Commerce Sec. Lutnick on Intel, Home Depot Misses, Palo Alto Surges 8/19/25

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Carl Quintanilla (0:51)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Mike Santoli here at Post 9 of the New York Stock Exchange. Cramer has the morning off. Future is fairly steady as consumer retail earnings kick off this week with Home Depot. And a decent diet of news on Megacap Tech. NVIDIA, Intel, Apple, Palo Alto will get to it. Housing starts were good, but permits down for a fourth straight month. Our roadmap begins with Intel getting this $2 billion investment from Softbank. The Trump Administration reportedly also weighing a stake in the chip maker. Commerce Secretary Lutnick is going to be with us in just a few moments to talk about that trade and a lot more.

David Faber (1:26)

Home Depot misses earnings estimates. That's the second straight quarter it's done that. It is sticking with its outlook. We'll keep an eye on that stock. And Nvidia reportedly working on a new AI chip for the Chinese market that outperforms the H20. This coming as OpenAI CEO Sam Altman warns about China's next generation AI threat.

Carl Quintanilla (1:46)

Let's begin with these stories about the Intel and these stakes. There's the Softbank side, Mike, and the government side. And of course, the Journal op-ed page talking about the nationalization of Intel, as they put it.

Mike Santoli (1:57)

Right, with these reports in particular that perhaps the stake from the government and Intel being contemplated as essentially converting the Chips Act grants that were earmarked for Intel into it, as opposed to a new infusion of capital. I know the details are not yet set. $2 billion from Softbank, I mean, I don't know if that's a good thing that if the stock is up 6% on a $2 billion investment, it's like 2% of the company. Intel spends $25 billion annually already on CapEx. So in other words, what moves the needle here changes the story in terms of manufacturing capacity, having a market for whatever it does build, or as has been reported, Softbank much more interested in kind of the chip design side of Intel, obviously with the big holding in arm. So interesting that it's in play along multiple fronts here. And the stock is, as you see on that chart, kind of kicking around these levels for quite a while.

David Faber (2:53)

Yeah, I mean, there does seem to be some, and it's funny, I picked this up and you know, there's a lot of dinners that that occur out in Long Island now because everybody's out there that there seems to be at least a hope that the turnaround of Intel is a possibility. And there may even be some investors who are willing to actually climb on board for that. You can see the month to date. But to your point, Mike, it's a long way to go. And certainly $2 billion is not going to change the story at all in terms of it. It is new equity, by the way, just making the point. It's not like Softbank's buying on the market. They are buying new equity. So 2%, you know, dilutive as well, potentially, but to a small amount.

Mike Santoli (3:30)

Was it at 24 or 23?

David Faber (3:32)

Yes, 23, I think, right? A little lower than where the stock is, but in that range. But to your point, the bigger question, and one obviously we'll spend some time with Commerce Secretary Lutnick on, is what exactly are the plans the US has for the money that has been promised Intel, not yet delivered to them under the CHIPS Act, and what is going to happen in terms of whether that becomes equity? And then, you know, you got any number of people who weigh in on the basic theme that listen, and Stacey Raskin, a frequent guest here, the lead semiconductor analyst over at Bernstein, talking about, you know, the goal is to help Intel build substantial US capacity. 10.9 billion from the CHIPS Act is not really enough, and he still wonders how much force the administration counter needs to bring to actually deliver products that can meet spec and on time and find customers, because that's the part, and you know, the Treasury Secretary talks about our dependence on Taiwan Semi, and it's true, and it is potentially a national security issue, hence the CHIPS Act, but the question Carl becomes, can you force them, them being customers to actually come to Intel to buy the chips from them? Yeah.