AI Boosts Nvidia's Blowout Quarter, Powell One Day Away, T-Mobile US To Cut 5,000 Jobs. 8/24/23

SPEAKER_1 (0:00)

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Jim Cramer (0:31)

It's Jim Cramer here. You're listening to the opening bell of CNBC Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:38)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Nvidia's blowout going to boost the NASDAQ as the market now moves on to Jackson Hole, and more specialty retail and software earnings. Jobless claims come in at the lightest of the month.

Yields are higher across the board. Our roadmap begins with Nvidia's AI boom, the chip maker delivering that blowout quarter with no sign of slowing demand.

David Faber (1:02)

Plus, we'll talk Fed expectations. What investors need to know as central bank leaders gather in Jackson Hole, Wyoming.

And Boeing's weighing on the Dow right now, at least ahead of the open. The shares are moving lower after the company revealed a new 737 Max manufacturing defect.

Carl Quintanilla (1:20)

Let's kick off with Nvidia, set to open at a record high this morning after reporting that blowout quarter. The company more than doubles revenue, raises their guidance, citing a surge in demand for AI chips. This is Jensen Wong on last night's call.

Jensen Huang (1:34)

Our demand is tremendous. We are significantly expanding our production capacity. Supply will substantially increase for the rest of this year and next year.

Nvidia has been preparing for this for over two decades.

Carl Quintanilla (1:52)

Jim, no lack of superlatives today.

Jim Cramer (1:54)

No, and look, because I do want to be able to get in, I have Everest NVIDIA. This was the dog I renamed Everest via NVIDIA. Jensen Wong gave me this one so I could get into headquarters. And then when NVIDIA sadly passed away, he insisted that our new dog be called NVIDIA Ragoo Cramer.

And this is so we can get in. All right, so let me explain to people, there's been a lot of misinformation, including a lot of questions that were wrong on the conference call. What's really going on here?

This is going to replace everything. It's not one of those things where people keep saying, well, what are they going to do with it? Oh, they've ordered it. What are they going to do with it? Well, we know what they're going to do with it. They're going to rip out everything else. And this is going to be the only thing that's used in the data center. It's the only thing that's going to be used in terms of being able to figure out how to get something done fast.

And then people say, well, hold it. Are they double ordering? Well, they can't double order because Nvidia works very closely with certain companies. If they double order them and cut them off, the gross margins are rather extraordinary. I mean, Andy Grove used to say the late CEO of Intel would say if you get to 63%, that's the Holy Grail. Well, they're well above that. And David, what really matters is that it's, as they said to me last night, it is the iPhone. It's like if you had a, let's say you had the Pebble. Remember, you had like the, let's say you had some phone made by Nokia, okay? Or Motorola, and this comes along. And there's just, well, what are you gonna use?

It's just it.

And there's never been anything like it, except for maybe the iPhone. Of which they did say, look, except for maybe, they didn't say, well, the iPhone, but maybe the iPhone.

David Faber (3:41)

Yeah, no one has ever seen anything like this revenue ramp.

Jim Cramer (3:45)

No.

David Faber (3:47)

And it's not just demand coming from the hyperscale players, those that we all know. It's also governments.

Think about all the uses for generative AI.

Jim Cramer (3:55)

Trillion dollars.

David Faber (3:56)

The money being spent to create those use cases, which we will start to see, we expect, in let's call it 2024 I mean, we've already seen, obviously, Microsoft and its copilot, 30 bucks a month, but there's going to be so much more coming.

And, yeah, nobody's ever seen anything like it, Jim. Is really, I know you say that, you reference the iPhone moment. Perhaps that's the closest we can come to this kind of a revenue acceleration. That said, the question that I'm getting is, okay, is there a pull forward in demand of any kind here, or is it really demand that will go on for the next at least two years?