Power Lunch: NVIDIA CEO Exit, Tech Volatility and Crypto Pressure

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1:04The future of the AI build out and the entire tech trade is unclear. Welcome to Power Lunch, everybody. I am Brian with Contessa Kelly. Back tomorrow, NVIDIA CEO Jensen Wong, you may have heard. He is out, forced to resign for the company he founded. So what does this mean for arguably one of the most important companies and most important stocks in the world? And what now from a rather obscure NVIDIA board? Suddenly, Contessa thrusts into the spotlight. And then you have strategy under pressure on two fronts. shares have lost nearly half their value over the past year as Bitcoin trades near 70 ,000.

1:39Now MSCI is removing the world's largest corporate Bitcoin holder from its global benchmarks. That's a move that could trigger selling by index funds and raise new questions about strategy's ability to keep financing its Bitcoin purchases. CEO Feng Li joins us exclusively to respond and explain what comes next. So there is a ton going on today, But let's start here. And we understand, even if you don't care at all about NVIDIA as a company or a stock, or you don't care about Jensen Wong or him as CEO, if you're watching or listening to us right now, you probably do care about the stock market.

2:17And the market cares about NVIDIA. And NVIDIA matters. Here's why. NVIDIA is a top 15 holding in more than 600 ETFs owned by more than 6 ,000 institutional investors. And if you don't think you own it, you probably do, maybe passively in a 401k or an ETF or an index funds. Now, to be clear, it's been a rough month, but NVIDIA has still way outperformed the entire market over the last three years. But as you can see from that chart, it has been a big decliner in the last month or so. And right now at the current price, NVIDIA has lost roughly$1.8 trillion in market cap since its October 6th peak, just over one month ago.

3:03And let us not forget, NVIDIA has kind of been the central bank for the entire AI boom. There are hundreds of billions, if not trillions of dollars directly and indirectly levered to NVIDIA. So let's broaden it out. Let's bring in Deutsche Bank chief global strategist, Pinky Chata, and Bespoke Investment Group co-founder, Paul Hickey. Great to have you both on for this big day. Paul, start with you. We just tried to give some of the stats. Stats don't tell a story necessarily. How important is NVIDIA to the macro market? Or maybe it's not. Well, I mean, it's an unbelievably large company. You know, the fact that it lost$1.8 trillion and it's still the second most valuable company in the world just pretty much puts that in perspective.

3:52But as far as Jensen leaving NVIDIA and its impact on the company, that remains to be seen what happens. For NVIDIA as a whole and its impact on the market and semiconductors specifically, I don't know how important it necessarily is. You know, I mean, you think of it as like a star quarterback going down and then the team falling apart. But you look at NVIDIA, it's become very decoupled from semis over the last several months. It's been negatively correlated to the Sox over the last five months or so. Is that where you see it? You see him as the star quarterback who's calling the plays and throwing the passes, and he's the guy getting the ball into the end zone, and there's nobody waiting in the wings?

4:36Well, that's the way people view it. But you look at what happened to the Giants this year, okay? Jackson Dark goes down. Everyone thinks the season's over. Oh, boy, now we're in the sport. Getting way deep here. They're still in first place, you know? But I think you think of it as this could be a major negative catalyst. For the stock, it is. But for the overall semiconductor sector, I'm not sure how important it is. So you're decoupling NVIDIA from the overall sector. Binky, what about you? I would argue, you know, tech as a whole is an absolute screaming buy here. I think it was last week, and it still is.

5:10And that's why you're seeing the market relatively basically resilient. So we spent a lot of energy looking at equity positioning. If you take a look at market positioning or positioning in tech. So last week, the market's pricing in that tech earnings are going to decline in the fourth quarter. You upgraded tech last week, didn't you? A week ago. A week ago. So it was a great call because I think the NASDAQ is having its best week of the year. If it's not, it's darn close. The NASDAQ 100 is up 5.3%, even with all this other stuff, Pinky. So you're not changing that upgrade of technology on this news.

5:48Not at all. It just reinforces it. I would actually argue. So if you look at the performance of what we call mega cap growth in tech versus the rest of the S &P 500, it's a very, very clear trend channel. So you can think about the top and the bottom as where you are in terms of relative performance. So we downgraded at the top and we upgraded at the bottom. We then overshot a little bit to the downside, but we still actually below the channel. So I would argue where we are is completely washed out and is in complete disconnect with the kind of earnings growth that we are getting. So initial conditions matter.

6:23Yeah, no, I think the decoupling I was just talking about, we talk about all this is hitting the fan with NVIDIA right now. The stock's down sharply. As of yesterday's close, the SOX, the Philadelphia Semiconductor Index, which NVIDIA is the largest component of, had its best four-day gain since COVID. That's March of 2020. OK, before that, the financial crisis. And then before that, you have to go down to the dot-com bust and boom. Paul Binky, thank you for joining us. Appreciate that. Let's get to Megan Casella now in Washington, D.C., who's got the monthly Treasury statement. Hi, Megan. Guys, bleak news on the fiscal front for the first month of the fiscal year.

7:00The monthly deficit came in at$404 billion. That is the highest ever for the month of October and 42 percent larger than the same month a year ago. It was$285 billion deficit on an adjusted basis. Now, that was largely driven by spending. It was also at a record high for the month, much of it, on interest. $115 billion spent on interest alone, again, the highest on record for October. Other big sources of spending, guys, defense military programs up 30 percent from last year. Homeland Security spending was up a full 66 percent. Guys, we are just shelling it out there. Megan Kinsella, thank you very much.

7:35Now, let's go back to Paul and Bickey here. So we're just part of the situation that we're going into next year is a renewed focus under new leadership in the House and the Senate. When you're talking about tech and the future, how much does that play into the CapEx spending that we've been anticipating or the kind of regulations that come down? Not to say nothing of an investigation into NVIDIA and whether it was bypassing restrictions on chip sales to China. Yeah, I would just repeat that, you know, when positioning is so washed out, so tech, I mean, from a technical point of view, it's sort of like one standard deviation below.

8:15That's historically, you know, the bottom of the band. So there's a lot of things already basically priced in. The other big pushback is these growth rates have to slow. They are so high. The market never priced in. Position never went up beyond pricing in. something like 18 or 20 percent. That's way lower than anything we've gotten and anything lower than anything we're likely to get over the course of the next. Well, I just wonder, Paul, listen, and you track this data and these stats so well, I frequently steal them from my own use. What happened? Two weeks ago, the market, I don't want to say crashed, but technology had some of the worst days in years, followed by this incredible, like I said, the Nasdaq 100 is up 5.3 percent today, this week.

9:02So it's one of the best weeks in years. What is behind these violent downturns and violent bounce backs? Because we're starting to see them a lot more frequently. Right. There's a lot of cross currents going on in the market. You have these big companies where you're seeing this volatility. You have the Anthropic IPO coming up next week, which is going to cause some positioning. And I think to the point is what Contessa was talking about with the new political makeup in D.C. What we were saying last week is maybe at the margin, it's a negative, but the economy and the market in general are bigger than what some legislators in D.C., just like NVIDIA will make it or break it.

9:42It's not just Genshin 1. Let me ask it a different way. Okay. And I'm not going to use the football analogy, but I'll use a car analogy because that's more my style. In the 70s, the fastest cars are slower than a Toyota Sienna minivan is now. Like a Corvette in 79 was like a hot car, right? A minivan is now faster zero to 60 than that Corvette. In other words, things accelerated. They got faster. The market feels that way. Core Weave was up 25 % yesterday. It regained a quarter of its value. Should investors, should your clients, Paul, just get used to things falling and rising a lot faster and more violently than they used to.

10:27Yeah. And what we just say is take a deep breath, OK, when these things happen, because when you panic or as in, you know, you sell on the big down days or you chase the headlines and and buy on the big up days, you're likely to lose. If you bought the market after every one percent up days since 1994, you'd be down. Your cumulative gain would be a decline of 44 % right now. The market's up 1 ,600 % over that period. So you want to sort of go what the opposite is doing, or just not try and put too much emphasis on what's going on. What do you think that NVIDIA can say in earnings to sort of calm all of the furor?

11:04You know, I think what I would say about NVIDIA is, I know you can't talk about it specifically, So I would say, you know, you have a new CEO, interim CEO coming in. Get the kitchen sink out there. I think investors are going to have a lot of questions and we'll see how they address it. But I would, you know, I think no one is mentioning right now is that Colette Kress is now, you may be interim, the CEO of the second largest company in the world. No woman has ever led a company that large. And within the S &P 500, there's 50 companies run by women. Their year-to-date gain is 18 % this year. The market's up 10%.

11:40So maybe she would be a good person. And they have multiple women on their board as well. Let me just point out, though, this is still a board that's under pressure. They're being sued by shareholders already. There's going to be concerns about what a congressional investigation means for the future of the company. So even if Jensen Wong is removed as a distraction, the board and the company executives, that C-suite, has a lot on their plate moving forward and a lot to grapple with that they didn't have to grapple with a month ago. In terms of the big cycles that we've been having, there's sort of been five rotations over the last few years.

12:15And by rotation, I mean both in and out. If you just counted one segment, we're talking about 10 of them. They've been pretty severe. But I think you've got to keep in mind that basically we've also had a lot of shocks over the last couple of years. And most recently, I mean, if you look at things from the buy side's point of view, we've had shock election in Brazil that was very, very painful for many, many investors. We've had sharp move up in rates, very steady, and then a sudden move down. So there's a lot of choppiness. And so there's an element of basically, you know, I mean, in terms of the selldown, I mean, there's definitely close parallels between what we saw with situational awareness, for example, earlier on one of those cycles.

13:02Then we have an intervention when somebody takes a risk out and then we rally all the way to the top. So hopefully it settles now. And that was kind of what I was poking around about, Binky, was sort of to see if, Paul, if there was some talk of somebody getting blown up a couple of weeks ago. Paul Hickey, Binky Chata, really great to have you on. Pretty dramatic day. I know you're sticking by tech. Thank you very much, guys. All right. Thanks. All right. Now let's check the bond market. A big move up in the 10-year yield. In fact, when all the tech stock stuff was selling, yields fell back below 5%.

13:33Not anymore. 10-year yield with the move today is back above 5%, highest level since October 22nd. But we are no longer below 5%. It's not just 10-year either. Yields across the long. And the short end of the duration ranges all supply higher. Those gains extending somewhat after what many would call a rather tepid 30-year bond auction. I think our friend Rick would have said a different word. All right, folks, we want to hear from you. All right, we just kind of had a discussion. What are you doing? Are you buying the dip in NVIDIA today? It's our PowerPoll. Scan the QR code on your screen. Go to our X account.

14:11Yes or no, buying the NVIDIA dip. All right. And we'll get to those show results later. All right. We have a news alert now. Calci has ended its advisory contract with Donald Trump Jr. Of course, this was after his venture capital firm, 1789 Capital, increased its stake in its rival, Pauly Market. Trump Jr. was named a strategic advisor to Calci in January of 2025. and I've learned from the company that Kalshi had started conversations about ending this advisory role several months ago. Kalshi says it's grateful for Donald Trump Jr.'s contributions. And we, of course, will mention here that CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.

14:58That's a big story. Yeah. That's your story. I mean, you know, look, this is the thing. his advisory role has come into some question where Calci is concerned, where the regulator is concerned and what Congress does. And again, with the switch in political power in D.C., what happens with prediction markets is also under scrutiny. It is a big deal. Contessa, thank you for bringing it to us. All right. We are just getting started. We'll talk more about NVIDIA, a big part of maybe your portfolio as well. And Jan Van Eck, whose firm runs the biggest ETF chip, ETF of all. He is here with The Risk Plus.

15:32Could tech's trouble spill over into crypto? The CEO of Strategy, Fong Li, joins us exclusively. But after the break, who might take the helm at NVIDIA now that Jensen Wong is out? There is an interim CEO. Is she the new permanent CEO? A lot of talk. Stick around.

15:56From the producers of The Traders, the circle returns with bigger twists and higher stakes. Contestants compete for popularity without ever meeting. Some are celebrities, some are regular people, and some are catfishing the competition. And now audience voting will influence the game. You decide who has what it takes to win in the circle. Watch the Hulu original series The Circle on November 17th, streaming on Hulu and on Hulu on Disney Plus for bundle subscribers. Terms apply. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S.

16:39and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts. If you're a parent and want to help set up your child for success, then iExcel is right for your family. As an effective and affordable online learning program, iExcel covers math, language arts, science and social studies using interactive practice problems for kids from pre-K to 12th grade. Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20.

17:20Visit IXL.com slash 20 to get the most effective learning program out there at the best price. All right, welcome back. It's a big question and maybe a question a lot of you were asking. Who will become the next CEO of NVIDIA? Well, there are many names that are sort of being floated around, including the former Apple CEO, at least floated by one pretty big name himself. Eamon Javers joining us now with what the president of the United States may be saying. Yeah, Brian, that's right. And we've asked the White House whether or not the president talks to Tim Cook of Apple before he posted this on social media earlier today.

18:00Take a look at his statement. He says, now that NVIDIA CEO Jensen Wang, who has done a fantastic job, has resigned, there's only one man to take his place. Tim Cook of Apple, a legend replaces a legend. The White House, though, has not responded to us to let us know if the president is sort of just throwing this out there into the conversation as he watches the news unfold along with the rest of us, or if he's in contact with the NVIDIA board and with Tim Cook. We do know that the president says he talked to Jensen Wang himself earlier in the week before Wang resigned from NVIDIA. Meanwhile, Brian, something else to bring you up to speed on is a report from Reuters, which is suggesting that the White House is now discussing Howard Lutnick's future as the Commerce Secretary.

18:45Now, this comes amid this controversy and some criticism of Lutnick over whether or not he was tight enough on NVIDIA and its export of highly sensitive AI chips to countries where those chips could get to China. The question is, was Lutnik sort of slow walking enforcement efforts around that kind of transshipment of chips? There's been some real criticism of Lutnik here in Washington around that. The president, though, earlier today signaled through an official at the White House that he still has confidence in Lutnik. That statement came to us a couple of hours ago. But, Brian, anytime you're in Washington and the president issues a statement that says he still has confidence in you, you know you're at least on thin ice because he wouldn't have to issue such a statement if you weren't.

19:35All right. Eamon Javers reporting there from D.C. Thank you very much. Back to Tim Cook and his odds of becoming NVIDIA's next CEO. Before President Trump's post on Calci, the odds were listed about 1%, maybe a little less than that on Tim Cook being the CEO. Now, let's take a look at here. You can see 4 % is the odds of Tim Cook. And Cook is far from the favorite. His employee, Johnny Sruji, Apple's chief hardware officer, now stands at 7 % odds of yes, becoming NVIDIA's next CEO. You've got Arm CEO Renee Haas, who's emerged with 9 % odds as a contender to succeed Jensen Wong. NVIDIA's interim CEO Colette Kress at 17 % chance of keeping the job.

20:21And right now, the favorite on Cal sheet, NVIDIA executive Ian Buck, who traders give a 37 % chance of taking the top job. So you don't know who Ian Buck is? Let's ask Seema Modi to explain. Who's the guy who's now leading the money on getting the top job? Yeah, well, Contessa, his name has come up in conversations I've had as well. Ian Buck, he joined NVIDIA in 2004, rose the ranks. He's now vice president of hyperscale and high-performing computing. So heavy technical experience. He also invented CUDA. That's NVIDIA's software platform, which essentially gives NVIDIA a competitive moat by locking in customers into the company's ecosystem and really making it harder for a customer to switch to another GPU.

21:05We're also told Buck has sat in for former CEO Jensen Wong on key technical meetings in California, as does Colette Kress, CFO and now interim CEO of NVIDIA. Another name that has come up, Jonah Albin, an engineer who has spearheaded the development of GPUs. He joined NVIDIA back in 1997, worked closely with Wong and the team to build NVIDIA's architecture. But guys, for a company that did not have a clear succession strategy, this search is not expected to be easy, guys. Seema Modi, thank you for bringing us that. Appreciate it. Still ahead is NVIDIA's market weight, a systemic risk. The chip maker makes up about 6 % of the S &P 500, a fifth of VanEck's SMH.

21:47That's a popular semiconductor ETF. We're going to talk about how big is too big to fail next.

22:02From the producers of The Traders, The Circle returns with bigger twists and higher stakes. Contestants compete for popularity without ever meeting. Some are celebrities, some are regular people, and some are catfishing the competition. And now audience voting will influence the game. You decide who has what it takes to win in The Circle. Watch the Hulu original series The Circle on November 17th, Streaming on Hulu and on Hulu on Disney Plus for bundle subscribers. Terms apply. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S.

22:45and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts. If you're a parent and want to help set up your child for success, then IXL is right for your family. As an effective and affordable online learning program, IXL covers math, language arts, science and social studies using interactive practice problems for kids from pre-K to 12th grade. Listeners can get an exclusive 20 % off IXL membership when they sign up today at IXL.com slash 20.

23:26Visit IXL.com slash 20 to get the most effective learning program out there at the best price.

23:37All right, time to check the markets now. You can see we're basically flat on the Dow just turning positive now fractionally. NASDAQ Composite off by a third of a percent and S &P 500 down just a tenth of a percent. That's pretty remarkable considering the news of the day. Investors just seem to be shrugging off the departure of NVIDIA CEO Jensen Wong, who resigned earlier this morning. Is tech the place to be or are there better places to invest? Let's bring in Jan Van Eck, the CEO of Van Eck Funds. NVIDIA represents a fifth of his firm's popular ETF, the SMH. And Kevin Gordon, the head of macro research and strategy at the Schwab Center for Financial Research, he went to neutral on tech from favorable six months ago, finding better opportunities outside tech.

24:23First of all, on NVIDIA. Give me a sense of the import of the scandal surrounding Jensen Wang and whether that really means trouble for the company itself. He's resigning. There's going to be somebody else new at the helm. What's this mean for NVIDIA? So I think, you know, to the extent the market was pricing in any of this disruption in advance of this, you could date it back to the summer when we started seeing a lot of disruption, not just in the stock itself, but broadly within semis or even the tech sector, really when it basically peaked relative to the broader market. I point out that timeframe because mid-May is when NVIDIA's weight in the S &P 500 peaked, just at around 8.5%.

25:03Since then, it's been chopped to sub 6 % today, no longer the largest company in the S &P 500. But in that same time frame, 70 % of the S &P 500 is up. So it really underscores and highlights this really aggressive rotational market that we've been in. I mean, I think just goes to show that capital's found another place and maybe other homes within the equity market has not been detrimental to the US. And I kind of said it earlier, but I want to repeat it for the folks in the back. The NASDAQ 100 is up 5.3 % this week. The best week of the year was in April, 6.3%. The second best was in May, 5.5%.

25:38So if we gain two-tenths of 1 % more today or tomorrow, Kevin, we will have the second best week of the year for technology, even with, I don't know if you heard about this, but Jensen Wong is out at NVIDIA. Did you hear about that? Yeah, I did. But isn't it amazing how, to your point, capital will, just like the band Yes sang, love will find a way, capital will find a way. And this is, I think, a good teaching moment for the markets and for younger investors. Oh, yeah, absolutely. And to Paul Hickey's point that he was making earlier, I mean, the negative correlation that NVIDIA itself has with the broader semi-index, even if you do compare it to the S &P 500, its correlation has softened significantly on a rolling 30 - or 60-day basis.

26:20So I think it does go to show that it's not the case that a lot of these mega caps are not good stocks or good plays. I mean, that's for the individual company analysts to figure that out. But in terms of their contribution and their sort of influence on the indexes, they don't necessarily need to be the best performers, even if they have the largest weight. So that's a really important distinction we've been making over the past couple of years. Jan, what about the SMH? What does it mean to the SMH? Well, I mean, I think it's what the SMH means for the rest of the market. I mean, it can't be understated how important technology is to the overall market and semiconductors in particular.

26:57So earnings growth for the S &P next year is expected to be up 17.5%. If NVIDIA just slows its growth by half, the overall S &P earnings goes from 17.5 % down to 15%. And if you take semis as a whole, if growth is cut by 50 % next year, that brings the overall S &P down from 17.5 % to 12.5%. So what happens in this story is super important to the overall market. And Cameron Dawson at New Age has really been putting her finger on this sensitivity point. I'm very comfortable with where we're at right now, but I just want to highlight that risk in the market. All right, we'll get back to both of you.

27:41Don't go anywhere. We do have some more breaking news right now with Seema Modi on NVIDIA. Seema. Brian Reuters is now reporting that former NVIDIA CEO Jensen Wang had a relationship with a second employee. They're quoting sources. Reuters is not naming the second employee. It does follow a report yesterday that Wong had a relationship with Kimberly Powell, who directly reported to Wong. We are out to the company for comment. But again, Reuters reporting that Wong had a relationship with a second employee. Back to you. All right. I'm not sure how to respond to that one. Sima Modi, thank you very much.

28:17So that would be the customer, Alice Wong, the first employee. And then according to reporters now, that would be three. So that's, somebody's leaking. This is being leaked out. Somebody's going after it. This is going to raise real questions for the board. What they know. About what did they know? When did they know it? And I spoke with a governance expert who said, you know, they're more focused on the actual mechanics of growth than they are about paying attention to rumors. And it's especially difficult with a founder who has cult status because there's a lot of headlines about him that the board wouldn't necessarily be following.

28:54Well, the question is, what did the board know and when did they may have known it? Because we're showing videos of people, of Jensen Wong, around. Anywho, let's go back down to Jan Van Ecken. Jan, you may have said this in your previous answer, but I was listening to some other stuff, so I'm just going to blame that. Contest, use the word mechanics. Talk to us about the mechanics of your ETFs, the SMH. NVIDIA was, I believe, over 20%. I know you talked about it just a touch a moment ago. But as NVIDIA comes down, does its role in the SMH also shrink? Or does it then just bring down the price of the SMH overall?

29:29How does it affect the mechanics of the way the ETF actually works? Right. The theory of SMH is to bet on the winners in the semi-industry. So the top companies, which by market cap is the simple shorthand for that. So, yes, to answer your question, the percent of NVIDIA will shrink in SMH as its overall market cap shrinks, and that's reset every quarter. If I could take a second, Brian. Yeah. To do what? To me, the NVIDIA story is not really anymore within NVIDIA. I think it's a larger governance question, meaning a policy question. Is NVIDIA a criminal enterprise? I think that's the toughest question.

30:16Hold on, my friend. I got to jump. You know, listen, I'm not a lawyer, but do you have a law degree? What do you mean by that? I want to be very careful what we say here. This is your opinion only, but what are you sort of suggesting or talking about? Well, that's the bottom line, right? There were export restrictions on the chips that they sold through to Singapore companies that were approved by the Commerce Department. And whatever they say in their internal investigation, I think someone in Washington, D.C. is going to have to have a bipartisan, transparent investigation of what happens here.

30:51because there are certainly people in D.C. that are going to try to tar the Trump administration and officials there with this whole thing. So I think the soap opera. I'm sorry to jump in on you here. We're kind of getting it. It's an important story. I just want to remind our viewers that, I don't know, earlier this year or late last year, my colleague Christina Parsinevelis was talking about, you know, illegal importation of NVIDIA chips through Singapore and Malaysia, how people hid them and how. So this should not be a new thing. Like the whole idea of the affair is new. But as I said earlier on CNBC, this idea of sort of semi smuggling potentially NVIDIA chips.

31:30This is a story that we did on this network. So in your in your view, and I know this is Jan Van Eck's opinion, Jan. Let's let's be clear. Somebody's leaking all this stuff. This is not just all happening at one time. What do you think then is happening around NVIDIA? Because this whole China may be buying an NVIDIA processors thing, to my point, is not a new story. We have to go back again to D.C. Department of Justice, Jay Clayton, someone of that, you know, sort of reputation needs to clarify the record on what happened here. You know, who knew it within NVIDIA, even board members, right, and executives and then administration people.

32:15Now, listen, I think NVIDIA is a compliant company. I'm not throwing accusations out there. But right now, transparency. But this started in the spring, to your point. So I will agree the soap opera continues, but it's already been happening behind the scenes for a period of time. And I think there's just more to come, Brian. Yeah, I would say to our viewers that in August, the United States government was investigating a Singapore-based supplier for importing NVIDIA chips. I mean, the stories are out there. Kevin Gordon, don't worry, I'm not going to ask you about any of this. You are totally, it's like a little drop of blood coming off your forehead.

32:50You're fine. Go back, though, to the macro point of this, which is from Schwab's perspective. Your clients, they may be nervous right now. Now, they're watching this thinking, what does this mean for me? And more importantly, if NVIDIA was the banker for the entire AI trade, if they were the financier for all of this, what is, if any, the spillover effect? Well, number one, I would say, you know, define all. It's not just one company that sits totally at the center of it. And number two, I think even outside of the strong business investment complex that we've had in the United States, and to the extent that's been a significant driver of GDP, You know, the other story outside of this is that we still have a relatively resilient consumer backdrop that you could argue is not, you know, entirely reliant on what has happened within the AI infrastructure buildout space.

33:39If anything, there hasn't even been as much of, I think, of a direct kind of effect there if you're looking through the employment channels in particular. Very hard, I think, to draw these really strong ties between an infrastructure buildout for data centers and overall employment in the U.S. Yet overall employment in the U.S. has continued to grow this year, evidenced by the October Jobs Report. So I would say from a broader macro standpoint, I certainly don't take a negative signal from what the market is doing today to the extent you want to focus in on any particular company. But I think I would also point to the fact that a lot of the fundamentals and the backdrop of the economy have not changed.

34:12Labor has continued to recover, even though it's relatively choppy, and inflation is an issue. It's relatively sticky. So both of those things, I think, are kind of the bigger points and bigger picture sort of macro points that you need to focus on amidst a lot of the noise that's in the market today. Kevin, it's great of you to join us. We appreciate it. Jan van Ecke of Van Ecke Funds. Appreciate your time. Thank you, guys. All right. Bitcoin and the entire crypto complex, they are also lower. We've got an exclusive interview coming up with the CEO of Strategy, Fong Lee. We'll talk about crypto, tech, the markets, and more.

34:46Busy day. And we're back right after this.

34:58Of course, we're watching NVIDIA and the tech trade today, but we're also keeping an eye on crypto. Bitcoin is down more than 3%, falling below the 72 ,000 mark to its lowest level since August. Strategy, the world's largest corporate Bitcoin holder, is also under pressure, down about 50 % from its 52-week high. So what's the strategy going forward? Joining us now in an exclusive interview, Fong Li, CEO of Strategy. It's great to see you today. First of all, give me a sense of MSCI taking Strategy out of its index. What does that mean for you and for the company and for your access to capital?

35:41Look, MSCI has been on a multi-year campaign against digital assets. And it's interesting because their role is to be an independent arbiter of the markets, not picking winners and losers. And they've clearly decided that Bitcoin isn't something that people should be investing in. Put that aside, about 3 % of our shares are related to MSCI indices. So it's really not a big issue for us. I would call it immaterial. The bigger question is, why is MSCI picking winners and losers in the market? I mentioned that your shares are down about 50 percent from your 52-week high. Why? To what do you attribute that decline?

36:20The last year, there's been unprecedented volatility in the market. There's volatility related to monetary policy, trade policy, foreign policy, geopolitical, U.S. political environment. And Bitcoin breeds on volatility. It goes up and down quite a bit in the last year, and as Bitcoin has declined in the last year or so, has MSTR. Fong, outside of that, we've had this thing called the election. Again, I know it's gotten lost in the NVIDIA news, but it's kind of a big deal, and it's a big deal for regulation. We're going to have a new Congress coming in. What do you think about it? What is your message to the new Congress, and how might it impact the regulatory framework that you and the entire crypto industry has to deal with every day?

37:03I don't really think Bitcoin and crypto are partisan issues, right? Bitcoin and crypto are about how do we modernize the financial markets and how we create financial freedom for 350 Americans and 8 billion people around the world. And what you see happening through the executive branch, the SEC, the CFTC is a set of rules that are going to allow tokenization of securities and access to stable coins and modernization of financial rails. If I'm a Democrat, I love that. If I'm a Republican, I love that. So sure, there will be some short-term volatility and perhaps some change related to who's in Congress.

37:44But I think long-term, it's a good setup for crypto, regardless of who's in the White House. Can I ask you about the Binance theft? You know, you've got billions of dollars managing to leave these accounts. What did that mean to you, and how did you interpret what should be the impact for you and for strategy in terms of defense, good defense? Yeah, it's a couple of things. Well, first of all,$6.3 billion were taken. About half of that was returned already because it was based on stablecoins. And all of it has been refunded to the owners that were sitting on Binance. So I think that's a pretty good story overall.

38:27That said, nobody likes hacks. Nobody likes the fact that some nation state in North Korea has been able to infiltrate that kind of wealth. What does it mean? Look, AI is real and people have to be more secure when it comes to running AI frontier models against their software and against their custodians. We hold all of our Bitcoin and U.S.-based custodians in cold storage. So I do agree it creates reputational risk to the space, but it's not a real hard risk to how we're holding our Bitcoin. But we have to stay vigilant. I've got to ask you about NVIDIA today. What are your thoughts on the challenges facing that company?

39:05Okay. I think Jensen's done an amazing thing over the last 30 years building a company from scratch that until today was the most valuable company in the world. Everything that we talk about because of AI is underpinned by the technology he's been created. CEOs are human, right? And I don't really know what's behind what occurred most recently. AI is bigger than Jensen at this point in time. It's a huge area of capital inflows. It's a huge area of really freedom for individuals and intelligence for individuals and abundance for individuals. So I think I think everyone will be fine after this incident.

39:46And AI is still going to dominate the world. Feng Li, strategy CEO. Thank you for your time. Thank you. Let's get on to Frank Holland with a CNBC news update. Good afternoon, Brian Contessa. Two children are among the eight dead after a Brooklyn apartment building collapsed into a construction site yesterday, according to New York City Mayor Zoran Mamdani. Two other victims are construction workers, he said, and 18 others were injured, including one person in critical condition. The fire department says it remains in rescue mode despite heavy rain in that area. President Trump is threatening to double tariffs on Mexico if it does not stop hundreds of migrants heading to the U.S.

40:24border. The caravan of around 1 ,500 people started walking towards the U.S. this week. Mexico will return them to their countries of origin, according to Mexican President Claudia Sheinbaum. And Family Dollar will pay$63 million to settle claims it overcharged shoppers. The Federal Trade Commission in 17 states accused the budget retailer of charging more at the register than it advertises on its website and on its mobile app. $40 million of that settlement will go towards restitution. $20 million will go towards future discounts. And$3 million will go to the states. Family Dollar has not admitted wrongdoing.

40:57Contessa, back over to you. All right, Frank, thank you for that. Coming up, NVIDIA's woes could spell opportunity elsewhere in tech. We break down the options action.

41:11All right. NVIDIA's pain could be AMD and Alphabet's gain, at least according to some options traders. Oliver Rennick is following the options action. What are they doing, Oliver? Hey, Brian, it seems like they're trying to pick up some of the pieces here of the missing market cap from NVIDIA, which is off about$200 billion. AMD is up 5%, about$50 billion in market cap, with about twice as many calls bought versus puts. But what looks like mostly high-volume retail activity, so think speculators. Traders targeting the 750 strike call, expiring in February. That one needs a 30 % rally in AMD. They're also looking at the much closer 600 strike, but with tomorrow's expiry, which needs an additional 4 % right here, right now.

41:58Another player to watch is Alphabet, which has been pushing TPUs. Flows there are arguably more bullish on the whole, with four times as many calls trading as puts, with attention on the 305 and 310 strike calls expiring tomorrow, as well as the 325 strike for next week, which would require Google Stock to recover its earnings sell-off. And finally, one player that seems left out is Intel. Well, unchanged in price and largely in options flows, which are mixed with actually a little more activity on the put side, guys. All right, Oliver, thank you very much for that. Coming up, an important question.

42:35Are you buying the NVIDIA dip? Powerful results and Jay Wood's take next.

42:53All right, just a quick business-ish related story. If you're trying to use Outlook or maybe some other Microsoft products and it's not working, you're not getting any emails, you can't send emails, I know what you're thinking. Number one, it's the greatest day of my life. Number two, what's going on? Well, there is a major outage hitting a lot of Microsoft products, not impacting the stocks. Nobody cares. What they do care about is that apparently, Contessa, productivity everywhere has surged. As people have to get back on the phone. Yeah, OK. Old school. But anyway, it's not just you. A lot of people can't use email.

43:27It's all of us, too. We feel your pain. Here's your story. Time to reveal the results of today's Power Poll. We asked whether you're buying the NVIDIA dip, and 56 % of you responded yes. Yes, 44 percent say not staying away for now. What about the other 7 percent? That was the joke. Jay Woods, the chief market strategist at Freedom Capital Markets. He keeps trying to make me do math on the fly. Jay, are you buying Nvidia's dip? I compliance did not allow me to buy today's dip. But yes, today looks like what we see as a near term washout. And I say near term carefully because this story may have legs.

43:59We don't know the China espionage part of the story, but we know the Jensen story is done. And what they've done today, I think, assuaged one major fear. All right, what happens? Is Jensen going to stay? Is he going to go? So we use 150, the low intraday, 148, and change as our low from a risk-reward point of view. So it is worth dipping our toe in the water because what do we have next outside of another breaking news affair story is earnings. And we have Collette Crass, you know, the smart person in the room. She's been there since 2013. She's going to handle this earnings call with class. And, you know, unfortunately, we're not going to focus on the earnings.

44:36They're going to be the guy should be solid, but we're going to focus on what is next. It's not her place to answer those questions right now, but we should have a rally. One sixty five. We get above it. I think it's smooth sailing to one eighty. And this is a trade stock now, not a buy and put away as a core holding, unfortunately. What's the what's the next catalyst for a big move? The next catalyst should be good earnings. But we do have Jensen testimony behind closed doors. And then if we get an announcement, which I don't believe will happen anytime soon, they should take their time to announce the next CEO.

45:08That will be what gets us back into the 180s. But I would probably use this as a trading opportunity and take profits and then reevaluate the long-term aspect of this stock. I do own it for a long-term trade. I have not sold it. If it breaks 150, then I will probably get out. All right. So there you have NVIDIA at 164.29, down 5.5 % today. Jay Woods, Freedom Capital Chief Market Strategist, appreciate your time. And markets headed for the third best week of the year. Thanks for watching Power Lunch, everybody. Closing Bell starts right now.

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