Key Market Tests Ahead, Brent Breaks Below $90, New OpenAI Chips 8/25/26

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**Kate Rooney** (0:27)
Courage.

**Contessa Brewer** (0:28)
I learned it from my adoptive mom.

**Kate Rooney** (0:30)
Hold my hand.

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You hold my hand.

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**Brian Sullivan** (0:48)
The trade war may escalate, but stocks in your money getting some relief, at least for now. Welcome to Power Lunch, everybody. I am Brian alongside Contessa. Kelly is off today. Oil down, Iran de-escalating a bit, and bond yields coming down as well with it. Like we said, at least for now, will make sense of the setup today.

**Contessa Brewer** (1:06)
We're looking at a real test here for the market, and it may be the AI trade. Nvidia is higher today, on pace to snap a seven-day losing streak. It's lifting the chip space with it. So is this a reset in the AI rally, or just a pause before the next big test? We have it all covered, and we begin with a one-two punch that could shake up the markets and your money. First, Nvidia, the company many see as the most important stock in the market, reports after the bell tomorrow, with expectations running sky high. And then all roads lead to Jackson Hole, where Fed Chair Kevin Warsh is set to speak Friday. Investors will listen for any clues on the path for rates. So what should you expect? Joining us now is MJP Wealth Advisors, CIO Brian Vendig, and Matrix Asset Advisors, CIO David Katz. Gentlemen, good to see you here today. All right, let's first talk a little bit about Nvidia and the fact that OpenAI now says it has infrastructure that could put Nvidia to shame. Is this real and will it affect earnings tomorrow?

**Brian Vendig** (2:07)
I think we got to pay attention to earnings, Contessa, like you said, because Nvidia is 7% of the overall S&P earnings power. And I think that outlook and the comments from Jensen Wong, based on those headlines is really what investors are paying attention to. If you look at where the stock is actually trading today, even though it's bounced back a little bit after that 7-day decline, worse we've seen obviously in a couple of years, it's really back to the same levels we've seen in May, Contessa and Brian. And so as a result, when you look at that, the follow-through over the next month is usually down, but historically has been up off of that. And I think it's because we're looking at that spending level for next year in AI, and investors are going to focus on the outlook.

**Contessa Brewer** (2:48)
You're really focused on looking for quality laggards in this group, like who?

**David Katz** (2:53)
A company like Qualcomm has not done a whole heck of a lot. We think it's a very good business. You have a two to three year time rising at about 14 times earnings. TE Connectivity is another electronics company, chip manufacturer, that's growing at about 15, 16 percent a year, yet it's at about 15 times earnings. So those are really good businesses, very attractive prices.

**Brian Sullivan** (3:14)
We never talk about TE Connectivity. I don't think, David, we've ever talked about TE Connectivity on this program ever. What a Dublin based company, they trade here, $58 billion market cap. What about them do you like?

**David Katz** (3:25)
They're a really good growth company.

**Brian Sullivan** (3:27)
What do they do? Who are they?

**David Katz** (3:28)
Basically, they make everything electronics that goes into the computer. So they're used in automobiles, they're used in PCs, they're used in the data centers, they're growing the business really well, they're using industrial factories, but they're under the radar. And that's exactly where we think is the opportunity. Good growth company, value price.

**Contessa Brewer** (3:46)
Let's talk about a company that has just been walloped today. It could be its worst day in history, Dix.
What does Dix's report tell you about overall consumer confidence right now? And it's not just Dix. We're seeing it with other Nike on Lululemon as well. What does it tell you about the consumer right now?