AI Valuation Jitters, Shutdown Hits Air Travel, Musk's $1T Pay Victory, Affirm CEO "First on CNBC" 11/7/25

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Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:52)

Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla, Scott Wapner here post night of the New York Stock Exchange. Cramer and Faber have the morning off. Stocks do look to close out a down week with some additional losses as Palantir, Meta, Oracle, Crypto, all lower pre-market. Shutdown is now in day 38 We'll watch the Senate today, but air traffic is being disrupted in the meantime. Ten year for one. Our roadmap begins with fears about AI valuations gripping investors as OpenAI's Sam Altman weighs in trying to allay those concerns.

Scott Wapner (1:21)

Tesla shareholders approving Elon Musk's trillion dollar pay package. And we will discuss what's next for the company and of course the stock. And shares of a firm getting a pop in early trading on the back of its latest earnings, the FinTech CEO, Max Levchin. He'll join us first on CNBC.

Carl Quintanilla (1:36)

Let's begin with the markets as we wrap up this volatile week for the AI trade. Metashare is down more than 17% since their last earnings report. A lot of discussion about sort of Microsoft this week being used as a source of funds. Met, I think it was the JP Morgan desk said, kind of a ho-hum quarter. In the meantime, concerns about OpEx, concerns about CapEx.

Scott Wapner (1:57)

Microsoft's down seven straight sessions. Met is down five of the past six. The NASDAQ has had three 1% pullbacks in the last six sessions. It's the worst weekly performance since April 4th when it was down 10%. It feels like we've hit a bit of an inflection point this week, don't you think? In terms of the scrutiny that is going to be placed on the hyperscalers not only for their spend, but in some cases for, if not the hyperscalers, the valuations of other companies. You look at Palantir, for example, fourth straight loss yesterday, the longest slide since August. It's the worst week since April. There definitely is a difference in the way that these stocks and the commentary from them is being perceived in the investor community. Yeah, for sure.

Carl Quintanilla (2:40)

We've been talking a lot with Cramer especially about Palantir, kind of three attempts to get past 190 finally did it. Jim's still calling for 250, but now sort of rejected once again. Down 10% from the all-time high, which it set on Monday. We do expect to hear from Carp. We actually heard from him a couple of times in the last couple of weeks about the trajectory of the business, sort of the sentiment regarding those who are skeptical or short.

Scott Wapner (3:04)

Throwing shade at the shorts. Defending the company said, our results were incredible by any metric, suggesting how could you possibly sell this stock down and talk negatively about it? We're knocking the ball out of the park.

Carl Quintanilla (3:17)

Right. Great chart out of B of A today.

Horton's Friday Note. He's calling it the watch out metric, but it is a look at bond spreads for AI hyperscalers. Now you look at a long-term chart, it's obviously much better than it was in recent years, but it bears watching in Horton's view. I think we have it built.

Scott Wapner (3:36)

Yeah. Obviously, there's been a lot of attention on the amount of debt being raised by the hyperscalers to fuel and fund all of these endeavors that they're doing on, whatever their build out is going to be for data center and what have you. Alphabet, $25 billion this week announced in US and Europe. Meta was $30 billion last week and Oracle was $18 billion in September. Morgan Stanley expects these big firms to spend about $3 trillion in infrastructure. There's the chart you're calling for. Not all from debt raises but nonetheless a pretty good amount.

There it is at the end, so we're at the end of the chart, the spread, okay, widening to about 80 basis points. It's not like it's blowing out, but the sheer size of the debt raises in total has led to some widening of that spread. Is that concern in some corners? Maybe not yet, but I think the way that they put it and you highlight it, watch it, watch out.