AI Trade in Focus with Nvidia Looming 8/25/26

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**Scott Wapner** (0:58)
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.
Thank you very much, guys. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the state of the AI trade is the biggest earnings report in weeks. Blooms large. The committee setting the stage for Nvidia and what it means for the broader market. Joining me for the hour, Joe Terranova, Stephanie Link, Kerry Firestone, Josh Brown. Let's check the markets. We are green across the board. Dow's trying for three up days in a row. Tech is leading. And on that note, we set the stage. Nvidia tomorrow. Stock's been down for seven straight days coming into today. It's the longest losing streak since September of 22 And it comes right on the back of one of the longest winning streaks that it had in some time. So what's riding on this? What do we think? Well, Nvidia's next leg, obviously riding on it. What about the semi-trade itself?
That's probably riding on it. The hyperscalers near term direction, probably, right? So you got a lot at stake. There's no question about that.
Josh Brown, you agree with the R list? And do you have more things that you think are riding on this report tomorrow?

**Josh Brown** (2:18)
So Sean and I took a look at exactly what you're talking about. Not just what the narrative is going into the report and what's riding on it, but the reaction. And this is not a great earnings stock. It really never has been. I don't mean to say the earnings aren't great. What I mean is there's always a lot of buildup, a lot of anticipation, but most of what the stock is gonna do, typically, in a given quarter, is dictated by what their top five customers say. And we got those reports two to three weeks ago. So if you go back to Q1 of 2020, I think that's a lot of time that we can judge. The average return for Nvidia at the close of the next trading day after reporting is plus 2%.
That's not much. There are two massive reactions that are skewing that average up.
One of them was a 24% move in May of 2023 I think we can all agree those days are over. The next biggest one was plus 16% in February of 2024 If you strip those two out, the average return for Nvidia the day after earnings is literally flat. Of the 26 reported quarters in that timeframe, only on 12 occasions has the stock gone up or down by 5%.
So it's really not, I think, about what the stock itself is going to do, although I would love a post earnings rally as a long. Again, and we talked about this last week, it was very important. Nvidia, Jensen Wang in particular, is the AI fed. And we absolutely need to hear confirmation of all of the things that we think are going to go on in the next five months into the end of the year and in 27 The guidance matters to hundreds, maybe a thousand stocks, more than it probably matters to the Nvidia share price itself. And I think for that reason, this will be the most watched earnings report of the entire season.

**Scott Wapner** (4:19)
Yeah, I just don't see how anybody is really going to disagree with that. Joe, I thought there was an interesting story today on Nvidia's dependence on the hyperscalers faces a big test in this earnings report. That's the headline. The company's hyper growth has been driven largely by techs hyperscalers, which have purchased GPUs in bulk. But those companies are seeing their free cash flow erased as they pour money into CapEx. Everybody knows that. Here's the question.