example, what if Huawei makes advances and because we exclude NVIDIA from that market, Huawei gets really big and could be the entire China market and then exports that technology to Europe and our allies. And that's really been his big argument, that it's better on our stack and that we control and oversee the development of this revolution so that the Chinese don't lead and then export it to our allies and that that's part of national security. That's been his argument. Obviously, there's many in the Trump administration and government who disagree with that and think that they would just fall behind and not be able to compete and that that's not a real threat.

15:52Yeah. By the way, we're showing the shot in Chicago at Civo. PT Asset Management ringing the closing bell there, ending the regular day for options. Ben, putting sort of aside the China sales, et cetera, I mean, do you think Jensen Huang should be the CEO? I mean, we know that he and or the board, and we don't even know where the line, you know, they were dishonest in characterizing the relationship. And either he lied to the board or the board lied on his behalf, and we don't know where it is. And so, you know, how do you feel about his leadership? How do you feel about the about the board's credibility in all of this?

16:29Well, I got to take right now the board's word that they've found no wrongdoing at this time. Obviously, if that changes and there was some kind of thing that happened with China where secrets were revealed, you know, then I'll have to change my mind. But they came out with a statement last night. Look, he's been nothing but a great leader within the AI world. There's many companies that rely on this man and many people at Nvidia who have his back. I know he's got a strong bench. It's stronger than you guys might think. And there's a lot of folks there that can keep the engine running. And they're going to have to demonstrate that when they report on the 17th.

17:05I'm looking forward to having them talk about what this is and the state of the investigation and hear from Jensen himself about his explanation for what happened, not really with regard to the affair. That's not what I'm interested in. I'm interested in his ability to stay on as CEO and then maybe highlighting some of his team and how he's going to run the company when there are these potential distractions. And that's what I'm here to talk about, not speculating about what may or may not happen with him. But obviously, I personally would like to see him be fine here. He's admitted his mistake.

17:40And the man has been nothing but gracious to myself and my colleagues. You know, the way the market is treating it, Ben, it's, first of all, a really interesting spot, right? Because the semis have been, you know, for sale aggressively for a while. And the multiples have been compressed. And you've got another little tick lower in NVIDIA's PE today, of course, with this drop. The market clearly doesn't believe, like, all those sales are going to be extrapolatable for, you know, as far as the eye can see. But you have massive rallies in competitors, right? AMD and Broadcom and all the rest. What do you make of that implied message that there is market share to be moving from NVIDIA elsewhere?

18:20Well, I think that this is the knee-jerk reaction. And when NVIDIA is down, I'll call it 4.27 points, like you say here on the screen, that's a lot of market cap, actually. And it's got to go other places. And what's good in the market right now is oil prices are going down. And that's providing actually some cover for inflation and rates. And it's risk on time when you usually see that. So the money that comes out of NVIDIA has got to go elsewhere in the semis trade. And I think the route Thursday was overblown. I do feel like places like Texas, while there might be modest delays, do bet on data centers long term, just do it in, quote unquote, the right way and get what they need from the companies that are standing those up.

19:05And then we can move on with this. I think that long term, this AI build out is going to go on. And it was really nice to see this rally. I will say this about NVIDIA. You know, it's trading at 11 times consensus for next year and probably, you know, on the real numbers, less than that and a single digit multiple on 28. So you got to realize these these guys probably nobody's making a market share decision based on today. There's a lot of work all through next year into a compute shortage. And I'll just say analysts are wrestling with that. We know that it's not great news with what we're hearing about Jensen, but the stock is very cheap.

19:41And they have orders for 70 percent growth for next year. And they've identified the land power shell, at least according to management and some of the research we've done to achieve that 70 percent. The shares are very cheap. So this is not like some easy call for analysts going here. This is the cheapest name in the group, and we still think long term chips are a great place to be. This build out is going through, you know, a little bit of a slowdown and a slowdown in sentiment and some sticky points right now. But we do feel we'll come out on the other side of this build. Ben, thanks. Great to speak with you.

20:16Ben Reitzes. Thanks. Great to see you. And just to that point, NVIDIA down like 200 billion in market cap today and something like 80 billion in NVIDIA shares turned over today, which is really off the charts in terms of heavy activity for a single stock single day. Meanwhile, Skydance earnings are out. Julia Boorstin has those numbers. Julia. Like Skydance is reporting results only for its legacy Paramount Skydance business, not the combined business with Warner Brothers Discovery due to that deal closing after the end of the third quarter. Now, Paramount Skydance revenues of$7.03 billion are effectively in line with estimates.

20:49Adjusted EBITDA of$1 billion is ahead of estimates of$913.5 million. Adjusted earnings are$0.45 per share. We are not comparing that number. Shares are now down over 3 % in after-hours trading. Now, a couple key highlights here. The company says after Paramount Plus revenue grew 21%, its fastest quarterly growth this year, they project continued strong direct-to-consumer revenue growth in the fourth quarter, also saying that their first step to combining Paramount Plus and HBO Max is to offer them together in a single bundle. That will happen starting in early 2027. The company also saying in its shareholder letter that in the fourth quarter, they expect the Warner Brothers film slate to underperform.

21:33And Skydance is breaking down the plan to cut$6 billion in costs, saying they see at least$2.2 billion in cost cutting from corporate overhead, real estate and facilities,$1 billion in savings from streamlining marketing and$1.4 billion each from technology changes as well as procurement and vendor management. Melissa? Julia, thank you. Julia Borsten. With the Nasdaq's big gain today, nearly all of Thursday's losses have been regained. So did the markets overreact to data center slowdown concerns or could it continue to weigh on markets? That's coming up on Closing Bell Overtime. Legacy credit scores only look at a brief snapshot in time and that limited view often leaves millions of qualified credit seekers out of the picture.

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23:41Stocks roaring back today. The S &P 500 up 2.3 percent and semi-surging 7 percent, even as NVIDIA falls. But today's rally brings us right back to pre-election levels. So where do we go from here? With us now to discuss that is Joe Amato, president and CIO of equities for Neuberger with$616 billion in assets under management. Joe, good to see you. Yes, good to be here. Thanks. Yeah, kind of a classic. A lot of folks saying maybe things got overdone to the downside, at least tactically. We've ignored a couple of quarters of amazing earnings because the S &P is more or less sideways in that period.

24:15How do you read today's action in the context of what we've been going through? It's certainly been a wild week, to say the least, right, with election results last week and the moves in the market on Wednesday. You know, I thought the markets would be down the day after the election. And when I saw them up, I was just scratching my head saying, I don't quite understand that. But if we think back, you know, we moved into this quarter and we pulled back on risk. So at the end of September, moving into this quarter, we felt that between a rate hike cycle, move up in the long end and the demand for capital, pushing long end rates up, and thirdly, peak earnings growth, right?

24:50I don't think we can sustain 20 to 30 % earnings growth, right? Was a reason to pull back on your equity risk. So we're reassessing, certainly. There's still below the index level lots of carnage, right? If you look at AI stocks, you know, going back to whether it's the June peaks or even at the end of September, right? They've repriced in a pretty meaningful way. So we think there's going to be time to jump back in from a standpoint, because I think the underlying economy is healthy. So how do you think about, if there is a pullback in the data center buildout, and I'm not saying full stop, but just a pullback, how do you think about how that impacts inflation?

25:26Is your inflation outlook much different now, you know, now there's a belief that that buildout will be a little bit slower? I think that was one of the concerns about inflation is that this very strong demand, like long term, AI is disinflationary, maybe even arguably deflationary. But in the short term, if you've got this huge imbalance of supply demand, right, that's going to push up and probably, you know, seep into core inflation. So I think that that gives the Fed maybe a little bit more flexibility here without that sort of piece pushing hard on prices. Although, you know, after Friday's solid jobs report, I think the December rate high gods are back up toward 80 percent or something like that.

26:04So it feels as if you have, you know, you'll go a couple of steps in one direction and then you meet the offset. Right. I mean, that's the way markets often are, where it's like, oh, we're we think CapEx got overdone to the downside. We're going to buy the CapEx names. Maybe that means more demand for capital. Maybe that means rates go up. Maybe that means more Fed. So you said you cut back on risk. Where does that leave you in terms of looking to get back? Our theme had really been this broadening out theme, right? That don't chase the sort of AI enablers that have been performing so well and whose stocks went vertical in the first six months of the year.

26:38Think about where those, you know, the adopters are going to embrace AI technology tools, not just AI. You know, create some margin enhancement, some tailwind to earnings. And that's really where the opportunity is. And I think that's still intact. I mean, the CapEx cycle really has two pieces to it. One is the AI build-out, but the sort of non-AI-related CapEx is also showing strong signs, which is more of the sort of overall economy versus just what the tech build-out is driving. We've seen in recent days a snapback in consumer discretionary names. We have not only the AI build-out inflation sort of pulling back, but also oil prices are significantly lower at this point.

27:15And I'm wondering if you think that that's sort of an area maybe people are discounting a little bit too much. Well, certainly coming out of Tuesday, I think there were two big takeaways. One is what happens with the data center build out. You've talked about that a lot. And we'll see it probably slows it but doesn't certainly stop it. And then there's the Iran situation and how does that impact oil prices. And I think if this administration listens to the electorate and wants to extract themselves from the Iran situation, I think it's going to be easier said than done. So we don't necessarily expect oil prices to drop meaningfully from here.

27:47They're going to probably stay within a range because this is going to take some time to work ourselves out of the situation they're on. The whole broadening story is tricky if you're talking about what it means for portfolios in aggregate. For the S &P 500, for example, if you had rough numbers, 40 percent of the S &P is somehow kind of AI driven, as people say. And then if you look at periods when the majority of stocks are outperforming, so when you get that broadening, I mean, that corresponds to periods when the index itself struggles to some degree. Yeah, but if you look at what's going on underneath the surface, there's still lots of opportunities.

28:23You can still deliver good returns, right? The index return is certainly going to be dominated by a lot of those AI names. But if you look at the S &P 500, I think the number is like 60 % of the S &P 500 stocks are below their 12-month high, 20 % below their 12-month high. Right. So that's a lot of, you know, beneath the surface, you know, opportunities that get created from, you know, from what looks like a placid overall index environment. Sure. Joe, good to see you. Thank you. Thanks. Joe Amato. I'll text Rebound today, getting a little extra push from a big drop in oil prices. We'll get the latest on this move next on Overtime.

28:58AI is here, transforming how we work, live and lead. And the women I talk to aren't waiting for the future. They're shaping it. I'm Julia Boorstin, Senior Media and Tech Correspondent at CNBC. This is CNBC Changemakers, where I talk with the female leaders transforming business as AI reshapes the world. Follow and listen to CNBC Changemakers, Women Leading in the Age of AI, wherever you get your podcasts.

29:29A drop in oil helping the market today with crude moving lower as the president signaled he is unlikely to order fresh attacks on Iran. Pippa Stevens has got the details. Pippa. Hey, Melissa. Well, Brent is down another 5 percent today, extending last week's 16 percent slide and settling alongside WTI below the 200-day moving average for the first time since August as the market focuses on a diplomatic solution to the war. Now, President Trump did meet with Qatar's prime minister today and after told Reuters that Qatar would rather see a peaceful solution with Iran, but the U.S. is ready for strikes if necessary.

29:59Also telling CNN on Sunday he was highly unlikely to order fresh attacks as long as talks to end the war progress. Now, much of the geopolitical risk premium has now been unwound, but Eurasia Group saying that while the risk of imminent escalation has receded, a negotiated settlement to reopen the strait remains unlikely, and that Chinese imports suggest an elevated floor for prices. Now, gasoline futures also tumbling with the national average set to fall below$4 per gallon for the first time since July amid a seasonally weak demand period, as well as refiners still running very hard given where diesel and jet fuel prices are.

30:33Diesel futures also extending declines, but Gulf Oil's Tom Closa noting it's still fetching a historically insane premium versus crude. And I did want to point out that President Trump just said on Truth Social that they are seeing positive momentum toward an end to the conflict, but that if there should be any changes with respect to developments in the Middle East, the United States of America is, quote, locked and loaded and ready to go. Mike? All right, Pippa, your first chart there showed it stayed under the 200-day moving average Brent did for like a day. So we'll see how it goes this time after we've breached it again.

31:05Thank you very much. Pippa Stevens, time for a CBC News update with Mackenzie Cigalos. Mackenzie. Hey there, Mike. A Massachusetts judge rejected Lindsey Clancy's bid to dismiss murder charges and the killings of her three young children. Now, the move paves the way for prosecutors to seek a retrial after her first trial ended earlier this year in a hung jury. Now, the retrial date is expected to be set in a court hearing on November 16th. The Supreme Court cleared the way for the Trump administration to resume building a border wall in Texas's remote Big Bend region. The high court lifted a lower court decision temporarily blocking the wall's construction, saying the ruling prevented the government from advancing its compelling interests in border security and integrity.

31:46And finally, President Trump named WeatherTech founder and Republican mega-donor David McNeil his special envoy for manufacturing today. He says McNeil will be tasked with helping to bring back American jobs, strengthening the country's factories and making sure products are made in America. President Trump previously nominated McNeil to serve on the Federal Trade Commission, but McNeil later withdrew after he went months without Senate confirmation. Guys, back to you. Hi, Mac. Thank you. Coming up, much more on the story sending shockwaves throughout the business world. Jensen Wang's affair with a suspected Chinese spy.

32:20Are the markets underestimating the consequences for the man, the company, and even the country? We'll talk to a former CIA agent on that next on Overtime. Welcome back to Closing Bell Overtime. Live from the Nasdaq market side, a huge rebound for stocks today, wiping out most of Thursday's losses. The Dow gaining 1 ,100 points, S &P 500 up 2.3 percent, and the Nasdaq composite, Nasdaq 100 and Russell 2000 all higher by about 3 percent. The AI build-out trade bouncing back strong. That includes Meta, Microsoft and Amazon, but also the big chip stocks, including AMD. All 11 sectors were higher today, with industrials actually outperforming tech.

32:56Consumer discretionary materials also strong. The gains in industrials were also AI-driven, as the names powering the AI build-out also powered the sector higher today. Bloom Energy and Qantas Services, as well as GE Vernova and Caterpillar. And some movers after hours. Trade Desk soaring right now after a solid EPS and revenue beat. The company is saying it sees fourth quarter revenue of at least$755 million versus estimates of$650 million. trade us also announcing an additional share buyback and hims and hers revenue missing estimates reporting a loss of 14 cents the outlook also weaker than expected for a fourth quarter revenue the stock is down 12 percent right now this is after hours no this is the market oh there we go extent hours down yeah it was down 12 percent regular session the records all right well back to today's big stock story nvidia we've discussed the potential investor implications but what about national security could chinese spies be making their way into other corporate giants here in the U.S.

33:50Joining us now is David Fitzgerald. He is a retired CEO, a senior operations officer, nearly 50 years of experience around the globe. He currently leads Vector One Global, a business leadership firm. David, it's great to have your your perspective here. Thanks for joining us. You called this kind of a classic play, if in fact what has been reported and alleged about Alice Wong is true. In what way and what should that lead us to expect? Well, thanks, Mike. Yeah, definitely classic, but in two senses. I want to describe both quickly here. Number one, let's just call it intimacy espionage. Some of our adversaries use sex or sex award for as a means to both influence, infiltrate and gather intelligence.

34:34But the other part of this, which is really interesting, is how they set up these companies in Singapore and Malaysia and everything so that Alice Wong was an adquisition that she had an ability to meet with Navidia's CEO and establish that relationship. There's a Megaspeed, which is the company that she was the CEO, actually had an affiliate in Malaysia. It was called Speed Matrix. And Speedmakers was actually the largest purchaser of NVIDIA chips in Southeast Asia, which when you look at the company, it's really kind of a shell company that is established in Malaysia right after Megaspeed was established in Singapore.

35:17So it's really interesting how this has played out. I think it's interesting to track that company, David. But also, I mean, when thinking about sort of the national security risks, The company is quick to say that there's no wrongdoing. And I'm wondering from your standpoint what you would be concerned about in terms of what possible information that could compromise national security, what kind of information could have been transferred in this sort of alleged affair? Well, I think that's the key word, alleged. But what we, at least what I've seen on paper, is you have what I consider a classic operation by the Chinese Minister of State Security using this intimacy to get close to contact.

35:57So what we've seen in the past is they've developed relationships with U.S. government officials, have access to classified information. But lately, the focus has been on economic and industrial espionage, especially in Silicon Valley and other areas of high tech. And I think that's where it really is a concern to national security. How much was Alice able to obtain as far as technology? I can tell, at least from the purchases, if her goal was to obtain NVIDIA chips, that appeared to be successful. But whether she was actually able to obtain proprietary technology from NVIDIA, I think that's going to play out as the investigation goes on.

36:40But either way, that is the concern. And that is the economic and industrial espionage, which is a big focus for us on national security. Now, the board of NVIDIA, I mean, just, I guess, last week had said that they didn't deny it, essentially, that there was anything here in terms of an improper relationship. Now the board says it's going to investigate. So it's doing its own investigation. I mean, what lanes do you think that will have to pursue? And, you know, we already know that the U.S. intelligence complex had its own established findings. Well, Mike, you know, I would assume that NVIDIA had a pretty large and robust security operation going on.

37:23And so most corporate security, it's not only about physical security, but it's also about human vulnerabilities. It's about inside threats. It's about one thing that is really key for national corporations is reputational exposure. And of course, they're there to promote an integrated risk picture of that company. And so whether it was a policy, whether it was reported that he was meeting with this person, I assume that during his meetings with Alice, there had to be some contact with the security detail or some type of reporting on that. Whether they did the follow up, that could have been where the where the failure was, was his own security apparatus not being able to either detect or understand what was going on with that relationship.

38:13you. There'll be a lot of questions asked in the coming days and weeks. David, thank you. David Fitzgerald, former CIA senior operations officer. Coming up, Berkshire's buybacks and Eli Lilly's sleepy success plus core weave has been at the center of the recent AI trade volatility. Can tomorrow's earnings ease investor fears? Closing Bell Overtime, back right after this. Berkshire Hathaway stock slightly higher today, though underperforming the market following the company's results. Net income was$22 billion. That was lower than last year. Its investments did worse, as did its insurance business.

38:46But energy and railroads performed better. Berkshire ended the quarter with$357 billion in cash and cash equivalents. It spent nearly$10 billion buying back its own stock during the quarter. That was actually a pretty heavy pace of buybacks for Berkshire Hathaway. It shows that maybe under Greg Abel, they're willing to be a little more generous with the buybacks, even with the stock at these upper valuations. So a lot of that was the accounting adjustments on the investments. Some folks I talked to focused on margin improvements in the railroad, which has been a big laggard. And also, of course, the stock has been such a winner as a defensive play.

39:19It's only within 2 % of its all-time high. So on a big update like today, I'm surprised in the sense that it wasn't down outright. Well, from Dairy Queen to GLP Ones, Mike actually wrote that. I mean, that was genius. Eli Lilly closing higher by more than, And let's see, 4 % here after the company said its weight loss drug, Fondeo, significantly reduced the severity of obstructive sleep apnea in a late-stage study. Lilly will submit the results to the FDA by the end of the year for the daily pill for moderate to severe, the most common form of sleep apnea in adults with obesity or who are overweight.

39:51The company, ZepBound, has already been approved for the condition since 2024. And really the importance here is that Fondeo has always been a laggard when it comes to the oral GLP-1 race to Novo's offering. And so will this be able to sort of close that gap and make Fondeo leap forward? And, of course, that would be a big concern for Novo shareholders because they've been suffering, even though that oral weight loss pill has been probably the most successful launch in all of pharmaceutical history. Exactly. And these additional kind of uses and applications and approvals, it's all basically the same activation, right?

40:27In other words, it operates the same, but mostly it's connected to weight loss, right? Yeah. I mean, that, but also when it alleviates joint pain. And that was sort of like the... Right. So it's like so many things knit back to weight control. To obesity or to inflammation. I see. And so that's sort of like the source of it all. Interesting. All right. Coming up, Corweave sets a report earnings after the bell tomorrow with the stock down more than 40 % in the past month. Can the earnings turn the narrative around or is the poster child for the AI sell-off due for more pain? Closing bell overtime live from the NASDAQ market site.

40:58We'll be right back. Well, let's get you set up with tomorrow's trade today. On the economic front, we'll get the consumer price index. Economists are expecting a rise of 0.3 % month over month. We'll also get an NFIB small business index and a 10-year treasury auction at 1 p.m. Eastern time. On the earnings front, we'll hear from SoftBank overnight and then after the bell, StubHub and Corweave. Let's dive into Corweave. The results come as the neocloud companies have been under pressure in the last few weeks amid uncertainties around the AI trade. Corey's stock is down 46 % in just the last three months and is now sitting on$5.5 billion in cash,$35 billion in debt.

41:37Could tomorrow's results restore confidence in neocloud companies? Joining us now is Nick Del Deo of Moffitt Nathanson. Nick, great to have you with us. Yeah, thanks for having me, Melissa. Obviously, investors are very concerned about the results of the midterm, what this means for the AI buildout. And the CEO, Mike and Trader, wrote a letter to the governor-elect of Texas, Gina Hinojosa, sort of saying, you know, we want some clarity here. He outlined a bunch of sites that are in process in Texas, also talked up the liquid cooling system, which he says uses less water, basically, than a large office complex of the same size.

42:10I'm wondering what, in your view, is the risk to that build out in Texas specifically? Yeah, so CoreEV has a reasonably well-diversified data center build out underway. Again, to be clear, they primarily lease data centers as opposed to build them themselves, but to get access, they obviously need their partners to construct them. Texas is the epicenter of the AI compute build. CoreEV has a lot of exposure there. My suspicion is that over time, the changes we can see in Texas will probably add sand to the gears. We'll probably see some projects fall out, add some cost. But ultimately, I think at the end of the day, we'll still see a lot of data centers constructed in Texas.

42:51Certainly the ones that are currently underway, Governor-elect Dina Hossa has suggested that those will not be affected by any changes she may make. And there are considerations with respect to the cadence at which the commissioners at the Texas Commission on Environmental Quality and other agencies can be swapped out. So I describe it as sand in the gears as opposed to something that's likely to be too disruptive to their model over time. Nick, when so much of the, I guess, shadow over CoreWeave has involved its cost of debt and its access to capital, what can the company say tomorrow that can address those issues?

43:27Sure. I would love to hear more about the strategies that they're considering and the tools that they're looking at to try to diversify their source, their access to capital. You know, Cori has leaned very heavily on debt since its inception. It's a key part of its strategy to grow its business without diluting its shareholders into oblivion, given the cadence of its growth and its capital intensity. They have a reasonably complicated multi-layer debt complex, consistent of secured debt, vendor financing, unsecured parent company debt, convertible debt. And the issues have really been concentrated with the unsecured parent company debt.

44:02So I'd be interested in steps they're taking to either find new sources of funding, restructure contracts, embrace a build-your-own-compute model. Or I think what may be most likely or most necessary over time is leaning more on equity or equity-linked securities. I'm wondering, Nick, when you think about standing in the gears and the financing costs, does that translate into higher financing costs? And is there any sort of way you think about what's going on with NVIDIA and an impact on CoreWeave? I mean, clearly, their financing costs are up. You know, their unsecured parent company debt is yielding approximately 16%.

44:42You know, it's pretty uncommon to see a company with debt yielding at that level in the market, but also have a$30 billion or so market cap. One of those two things is wrong. I guess we'll find that over time which one it is. But clearly, that financing challenge is pretty acute for them because they are largely shut out of the unsecured debt market today. But they have a need for tens of billions of dollars in capital over the coming quarters. So they need to plug that gap. With respect to NVIDIA, from Corey's perspective, I think that so long as NVIDIA can produce and deliver the chips that they've promised Corey over time, be a reliable supplier.

45:24I think that that suggests that what's going on with NVIDIA is not necessarily going to derail CoreWeave. I do think that CoreWeave is a critical partner for NVIDIA in terms of standing up an outlet, an alternative outlet versus the hyperscalers that have their own chip programs. So that ongoing support is going to be important. Nick, thanks. Appreciate it. All right. That's going to do it for overtime. We'll see if this bounce was real tomorrow. That's when he starts right after this. Snoring, gasping for air during sleep, daytime sleepiness. I'm Shaquille O 'Neal, and this shouldn't be anybody's experience.

45:57Ask your doctor about ZepBound or Zepatine, the first and only FDA-approved prescription medicine for moderate to severe obstructive sleep apnea in adults with obesity. ZepBound is a prescription medicine used with a reduced-calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea, OSA, and obesity to improve their OSA. ZepBound is approved as a 2.5, 5, 7.5, 10, 12.5, or 15 milligram injection. ZepBound contains trisepatide and should not be used with other trisepatide-containing products or any GLP-1 receptor agonist medicines. It is not known if ZepBound is safe and effective for use in children.

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47:08Side effects include nausea, diarrhea, and vomiting, which can cause dehydration and worsen kidney problems. Talk to your doctor. Call 1-800-545-5979 or visit zetbound.lily.com.