11AM Hour: Goldman Sachs CEO David Solomon, Former Treasury Secretary Jack Lew & Nvidia Investigates CEO Jensen Huang 11/9/26

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0:57David Solomon: Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanier with Sarah Eisen, live at Post 9 of the New York Stock Exchange. Today, Goldman Sachs chair and CEO David Solomon is going to join us live from the company's Alternatives Summit. We'll discuss everything from the impact of the midterms on banking to the Fed's rate policy outlook, maybe some NVIDIA and more. Plus, NVIDIA's key man risk, CEO Jensen Huang embroiled in scandal. The company with no clear succession plan. We're going to be joined by a top chip analyst who says Jensen Huang is no ordinary CEO. He, quote, is NVIDIA.

1:29David Solomon: Shares of building products distributor QXO surging this morning after announcing preliminary results. We'll talk about it with chair and CEO Brad Jacobs. As for the markets, dows up 900 points. Best day here for the Qs going back to September, as we're trying to get back much of what we lost after Thursday of last week, where we closed around 7 ,700, but right now, 7540 or so. Let's get some breaking news out of the New York Fed and turn to Steve Leisman for that. Hey, Steve. Carl, good morning. The much-watched inflation expectations from the Fed's, New York Fed's survey of consumer expectations unchanged, though, at still elevated levels.

2:09We had declines for expectations for gas prices and unchanged for food prices. That's the good news there. But expectations for rent, which has helped bring down overall inflation over the last several months, it did increase by almost a percentage point to 7.7 percent. Looking at the clear at the key metrics here, one year expectations, three nine, same level as last month, which was the highest level since 23, three year unchanged at three three on that five year. That's the one the Fed watches a little more carefully at three percent unchanged. New York Fed employment expectations rising to the highest level since 2020.

2:44But confidence also grew in finding a job if one lost a job. So maybe some offset right there in terms of the job market and that strong job report we got on Friday. Household income expectations declining along, however, with spending expectations. Looking at Fed probabilities, kind of elevated after that payroll report, 81 % for December. And that second hike for next year, back in play, but back in play for June, guys. Back to you. OK, thank you, Steve. Steve Leisman, for more on the market, let's bring in CNBC senior markets commentator Mike Santoli. Are you surprised that the NVIDIA story isn't having a bigger, broader effect?

3:19David Solomon: Moderately surprised, but I think the initial circumstances matter a whole lot, which is the entire semiconductor complex, including NVIDIA, was so pounded and cheapened by the AI panic that we had around data centers. Sure, but this is still new information. Of course. And NVIDIA is down and everything is rotating into NVIDIA competitors and customers. And I think that makes a lot of sense because the business and the demand, you know, even if a big chunk of the China demand goes away, I don't think it changes the whole story. So to me, it's all about a very washed out market coming into the week, especially the parts of the market adjacent to NVIDIA.

3:55David Solomon: And nobody quite knows how to reprice that particular stock in relation to it, except we all know that because of the valuation being so low, the market, for whatever reason, was not really paying up for a bunch of the forward revenues and earnings. We don't know why. We don't know if it was just doubts about the pace of the build out. But I do think that the way we came into the week really primed to bounce. In fact, if you didn't bounce, we're talking about something pretty suspect in terms of the trend. So the overall indexes have kind of protected this lower end of the range that goes back months.

4:30David Solomon: You know, my bogey for whether this is more than a dead cap bounce for the S &P is like 3.5%, 4%, because that gets you, you know, above the 20-day average. All these other little metrics for the NASDAQ 100, we need a 7 % bounce before it's anything but kind of a reflex move. So I think that's the zone we started in. We've also had this pattern of strong early in the week, and then you get a little bit of choppiness and downdrafts later in the week. So through that filter, it's constructive. It's a pretty assertive and broad rally as opposed to Friday, which is really tentative and not convincing.

5:03If the fundamental story for the market and the strength has been earnings.

5:06David Solomon: Yes. Has anything changed in terms of the outlook? No. Oh, and I think that that can be spun as positive or negative because the market refusing to really price in the earnings growth of the past two quarters at 30 percent for the S &P 500 and basically kind of going sideways in that period expresses a tremendous amount of doubt about whether that should be interpreted to be sustainable. Yes. So going to come down. I think the real argument now is how much of a downturn in projected semi-profits has already been priced in. Because it's a good bit. And they're being priced as cyclicals. They started at 20 % of the S &P.

5:47David Solomon: Now they're down below 15%. So the whole story of peak capex, peak concentration, peak earnings growth has been getting into the market. And we just don't know how much of that is left to do, if any. How big of a weight is NVIDIA these days? on the overall market? NVIDIA is in the six to seven, still around seven. I mean, Apple's bigger. Yeah. And Amazon, of course, is bigger in revenue. But, you know, it's pretty big. Yeah, there's that. All right. Let's stick with the market and the broader economy. Joining us here at Post 9 is Jack Lew, former U.S. Treasury Secretary, former director of the Office of Management and Budget, the U.S.

6:21Ambassador to Israel under President Biden, currently a professor at Columbia School of International and Public Affairs. Welcome back. It's great to have you, Mr. Secretary. Good to be with you, sir. I was really eager to hear your response to the midterms and what your takeaway was for that, for markets and for the economy overall. First, as somebody who teaches about the American system of government and the balance of power and popular sovereignty, it was a tremendous triumph of American democracy. The American people came out and voted. They put all of the skepticism about elections to the side, and they said, we're going to vote for change.

6:56And the question is, what kind of change they're going to get. What I saw out of the election was a public that wants government to act, particularly on questions of affordability. You have to be deaf not to hear that people are upset about health care prices, gasoline prices, diesel prices, food prices. And the question is going to be in a divided government. Can that happen? I've got a lot of experience with divided government. I've sat at the negotiating table many times. It takes compromise. The question is, will the Congress and the White House be able to compromise? And we'll find that out soon enough.

7:36I've heard promising things coming out of the new leaders-to-be from Senator Schumer and Congressman Jeffries. I don't know whether there'll be a partner on the other side. I hope there will be. What can they realistically do on those affordability challenges? So I don't think that they can fundamentally accomplish their long-term goals in divided government. That's going to take an election that's about some pretty big issues. You mean Medicare for all, that sort of thing? Either Medicare for all, or if the other side were to win again, eliminating the Affordable Care Act. That was what was demanded when Republicans controlled Congress and President Obama was in office, and when President Biden was in office.

8:16So you have to recognize that In divided government, compromise means taking small steps. There are important steps that can be taken. You can reverse some of the cuts that were made that are taking people off of the Affordable Care Act rolls, making it unaffordable to pay the premiums. You can reverse some of the cuts in Medicaid that are making rural hospitals face shutdowns, and you can reverse some of the cuts in nutrition assistance that's making food unaffordable. The tariff debate is going to be a hard one. I very much don't agree with the tariffs, but that money is now baked into the projections.

8:51Whoever takes the tariffs away is going to be faced with how do you pay for it. That may mean picking and choosing the tariffs that are most damaging. That's all compromise, not the whole thing. And that takes people sitting at a table and being civil with each other. And I hope that happens. I'm, you know, like everyone else, waiting and watching.

9:13David Solomon: We're 32 days out from a possible shutdown. right? Debt limit will be a conversation early next year. We're paying a trillion in interest every year. And in 10 years, we'll pay two trillion in interest every year. Do corporate taxes need to go up? I mean, where is it a revenue problem or a spending problem? Look, the reality is it's both. And when we've had meaningful deficit reduction, it's involved tax increases and reforming some spending programs. Back in the 1980s and the 1990s that was the case. I think right now we've seen a lot of tax cuts built one on top of the other, and we are seeing revenues not sufficient to meet what the spending demands are, particularly when we're seeing defense spending grow and people are worried about losing their health care.

9:59So I don't think there's a solution without revenues. I'm not personally terribly optimistic that the next two years will be the time for the big balanced long-term approach. But I think I don't need to tell you that in the term of the new senators that were elected, Social Security will run out of money. It's in that six-year term. That means people better start paying attention to it. I think Social Security will offer the best opportunity to deal with some of these long-term fiscal issues because nobody can let Social Security be cut 22 percent. I don't think it's today, but I certainly hope we don't see people take workable solutions, compromises off the table.

10:39Or we could grow our way out of it. And part of the promise of AI is this massive productivity boom and economic growth that will help us deal with the fiscal issues if we don't mess it up and put moratoriums on building that out. Isn't that a concern after the elections? I hope we can grow our way into reducing the size of the problem. I think it's fanciful to think that growth will solve the problem. So I wouldn't bank on that. But CBO has said the same thing essentially. Yes? I think all of the conventional economic forecasts that I've seen, even those that are optimistic about AI, don't think it will solve the other problem.

11:20It would help if there's growth. I think AI is certainly going to have benefits that come in the form of efficiencies and cures to diseases and things that it will help chart a path to. It also has risks. The question is, can there be a conversation where I hear a bipartisan concern for the conversation about how to put some guardrails on it so that the American people are protected from some of the risks that could come out of it? That's another thing that will take bipartisan cooperation. I even heard in the president's interview last night that he was open to it. So I don't think this is a particularly partisan question.

12:04I think the idea that left to its own devices, all of the risks will be managed, would be the equivalent of saying the financial system doesn't need to have regulation either. We know that's not the case. Are you comfortable with the growing number of socialists in your party and those that are going to represent your party in Washington? I think there are very few of them. I think the fact that you can count on your fingers the number of people who call themselves socialists tells you a lot about how big a part of the party it is. There are socialists that they don't call themselves socialists, but they promote a lot of the same ideas.

12:42Also mayors of the two largest cities. I think if you look at the election results last night and how the congressional majority shifted, It shows a huge increase in the number of centrists who were elected from states that were ruby red, states like Kansas and Iowa. And these are not people who are going to be open to those kinds of policies. The Democratic Party is going to have to handle a range of views. I don't think that there's going to be a pathway for these far left views in the next couple of years. I hope that the voices in the party that speak to solving problems with solutions that are more geared towards the center prevail.

13:24And I think in the numbers, they actually did very well in the elections last week. OK, Jack Lew, thank you very much for joining us. Really appreciate your take. Good to be with you. Former Treasury Secretary.

13:34David Solomon: Still to come this morning, Goldman Sachs chief David Solomon is going to join us exclusively from the firm's Alternatives Summit. Thinking about the markets, the impact of the midterms and a lot more. Plus, we've got much more on NVIDIA's investigation of CEO Jensen Huang, why one analyst asserts NVIDIA is not an ordinary company and Jensen is certainly not an ordinary CEO. He is NVIDIA. We'll be right back. We're an agent supposed to take things off your plate. Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done.

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15:22We're getting an update on the shocking NVIDIA story. Eamon Javers has more. Eamon. Sarah, another scoop here from the New York Times on NVIDIA. This time, the newspaper is reporting that the Commerce Department was engaged in an investigation into Megaspeed. That's the NVIDIA customer where Alice Wong, the alleged Chinese spy who was romantically involved with Jensen Wong, was working. This investigation from Commerce Department into Megaspeed was shut down, however, according to The New York Times, after an NVIDIA official reached out to investigators at the Commerce Department. That investigation, the Times reports, was later transferred to the Department of Justice.

16:06So it's unclear what happened to the investigation after it went over to the Department of Justice. But questions being raised here in this article that just dropped moments ago about how much influence NVIDIA had over government regulators whose job it was to watch for illegal transshipment of highly sensitive GPUs to China. So some questions here about whether there was political maneuvering by the company, as well as these other allegations about sex and spying and Jensen Wong's confession to all that yesterday.

16:41David Solomon: Well, Eamon, you were just saying in the last couple of hours that generally these things have a bit of a rolling effect. And The Times clearly has a stack of reports that they have rolled out over the past few days. Eamon Javers, we'll come back to you. Thank you. Meantime, Goldman Sachs hosting its Alternative Summit today. Our Leslie Picker's there now and joins exclusively with the CEO, David Solomon. Hey, Leslie. Hi, Carl. Thank you. And David, thank you for having us here at your 25th annual Alternative Summit. Really appreciate it. Absolutely. Thank you. Thank you for being here, Leslie.

17:14David Solomon: It's always nice to have you at Goldman Sachs. Thank you. Thank you. So last time you and I sat down back in June, you described the environment, particularly around AI financing in the capital markets is having more greed than fear. We've seen a lot of price swings over the last few weeks or so, and I'm curious if you think that's reversed. I think investors are constantly evaluating, you know, the environment around them. And I, you know, I do remember when we had that conversation, one of the things I also said is that there would be recalibrations along the way. And that I said to you specifically, the growth and the investment in AI infrastructure in this country will not be a straight line.

17:53David Solomon: And as people have better understanding of the facts, the political environment, the conditions, the demand, how the application layer starts to develop or signaling around the application layer, you know, that will, you know, create recalibrations and ups and downs. And we're seeing some of that. But I still deeply believe in the long-term trajectory of the power of AI and our economy to drive productivity. And, you know, I don't think the base for that has changed. But investors will constantly recalibrate. That's why our markets are great. So this is the first time we've had the chance to sit down with you after the midterm elections, which were ripe with anti-AI sentiment and discussions about moratoriums on data centers.

18:33Does that change the cost of capital or just the equation of doing more data center financing? does it pose a significant risk to that outlook and that trajectory?

18:43David Solomon: Well, there's certainly been a lot of noise around that as we headed into the midterm elections. And I think the important thing, you know, for us to think about, Leslie, as we look forward, is what was kind of political noise and what is going to wind up being substantive policy or action. And I think there are a couple of things, you know, I'd say on this that are on my mind that I think, you know, people should think about. One, it's not universal across this country that in every state people don't want data centers. There are certainly states where there's a very strong sentiment against at the moment, but there are places also where people understand the economic benefits that come with that investment and infrastructure that's important to our economy.

19:19David Solomon: Now, one of the things that I think we should all think about is if you go back 50 years or so ago, because there were concerns and worries around nuclear energy, we made a bunch of policy decisions that I think, with a 50-year hindsight, we probably would like to have made differently. And so when you look at this infrastructure, this infrastructure really is what delivers compute to U.S. businesses. It's going to be important as the economy moves forward. We have to figure out how to do it the right way, in the right places, with the right protections. But at the same point, we certainly don't want this infrastructure going to places outside the U.S., which is what will naturally happen because the demand for compute is there.

19:59David Solomon: So I think, you know, this is developing. I don't think it's as black and white as the political narrative, but I think we should be very thoughtful as we go forward. Obviously, a lot of this will be regulated by how local states and local communities make decisions on a go-forward basis. And you've seen a number of politicians talk about that. But I'm optimistic there'll still be a significant amount of investment in data centers and compute capacity in the United States. And I think we want that. I think if we really prevented that, we'd look back 10, 20 years from now and not like that as a strategic decision for the U.S.

20:29Yeah, today is an epitome of the geopolitical environment, the competitive environment as it pertains to AI. I have to ask you about NVIDIA's centrality to the AI complex. It has become increasingly intertwined with the financing of the ecosystem through investments and backstops and securitizations, including with Goldman Sachs and others that I know you're working on. And given the news over the last 24 hours and the questions surrounding Jensen Wang, how much of this ecosystem do you think is centered around one individual?

21:03David Solomon: I don't think the ecosystem is centered around one individual. I obviously know Jensen. I think highly of Jensen. I think NVIDIA is a great American company. And I think no matter how this plays out, NVIDIA will continue to be a great and important American company. I am watching the news. I obviously am not privy to any of the facts or information. Obviously, the board's investigating. Regulators will take a look, and we'll have more information as to exactly what happened here. And based on that, investors will be able to gauge better the sentiment around the company. But no matter what happens, this is going to be a big, important company in this ecosystem and in the United States under any circumstances.

21:40So you're not concerned that there could be some sort of distraction risk or concentration risk with NVIDIA specifically as all of this unfolds?

21:48David Solomon: I'm not going to speculate as to what can happen when you have news like this, because I don't know enough to speculate. But it's a big company. It's an important company. And it's going to continue to be from my perspective. But we obviously have to watch and understand exactly what did or didn't happen here. Anthropic is another big and important company here. I know it is a client. Goldman is reportedly leading that IPO, which could start its roadshow as soon as tomorrow based on the SEC requirements there. There are reports about downsizing offering plans, lowering its target valuation. I know you can't talk about those specifics, but how would you characterize market receptivity to AI right now and AI financing?

22:33David Solomon: There's still very strong demand for investments in the AI infrastructure build and the technology around the growth of AI. As we talked at the beginning of the segment, the market is calibrating risks slightly differently than it was a couple of months ago. But that doesn't change the fundamental interest in this technology, in this infrastructure, et cetera. And so the market is open. Transactions are occurring. And we'll see, obviously, if this IPO moves forward, how it all plays out. Can't comment on it any further than that. But I would say that the market environment is still pretty constructive.

23:11David Solomon: And, you know, everything's relative. So people tend to look at how things felt, you know, two months ago. But it's a pretty constructive market. And this is important infrastructure. And you're going to continue to see significant capital flows into that infrastructure. Look at our activity over the course of the last couple of weeks. We've obviously been very active in the markets. And that's, if I look at the way the world looks today, you know, looking forward for the next two months, I think that's going to continue. Thank you. We're obviously here, as we mentioned, at your Alternative Summit, 25 years of this specific conference.

23:40Do you see any differences between the public markets and the private markets as it pertains to some of the AI jitters and concerns that are out there? Well,

23:50David Solomon: capital is pretty efficient across public and private markets. There are advantages in private markets, the fact that not everything is marked on a daily basis. And so there's no question when there's volatility or there's recalibration, it happens much quicker in the public markets than it does in the private markets. You know, Alternative Summit, this is the 25th year. We're obviously a very, very significant alternatives platform. The firm manages over$700 billion of alternatives and has a huge client franchise and alternatives. I think we're still in the early innings of private market capital formation.

24:25David Solomon: You know, you look at the size of the public markets and you look at the size of the fixed income markets and the government bond markets, the private capital markets are still relatively small. You know, people get confused sometimes. They think about private equity as representing, you know, the private markets, but you've got enormous debt markets, enormous real estate markets. There's enormous capital formation around private markets, and I think that's going to continue. It won't be a straight line. You know, there'll be ebbs and flows, but the Alternative Summit is bringing together hundreds of investors that play a crucial role in allocating capital in private markets, And we see continued strong growth.

25:00David Solomon: And by the way, look at our alternatives fundraising over the course of the year. Very, very strong. By the way, very, very strong in credit, for example, because one of the things that institutions appreciate with all the noise around private credit, spreads are wider. Our default's a little higher. Yes, but they're still below historical averages. So still pretty good momentum around interest in private markets. And I think that's a long term secular trend. That's not something that's stopping anytime soon. And that's made clear by some of the acquisitions in the asset management space you've made over the last few years.

25:32NEOS, LCN, Innovator Capital Management, Industry Ventures. And you said on a recent earnings call that you still see gaps across the platform. What do those gaps entail and would further acquisitions be the solution for that?

25:47David Solomon: We have a pretty broad asset wealth management platform, as you know. We supervise over$4 trillion of assets. We've got an extraordinary ultra high net worth platform, which is a really, really interesting business. But we also have great capability, manufacturing capability, product manufacturing capability in our asset management business. And when you look at these acquisitions, they all, you know, basically accelerate our growth in areas that we think are strategic. Innovator and Neos, you know, really focused on the active ETF segment. And, you know, we've moved our position in active ETFs, depending on how you look at it, up to six to eighth from really not being in the top 50.

26:23David Solomon: And so given the growth that's going on in active ETFs and given kind of Goldman Sachs and the way our asset management business is branded, that's been a good strategic move for us. Industry ventures puts us at the center of venture capital flows and client interest in venture capital flows in a way that's very, very powerful when married with our investment banking franchise around growth companies and technology innovation. And so that's been powerful. There are other gaps. And we continue to look. But we've got a very broad platform. And I think one of the things that's interesting, we've said publicly that we're going to grow this platform, the durable revenue in this platform by high single digits.

27:00David Solomon: We're growing it faster than that. And I think there'll be other opportunities in the future for us to do add-on inorganic things that just accelerate and strengthen the breadth of our platform. One of the things we hear from our clients is they really value our ability to create very customized and tailored solutions because of the global breadth that we have on this platform. And that's something that I think really differentiates the firm. Interesting. Well, looking forward to the conference later today and into tomorrow as well. David Solomon, really appreciate your time. Absolutely. Thank you for being here and thanks for having me, Leslie.

27:33David Solomon: Always great to see you. Always good to see you, too. I'll send it back to you all. OK, thank you, Leslie. Leslie Picker from Goldman. Coming up, QXO CEO Brad Jacobs will join us. We'll discuss the company's preliminary results, beating expectations, and his latest venture into a land management company. A new company is born. Later on, we'll break down what's driving oil lower today. Brent below 95 here, coming off of some of the worst weeks of the year. We'll be back in a minute. weren't agents supposed to take things off your plate building another to handle the others is a bit much don't make more work out of work gemini is the one agent that knows all parts of your business and actually gets stuff done you give it a project close your laptop and when you come back the job's finished no matter your industry or role your agent has the skills to help every team stay in their flow seriously make work less work with gemini on google cloud check response subscription required.

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29:25David Solomon: Dow's up 900 points. There's a look at the S &P heat map. About 4 to 1 positive breadth. You've got all sectors green except for staples. VIX below 21. There's only one Dow name that's red materially, and that's NVIDIA. And there's only one component of the SOX index that's red, and that's NVIDIA. I guess the good thing is, though, it's not having the sort of circular effect that it could. This risk that, you know, Jensen Wong, I know the board is investigating, might not end up as the CEO. And people are worried about what that means for all the companies that touch NVIDIA. It financed so many companies.

29:57It sold to so many companies. I know.

29:59David Solomon: You just posted that map of all the financing that we are so familiar with now. Yeah, it's smaller upstarts. It's neoclouds. It's the frontier model companies. It's fellow chip companies. I mean, all connected. And so far, the sentiment out there is good for the rest. It's really an NVIDIA problem in the market. Time now for a news update. Julia Boorstin has it for us. Morning, Julia. Good morning, Sarah. President Trump last week said he would accept the historic election results that swept Democrats into power. But this morning he questioned their legitimacy and asked on Truth Social whether anyone really believed the election was, quote, honest.

30:34There has been no evidence to suggest any widespread fraud or wrongdoing during the election. Private equity firm B.C. Partners is reportedly looking to revive its effort to create a new version of Live Golf after abandoning the plan last week. Financial Times reports that the firm thinks a team-based golf group will eventually thrive and is willing to invest more money to make it happen. The Lib Tour is expected to outline its liquidation process to the court today. Elon Musk says Tesla will have to refund deposits that some people have put down to get a Cybertruck once production ends next year.

31:09Musk called media reports that the Cybertruck is unprofitable, not true, Instead, adding more production capacity for Tesla's upcoming CyberCab will mean more to the company than continuing to make the futuristic-looking truck. Back over to you.

31:24David Solomon: Julia, thanks. Coming up, we'll talk to a top NVIDIA analyst about why he says the revelations over the weekend highlight the considerable key man risk that NVIDIA faces. Plus, we'll bring you the latest details on the war with Iran as oil prices fall this morning. We're back in a moment. Welcome back. NVIDIA shares are falling this morning as CEO Jensen Huang is being investigated over his relationship with an alleged Chinese spy. It's the stuff of Hollywood movies. Seema Modi joins us with more. Seema, what do you hear? So Sarah and Carl have been speaking to a few different hedge funds that are NVIDIA shareholders.

31:56Their top concern right now is leadership and stability. You remember NVIDIA for the first time in its history as a 30-year-old company faces now real competition from its peers. An investor close to Jensen Wang telling me he does not see any change in the C-suite, adding that if the affair carried real national security concerns, the government, which had known about this, would have intervened sooner. The investor also adding that they did see Chief Financial Officer Colette Kress as one possible fill-in should Wang need to spend some time focused on the investigation. Another name that came up was Ian Buck, who invented CUDA, that's NVIDIA's software platform.

32:31Interesting wording in last night's letter from the company's board in which it backed Jensen Wong, saying they have full confidence in him and his leadership team. NVIDIA has always said there's no succession plan, and Wong, at 63 years old, was in it for the long run with no plans to slow down. But Wong now has no choice to address leadership. When NVIDIA reports earnings next Tuesday, the following day, there's a House committee briefing on his ties to Megaspeed. And then the company's annual GTC conference in early December, even beyond NVIDIA, guys. market had been contemplating whether NVIDIA would provide a backstop to some of the companies out there in the ecosystem that have been experiencing near-term pressure.

33:08Top of mind is Corweave, which is set to report tomorrow. I think one active discussion happening right now is just how this investigation changes CEO Jensen Wong's priorities if he now is focused a bit more on this investigation, less on the portfolio of investments the company has made. That's clearly something that people are debating right now.

33:27David Solomon: Yeah. The priorities and the bandwidth, given what this will entail in addressing it. Thank you, Seema Modi. Our next guest is sticking by the stock, though, despite calling the investigation an overhang that may persist for some time. Joining us this morning is senior analyst at Bernstein, Stacey Rasgon. Stacey, thanks for being with us. I did notice yesterday that you posted the word sigh, S-I-G-H, and I assume that was involving this story. I mean, how have your thoughts evolved in the 24 hours since? I mean, look, I'm kind of amazed that, you know, nobody had this sort of thing in their DCF model for the company, I'm sure.

34:01So, you know, and we sort of saw, you know, this actually broke. It started a couple of weeks ago, and it's actually some of these things have sort of been in the press on and off for months. It started to pick up a lot of steam, like on Friday evening and like through the weekend, you can sort of see it building. So I could sort of see where this was going. And yeah, you know, it's a long weekend. It's probably going to be a long week, although probably longer for Jensen than for us. Yeah.

34:29David Solomon: The market action today, though, you know, we've got Google with some new variations of their TPUs, an upgrade of AMD. Can you explain to viewers why the sort of why NVIDIA today is the hole in the donut? Yeah, well, it's I think what it suggests is that people do see that the demand environment is still there. regardless of what's going on with NVIDIA. And right now this does seem to be an NVIDIA-specific issue. And even with this, I don't think any of NVIDIA's customers are going to be looking to purchase less than they were last week given some of the revelations that came out over the weekend.

35:06So that's all fine. I'm actually not worried about NVIDIA's business or the trajectory of AI, although it would be hilarious that this is what actually finally blew up the AI trade, I suppose. I'm not calling for that. But my biggest concern with this, and you kind of mentioned it, is the question around leadership and team and risk. And, I mean, look, Jensen is NVIDIA. NVIDIA is Jensen. He runs the thing pretty much top down. He sort of pulls all the strings. He's got supposedly 60 direct reports. Like, there aren't a lot of, like, layers in between. And, like, I'm not really worried about if, God forbid, something were to happen.

35:46And I'm not worried about them being able to find someone who could run the company in a good way. I'm sure they can. But who's out there setting that that that vision five years, 10 years, even longer down the road? I mean, that that's what Jensen does. And right now, it's not entirely clear to me who would be able to step in and fulfill that. If, in fact, he found himself unwilling or unable to lead. I mean, that that's kind of where I guess our worries are. Now, I would also say I don't think anybody has any interest in him stepping down. I mean, I don't think the shareholders would want that.

36:14I don't think at this point the board wants that. Trump certainly doesn't want that. I think he may have made some comments. I mean, who wins if Jensen steps down? It's China wins if Jensen steps down. So I'm hoping that cooler heads prevail, but you will have to watch what comes out of this. I think what, you know, Miss Wang, like what she was actually thinking and doing and whether or not, you know, she was actually, you know, an agent or not. And what Jensen knew or didn't know and what their, you know, goals and everything were. These are the things that are going to become important. We're probably going to see a lot of this like news flow come out in dribs and drabs over the next, you know, like probably months.

36:51Like this is going to be an overhang for a while, I think, unfortunately. Yeah, I mean, he's already getting called to testify on Capitol Hill. Talk about an overhang and a distraction. That actually came last week, actually. They asked him. It's a request, by the way, at this point. They requested him, I think, on the 5th to come give a closed-door briefing on the 18th. So it's not testifying. It's not a hearing. At this point, it's a briefing. But we'll see where this goes. I don't know. I feel like he'll get a lot more invitations of the like. But, Stacey, what about the board? You know, a lot of people are looking at the board now of NVIDIA.

37:23This is in their hands, right? They're investigating as far as what to do with him and what the risk could be to the company. It's a lot of, I don't know, former leaders. A lot of people don't necessarily recognize. I'm told it's a lot of people that are very loyal to Jensen, who made a lot of money with Jensen in the early days. So I don't know how much is that. It's not kind of what you want in a situation like this. Well, I mean, at the same time, though, like, it's not like there's dual class shares that allowed Jensen to do whatever he wants. I mean, he owns three or four percent of the company and that's it.

37:59You know, I don't think there's any like like, you know, employment agreements or anything like that that would stand in the way of the board if they felt that they had to do something of them pulling it. So it's not like some other tech companies where the founder in charge still has all the power and can basically do what they want. That's not the case. I think that's a good thing. Right. So I think the board in this in this kind of scenario does certainly have the power to act independently if they need to.

38:24David Solomon: Obviously, just day one of this likely multi-week and month chapter. Stacey, thank you. Talk soon. Stacey Raskin on NVIDIA. When we come back, shares of QXO are rallying after the company released preliminary results ahead of expectations and has a big new announcement of a new company. The CEO joins us after the break to discuss. Pretty nice bounce here as we get the Dow up almost 1 ,000 points. S &P's up 2%. The Q's up 3%. That's roughly back to 75-30 S &P, being led by a lot of AI build-out names. Coherent, Bloom Energy, Sienna, AMAT, and AMD, some of the big leaders today. Well, they got slammed last week after the midterm elections.

39:02Questions about that AI build-out. So a nice bounce back today. Take a look at stocks that are moving even more today. shares a building products distributor, QXO, surging this morning after reporting better than expected preliminary results for the third quarter. The CEO also announcing plans to lead a billion-dollar equity investment in Louisiana-based CKX, which specializes in land and mineral interests for oil, gas, farming, and more. Joining us in a CNBC exclusive to talk about all of this is QXO CEO Brad Jacobs. This marks the ninth company he plans to launch. Big day for you, Brad. Thank you for coming in.

39:36Thank you for being on here. So QXO had really good results, and the stock is moving a lot. What drove the outperformance there? Because investors have kind of been, I don't know, not as excited about this one as you might have thought. Well, the external environment is pretty tough. So you're in a group, and most stocks are traded now in baskets and ETFs. So that's understandable. But the team is really doing a great job. We're executing the plan that was well thought out to have the technology, to have the people, to have the org chart, to have the customer focus. It's all coming together. And this morning, we blew out the numbers.

40:11The consensus was$520 million of EBITDA, and we reported$557 million. So I think the stock reacted favorably to that. Is it reflective of the housing environment? Is it like a macro-related risk around this stock? I don't think anybody today suddenly thought the housing market was getting better. But we're getting better. You're executing. QX is getting better. But how is the environment overall? The prime overall is still soft. Still soft. Now, we've seen some green shoots. We've seen really good pricing. Every month's gotten better than the previous month over the last five months. But it's too early to call it a trend.

40:45You know what everyone wants to know always from you on these stocks is the opportunity out there for roll-ups, for M &A, right, to upgrade technology or just continue to drive growth. Yeah. Well, that opportunity still exists at QXL. It's an$800 billion addressable market. And we're only up to about$18 billion. So it's a long way to go. You're also for this new company, CKX, another company. Yeah, I'm going to start another one. What's the idea here? The idea is do the same exact thing I've done eight times before. Use the same exact playbook that I've written two books about, so it's no secret.

41:17It's to find an industry where there's some growth to it, that's large, it's fragmented, and is not necessarily tech advanced, and bring what we bring to the table and create a huge amount of shareholder value. Does the cycle matter in this playbook? Not really, because I'm not building companies for like a year or two. I'm building companies for 10, 20 years. So if you look at the companies I've started in the past, most of them are still around and market leaders and very durable.

41:44David Solomon: So the way the cycle is doesn't really matter. I was going to say, but maybe from a pricing standpoint, it helps to start at the bottom of a cycle. You know, I'm not smart enough to know exactly when the bottom is. That's a tough thing to call. So if you get into an industry, just kind of buy and grow throughout the whole cycle, it averages out. Are there things that could go right in the macro that would dramatically increase operating leverage in a hurry? Absolutely. Mortgage rates coming down. So mortgage rates a few years ago were 3%. Now there's 7 point something percent. There's more than 2x.

42:15We've gone up more than 2x. If mortgage rates come down, the whole industry, not just QXL, the whole industry will do very, very well. So how do you plan to spend your time? You're going to be leading both these companies? I'm going to do both companies. I have plenty of time. I have plenty of time because I used to be on the three XO boards, XPO, GXO, RXO. I got off those boards over the last year. And also with AI, I, like every other CEO is using AI tools, you can be so much more productive and so much more efficient with your time. Information can be gathered and analyzed, stuff that you could never do in the past.

42:50David Solomon: So I have time. Is that something you do through your team or you yourself? No, I do. Do you have an agent, for example? Use Clause, ChatGPT. You use LLMs? Yeah. And first thing in the morning, you'll start asking questions? So first thing in the morning, no, I don't have to ask questions. I have tasks. So 6 a.m. every morning, I get about a half a dozen messages. I actually use ChatGPT for that one. That shows me I have about 350 people that I know and I'm interested in that I follow. If they're in the news, boom, I know what they're in the news like. So it's a curation tool in the beginning of the day for you.

43:22Yeah, and also stocks. I have different categories of stocks. He wants to know what we're saying, of course. Finally, Brad, how big can each of these companies get? Big, because you've got here in building products distribution and installation. We're leaders. It's$800 billion. We're only$18 billion. We're the second largest publicly traded one. We're only a small part of the whole market. Now, the new industry, I don't know what it is yet. We're going to look at a lot of different ones and make sure we pick the right one. But generally speaking, I like to go for large industries, large addressable markets.

43:53So you can create a large company in a large market. I mean, this is straight out of your book. This is your playbook. It's very. You've got to read the book. Same thought. How to make a few billion dollars and then how to make a few more billion dollars. That is Brad Jacobs. And it's in action today. Thank you very much. Thank you for inviting me.

44:10David Solomon: Still ahead this morning, oil prices are lower today as the president signals some restraint on Iran. We'll get some details with Brent now below 94. Stay with us. Welcome back. Oil prices are lower this morning as the president downplays the likelihood of fresh strikes on Iran. Our Pippa Stevens has more on that. Morning, Pippa. Good morning, Carl. So the market is clearly focused on a diplomatic solution with President Trump about to meet with the prime minister of Qatar after the president told CNN yesterday he was highly unlikely to order fresh attacks on Iran as long as talks to end the conflict progress.

44:41The secretary of state, Marco Rubio, did say talks with Iran are not close to a breakthrough and called some of the country's demands outrageous and ridiculous. For now, we remain in the limbo of no war, no peace. The Democratic sweep stripping out the war premium that had been priced in. October saw both the highest number of attacks on vessels transiting Hormuz as well as steady exports out of the region. Still, S &P Global saying today there are four factors that continue to support crude prices. China has resumed buying. Strategic reserve releases came and went. Global crude inventories are low and transport costs remain high.

45:15If hostilities resume, the firm argues data Brent could move as high as 140, while sustained de-escalation could see Brent fall to 60 in 2027. And with the recent declines, the national average four gallon of gas on the verge of slipping below$4 for the first time since July. Guys?

45:32David Solomon: Yeah, watching gasoline futures as well. Some eight-month lows, maybe some relief at the pump. Pippa Stevens, thank you very much. That's going to feed into CPI, of course. I think Goldman's looking for like two-tenths on headlines, something like that. Yeah, I mean, the headline and then there's the core, right, which strips out food and energy to determine how much of it is just energy led with these with higher oil and gas prices. NVIDIA is the story right now. I mean, and it's interesting that it's an isolated story right now in terms of the stock market reaction. You're not seeing it in terms of some of the companies that it finances, although CoreWeave will be an interesting case test tomorrow, right, on earnings.

46:06I don't know that they plan to answer questions on, you know, Jensen Wong and who he was sleeping with. But that's that's added wrinkle in the story now.

46:14David Solomon: Stocks higher today. And we'll get AMAT later in the week and Cisco as well. Just getting started as we work our way through this Monday. All opinions expressed by Squawk on the Street 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. You 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 his opinion. Such opinions are based upon information Squawk on the Street 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.

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