9AM HOUR: Stocks Pull Back From Record Highs, Marvell CEO Exclusive, "Halftime Report" Rings NYSE Opening Bell 10/7/26

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0:59You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action. Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanillo with Jim Cramer, David Faber, at Post 9 of the New York Stock Exchange. Futures are on the back foot here as the 10-year yield hits 5.35. That's the highest since 2002. Also ahead of an auction today,$39 billion in tens at 1 o 'clock. Brent back to 1 at 1. We now have Tropical Storm Isaiahs to watch, likely to hit hurricane strength and hit the Gulf Coast this week. Our roadmap begins, though, with stocks pulling back after yesterday's gains.

1:30S &P with its first record close in two months. Plus, SpaceX looking to raise$40 billion in bonds. This would help it purchase AI chips. Apollo is said to be and is, in fact, one of the leads of that financing. And an exclusive interview with Marvel CEO Matt Murphy. Of course, they had their investor day yesterday. He joins us this morning right here, I believe, at Post 9. Is that right? Yeah, absolutely. We'll break down. Obviously, stock had a good move yesterday. Let's begin with stocks entering today's session at record closing highs. Jim, we're now U.S. is beating ex-U.S. for the year, although it doesn't sound like you were that enamored with the close yesterday.

2:08No, I mean, I think that we saw this kind of everything went up at the opening. A lot of it was because of Matt Murphy and the new targets he put out, which were so much more bullish. And Matt's involved with data center than anyone thought. And so NVIDIA opens up three, totally unsustainable. You can't have these giant companies, a$6 trillion company, open up three as if it's some sort of meme stock. So the rest of the day is spent going down. And I think that led us down. The only ones that really kind of hung in there were some of the big hyperscalers. And they're off today. I do think that, once again, we're trapped with oil.

2:42And we're trapped with this gigantic 10-year, David, that comes out of nowhere. Now it's a lot like in the 90s, where we know that the ground has to be softened like artillery before the soldiers land on the beach. It's like the old days. And so the price you may see right now on this one issue, it actually, the interest rates could actually go down if we think that everybody's shorted. It's what, 20, 30 years? Is that what we're— Tens today. Tens today. Tens tomorrow, maybe, or something, I think. You know, look, all of these are going to be what I call poorly timed from now on. It's like, oh, my, because you've got to put them on your calendar, just like the 90s, and recognize that you're in control.

3:19Sorry, right. 30, yeah, sold. Okay. So you see a lot of stocks down. A lot of that's related to the 10-year. A lot of that's related to oil. And some of it's just a hangover yesterday that, I mean, let's put it this way. NVIDIA's got the biggest order, conceivably, ever. Well, yeah, we'll get to that in a minute. No, but I'm saying the stocks down bailing. That's all I'm saying. NVIDIA's down bailing. But the calls I made this morning, everybody led with rates. It was rates, rates, rates. That was it. I was like, try to entertain them on something else. And they just like, you know, it's it's right.

3:49And it's a it's a difficult even though we're at highs. It's a difficult market. Yes, it is, because everyone's talking about 30 year six and a quarter, which is how you get a good yield curve. And suddenly maybe bonds make banks make money. But six and a quarter is in play for the third. For the 30. That's funny. BNP Paribas yesterday recommended shorting 30s with a target of five eight. But I don't think you like that call. That's not something you would do, is it? Look, we obviously have too much supply. There's two kinds of supply. There's the supply that has no problem being placed, which is this kind of the Apollo supply.

4:28People will pay any. It just doesn't correlate to the economy. Data center doesn't correlate to the economy. You want to raise money for data center? Here, B, triple B, give it to Musk. Yeah, actually, you're right. M &A-related, IG supply. Actually, well, hyperscaler is part of that. But$72 billion in September, way above what we had in August. Right, but then if you want, I don't know, let's say you're a consumer products company. I wouldn't give you a dime. No, there is a divergent. And as well, the flow of funds in terms of the stock market also reflects that as well. Now, as for this bond offering, it's I mean, they did 25 billion after immediately after coming public.

5:10By the way, didn't perform that well in the aftermarket. I'm talking about SpaceX now. Obviously, our viewers know the stock has done extraordinarily well since the IPO. After initially falling, it has had a number of very strong weeks, really, of late, despite the lockups and everything else. And now we've got a 40 billion dollar bond deal being led by, we're told as well, Apollo. perhaps in for as much as$10 billion. They've got all that insurance money coming from Athene that they can put to work. I don't know where this thing gets priced. They haven't priced it yet, is my understanding. I'm trying to make calls this morning to get more insight.

5:44People want it. Didn't really. You think so? Yeah, people want it. They want it. It's going to be well-placed. I mean, this is low investment grade, to Carl's point, right? Triple B. Triple B. Rick, look, have you seen this? And it's all about NVIDIA chips. To your point, which is a point Musk made on the last conference call, which was simply, we're all about NVIDIA. They are the best-performing chips. Vero Rubin is what we are. And I guess that certainly solidifies his relationship with Jensen Wan and NVIDIA by saying things like that. Look, I'll bring it up also as a metaphor. David has a very important interview to come.

6:20Because it's what people don't want. We don't want entertainment bonds. We want data center bonds. Well, they just sold 52, 53 billion of those bonds. Oh, yeah, and that was a great buy. Well, okay. You got your head handed to you. They pulled it off. They got it done. Oh, they put it up quick. You know, the goal is for our viewers. They got it done. The goal is for our viewers. They didn't come up short. We're not. And you know, Ian and Christ are good, huh? Well, we'll see how everybody does tomorrow. I'm looking forward to the interview, of course, with David Ellison and Ian and Christ. You should.

6:48It's so important. Right here on the New York Stock Exchange floor. You should literally take it. They will be ringing the bell tomorrow. You should take it literally right through to, like, 9.15. Will you give it all to me? You give me the first 15 of our show tomorrow? I'm jammed. I'm jammed. You're always jammed. I like being jammed. Yeah, I know you do. Anyway, look, it's important to see you. All right, so everybody wants SpaceX to know what you're saying. What, people don't want Paramount? We'll get to that in a minute, by the way. Yes, because yesterday there was a very important piece by Goldman Sachs where they actually raised the price target, SpaceX.

7:15They're using incredibly profitable numbers for SpaceX. They raised the price target from 220 to 230. David, they ratified 220. Right. Well, that's unbelievable. Well, Jonas is at 300, who writes again today. How many days in a row is Jonas going to write on Space X? We don't know, but Dickens did write every day. He knows that I think he's Dickens. I've said it to him. He did. What do you got? You listening to something? No, I'm just trying to. I'm a little clogged up. You're ear itches? I'm a little clogged up. It's ear itches. I'm trying to figure out the world, and you're ear itches. We're getting words from the streets.

7:53Thank you. to him. Gary Owens and laughing. Hold on. Wait, what? Elon, what? Sorry, I didn't hear that. He's listening to Albert Brooks. Remember that? He sweated a lot. But all right. Forty five, forty four and a half billion of revenue is basically only a little bit more than they're issuing in bonds here. We've we've talked about it endlessly. It just continues. Forty billion here. They already issued twenty five at SpaceX. Obviously, I will always come back to the equity issue by Google as a seminal moment by Alphabet right back in the spring. The 80 billion there. I know. That was incredible.

8:25The point being, none of these companies are generating anywhere near the free cash flow they once did. SpaceX obviously is not in that group, but it is not considered a hyperscaler without a doubt, given how many chips they're buying and what they're going to be able to offer in terms of capacity. And yet I've been saying, I should have come through here with a story that I'm changing my thinking about SpaceX. It's now going to be a very probable hyperscaler that does a lot of other things. Well, I mean, I've got bulls who tell me they're going to do$100 billion in EBITDA by 28. Yes. I agree with that.

8:52I don't know when they're going to have the first orbital data center out there. Well, I think it's good. You have to do a little experimentation. And you've got to raise a lot of money to get it done. But I think a lot of people, if you're a professional right now on a major bond desk, you're saying, oh, my God, suddenly I'm in control. I'm in control. And that's because of what you said, because the balance sheets aren't. This is not 2023. When the Magnificent Seven burst upon us because they create balance sheets. Now it's like, hey, listen, we do want to give them money because they are in the only zone that's grown.

9:26We watched this piece yesterday. JP Morgan distressed loans at the highest level since the pandemic, up 90 percent. Distressed leverage loans up 90 percent in 12 months. But they're still heavily weighted toward these software companies that would be like what situational awareness said were bad. And every time I think that, I think that the one that was most troubled, Toma Bravo, was SailPoint. And here's a sale point. It's like stocks breaking out. And I have Viva on tonight, which was supposed to be annihilated by enterprise software, and the stock was up 60 % last quarter. I still think that that piece is a hangover from the days when we thought the enterprise software was going to be wiped out by AI.

10:02Well, Intuit's the worst S &P-er of the year. I happen to think that Intuit is a good company, but it happens to be in the target of Muse. Yeah. I can use Muse for everything I can use Intuit. Well, in fact, even some stories now about Muse could cost the banking industry. Are you going to go with the regional? No, I'm not going with the regional. I'm going with this idea that it can optimize for reminding you when you've got too much money in your bank earning absolutely no return and therefore move that money to a higher yielding product. Whether that will actually happen, I don't know, but it is yet another concern.

10:34We've talked about subscription products and the fact that many of the digital subscription companies are companies that rely on it. Take a look at New York Times stock recently and others, even our own. this idea that basically you will be able to have your agent optimize your subscriptions. Yes, but what happened? And constantly canceling and doing everything you need to be doing. That presumably is a level of productivity that individuals historically have not had. They have not been doing that, chasing, institutions have, chasing of that First National Bank of, I don't know, wars. Yeah, yeah, yeah, whatever, right.

11:10Okay, the highest CD rate. And if the FDIC were to wake up, they'd realize you can't have, you can't go back to the 2005 FDIC rules where you can offer anything. No, I'm not even talking about that. I'm just saying you got$10 ,000 in your checking account and Muse says, what are you doing? Look at Schwab stock. Look at Allstate today, which actually gets upgraded. All I'm saying is that they used to be able to chase short-term rates. And then the FBI said that game is no going. They ended it. All right. Well, that's kind of separate from what I'm talking about. No, it isn't. Because Muse is finding where the rate is highest.

11:48And then while you're sleeping, like remember City never slept? City's sleeping big time. If you're going to give Muse the right to sleep. City's like on Santa. Although I will say Time Magazine has this interesting look at how Muse creates a dossier on you and refreshes it every day. And not only that, does dossiers on everybody you talk to or communicate with. because... Matt is never going to use that for anything. Come on. Right? Those guys would never, ever use your information. I don't know. I asked for Elvis Cheryl last night with Cole Porter. As soon as it was over, they switched to Rogers and Hart.

12:21How did they know? It's also a great songbook. Rogers and Hart is a great songbook. It is. On the time we have left here, of course, we'll just mention Paramount, or I should say Skydance. I've got to remember, it's Skydance. And that actually incorporates Paramount and Warner Brothers and Discovery and so many other things, too. They had their big presentation yesterday. That is they being David Ellison, Yanan Krais, who are the co-CEOs of this company. Obviously, Ellison also the chairman and CEO as well. Laying out sort of for the employees and answering questions of things that they're going to be focused on, including, of course, delivering the six billion in synergies over the next few years.

13:04It is so important to making this work financially, announce a new board of directors, or I should say additions to the board of directors that include Bobby Kotick, Laureen Powell Jobs, and others. But to the point you made earlier, you know, I mean, the capital markets are going to be one of the keys here. They did that huge bond offering, largest corporate bond offering, I believe of all time. This is really the fulcrum. Do you want to give it to them or do you want to give it to SpaceX? I want to give it to SpaceX. I don't want to give it to power. You know? Not even a little. You got nothing for them?

13:39I never reach for yield. I don't think I'm reaching for yield if I go with SpaceX. With Paramount, I don't know. Look, I don't know. I mean, like, how many movies they have to put out each year? 30. What, is it, like, mandated by the government? Well, it's a commitment they've made, yes. And then goes to 32, I think, in a couple of years. They did talk yesterday about the prospective layoffs. Yes. And Lorraine Powell jobs to the board, Tony Blair. Yeah. And spending more on content than... Tony Blair is an advisor. Yeah, advisor, yes. Yes, yeah. Bobby Kotick on the board as well. Bobby Kotick's one of the most sophisticated financial minds I've ever seen.

14:11Bobby Kotick's serious, heavyweight guy. Without a doubt. Incredibly smart. Very savvy. No, it's a strong board. Doesn't play for dinner. Obviously, it's controlled by the Ellisons. The entire company's controlled by the Ellisons. So, it's a controlled company. Is David Ellison going to be in more movies? I don't think he's about being in the movies. He was. But we are going to see him tomorrow. Looking very much forward to that. sit down to talk about the future, of course, of this entertainment behemoth, media behemoth. God, I can't believe this deal has to come right now. Just when I'm just so worried about the tenure.

14:39Wait, what deal are you talking about now? I'm worried about the tenure. I'm worried about your Paramount. Yeah. And I'm worried about Triple B and SpaceX. And that's what I care about. Yeah. I don't care about the fact that Mar-Vell is using 30 and 30. You know? No, I'm saying... You should. Think about the conversation. The conversation's all about bonds. Rates, rates, rates. Right. That's what it is today. Okay.

15:04we'll keep our eye on the bond market. We'll, as Jim said, talk to Marvell, Matt Murphy, a day after shares rallied on that long-term revenue guide. Stocks more than tripled this year. It's a big day here at the big board. We are celebrating 15 years of the half. So if you want to see the judge and the traders ring the bell, stick around. Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring. Vantage Score uses 400 % more credit and alternative data to create a fuller picture of financial behavior, including trended credit data, rental payments, and timely utility payments.

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16:30Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. 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. and 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 marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Two names that often trade in tandem these days, Goldman and Caterpillar among the Dow Laggards pre-market.

17:14Cat's still up 50 % for the year, but Goldman's gains for the year now down to two, two and a half, as the XLF is red for the year. We'll get Kramer's Mad Dash countdown to the opening bell in just a minute. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools. No extra logins. Just one subscription that gives you personalized AI right inside your actual workflow. Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini.

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18:30Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and 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 marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Let's get a mad dash with Jim. We've got nine minutes before we start trading here at the New York Stock Exchange on this Wednesday. Constellation, we talked yesterday a lot about Constellation Energy. The nuclear Constellation Energy is on fire right now.

19:08Constellation Brands. Now, there's a lot of issues here. They report after the close, and they strangely always do this conference call in the morning. Now, after the close last night, they gave you a good number, and they did not raise the year. So people, therefore, said, OK, this must be the last good number. This morning, they start their conference call by saying, wait a second, if things continue in September, we're actually going to hit the high end of the range. And that's why the stock went from 115 down to 107 and back to 114. But my conclusion here is, once again, alcohol, it just doesn't happen.

19:43Beer growth is flat. Kim Krovert a little bit better. Mecompa, the Q is doing very, very well. They did buy Spiked Aid. The front of a liquor store is largely these ready-to-drink. Yes, I've seen that. And I don't know if they're chasing the theme or not. They are spending a lot of money on Spiked Aid,$75 million for 100%,$278 million over five years. But what I'm saying basically is beer margins are just not that great. We don't have the growth we used to have, but it's not as bad as it was last night when people were really freaking out. All right. So what does that mean then? At 115, do you want to own the stock or not?

20:19Look, I don't like liquor. No, you don't. I don't like liquor. Liquor is GLP. Liquor is this new generation of bodies, my temple, younger people. And you have to have, like, tequila is really the only growth thing in the universe in this moment. Well, there's a piece on the tape today about Pepsi and GLP-1s and how they're having to step on the gas if they're going to meet these targets, Elliott-inspired targets. Well, we'll know soon enough, boy, I'll tell you. If you were in any of these consumer-packaged goods situations, it's rough out. And include beer. Include wine. Wine, too. Wine, too.

20:57I'm trying. I can't do it alone. No. No. Well, remember we used to think two glasses of wine was fine for you? Yeah, now it's not. The glasses of wine's terrible for you. I know. Now they're okay. Everything's terrible for you. Everything's terrible. Is it going to cut the years off at the very end of my life, though? Is it just a year or two? Speaking of years, don't they go by fast? Fifteen years since they started that show. And there's Scott Wobner, of course, and the entire team of traders who've made it such a staple of our programming day. Absolutely. Every day. Opening bell just a few minutes away.

21:27And CNBC's halftime is going to do the celebrating and the ringing for that 15th anniversary. Don't go anywhere. A new milestone for CNBC's halftime report. Show is celebrating 15 years getting ready to ring the opening bell here at the big board. Let's bring in the judge who's at the podium. Scott, our congrats to you and your entire team. You guys look great. How's the view up there? It's kind of surreal, to be honest with you, Carl, after sitting down on post nine for all these years and looking up at the balcony to actually be standing up here looking down at this incredible floor in this amazing place.

22:05As I said a few moments ago upstairs, it's the best backdrop in television. And you guys obviously know that. And I feel so privileged and grateful to be able to sit in the position in which I do down there. Well, Scott, we are grateful to have you and how you change things. I think before your show, we really didn't know how big money thought. We didn't know how big money traded. We didn't know how big money actually was in many ways a competitive industry the likes of which we didn't know. Thank you for opening the, I was going to say opening the kimono, but better say pulling the curtain back on what really happens.

22:39You've changed it. You've changed it. Honestly, Jim, I owe everything to the folks who are surrounding me here for doing that. I get to ringlead this whole thing, but without the committee. And by the way, Jim, you're the one who coined for us the investment committee. And it stuck from the moment you said that because you realized that something was happening on our program. and it's a testament to what these guys do, that they're open and they're willing to share their actionable ideas with our viewers, and it's truly made a difference. They let me push and probe them, and we debate. Really, the ethos to our show, as you know, is real money, real debate.

23:21And these guys are putting real money on the line. They're willing to have the debate to educate our viewers, to give them ideas about the markets, and to entertain them, too. along the way. And I think they've done a pretty good job of doing that. So thank you for all your support. And to hold them accountable. Sometimes I cringe. You put up what they put up and you say, well, what happened here? And it's like no committee. You may be the committee, the investment committee, but in the internal investment committees at the big firms, they would never do that. Thank you. That's the job that comes with the judge, Jim.

23:54They let me do that. They get called into the chambers after the show if they don't play ball. I got to say, Scott, whenever I'm out, people approach us in public. They do say, Steve, Joe, Josh, Jenny, Stephanie, what do they think about this or that? Yes, they do. And, of course, over the years, I know we're going to spend a good part of today looking back at the viral moments that that chemistry has created on your show. You know, January 25th of 2013, Carl, is when we sat down on that desk there and Carl Icahn and Bill Ackman had this big debate and sort of everything stopped for a moment. It was one of those crazy moments that, again, that was the beginning of real money, real debate, and these folks here have carried that on through.

24:40So I'm just thankful to the support from all of you, our CNBC management, past and present, who've allowed me to do this and have so much fun every day. I can't wait for the next 15. Guys, here we go.

25:22Thank you. There you go. Nice moment there, Jim, for one of the legendary brands of CNBC. I think that I remember when that fight, I read the book was great, by the way, that Scott did about that moment, Ackman, Carl Icahn. And I keep thinking, David, to bring you in, another guy, another arbiter, Queens, between Ackman. And it was really interesting to see that in the end, what it came down to was the whole country and stuff. Everybody watched just stopped and listened. That was the moment. And in the end, it was like, OK, listen, Sonny. It was a listen, Sonny moment. It was. It was. I loved it.

26:08And it's a long time ago. Scott and I were talking about it yesterday, actually, because we sit with each other up in the back, talking about just the years going by and how quickly. And how hard Scott works to do it, right? We all know. That's for sure. Well, it's doing two shows a day. Guys, taking a look at things, you know, I'm going to come back to NVIDIA, Jim, and just start there. Sure. It's the largest market cap company. Why wouldn't its stock move higher on the news that yet another customer is going to be raising money, in this case, SpaceX? And by the way, during some of that, I was able to confirm the numbers are essentially right.

26:44$40 billion, Apollo, PIMCO, as it's been reported, didn't get to pricing in terms of trying to understand where that may end up. But why is NVIDIA's stock price not moving even higher on what's going to clearly be a significant order for its chips? Okay, well, we do have Samsung reporting very soon, and people are very concerned that Samsung is going to say something. It's the Cosby. It's the Cosby. Cosby was bad last night. and this stock, unfortunately, has a history of trading with SK Inex, history of trading with Samsung, and you come in, it's like the book moves over from country to country, and it comes in with this, and we're stuck with those pricings, so people realize maybe this is a big order.

27:25But today could be just a sell-off day because the group has been so strong, and it's momentum. And Nvidia's stock price has moved higher. The momentum. And yesterday we had that terrible reversal. So it's been a bit of a nicer mood lately from you? Absolutely. As a part of that? Samsung ports tomorrow, yeah. Look, it's still one of the great performers of this era. I am concerned there's also the possibility of Micron. There's a union that organized Micron, 99 % vote that they have the right to strike. So suddenly we have a bunch of negative trends that are really from Asia to follow about where NVIDIA is going.

28:01It's almost as if they didn't care in Korea about the biggest order ever. I think that was a mistake, but we have to see it because the world is stopping for the 10-year. Yeah, it is. It is. Look, if you know if the 10-year is not good, then you bought NVIDIA at the wrong price. You did, or you might have. And again, I am going to try and do more reporting, get a sense for the pricing on that SpaceX deal. It'll be very interesting just to see where you're— But what I am hearing, guys, is the demand for capital is not slowing down. Not a newsflash, I know. But when you speak to the people behind these deals, it's just not slowing down.

28:39It's coming from everywhere all the time. But Paramount is correlated with the economy. And SpaceX is correlated with the future. There is no correlation. I'm talking about the need for capital to continue the AI build-out, so to speak. It's not slowing down. It's secular. And the point being made by those who are underwriting these deals is, why am I going to be concerned, regardless of the pricing, for a$2.3 trillion market cap company? I've got over$2 trillion in equity ahead of me. Do you see the estimates going up? They're not going up slowly for SpaceX. They're going up rapidly. I know. Estimates.

29:13Estimates for earnings. I remember people saying, listen, it's reckless. Individuals stay away from it. I think that that was reckless. The underlying theme remains, which is we will spend the money and we will generate the expected returns, if not more. We will have Matt Murphy here in a few minutes. Matt Murphy ran a very small company not that long ago, okay? Yes. And I remember five years ago he gave targets, and the targets seemed aggressive, and he was kind of like, why does anyone believe me? The targets were so conservative. We will know, we have to ask Matt, why the hell is this money available?

29:46And I think the answer is because it's secular demand like we've never seen for a person who understands connectivity, which may be the next thing after compute. We still haven't done away with the open source revenue threat to some of the big players. No, and open source is very important. No, and it's only getting bigger, Carl. It's a very good point. I mean, when you talk to people who are deploying these models, you know, you use the frontier models, but you can use them for certain things. And then you're all about open source. And we saw another introduction of a new open source model yesterday from Reflection.

30:19Murmurati, remember her, from OpenAI. Her company is going to be coming or is with open source. Obviously, the Chinese still dominate open source as well. But that's not a threat to Marvell. That's not necessarily a threat to Marvell. No, I'm not saying that's a threat to Marvell. We're talking about the bigger picture of really coming back to Anthropic and OpenAI, where it is more of a potential threat. Oh, no, I think that those are the two that are on the line. But, David, the amount of business they're doing, I keep thinking there's a chink there. I've been wrong. Well, OpenAI seems to have had a resurgence.

30:49Yes, it has. And, again, I don't have the numbers, but it's sort of when you talk to people who are investors in these companies, it does seem to be believed that their revenue run rate is accelerated. I'm not as sure on Anthropic. And I'm not sure what that means, therefore, for the plans for Anthropic to come public, let's call it in the next month and a half, as still seems to be the belief of many, that they will try and price something before Thanksgiving. Ever since, I'm telling you, ever since the meeting with the president, we're kind of really thinking, you know what, we can control the uncontrollable death threat.

31:21Yeah, but I wonder whether I don't know. The death threat thing was a really bad call. They did a bunch of Tesla waters. What sandbox? They might have gotten back, Anthropic, might have gotten back, Like, oh, you know, trillion and a half, maybe two trillion. I don't know where they want to price. And given the volatility in the market overall, Carl, I don't know what that means. But so far, I've heard nothing that indicates it's being put off. Sarah Fryer, CFO. But a lot of people are wondering. Sarah Fryer, here. Here's 20 billion. Here's 20 billion. Do they even care? You're talking about OpenAI raising 30 billion.

31:52No, I'm just saying it's at 1.4 valuation when it was at 809. I'm saying these don't correlate. They may be having an acceleration of their revenue run rate as opposed to... There's that race. The real race is between them and the open models. And Valero. Look, I found companies... I was trying to get companies that have the same earnings momentum. Valero, Marathon, Phillips 66, SpaceX. Okay, it is crazy. Yeah. I mean, we're in a tight distillate market. this hurricane we mentioned in the Gulf would be hurricane. We think it's going to get there in the coming days. That actually could move some prices.

32:31Mike Worth was on, I don't know, like 2 a.m.? I mean, come on, Mike. You can't do that. Well, he was mostly talking about how bad an export ban would be on diesel. I asked Mike, I said, how do you do it? How are you around the clock? He said, you've got to get used to being tired. There you go, David. Look at that Chevron. Look at that Chevron. Lately, I've been getting used to being tired. Yeah, the CEO of Chevron is Mike. I see you SpaceX and I raise you Chevron. What does that actually mean? No, I'm just saying Chevron is actually a great company. Oh, I know. I mean, Jeffrey's at a good table yesterday.

33:03Last three weeks, equal weight. The only sector is positive, tech and energy. I know. I'll tell you, one area that you mentioned this, Carl, that isn't is financials. Oh, my God. I was going to say. Why do you have to bring that up? We've got Matt Murphy right here. Because it's an important part of the market. And the stocks which were outperforming the S &P through much of the year, at least the biggest banks, are barely up. They're barely up, Jim. I was being facetious. Also be bad. Oh, God, the Queens. I have a deal with Queens. I'm from Philly. Don't worry about it. Lane Johnson, great man.

33:34So you got nothing to say about the financials? No, because we have Matt Murphy right here. I kind of want to go into what Matt has to say. What did you point out, though? Goldman now red for the year, and a lot of those names down 2 % to 3%. Solomon has a good record. Okay. All right, Chief. All right. Don't you dare chief me, buddy, buddy, pal, friend. Stay away from my lane. Marvell Technology has been one of the top performers this year, and the company's been at an analyst meeting. They had all analyst meetings. And, Matt, I've been with you, and you had analyst meetings, and no one believed in you, and they were wrong because they thought you were too aggressive.

34:11They were wrong. So I want to ask you, Matt, what gives you the conviction to make projections that, frankly, were jaw-dropping, including that one by your CFO, 30 in 30. 30 for 30, that's right. Well, look, Jim, I've been CEO for 10 years. I've been in this industry for 32 years. And now you have gray hair. I have gray hair. The picture doesn't match the one you guys flashed up. I probably need to redo the photo. But look, I think we always put out what we think is pragmatic, judged, and achievable. And so if you look, actually two years ago, we were in New York, Same hotel, same venue, talking about our AI and data center ramp.

34:52And we were talking at that time about a$15 billion data center, 2028 Marvell revenue. If you look at sell-side analysts' consensus today, after our meeting yesterday, the implied data center revenue in 2028 for us is over$30 billion. So basically, it's fundamentally 2X'd in that period. Now, along the way, we've updated investors. We've been taking people on the journey. But, yeah, we've achieved the targets along the way, and the business continues to perform really well. On June 2nd, a very famous prediction by Jensen-Wong. Yeah, that was a surprise. You could be the next trillion-dollar company.

35:25It seemed absurd. At 42 times the earnings you made, you will be at a trillion dollars. So it is not absurd, and it could be four years from now. Yeah, it was not rehearsed and shocking when Jensen said that. But at the same time, if you actually take the range of$70 to$90 billion and you put a multiple on it four years out, You know, who knows what's possible? But he saw it. I need to know whether you saw it first, that it wasn't, it was not actual, usual kind of GPU versus TPU. Right. It was connectivity. You discovered connectivity. Explain to people what connectivity, which may be bigger for you than actual XPU, TPU.

36:05Yeah. No, no, we're unique, actually, in this AI semiconductor cycle in that you had the three big compute companies, right, It drive massive growth when generative AI first rolled out. That was followed by a huge memory wave, right, which we've all followed, right? Three large trillion dollar memory companies. That's what they do really well. And what we're seeing now is there's a gap because there's not enough in the connectivity layer to connect all of those things. So you've got a lot of installed compute, a lot of installed memory. But guess what? They all need to talk to each other through high speed optical interconnections, switching networks.

36:41and what you don't want is any GPUs or memories sitting idle. And actually what happens when you start talking about agentic AI and reasoning models, there's more and more diverse kinds of compute, so the connectivity layer even gets more complex. So that was my June 2nd sort of thesis at Computex, was look, we see this as the next big unlock, and our business has just been ripping since, and that's when Jensen came on stage and basically said, yeah, I agree with Matt, his business is doing really well. I mean, it was only April of 24, I think, Matt, when you were talking about your XPU custom total addressable market at$40 billion.

37:16Yeah, that's right. Now I think you're saying it's$235 billion. That's right. That's two and a half years. Yeah, yeah. I mean, we know the numbers. We share them every day with everybody in terms of the spending. But is it astounding to you? And what gives you the confidence that number is going to be right? Yeah, the custom number, it really ran on us, for sure. I mean, and it was interesting, if you go back two years ago, the debate was actually, can custom even materialize as a portion of the market? Now, you fast forward, and it's not just us, right? That whole segment has clearly, clearly been solidified as a real thing.

37:51And so you roll forward just a few years into 2030, and yeah, you're looking at a$235 billion market just for custom silicon. We participate in that in two areas, by the way. Well, you're 13 % or so, aren't you? It's a pretty reasonable... It's actually... The crazy thing is we said, hey, our target is$30 billion in revenues in 2030 in custom. Yeah. And then somebody pointed out in the meeting, look, if you just divide that by the 235, it's only 13 % market share. And we've got customers there today. I mean, our business in 2028 is going to be$12 billion plus in custom already. So that drive from 28 to 30 is not a stretch, and it's not a huge portion of the market.

38:37So I think that's why we gave some headroom, too, on our ranges. We said, look, it's not just$80 billion target. There's a range of outcomes. We actually gave ranges on all of our businesses. So, you know, investors can take a look, and they can make their own judgments. But we think the midpoint of$80 billion is very achievable at the company level. That's interesting because the streets elated pretty much at all the targets. But I think it was Morgan Stanley that said they're happy, but we don't know whether Marvell needed to raise the bar this high. Right. Was there any discussion about hedging bets?

39:07Yeah, you know, it's interesting. You know, there's always this debate. Are you conservative? Are you aggressive? You know, what do you like? And I actually I never like to use those words. I always look at most probable outcome judged and pragmatic. And we call it like we see it and we give a range. and that has served me and the company, I think, extremely well for the last 10 years. You know, we've grown the revenue from basically low$2 billion in revenue 10 years ago. We're looking at$20 billion next year. We've taken investors on the journey. And yeah, I think you could say I've made some moves that would be aggressive, maybe forecasts we gave or acquisitions we did or divestitures we did.

39:48But in my mind, all of them were very rational, thoughtful, and pragmatic. And that's how we think about it. So no change in how we're running the place, no change in me. So when you look out to our targets in 2030, it's very consistent with how we've been doing it. But you have a particular edge that people have to understand, which is that you figured out and know how to break through the copper wall. Copper wall. Right. I mean, if you think about it, if you go back like 15, 20 years inside the data center, today you look at a data center, there's optical cables everywhere, right? You see all these fiber optic cables plugged in and out.

40:23those all used to be passive copper at one point. And because of the data bandwidth, the data rates required and the bandwidth required, more and more of the data center links have been moving from copper or passive to optical. So that's driven our business quite nicely today. But there's another wave. Basically, what's happening now is there's two terms. One's called scale-out networking, and then there's scale-up networking. Scale Out is connecting all of the racks together, all the networking inside the data centers. But now people want to hook up and coherently connect GPUs and XPUs together.

41:01In the rack, you mean? In the rack. Is that all copper still? Inside the rack. It's all copper today. Okay. And it's going to move to optical because you're running. Explain to people why copper is not good. When does that actually happen? Oh, it's going to start next year. Yeah. We have a category, a sub-business we call Scale Up Optics. and it's zero dollars this year and we said next year actually two quarters ago i said it would be 300 million in revenue i then said it was going to be material higher than that last quarter and then it's gone up again so this is ramping now this is the fourth leg you were talking about or no that's the third leg there's another four david david david there's always one more leg all right that's how we do it here you can't just stop like one or two years out No, you've got to have four.

41:45It's a four-legged stool. Okay, yes. All right, so I think there are people out there who say, wait a second, there are moratoriums going all over the place. The political situation is not good. You've got to worry. Matt, it doesn't sound like when you're using a$400 billion total addressable market that you're that worried about the political implications of data centers. Yeah, I mean, we think about the external environment all the time. And I think we battle that constantly. We have to think about it at a company now, our scale. But I've got to tell you, at the end of the day, we're a semiconductor company.

42:19We build world-class chips for a living. We work directly with our customers. And right now, our customers in particular are the largest hyperscalers who have been executing their data center plans and build out for many years. So they've got a flywheel that they're building on. We've got line of sight to where they want to take their business. We're going to be part of that. But, yes, we have to be aware of the external environment, but we see no impact from any of these externalities right now on our market potential and certainly not right now, even in the near term, on our revenue growth. I mean, we basically said for next year, we took everybody up next year from$18 to$20 billion, primarily because of connectivity, actually, is what I just mentioned.

43:02So even in the near term, we don't see that impacting our business. Well, I want to congratulate you, Matt, for everything that's happened. And I do want to point out that twice the press has befuddled you and people have attacked you. And what do you do? You went in the open market and bought how much stock? I bought some shares. I bought twice, actually. Yes,$1.70 million. I bought twice in the 70s. Thank you for coming on this show and telling people, listen, here's my answer to the doubters. I just bought a million dollars worth of stock. You call it like it is. Matt Murphy runs Marvell Technology.

43:34Congratulations. Thanks, guys. Appreciate it. As we go to break, watch bonds here. Yields up across the curve. Long bond, 572-ish. And we do await that one o 'clock auction of$39 billion in tens. Don't go anywhere. You know, we haven't talked that much about today is AI, the technology. I don't know if you guys saw OpenAI. Solved all these math problems, even more of them, every day. Solving new math problems that haven't been solved. We're going to have a chance to talk about the safety parameters around it with the czar. There he is, Jay Clayton and the Kesher War, of course. That's going to be on Closing Bell today.

44:08I'm going to have an opportunity to talk to both those gentlemen and certainly to Clayton as well about what the plan is as he undertakes sort of a review of what will make sure this technology works for all of us and does so safely. That'll be today, 315. Jim, you're going to lead us into earnings season tonight. Yes, the consumer economy represented by Levi Strauss and then the enterprise, Saskopelix, whatever, has it going away. It's Viva. If you take a look at V-E-E-V, you will see a chart that shows you what recovery looks like after a company like Situational Awareness blows up. Although I'm told Situational Awareness had a little bit of Intel that they were able to sell.

44:49That's what people say. It was hungover from October Options. It's just a rumor, and I usually don't like to pull on rumors, but Intel happened the last couple of days, and Intel's back. because we know that Elon Musk is not abandoning Intel's founder. Yeah, that was an important post. Yes, no one even talked about it. Musk on TerraSlam. It's a very jam-packed day. Jim, buckle up, I guess. We'll let the next few days. Yeah, the 10-year. I mean, you know, the 10-year is the World Series. Yeah, a little bit off of session highs. Yeah, 10-year, by the way, David, it's a home game tonight. Oh, it is?

45:25Yeah, it's a home game. Good to know. Thank you. No problem. Mad Money, 6 p.m. Eastern Time.

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