Jensen Joins The Party… And Next Move In Rates As Warsh Gets Confirmed 5/13/26

0:28Hi, I'm Jennifer Garner. Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos, and more. All curated just for traders. Plus, guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need, so you can spend your time learning to trade brilliantly. Learn more at schwab.com slash trading. Live from the Nasdaq market side in the heart of New York City's Times Square, this is Fast Money.

1:03Here's what's on tap tonight. The golden ticket. Chairs of NVIDIA jumping to new records. The CEO Jensen Huang books a last-minute trip to join Donald Trump in China. What's on the agenda in Beijing and just how much is at stake at the meetings this week? And the next Fed chair confirmed. But with inflation still running hot and rates at nearly one-year highs, is Kevin Warsh inheriting a more complicated economy than he expected? We'll debate that. Plus, Nike swooshes to 12-year lows while shareholders are shrugging off EX-1000 proof guidance. And Ford revs up, shares seeing their best day in over six years.

1:37What for the stock in overdrive? How much further can it run? I'm Melissa Lee. I'm to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Steve Grasso, and Guy Adami. And we start off with that 11th hour invite that sent shares of NVIDIA to new record highs. This time yesterday, the ChipGiant CEO was not on the list of execs accompanying President Trump on his trip to China. But late last night, Jensen Huang boarded Air Force One in Alaska, joining Trump and more than a dozen other CEOs heading to Beijing. The news helped NVIDIA stock to gain more than 2 percent.

2:09Its sixth straight day in the green. Shares are up 15 percent during that run. The move powering the Nasdaq to new highs as well. The tech-heavy index up 1.2 percent today, twice the gains of the S &P 500. So does Wong's trip to China suggest NVIDIA is back in the driver's seat for the mega cap tech trade. Does this say something about semiconductors in the AI trade, Tim? Well, it certainly says the influence that he has even within the power brokers, not only in technology, but in the White House. And I think Jensen Wong has been a very important, call it an advocate for even this administration in terms of the U.S.'s role in Technology USA.

2:46So I think we still are not going to have an outcome where we understand export dynamics totally for NVIDIA because I'm not sure anybody totally does. And one of the things that we've also learned over the last few days, especially from some of the Chinese hyperscalers, is that the efficiency of some of the local chip dynamics and what you're seeing, DeepSeq was not a mirage. It doesn't necessarily mean it was the end of the hyperscaler investments that we saw. So I just think it's important Jensen-1 is there. I mean, there's no question about it. Yeah. I just think it never should have been where it was two weeks ago, right?

3:20You had such a melt-up in everything. They were at the center, and everything around it was a melt-up, an evaluation so wildly different. Right. Except for, obviously, we know that the scale-up of the memory and that PE is a little bit different. But it shouldn't have been there when everything else is going on as much as it is. So I think it's still not expensive here. Definitely not. I don't love going into, I think it's the 20th is earnings. So I don't love a giant run up into earnings because expectations get too high and there's nothing they can say. And it'll be a gigantic quarter, no doubt.

3:56But it should be here. What chip? I'm struggling trying to find the tailwind for NVIDIA. So the chip that they're allowed to sell is the H20 or the H200. One of those. So it was a$17 billion number to NVIDIA when it was allowed to be sold into China. Or I should say, China was a$17 billion account for NVIDIA. Now you have the 15 % government surcharge on NVIDIA. So if you even get that full$17 or$18 billion, you're only looking at$13 or$14 billion in revenue. I don't think you're going to get the full one because it's an older, outdated chip. I don't think China is just going to rewind and say, we're going to give you the same order.

4:44So I think it's a negative for NVIDIA because if we're buying it ahead of this meeting, I think it should be sold. I think this is a buy the rumor, sell the fact. I don't think they're going to get the contract. And I don't think it matters as much as it used to months ago, a year ago, or whatever the case might be. There's a reason why NVIDIA stock has underperformed the rest of the group, but I think it continues to do so. Who's in the, what's that building, the Parthenon? Oh, the Pantheon Parthenon with the grapes. Right, Louise Yamada. She's up there for sure. Now, just so to be clear, I've been a non-believer.

5:20Tim and Karen have been all over this, and rightly so. But, you know, you go back and look, and if I didn't know it was NVIDIA and said, you know, this stock has been basically basing since last August, it's been trading sideways, and now we're breaking out. So her famous quotation amongst many is, the longer the base, the higher in outer space. and now we are appearing to go into outer space in earnings. The setup isn't good, but quite frankly, you could say that the last three or four times they've reported the setup probably hasn't been all that good as well, and they've delivered. My concern continues to be around competition and the potential for margins to decrease and start to decelerate.

5:53That's the other side of the story, but it appears as though we're not close to that other side. On this China trip, by the way, the CEO of Micron is also in attendance, so that's sort of an interesting addition here. In today's trade, I thought it was really interesting in general that we did see chips in particular outperformed tech, tech which outperformed the markets more broadly. And it looked like a defensive trade, like in a world in which inflation is going to hurt the consumer in a world where inflation is going to push up prices across the board. That's the trade you want to be in, the one that's been off the charts.

6:22And it's been the one that there's also definitely rotation within mega cap tech. I mean, how are we explaining the Apple move and how are we explaining? Well, we're going to talk all about Cisco in a second, but I do think that tech looks defensive in a high inflation environment, especially as tech companies have the ability to really to, they have levers they can pull. We're going to hear about AI job losses again. I think it remains an interesting tape because in fact, we're seeing rates around the world go to all-time highs, not all-time highs, at least 15 to 20-year highs in the case of Europe and Japan.

6:56That's fascinating for today. Yeah, that is this, you know, that's the other story of the market, you know, where obviously markets doesn't seem to care about where rates are and maybe it shouldn't care. And I think the optimist will say rates are here, guy, because there's growth in the United States economy. I think that's a small part. You person yourself there? Did I do that? No, he said that some would say. Some other person talking to you? Yeah, but it wasn't a total third person, but I appreciate that. It wasn't great. No, but I tried to slide it in there without you noticing. Obviously, I was not able to do that.

7:24Yeah. A high rate environment at some point matters because it's not just growth. It's an inflation problem, which obviously we saw in the last couple of prints. Let's get more on that first high stakes between President and President Trump and China's Xi Jinping. We expect to talk everything from tech to trade to Taiwan in the Iran war. Eamon Javers is live in Beijing with the very latest. Eamon. Yeah, Melissa, it is daybreak here in Beijing and President Trump is going to begin his day in about four or five hours. He arrived last night here Beijing time, went straight to his hotel, and we're going to expect to pick up the schedule this morning with the official greeting from Xi Jinping onto a bilateral meeting.

8:03They'll end up the day today with a state banquet. And that's where I think you're going to see all those CEOs that you guys have just been talking about out and about here in Beijing, all trying to work side deals of their own for their own companies. And there's so many flashpoints here of diplomatic difficulty throughout this day where you could really see some challenges. We've made a list for you here, but start with the idea of Chinese weapons sales to Iran. That's something the U.S. is going to want to press them on. The Strait of Hormuz blockade, obviously deeply concerning to the Chinese government because of the amount of oil they get out of the Strait of Hormuz.

8:38The U.S. relationship with Taiwan, we could see the Chinese push President Trump to try to disavow Taiwanese independence and say the U.S. actively opposes that. And then, of course, AI is the big wild card here. We don't know exactly how AI is going to shake out in these negotiations this week. Is there a deal potential on the table there? It seems like maybe the answer is no. expectations across the board are relatively low for this summit, Melissa, but certainly we'll see some soybeans purchased. We'll probably see some Boeings purchased, probably see some beef purchased, and maybe that enough is enough to call it a win if they can kick this trade truce down another six months or a year down the pike.

9:22That might be enough to make global markets happy, guys. It seems, Eamon, that it would be unlikely, and yet China will, I'm sure, press the U.S. to actually say they oppose or they disavow Taiwan independence. And I feel like that issue is tied up in the AI trade at this point, since Taiwan Semi is so important to the AI trade here in the United States. Is it seen that China has any leverage on this front because of that? Well, China has a lot of leverage. And, you know, one of the big pieces of leverage is obviously Iran. The president wants a solution there. The Chinese, you know, the Iranian government is in many ways a proxy for the Chinese government, and they have a lot of leverage with the Iranians, so they can offer something there.

10:05And then in terms of trade, they might be able to offer some things that the president really likes on trade. So is the president willing to consider Taiwan and its status a poker chip in a grander negotiation, so to speak? He has said he's going to hear out Xi Jinping. He expects that Xi Jinping is going to bring up the issue of Taiwan. what he's going to do with it. That's why we watch these summits, to find out. Yep. Eamon, thank you. Eamon Javers, live for us in Beijing. For more on all of this, China Beige Book Chief Operating Officer Shahzad Kazi joins us here on set. Shahzad, great to have you with us.

10:40I'm going to pick up right where we left off with Eamon in terms of Taiwan. I'm just wondering how you think about it. If Taiwan, if for some reason the China, the U.S. flips in terms of saying, we don't oppose, we disavow Taiwan independence. What does that do to Taiwan Semi if it's more under Chinese control? I would think that it would actually sort of foul up the AI trade here because of national security concerns. Yeah, I think that would be pretty much disastrous for lots of American companies, including, of course, starting with NVIDIA, because of how dependent we are on TSMC. And I think one of the things the staff wants to make sure is that the president doesn't say anything even resembling what he just described here.

11:25And we keep him on, you know, on note where he's supposed to be. Yeah. No, just along those lines, I was wondering that. I mean, that seems just sort of nuclear is the wrong word, but so draconian that the market reaction, we know the president doesn't like a market reaction that's very violent to the downside. What else what else do we have in our bag of, I don't know, you know, tit for tat kind of. They give us the soybeans, the beef, all of that. Yeah, look, the way this was structured is we have to remember the president asked for this summit in many ways, rather than this being sort of the invitation from the Chinese side.

12:01The way the U.S. side has tried to structure this very hard is we want to hear the Chinese make a bunch of big announcements, whether they be on soybeans, whether they be on Boeing jet engines and so on and so forth. And this is not so much supposedly about going in there and asking China for greater market access or doing the traditional things like, you know, we're not happy with your IP theft issues and we don't want these joint, you know, joint ventures anymore and so forth. So it's supposed to be a bit of a departure from the traditional delegations and trips that we've seen. Shazad, it seems to me, obviously, the tech CEOs are there because they are some of the biggest companies in the world.

12:37But it does almost feel back to Taiwan Semi, that being a disaster for NVIDIA, as you say. I almost get the sense that the Chinese, excuse me, that the American CEOs, tech CEOs, they want to see some kind of a truce. I mean, I get the sense that this is good business for America. And I get the sense that this is a president that's always been about business. So I understand the national security issues, and I know we're kind of really forget everything else. It really is about supremacy of the digital age. But right now, the commercial interests favor more rather than less cooperation. So I think it depends on which sectors we're talking about.

13:14But your larger point is absolutely correct. Pretty much everybody around the table right now wants to see the truce extended. Whereas there's no grand bargain to be had at this delegation or really, quite frankly, any other Xi-Trump meeting at this point, U.S.-China relations are just not there at this point, and I suspect they're only moving further away from that. Watching this relationship not blow up has become priority number one. So everybody wants to make sure things stay calm and we can just keep extending that truce, as we say, that was struck in Busan. Through a lens of the market, what's the best outcome out of this meeting?

13:44They walk out hand in hand, shaking hands, unilateral. How does it work out for the market? Well, look, the announcements on purchase agreements, which, of course, would have to correspond with certain tariffs coming down on the Chinese side. Perhaps some kind of positive messaging on Iran would go a long way. I don't think Xi is going to commit too much on this. I think those things would be incredibly positive for the markets. So when you look at the tip of the iceberg for me, or the iceberg, is where Melissa started with Taiwan. In your opinion, you follow this closer than anyone. In your opinion, is that a conversation that's going to take place?

14:18Not at this meeting. Is China going to force that issue in the next year? Two years, in your opinion, never. Look, I think some of the projections around how quickly China would move on Taiwan are probably way, way too aggressive, I'm going to say. There's a very good chance that they don't have to make a big military move at all, right? I mean, if they can strike some kind of a deal with Taiwan, which essentially gets you some kind of de facto reunification of sorts, that could very well be an option on the table for the Chinese. So I'm not betting my money on them moving in in 2027. Is that likely in your view?

14:57And would that have to, inherent in that is the U.S. saying effectively, OK, we don't back Taiwan independence anymore. We're going to quietly walk away from that. You know, it's hard to just how just incredibly how likely that is. Some of it comes down to how much the Taiwanese want to fight themselves. Right. We're seeing some changes there taking place. And then what the political atmosphere in Taiwan itself also is. How does the public feel about it? They are, after all, a democracy, unlike China. But that will play a role in that. And not to sort of beat this point to death, but if that happens, if there's some sort of reunification that happens, I would think that our ability or U.S.

15:33company's ability to manufacture at Taiwan Semi would be much more limited at that point. It would have to be, which is why TSMC shouldn't be just seen as this place where we can just do business freely without worrying about it. This all comes down to U.S. supply chain security. And we need to treat TSMC as this very serious choke point against us that it is. All right. Shahzad, thanks for coming by. Great to get your analysis, as always. So you've liked TSMC for a long time. You start rethinking this whole dynamic. We've had this risk out there. You can make an argument TSMC would be a lot higher without this risk.

16:09I mean, it's the largest position in my ETF. It's the largest position in emerging markets. It's the largest ship manufacturer in the world. So I think we all have to be cognizant of that. I think the things also, just back to the markets, we should not forget about is there's an element. I think there's a little bit of an inflection in the Chinese economy. I think in the second half of the year, you're going to be surprised at the upside. Chinese stocks have massively underperformed. K-Web has massively underperformed. You've seen a nice breakthrough today. You've had great earnings out of J.D.

16:36and Baba. I mean, I think, you know, they're the cheapest companies in the tech world right now, and I think they're interesting. To Tim's point, you know, if you listen to people like me over the last couple of years that have been concerned about Taiwan, you've missed a lot on the upside in all these trades. And that risk is out there. It's been out there. It will continue to be out there. But at this point, it's a bit of a tail risk. So you have to say, you know, if there are 15, 20 percent chance, 25 percent chance, I think that's rational and reasonable. But you want to sort of exit these trades on the back of that potential to happen.

17:05So the whole thing about what would happen if they were to invade Taiwan does make me think they have so much more leverage from not maybe that we'll leave it as is and we'll just continue to bargain using the same chip that we don't ever need to play to get what we want and it's somewhat successful yeah i don't think i've ever heard a non-aggressive takeover or reunification i don't have you heard that i haven't heard he's the first person that i've from its interesting concept. 70 % of Taiwanese would oppose it. But I think if you get it down to a trading element, between Eamon and Shahzad, Boeing, Archer, and Tyson.

17:47Those are the names that are most likely to come up and in that order with deals that come away that can rally stocks. Now, back in January, the chart master called the software trade vulnerable and semis compelling. But now he thinks the tide may be turning. Carter Braxton Worth of Worth Charting joins us now What are you seeing in this trade? Carter? Yeah, not so much interested in software here, but I certainly think that the semis are full. I mean, very hard to know when something has run its course, when it's extended, parabolic. But let's look at some charts. I myself want nothing to do with it at this point.

18:23This is the SOX index going back to 07. Let's annotate this a bit and put in some lines and arrows and other things. we're at the top of a channel that's been in effect since the 07 peak. The low there is 09. So one way to draw the lines. Let's do it again. Another iteration, put in quadrants again at the upper band here. Right now we can do another one for fun. These are all the same charts. I mean, do you buy or sell something that's this steep? Now, many would say, hey, look, it's not as steep as it was in 2000, which is true. We're 54 % above the 150-day moving average in March of 2000. We were 95.

19:03That would say there's more to go if it's going to match that run. But what we do know is that it's a very popular trade. It has come a long way. And there is a fever. There is a fevered pitch about the whole thing that, to my eye, by my work, one is right to back away. All right. Carter, thank you. Carter Braxton Worth of Worth Charting. Again, Carter said he wants nothing to do with this trade. Do you, Stephen? Wow. Usually you're Stephen for the final trade. You're in trouble. I do believe you should back off the trade. I think it's exhausted. And I think that money that was coming out of software stocks had to go someplace.

19:45And when you started to see the data center build, it was a logical place to rush right back into the semis. I think that's long-winded. NVIDIA has underperformed for a good reason. They've been the leader. I would look for plays that have not been exhausted. There is earnings momentum in this group, and also it may be defensive in this environment. Isn't that what we were talking about? I mean, right? I mean, tech is seen as defensive. In a higher interest rate environment, as Tim has said, tech can be viewed as defensive. What would you say? Technicals are fundamental. Look, I'm not going to play this semi-game because I've been bad at it for a long time, but I'll play the software game, And I do think there's an inflection that happened a couple of weeks ago.

20:22Now, they've been sort of dicey over the last couple of days, but I do think there's a chance that IGV outperforms over the next couple of weeks. 35 percent outperformance to the S &P in what has been a heroic run for the market by semiconductors since the low of March 30th. So I can't argue with what's been said here. I would say dance by the door after you get out of this dance, because you want to dance your way back into this. by the door, the dance you want to leave. I was always dancing by the door and I couldn't dance. It's like you don't want to quite leave, but you want to sort of hang out, but you want to be ready to go.

20:59You should be ready to possibly take some profits here, but you better not get too far away from the dance because it's a good time. Okay. I like that. It's a confusing metaphor to me, but I understand. It was always confusing. Coming up, shares of Cisco on the move after the OG tech giant posted results. The numbers and the details from the report next. Plus, Nike stock hitting 12-year lows today. What the company needs to do to lace back up and whether there's any chance of a solution store. Don't go anywhere fast when he's back in tune.

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22:41All curated just for traders. Plus, guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need, so you can spend your time learning to trade brilliantly. Learn more at schwab.com slash trading.

22:59Welcome back to Fast Money Earnings Alert on Cisco, the cloud networking stock soaring after hours. It is up 18 % right now on an AI-driven beat and raise. Shares had already hit a record during the regular session. Our Christina Parts-Nubles has been listening in on the call. She joins us here on set. Christina, what's the latest? There's a lot. First, Cisco's posting the biggest post-earnings rally in over a decade. The last time the stock actually jumped double digits was after it's May 2013. Really a sharp reversal from last quarter when you actually saw it fall 12 % on margin concerns because of memory costs.

23:30Two things driving this move that they're talking about on the call. First, AI demand. Cisco raised its full-year order expectation to$9 billion, up from$5 billion. This is a near doubling of the outlook. And then second, the guide. Cisco is calling for Q4 top-line growth of 14.5%. The earnings strength appears to be driven by genuine demand rather than price hikes, which they did do since gross margins were roughly in line, meaning the upside is coming from volume, not necessarily fully pricing. Although they did admit that some demand was pulled forward in Q3, not necessarily seeing it in Q4.