Closing Bell: NVIDIA Fallout, Anthropic IPO Test and Apple’s Record Run

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John Ford (0:59)

Welcome to Closing Bell and Happy Friday, I'm John Ford. In for Scott Wapner, this Make or Break Hour starts with the continued fallout after Jensen Huang's abrupt exit from Nvidia. We're going to have a top tech fund manager standing by with his reaction. But first, here is your scorecard with 60 minutes to go in the trading week. You can see the Dow there just about at break even for the day. S&P 500 down a half a percent. Nasdaq down close to one percent. Russell, the small caps, about half a percent as well. And check out Nvidia. That stock is down again today two percent, more than the market, more than the Nasdaq, as the Jensen Huang scandal overhang continues. That brings us to our Talk of the Tape. New reporting this hour on what might come next for that company, our Seema Modi, following the latest for us. Seema.

Seema Modi (1:49)

So John, the search for a permanent successor may be on, but Nvidia's board telling CNBC, they are still in the process of selecting a search firm, and at this point, it has not engaged with any potential candidates, internal or external. Those comments follow a report from the Financial Times that the company approached arm CEO Renee Haas as a potential successor to Jensen Huang. This as Collette Kress conducted her first meeting as interim CEO with high level executives at Nvidia headquarters yesterday where we are told upcoming earnings, the report, the communication strategy were among the topics addressed, a lot of chatter among analysts on their being more interest in better understanding how Nvidia breaks out revenue derived outside the US given the unconfirmed reports that Nvidia may have sold advanced chips to China. John, so we are counting down until that earnings report.

John Ford (2:39)

Of course we are. Yes, Saseem and Modi, thank you. Now let's bring in Baker Avenue's King Lip. King, happy Friday.

King Lip (2:47)

Hi John, how are you?

John Ford (2:48)

I'm doing pretty well. Let's start with Nvidia earnings coming up.

The traditional tension is that the CEO wants to set targets for the coming quarter guidance that is ambitious and spurs on the company to action and the CFO tends to be more conservative. Now that, at least for the time being, the CFO is the interim CEO, how likely that perhaps that guidance is more conservative so she maintains the trust of the street?

King Lip (3:20)

You know, that's possible. I think this next quarter's communication is probably one of the most important of Nvidia's history. I would say this, we don't need a heroic order.

What we do want to see is proof that Nvidia is bigger than Jensen. So, we're expecting some strong numbers.

John Ford (3:40)

What does that mean in this case? What does that mean in this case when all of the numbers are pre-scandal numbers that they're actually reporting in this quarter? So, what you get is a guide, and I find it hard to imagine that there's much of an incentive to give an aggressive guide in this situation.

King Lip (3:58)

Yeah, I think it's likely that the company will continue to deliver strong guidance. But that being said, they might want to give themselves a little bit of push in, given the transition.

But I think its most important thing is for them to deliver confidence. So whether that confidence comes from qualitative numbers or from a more quantitative perspective, I think that's really the goal of this next earnings call. It's to maintain, see if the company can basically communicate that it can maintain the culture and give a credible message that the product roadmap is there and customer relationships are still intact.

John Ford (4:39)

King, what do you see as being the key ingredients for that? Because it seems to me for investors, the question isn't so much just will the stock price keep dropping. The question is how long before it gets to that $240 a share territory or higher and when will they have leadership that can confidently, crisply make the kind of decisions around roadmap, around partnership, around M&A that might fuel growth?