Markets Try to Rebound from the Sell-off, Nvidia Pain, Dollar Tree Hit By Consumer "Pressures." 9/4/24

SPEAKER_1 (0:00)

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

Carl Quintanilla (0:05)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at Post 9 of the New York Stock Exchange. David Faber has the morning off. Stocks do look to add to Tuesday's losses. Worst day for the NASDAQ since July, second worst day of the year. Nvidia's down another percent, the two-year yield at a 16-month low. RoBat begins with its tech-fueled sell-off. S&P clocks its worst day since early August, but there are areas of opportunity some say to buy the dip. Nvidia is under pressure again after the biggest one-day market cap wipeout for any US stock in history. The chip maker reportedly now facing that escalating DOJ on a trust probe. And the state of the consumer, Dollar Tree and Dix, the latest to deliver some cautious guidance. Let's begin though with the markets after the sell-off yesterday. Jim, looking at what you wrote this morning, it doesn't sound like you think this is a growth scare in the classic sense.

Jim Cramer (0:56)

Exactly correct. I feel like there are many situations that are individual in each sector. For instance, just take last night, C-Scaler, people saying, because Jay Chaudhary is going to be on there the day after noon, saying he's very cautious on buildings. Yesterday, we have a lot of people saying, okay, super micro is really in trouble. We have another super micro cut. Intel, obviously very, very troubled. So it was not just Nvidia. We all make it sound like that Nvidia is the sun and everything revolves around it. But there were a lot of negatives yesterday. They were all individual negatives. Nvidia, I've been saying, let it come down. Look, I love Nvidia. Everybody knows that. I hate the love. I shouldn't say it because it's just a stock. But I've been saying ever since the quarter, you got to let it come down and don't be a hero in this. I mean, I tried to compare to last night to the cowardly lion, because counting you guys to stop me basically before we go into it. I feel that that's the way it is. I really do.

Carl Quintanilla (1:50)

We talked yesterday about the Michael Symbolist note out of JP Morgan.

Jim Cramer (1:54)

That was the factor.

Carl Quintanilla (1:55)

Not just the argument that competition is coming for Nvidia and their historic margins and market share, but it sounds like he thinks there should be more progress by now on some of these use cases.

Jim Cramer (2:07)

Okay. I think that's really great because there are a lot of people who told me why it was down yesterday, and they were all wrong. I mean, it's down because Michael Symbolist is one of maybe the most powerful strategic thinker right now on Wall Street. Yes, he didn't reveal he is a friend, but so what? He saw the sun this weekend, he saw the great fisherman, just like his dad.

Here's what the problem is with Nvidia and that piece. He does say that there's competition, and he really kind of signals that it's AMD. With Charleston's AMD and Nvidia, I think Lisa Su is doing a remarkable job. I don't think that she would even admit that they're competition right now on Nvidia. I think Intel, let's just take them off the table. We got to stop considering Intel as a competitor to anyone other than itself. But there was that notion that mainframe spend was all wrong, and there was the 2000, oh my god, the 1990 to 2000 fiber connection. He compared it to that. I wanted to vomit when I saw it. I think that Michael is terrific, but let's just understand. These are going down because they're real thinkers, big thinkers who read Michael Sembliss, and they just changed their mind. One of the few people makes you change your mind.

Carl Quintanilla (3:11)

Jim is referring to this chart which I think the booth has where he looks at data center revenue for Nvidia versus IBM peak revenue in 69 and Cisco Nortel Lucent peak spend in 2000

Jim Cramer (3:25)

Look, I remember that anyone who remembers the Cisco Nortel Lucent knows that that was a collapse situation. Nortel just immediately collapsed, Lucent collapsed. It turned out that both of them had accounting issues, so it made it even worse. Cisco got to some outrageous multiple that was undeserved. And what I, I never attacked Michael, but I did say, listen, all these companies, give me a break, the companies that are customers are absolutely just, they're nation states, they can print money. Nvidia himself, Jason Wong has said over and over again, the CEO, look, if you buy our stuff, you get an amazing return. And his demonstration is an amazing return, and that was ignored by Michael, and that was painful. But can we have no doubt about it? The idea is so chilling, that it might be mainframe or fiber, that it made you think, let's step back. Now, I believe this was going to be the case because this was the quarter where you should have seen that there are a lot of companies buying Blackwell because they believe they can make a lot of money with Blackwell. Instead, we got not enough Blackwell, and we started thinking, wait a second, maybe all these, what we call them hyperscalers, tech titans, are dreamers. Now, in return, I would say, is really, is Mark Zuckerberg a dreamer? Meta AI runs a little bit slower than the others.