NVIDIA Fallout and AI Trade Rotation

0:00Who's ready for a bike ride? Peppa Pig is learning to ride her bike. First, pop on her helmet. Safety first. Then, attach the push stick and give her bike a push. And watch Peppa paddle. Her legs go round and round as the wheels turn. With more than 75 sounds and phrases, every ride is a big adventure. Peppa Pig Ready Paddle Go. Available at all major retailers now. At Edward Jones, we believe rich isn't about having life all figured out. It's opening yourself to all the possibilities. That's why your dedicated financial advisor provides long-term planning built around you, meeting you where you are, and helping you get closer to where you want to be.

0:47So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts. Let's find your rich. Edward Jones, member SIPC.

1:00Scott Wapner: I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the big bounce in the markets today and the big fallout from this weekend's NVIDIA bombshell. We trade all of it with the Investment Committee. Joining me for the hour, Joe Terranova, Bryn Talkington, Carrie Firestone and Jenny Harrington. We'll go to the markets. We're having a big day all around, as you know. Stocks up sharply. NVIDIA, not so much.

1:36Scott Wapner: That stock, we'll show it to you because that really is the story of the day. After Jensen Wang admitting to an affair with the alleged Chinese spy, independent investigation now underway. And for our purposes on this program, it's the investor base kind of grappling with what all this means. for NVIDIA's future, for Jensen Wong's future at the company. We don't know where all this is going to lead. DA Davidson's Gil Luria was on earlier, asked how much of NVIDIA's success do you attribute to him? His answer, all of it. That pretty much sums it up because, Joe, it's hard to think of another CEO more synonymous with their company.

2:18Scott Wapner: Maybe Zuckerberg, if you want to look for somebody. But Jensen Wang is NVIDIA. NVIDIA is Jensen Wang, period, end of story. So what do you think about as an investor here? So as an investor, I'm going to share two perspectives with you. The first perspective is my personal opinion, which quite candidly, maybe doesn't matter as much as the actual evidence for my strategy. My personal opinion, of course, you want to own NVIDIA. They are at the center of the universe for the innovation surrounding AI. in terms of the strategy that I run, it is not a momentum stock. It is down 5 % year to date. It is down 11 % over the last 12 months.

2:59It is down 19 % in the last six months. Since August 1st of 2025, it is up 97 basis points. The analyst community is absolutely in love with the stock. 78 % buy rating, 323 price target. You cannot tell me that on November 17th, when they report earnings, that the focus of that call is going to be, once again, the astronomical, the revenue growth record. No, it's going to all be about Jensen Wang and where we go from here.

3:32Scott Wapner: Oh, man. I mean, the fact that you've got that report and the call coming up in such a short period of time really makes this all the more interesting of when and what beyond the statement, obviously, do you hear from from Mr. Wong. Dan Ives, you talked about the analyst. Dan Ives today says it's a black eye moment. He is maintaining his outperform rating. He is acknowledging, however, the risks. There is clearly risk that Jensen could be removed as CEO, depending on the board investigation. And this will add risk to the stock. You do have most analysts sticking by the name, at least for now, while acknowledging that there's going to be an overhang?

4:11Scott Wapner: How could there not be, at least for a while? Bernstein, Ray J, Rothschild, among those that are out with notes today. You're another shareholder. I'm so glad we have you on the set, on the show, because I couldn't imagine doing this story and not hearing from you. Yeah, thanks, Scott. Well, first of all, Elon to SpaceX and Tesla is Jensen to NVIDIA. He founded the company, founded the company. And if you look at the board, you don't really recognize household names on the board. There's no succession plan. Tim Cook had, I mean, Steve Jobs had Tim Cook, right? But I think where investors, if I'm being pragmatic, taking aside what's happened, U.S.

4:50intelligence has known about this event, this affair, since 2025. Okay? We all wondered, remember last year or earlier this year, why wasn't Jensen invited to that Chinese meeting? Well, Trump knew about it in 2025. Again, Markia Rubio apparently had a briefing in March of 2026. And I think now we know why originally he wasn't invited. And so I think Joe talked about the earnings on November 17th. But guess what happens on November 18th? His private congressional hearing the next day. And so I think this is going to be a must-listen-to call. I think Joe's absolutely right. Everyone's going to be distracted.

5:28And I think the jury's still out. You would like to say this was a dalliance, et cetera. But make no mistake, this company, what is it, Megaspeed, had like 30 million of revenues or something like that in 2023. I think last year it had like 30 billion or 3 billion, some like exponential number. And clearly she is a Chinese asset. So we've already identified these things. So I think the jury's still out. I think it's going to be dead money. I'm somewhat surprised. I think the market is saying we believe Jensen. That's why it's only down 5%. But I do think this is the AI ecosystem. So I think he has to be pragmatic as investor and say, let's just see what happens over the coming months.

6:05Scott Wapner: You're a shareholder, too. What do you think? Well, first of all, I think that I picked this leather jacket to wear two days ago. Nothing to do with some. And I think we have to be suspicious of the two hundred dollar haircut. But I would I would say that he is not just the entire company. The company exists way beyond him. There is a massive amount of technology there and knowledge and a base of business. So, you know, to say it's all about him right now. Well, I mean, he's the founder and CEO and he is synonymous. Well, so is Bill Gates. Respectfully, he's synonymous with this company and it and it with him.

6:48So the stock is down 26 percent in about a month. It's trading at 13 times forward earnings. I'm not saying anybody should buy it now, but markets have a way of stabilizing. This is very bad for him. I don't think it's going to end well. But the market is up. Notice that the market is up 2%. And there's a Dow of 1 ,000 as we speak.

7:11Scott Wapner: It's a near 2 % gain. It's such a juxtaposition of where we're at today. You look on the left, and if you had the NVIDIA shares on the right, I know we're showing the Dow for obvious reasons. But if we had, you know, the 1000 points, 2 percent in video, that sort of shows you the story of the day, not necessarily, you know, driving what's happening in the market, because there's a lot of other stuff going on as well. When you say I wouldn't tell people to buy it today and you don't think it's going to end well. What is you don't think it's going to end well mean? Well, I think it's unlikely that if this woman happens to be found a spy, he can keep his job.

7:51I don't think that's going to be able to happen. I think he's going to have to leave.

7:55Scott Wapner: OK, so is that going to influence what you do with the stock? Not necessarily. I think because it's a valuation, the stock might plateau. We might see a level here where it bases, where it goes for a few months at this level. It happens all the time. Stocks are oversold. But it could take a while because this is going to unfold and there's going to be sort of crater-like behavior at some point. It's going to be emotional. That's what happens when you're the leader. they've been the leader in the market for three years. But if Jensen's out, it's like if Elon was out. Yes, they're smart engineers, et cetera, but they are setting the tone.

8:33It's like Jensen has a seat at the table. No one's ever in Congress until all this comes out is going to give him any ability to have leverage, insight about what's happening with our chip policy, et cetera. So I feel like if he is out, just like you would say if Elon was out, you would have to just reassess how you think about the company just because he is pushing that important. And once again, I think employees, the important employees would say, maybe I go with Lisa Su. Maybe I go here. So hopefully that does not transpire. But I don't think you can just say, oh, business as usual, if Jen, the founder of this company, almost 40 years old, is pushed out for this event.

9:07So I actually think, I don't think the Elon is quite the right analogy. I do think a Warren Buffett at Berkshire is the better analogy. You simply can't make this level of sophisticated chip on one man. You know, whereas if you read the Walter Isaacson biography on Elon, like it really does take that one key man to be like, hey, let's catch a rocket in chopsticks. Right. That's really Elon. And I think I think SpaceX and Tesla are more dependent on one man than this is. And so what you say that, because there's just like a, you know, because you these are the I don't know how to express it best.

9:40But like the level of sophistication, these chips takes enormous teams, teams and teams and teams of the best scientific minds out there. Whereas catching a rocket in chopsticks, which is revolutionary, takes one mind, and that's Elon's, to be like, hey, and now we're going to make it happen. And so I think when we're going to peel it back, we're going to see what we saw at Berkshire, which is like, actually, there was a huge team behind that. And actually, the team was doing so much more than the one face of the company.

10:07Scott Wapner: Sure, but I mean, he obviously is, he's very much the public face of the business itself. There's a difference between public face. He's an incredible salesman for the name, for the product, for the moment, for the technology, for the revolution. He, in many ways, is what we talk about every day, whether we talk about NVIDIA or not. He's not the driving engineering force behind the creation of every single chip there. I think this is funny, too, right? Like, have we ever been me positive on NVIDIA and you negative? But the other thing is, too. I have no. I'm not. No, I know. You know what I mean.

10:41Scott Wapner: No, I don't count. You don't own the stock. But I mean. But let me just say one more thing. I don't know what that means. If he does get replaced, it's going to be an easy replacement. They're going to get like the LeBron James. Hey, how about that sports analogy? So they're going to get like the best CEO that money can possibly buy. Anyone would clamor for that job. Whereas a lot of the companies in my portfolio that are smaller, when they need to replace the CEO, it's hard to find some of it. I don't think anybody with all due respect believes that it will be, quote unquote, an easy replacement.

11:10Scott Wapner: I'm sorry, but I don't know. Really? Who does? Every best CEO out there is going to want that job. Anyone well positioned? I don't know. I think, but you know, everyone sold Greg Abel short, right? And he's doing a fantastic job. Why would they go outside? Was Greg Abel a household name? Does it matter? Because you know what? The stock's doing really well, and he's running the company really well. Is it doing as well as it did when Mr. Buffett was running the company? Well, we're only a year and change in, so you can't really tell. So you've just declared Berkshire Hathaway as Warren Buffett's just an easy replacement.

11:44Scott Wapner: No, you're missing the point. The point is, is that they had a very, very credible, high quality person to fill that in. We're not seeing that at NVIDIA, but I'll bet there's people. We don't know. Right. Internal, but I also think external. I think it's internal. But you don't see it. It's CFO. It's Colette Kress. She's been there since 2013. This is almost like an irrelevant conversation. The talk. No, first of all, nobody knows. Second of all, the conversation has really been about no obvious succession plan. I mean, that's sort of been out there. It's got like 60 direct reports, not six or seven like any other quote unquote normal company would would would necessarily have.

12:23Agreed. So, I mean, I think we are getting way ahead of ourselves. Hopefully that doesn't happen. I just think the person doesn't own the stock is. I just think bottom line, he is he is NVIDIA. He has incredible technical expertise like Elon, incredible technical expertise. He's got such gravitas. He able to take very complicated ideas and make all of us laymen understand them. So we'll see what happens. You know, I think 1117 and then following that, those private congressional hearings on the 18th are going to be where we come back to this and say, what have we learned the past two days?

12:56Scott Wapner: A few things, a few more other things are interesting. He's not in control of his own fate by virtue of the there's no dual class, unlike others, founders and CEOs. As Semaphore had a really good article on on that today. I think it's also noteworthy that almost every competitor in quotes of NVIDIA is up today quite sharply at that. You look at all of the other, you know, the hyperscalers who have chips in their own right. Yes, that's one of the most interesting parts of this story from the get-go. All of these hyperscalers are customers of NVIDIA, while at the same time, many of them are in development of their own chips to compete with NVIDIA.

13:40Scott Wapner: They're not yet at the level of where NVIDIA's most highly dependable, best gotta-have chips are. But nonetheless, everybody's been coming for a piece of the pizza. Yeah. Well, I think Lisa Su would would take the other side of that with the Helios server design. And clearly what we heard from AMD was very positive last week. I think of almost 12 percent. But you know what's interesting, Scott, is is the resiliency in the other chip makers, because you read the story and you dig into it last night and you say to yourself, oh, wait a second. Here come the Democrats. Here come far more oversight as it relates to what the defense bill is going to look like.

14:19and Chinese access to our semiconductor supply. And the market today takes the complete other side of that. We're seeing semiconductors outside of NVIDIA rallying strongly.

14:31Scott Wapner: Well, the market's betting on a weakened NVIDIA and a strengthening everything else. I don't think a market is afraid of the oversight like you originally would anticipate. So Broadcom's another one. Let's look at that. So if you had to say, OK, here are the two names that are getting the biggest boost out of this group. It's AMD in that one. Broadcom's up 9%. You just bought more. Yeah. Did you buy more before the news came out? Oh, yes. Yes. Yeah, we did. I mean, the stock was down with the group. I mean, it just got trounced and it was selling at 11, 12 times earnings, forward earnings. And we just decided that this is a time to add.

15:10The position was not huge, but it was time to add more. And And we did that with a few other names, so we'll talk about later. I would say that on this, what we might consider a divergence, how can the market be up when its leader for the last few years is having so much difficulty? I think the market right now has a bit of a split personality. It rallied on Wednesday because perhaps the hyperskills will spend less, either because they'll be forced to spend less, because regulations will say no more data center here, or because they'll have some restraint on their own. And then on the other side, the market really is negatively biased for some people because they don't want Elizabeth Warren determining everything about regulation in each sector of the market.

16:00Today, we're back to the Wednesday side. Well, of course, short selling and covering. But the market seems to embrace the idea that we will be more, I would say, deliberate, logical, rational in the way the spending unfolds with the companies that have led the market higher, including these other.

16:19Scott Wapner: Let's be clear, too. And Joe made this point either directly or, you know, on the periphery of that. It's not like NVIDIA was running away with the show in the market. The stock's down year to date. And, you know, it's basically if you take this slide out, it's flat. Yeah. So one of the reasons the market's been able to hold up is there's just been a lot of other stories that are working. This is unraveling itself a little bit, but it already looked like it was, you know, one step forward, two steps back as an actual stock. There is the news today on competitors. Google's challenging NVIDIA, two new versions of its TPUs.

16:58Scott Wapner: You know that Amazon's doing that as well. Meta gets added to JP Morgan's focus list today. Alphabet gets taken off. All those stocks are in the green. I thought it was interesting, too, of how we should think about this today relative to the overall AI trade. Given the role of NVIDIA in the ecosystem itself, the circular nature of the deals, these guys were talking about, too, the fact that its tentacles reach everywhere, at least almost. Gil Lurie, I mentioned him earlier of DA Davidson, what he said when he was asked how much, you know, does Jensen Wong mean to NVIDIA? That kind of everything.

17:37Scott Wapner: he was asked about nvidia's sort of role in all of the ai stuff let's listen to this mr wong orchestrated the growth of ai not just nvidia's success but the growth of the entire industry all right and industries trade is kind of under the microscope of late you know right Right. And I think the market is figuring this out because I do think, you know, post the midterms and we'll see what happens in 2028. These the slowing of the data centers of the new builds is going to be better for Meta with Hyperion. It can be better for Google, better for Microsoft, better for those who have already stood up their own data centers, make them more valuable.

18:24It's going to make the NVIDIA makes Lisa Sue more valuable, Broadcom more valuable. And so where you have to question is like the other companies, the Vertives, GE, Vernova, et cetera, to say there's going to be maybe different winners and losers. But I do say is when you look at like the Mag 7 net net, this is all very positive story for them. I think going into 2027, 2028, because it does feel like the spend, the CapEx is going to slow for them. And maybe they start looking more like Microsoft and less like the current versions of themselves, ongoing negative free cash flow, just because the regulatory environment is going to be kind of prickly for the next 18 months.

19:00Great. Do you want to make a quick point? Yeah, I think the last several days has been the market giving investors a lesson about moderation. Moderate your earnings expectations. Moderate your return expectations. Moderate your concentration degree. What are we talking about next year for earnings growth? 20 percent. OK, we'll probably need to moderate that. I think that is exactly what has happened over the last several days. On Tuesday, the day of the midterm election, the market closed at 75.68 in the S &P 500. We sit right now at 75.47. Does it feel like we had that little de minimis fall in the S &P?

19:43Or does it feel like we had an extreme volatility and the extreme volatility was all about it's time to moderate what your expectations are. It's not going to look like 23, 24 and 25.

19:56Scott Wapner: All right. So we'll wait and see what the investigation comes up with. What other reports come out between now and that? I think one of the many questions is when you think and one more word about this whole episode is whether Mr. Wong's push to sell chips to China was influenced in any way by the relationship. I want to play you what he told me about doing business in China when we last spoke in February. China is a very large market. It makes no sense to forfeit, to concede a large market if you would like to win globally. The American chip industry should do everything we can to win all over the world, including in the Chinese market.

20:44We have to compete.

20:47Scott Wapner: They have to compete because it is an important market. Seema Modi's following that part of the story joins us now. What do you know? Well, Scott, you just said it. China matters because it represents a growth market for NVIDIA. CEO Jensen Wang has been pushing to allow his company to sell chips there. But even with easing export controls that we've seen over the last year that now allow Beijing to buy NVIDIA's older dated GPUs, NVIDIA sales in China have fallen sharply in recent years. At the peak, Bernstein analysts estimate sales made up about 20 percent of its total revenue. But as Beijing turned inwards to develop its own chips and tensions grew with the United States, sales there dried up.

21:25But Scott, this is the crux of the debate and the one that was first flagged by short seller Culper Research, alleging back in May that Nvidia may actually derive a greater share of its sales from China, supported by these intermediaries in Asia, like Megaspeed, that circumvent U.S. export controls and allow China to smuggle Nvidia chips in. NVIDIA's board investigation has been initiated. And in the meantime, as you guys were discussing, earnings about a week away. On the last earnings call, Chief Financial Officer Kolek Kress said shipments of data center hopper products to China during the quarter were less than 1 % of its data center revenue.

21:59We'll see if that number changes, Scott.

22:02Scott Wapner: All right. Seema, I appreciate that very much. Thank you for that insight. Then there's the issue of, in terms of the market and how it responds to all of this, can tech stabilize? If this remains upset for a while, what does today say about that? Citadel's Scott Rubner says the question for the coming weeks is whether tech can begin to stabilize without reversing the broadening that has taken place elsewhere. Vital knowledge out AI far from being out of the woods. Citi today downgrades U.S. and global tech to neutral from overweight. Maybe now the big next moment is the Anthropic IPO. and what might be riding on all of that as we think about it.

22:43Scott Wapner: Yes, it's intertwined as part of those tentacles that I mentioned earlier with NVIDIA. Kate Rooney joins us now with some insight there. Hi, Kate. Yes, Scott. Well, we are expecting Anthropics IPO Roadshow to kick off this week. The earliest that we're hearing is tomorrow. So we'll see if that goes through, given all the volatility we're talking about. Investors, though, from what I'm hearing, are bracing for a lower valuation. So$1.5 trillion had been widely expected. That is now considered a stretch by some investors I'm talking to. $1.25 trillion more likely a target from what I'm hearing in that range, maybe even a trillion dollars.

23:19But again, we will see as they kick off this roadshow. NVIDIA's leadership crisis, though, does add even more noise for this company during its roadshow. NVIDIA and Anthropik have a deep relationship. They do have a deal to optimize cloud for NVIDIA's chips. Anthropic also signed a$35 billion cloud deal that was backed by NVIDIA's balance sheet. And NVIDIA has invested about$10 billion into Anthropic directly. At the same time, Anthropic has diversified a bit. It's been working on its own in-house chips, and right now it does use Amazon's Tranium chips as well as Google's TPUs. The more immediate impact, though, for the IPO, Scott, is going to be investor confidence.

23:54So Anthropic is going to be out there selling its AI growth story while one of the industry's most important players is under investigation. Plus, there may be renewed questions around governance. Anthropic does have this unusual voting structure with a super class F share. It's a single share that gives the seven founders majority control. Scott, back to you.

24:14Scott Wapner: People, thank you, Kate Rooney. People are going to be watching every single movement of this, whether the roadshow begins tomorrow or not, right up until the IPO to really sort of get a temperature on where we are. I do want to check one other stock, and it's Apple. Right now, the stock is higher. It is up 29 % year to date. It is the best performing mega cap stock year to date. 29 % thereabouts. There's the chart and what's been a nice run. Trimmed it? Trimmed it. Why? Selling for 35 times earnings. Has been, though, for a while, right? Well, it's been on a tear. It's been the go-to stock for people who are nervous about other hyperscalers.

25:01As this trade has unfolded, money has definitely gone from Google, as an example, or Meta and moved into Apple. It's the bank. I mean, Microsoft has served that role before. And at this price, we thought it made sense to trim some. I mean, it wasn't, we didn't slice it, we didn't cut off half holding, but we trimmed it, and that's what we do.

25:25Scott Wapner: To Rich? She makes a good point, right? I mean, historically, that valuation, to punch through that, right, to punch through this Ford multiple, you're going to need a catalyst. I will say, though, their revenues are like low teens. We haven't seen that. Like, we saw this earlier this year. Prior to that, the last three or four years, it was like low single digits. So I do think this revenue growth that they're experiencing over time is a catalyst, and they continue to be in the catbird seat of not using their CapEx budget, being huge free cash flow positive. So we'll see. But I get the trim. I mean, you can't really have a huge problem with the valuation today if you didn't have a problem with it at the beginning of the year, for example.

26:04Scott Wapner: You know what I'm saying? It's been at a perceived significant premium. But revenues have grown, though, also. I mean, it's such a huge juggernaut having, I think their last quarter was 10 or 12 percent revenue growth. That's exceptional, exceptional for a company of this size. And I think the duo will see. I think it's still too expensive, but people are going to continue to upgrade. We all we all got the Siri upgrade, you know, if you upgraded your iPhone. So we'll see how people like that. But I think people will continue to own this as a top holding, like I'm sure you guys do just own a little less relative to the others.

26:35It's it's more expensive. Well, sure. It's like just selling premium, you know, and the way I've heard it phrased is when you're paying 35 times for something that's growing earnings at 12%, like you're paying for the safety trade. And all you're doing is basically selling the premium and putting some in your pocket and saying, hey, people moved into this. But to your point about if it was rich at the beginning of the year, and it still is, that's when you're a fundamental analyst and an active manager. You can say, hey, this is rich, but I see the momentum. I'm going to let it ride a little bit.

27:03You just need to be careful with it.

27:04Scott Wapner: Yeah. All right. Coming up, we do have more moves. I got two of them right in front of me from Kerry. We got calls of the day. Got some other stocks on the move. We'll do it when we come back. Who's ready for a bike ride? Peppa Pig is learning to ride her bike. First, pop on her helmet. Safety first. Then, attach the push stick and give her bike a push. And watch Peppa paddle. Her legs go round and round as the wheels turn. With more than 75 sounds and phrases, every ride is a big adventure. Peppa Pig Ready Paddle Go. Available at all major retailers now. With the Discover Cashback Card, it's payback time when you earn cash back on everyday purchases.

27:52Activate and earn 5 % cash back at different categories each quarter on up to$1 ,500 in purchases. That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to Discover. Terms apply. See discover.com slash 5 for details. Your financial life rarely fits between nine and five, and the questions shaping your future don't follow a schedule. That's why Citi created Citi Sky, a secure AI member of your Citi Wealth team built with the Gemini platform on Google Cloud. Whether expanding your portfolio or planning your future, you'll be able to access tailored wealth guidance on your time.

28:31Start building with Gemini at cloud.google.com slash AI. City Wealth Investment products and services are provided by Citigroup Global Markets, Inc., member FINRA and SIPC. All right.

28:44Scott Wapner: Carrie's been busy in the market. But Chipotle, Chipotle. Tell me more. Tell me more. Why are you just sitting there? Let's go. You have never heard me talk about a restaurant. That's why I'm like, let's go. What's going on here? Will the real Carrie Firestone please stand up? Yeah, I've only been there to do research on the company. No, it's great. It was down 60 percent. Start was down 60 percent, trading in a multiple around 20, where it's typically traded in the 40 multiples. Obviously, the CEO left new management, but the management is starting to make changes. They're doing well. There's high returns.

29:26Same store sales next year are going to be improving. This is the time that you buy a stock, a consumer stock, where the market has lost faith in it. It's been sort of hanging out at this level. And since we bought it, which was before their earnings, the stock has had a nice move.

29:43Scott Wapner: Remember, there was sort of, you know, banter in the market of Starbucks, Chipotle. Correct. Yeah. Would you have wanted that? No, not necessarily. I think the styles are very different. People are going to Starbucks all day long for their coffee. And it's a different, I would say, pace. Chipotle is more serving lunch. And that's what you have to be able to handle all of the crowds quickly and make sure that the ingredients are safe and taste. Well, it was a price. We've been working on it for a while. And it hit up a target that we couldn't resist. All right. Now, the next one is definitely more in line with the Carrie Firestone I know and love.

30:25Scott Wapner: You bought LVMH. There you go. Yeah, okay. Exactly. She's a classy lady. So here's what's similar. Thank you, Scott. Let's go with this one. That's right. Yeah, Upper East Side. So Louis Vuitton. Representing. Representing, yes. Below. Christian Dior, Tiffany, Moet. These are brands that are in the LVMH universe. That you know well. Absolutely. You did research on those, right? Well, I guess. Let me ask you this. Why now? Stock down 60 percent. Well, you know what happened during COVID? Everybody spent their money shopping online at home and buying luxury brands and the stocks all skyrocketed.

31:06And then, you know, they hit a peak and nobody was spending. They were going out more, going to restaurants like Chipotle or more expensive restaurants. Stock down 60 percent. They've got a lot of cash. They can buy brands. The R &Os are very smart about buying brands in distress. I think they'll do it again. a lot of brands.

31:23Scott Wapner: You want them to have more brands? Yeah. Yeah, I think so. I think so. And they can also trade out brands. If things don't well, they've moved things out in the past. They moved them into certain divisions. They've had, I would say, a fluid relationship with their brands and that they manage them correctly. I give them a lot of credit. And I thought, you know, we looked at it at this price and it made sense. Okay. Good stuff. Let's hit a couple calls. CrowdStrike. Joe, I'll give that to you. Lifted to 177. It's at 224. Interesting. It was at 132. Yeah. So CrowdStrike. Hold on. Let me let me just let me just read this out loud so people can try and get their arms around what seems absurd.

32:05Scott Wapner: I don't know. Yeah. CrowdStrike September Analyst Day left us with continued optimism for the company's future. These numbers are right. Yes, they are right. Not only are they at the cutting edge securing enterprise AI deployments and protecting from inbound AI enabled threats, but legacy antivirus modernization appears to be accelerating from AI induced cyber anxiety. It strikes us that this isn't short. This isn't a short term demand bump, but the type of traction that lasts for several years. You sure it's not 277? Guess it's 177 from 132 at Bernstein. Go figure. Yeah, I think that might be incorrect, but we'll leave that for another conversation.

32:49Maybe it's 371. But look, 471, I have 177. Yeah, it might be 371. Fortinet reported on October 28th, and that was a bad earnings report. In the JOT, we hold ownership for four of these cybersecurity names. We have Fortinet, we have Okta, we have CrowdStrike, we have Palo Alto. What we heard from Fortinet was not good. I will acknowledge that. And people will tell you that Fortinet probably has the strongest balance sheet of the four cyber names that I mentioned. Oh, it's in here. 177. 177. 177. Interesting. They love it. They hate it. Yeah, they love it. They hate it. OK. They hate watching it.

33:27Most of us love the cybersecurity trade, for sure. I will tell you, we have broken the fever in the cybersecurity trade. You're going to have some very important earnings that are going to be following. Palo Alto is going to report on the 18th, I believe. Then on December 1st, you will hear from CrowdStrike and from Okta. They need to reverse what has been injected into the cyber theme, which is a little bit of near term negative momentum. So you're selling it.

33:54Scott Wapner: No, I'm just kidding. Just playing off the note. Like it. All right. Julia Borson has our CNBC News update. Hey there. Hey, that's right. The United Nations COP 31 climate summit kicked off today in Turkey without the United States, it comes as researchers say the world is already poised to surpass a one and a half degrees Celsius or nearly three degrees Fahrenheit warming threshold set at the 2015 Paris Climate Summit. This is the second year in a row the U.S. has been absent from the conference. A Utah judge is expected to set the trial date today for the man accused of assassinating Charlie Kirk.

34:28Tyler Robinson has pleaded not guilty to aggravated murder for shooting the conservative activist in September 2025. His defense has proposed a 2029 trial date, but Kirk's wife, President Trump, and others have urged the judge to speed up the proceedings. Prosecutors have suggested a January 2028 trial. And the college football playoff organization says its management committee unanimously approved expanding its playoff field from 12 to 24 teams, beginning with the 2027-2028 football season. The CFP also announced a new media rights agreement with ESPN. According to ESPN reporter Heather Dinich, the five-year deal is worth$1.7 billion.

35:12Back over to you.

35:13Scott Wapner: All right, Julia, thank you. Julia Borson, coming up next, your ETF edge with the domino. Dom Chu, what do you have coming up? All right, Scott, that big news around Jensen Huang and NVIDIA could have wide-ranging ripple effects in the market, not just for the chip stocks. We're going to speak with the CEO of an ETF provider who specializes in thematic investing to see where the biggest impact could be in the markets and the types of stocks to watch. That story is coming up on ETF Edge on the Halftime Report. Keep it right here. Who's ready for a bike ride? Peppa Pig is learning to ride her bike.

35:47First, pop on her helmet. Safety first. Then attach the push stick and give her bike a push. and watch Peppa paddle. Her legs go round and round as the wheels turn. With more than 75 sounds and phrases, every ride is a big adventure. Peppa Pig Ready Paddle Go. Available at all major retailers now. The real cost of a break-in isn't your valuables. It's the feeling that your home stopped being safe. SimpliSafe keeps danger away from your family with three layers of protection. One, smart AI cameras and live US-based agents help stop intruders before they break in. Two, we sound the alarm at points of entry.

36:26Three, our agents request emergency response. Plan starting around a dollar a day. Right now, get 70 % off your new system with professional monitoring at simplisafe.com slash sxm. Outdoor deterrence plans start at$49.99 a month. Visit simplisafe.com slash licenses for alarm license information. AI 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.

37:00Follow and listen to CNBC Changemakers, women leading in the age of AI, wherever you get your podcasts.

37:10Welcome back to the Halftime Report. I'm Dominic Chu with today's ETF Edge. As the turmoil around NVIDIA's CEO continues to unfold, What kinds of knock-on effects could we see within the AI ecosystem, thematically speaking, and with the ETFs that focus on some of those AI themes? Joining me now for this conversation is Dave Mazza, the CEO of Roundhill Investments, specializing in thematic investment and chips, among other things. So, Dave, I wonder now, what exactly would you expect to see with the plethora of ETFs that hold NVIDIA simply because of the size of the company? Yeah, there's a shoot first and ask questions later market, and NVIDIA is the latest victim.

37:48It's difficult to diversify away from a$4.3 trillion company. To your point, NVIDIA is in the S &P 500. It's in the NASDAQ 100. It's in the Dow Jones Industrial Average and in nearly every other thematic ETF out there, let alone technology and other specialized semiconductor ETFs. So news like this is certainly going to weigh on NVIDIA and then weigh on where it's found ETF-wise. We're not seeing a lot of that effect outside of just NVIDIA specifically today. All the other chip stocks, for the most part, are higher on the day so far. What exactly would you expect to see in the coming days because ETFs that are tied to NVIDIA and others are in such focus for investors?

38:27Yeah, well, look, I think the market needs to shake out exactly the extent of this relationship and what this may mean for national security concerns. I think it's difficult to think about NVIDIA without Jensen Wong at the helm there. And so as investors work through that, I think where you find large weights of Davidia, it's going to weigh on that. But at the same time, particularly in the context of the last few weeks we've had, especially last week, it is very positive to see the broader chip space be recovering. And do you think we'll see any kind of outflows from some of these ETFs or do you think it's too early to make that call?

38:59I think it's too early to make that call, particularly, again, when we see the market, especially the semiconductors rallying, especially a company like Broadcom today. But we have to remember that NVIDIA is the tip of the AI sphere. It's also the central bank of AI. And if companies get concerned about that relationship, if we do get more concerning news coming out, I do think that actually weighs on NVIDIA, then that's going to weigh on the broader market. All right. So we're going to continue this conversation over at ETFedge.cnbc.com. Dave is going to be joined alongside by Dan Ives of Yorkville Ives, partner and senior managing director.

39:30We're going to talk a little bit about just what it means for the AI ecosystem overall. Scott, I'll send things back over to you.

39:36Scott Wapner: Domino, thanks. That's Dom Chu. Coming up, more committee stocks on the move. One of Bryn's names just reported a record quarter. Tell you which one and what the stock's doing next. Stocks on the move, KKR. Let's take a look. Profits hit a record. Asset sales and fees surging. Bryn Talkington owns the name. Likes the stock up 2%. It's nice. I mean, the stocks went up 8 % for the month. It's still down 23 % for the year. It's down 23 % for the year. Nothing to do with their fee-related earnings, which actually up 26 % year over year because people's skittishness around private credit, which continues not to manifest itself.

40:09So it's slightly above the 200-day moving average. If you can stay above that, I think sunnier skies are ahead.

40:14Scott Wapner: What do you mean it continues not to manifest itself? Private credit, as we've talked about a year and a half ago, everyone got it. Still concerns about it. But nothing's happened, though. And so people talking a year and a half ago about first brands, which I've said a million times was a public market issue, and people concerned about the private credit's the next big shoe to drop. Well, private credit continues to have really low losses. And so I think there was just this panic to get out of everything, including like an Apollo and KKR. And as private credit credit continues not to be a canary in the coal mine, their fee related earnings are up 26 percent.

40:48I think the duration of their average fund is a decade.

40:51Scott Wapner: It may not be a canary in a coal mine, but it's obviously still somewhat of an overhang. It's an overhang. Don't you think so? I mean, look at what the stocks have done. That's my point. Yes, that's my point is the sentiment. But the sentiment is real. You could make the case that right now that, I mean, the ongoing negative sentiment or at least concerns around that supersede whether something's a canary in a coal mine or not. Because as long as that's there, the stocks have had a hard time getting a lot of traction. Right. What was, you know, what were loans to software now is sort of focused on, well, who's got loans to data centers?

41:24Scott Wapner: You know what I mean? No, exactly. I mean, that's why I sold Apollo earlier in the year, because I wanted to lighten up on that. And so I agree with you. What I'm saying is like their earnings are incredible. The stickiness, the durability. But investors need to know sentiment can trump everything for a long period of time. And that is exactly still what's happening with the name. But sentiment can also go too far, which is, I think, your argument. And then you have these great entry points. And so in our portfolio, we have Sixth Street Lending. The ticker is TSLX. And they got just shellacked, right, like KKR.

41:56We also have Hercules. But on Sixth Street last week, they actually increased or put back in place their supplemental dividend, which is kind of adding to Bryn's argument that under the hood, things are still OK.

42:08Scott Wapner: Can I say Sixth Street for more than intraday, please? like year-to-date guys, if you can get that. TSLX. It's got a 10 % dividend yield right now. And again, they just, like I said, put the supplemental back in place. So maybe you've got an opportunity. That's a beautiful chart. The improvement in publicly traded software stocks has helped a lot of these publicly traded private. There it is. Better like year-to-date down 18. To your point. Yeah, yeah. And same with KKR. It's still down 22. All right. Mike Santoli's next. Senior markets commentator and overtime co-anchor Mike Santoli with his market memo.

42:44Scott Wapner: I mean, can you take from this that the market right now just feels like this is NVIDIA's problem and not the market's problem? I don't know how else you could take it, given all the green on the screen except for that. Yeah, if you could have scripted the setup for, you know, kind of a bombshell report like this on NVIDIA, it would be this, which is the entire AI trade was heavily for sale for a long time. In fact, no matter what was going to be in the headlines, you were probably going to come into this week and say, we have some washout conditions in a lot of the AI food chain. It's really kind of time for it to prove that it can bounce here.

43:18And I do think it's a net positive, certainly, that it was sort of rotation out of NVIDIA into the rest of the hard hit areas. But also, it's a pretty comprehensive bounce. You know, we're down 6.2 % or something off the record highs in the S &P. You get back almost 2.5 % of it. We've cleared a couple of hurdles. So it's a good start. But I guess I would say after the kind of sell off that we saw, the first two and a half percent bounce is the easy two and a half percent. And so still something to prove. But I do think it's it's broad enough, inclusive enough and assertive enough that if you were looking to buy the dip, you say the market gave you enough to say maybe the bottom of the range is is going to hold for a bit.

43:57Scott Wapner: I do think it's interesting, the other movers around NVIDIA, you know, and AMD and Broadcom getting such big lifts that and some of the other, you know, the hyperscalers, the ones who have competitive chips coming online, how the market's placing its bets on how it thinks the fallout may be, at least in the interim. For sure. And, you know, I think this also comes in the context of the market for a while has wanted to deconcentrate. You know, it's wanted to get away from hyperconcentration. And that probably includes on the sector level for semiconductors. And so whether the fundamentals are going to follow, you know, NVIDIA has got a lot of market share that could be trimmed away if that's the way it's going to go.

44:40And it actually would be material to the rest of the industry. So for now, I feel like it's a little bit of a, you know, more of a portfolio management tactical response as opposed to a very sober, fundamental conclusion that, in fact, those other companies are going to be net beneficiaries. But, you know, one could follow the other.

44:58Scott Wapner: OK, good stuff. I'll see you this afternoon. It's Mike Santoli. Take a break. We'll come back with finals. We'll kick the markets around and obviously the story of the day. Alex Kantrowitz, Tom Lee, Kevin Gordon, Chris Heisey and Lowe Tony are going to join us at three o 'clock. I hope you will as well. Look forward to seeing you all there. Jenny Harrington, final change. Okay. Freeport is trading at 15 times earnings, has a 7 % free cash flow yield, is down 22 % from August, and there's endless demand for copper. All right. LVMH. I'm giving you Deckers. It's another consumer brand. Right. Consumer brand.

45:33Great sneakers. The stock's way down. Coming up through its 15, 100-day moving average, 11 times earnings.

45:39Scott Wapner: All right. All right. All right. All right. Brent. RSP, the rotation continues. An easy way to play the rotation. State Street. I think the asset managers benefit from this volatility. OK. All right. I'll see you at three o 'clock. Look forward to that. The exchange with Kelly begins now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC. All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium.

46:19You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the Halftime Report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com forward slash Halftime Report disclaimer. Traditional home security only alerts you after a break-in, and that's too late.

46:47SimpliSafe is changing that. Stop. This is SimpliSafe. Police are on the way. We don't just alert. We help stop crime before it starts. Plan starting around a dollar a day. Right now, get 70 % off your new system with professional monitoring at simplisafe.com. SimpliSafe, ahead of crime, in real time. Outdoor deterrence plans start at$49.99 a month. Visit simplisafe.com slash licenses for alarm license information.