NVIDIA CEO Fallout, AI Trade Risks and Retail Earnings Setup

SPEAKER_1 (0:00)

Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required.

Stephanie Link (0:28)

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, US and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts.

Brian (1:03)

What was a good week is ending the week weak. Welcome to Power Lunch, everybody. I am Brian Kelly is back. You just saw our last hour. A solid week for most stocks rocked by the sorted ouster of Nvidia's CEO shares and investors hammered. And now there are even more concerns about what may happen next. And who knew what and when could Jensen's fall as the godfather of AI also end in P-A-I-N for stock investors.

Kelly (1:30)

Plus retail detail, a read into the consumers coming up next week. Major retailers like Walmart, Home Depot and Target and more report quarterly results. We'll get some insight into holiday season. By the way, the consumer staples are hitting a record high. We have an investor today who will reveal the name that she is doubling down on.

Brian (1:49)

All right. So we got a big hour. Happy Friday, everybody. Happy Friday the 13th. And we arguably begin with the most important stock in the world before and after the last couple of weeks. That is, of course, Nvidia. That stock down again right now as controversy around now former CEO Jensen Wong continues to unfold. But let's be clear, Nvidia stock was falling before any of these sordid headlines came out. Nvidia now down six weeks in a row. That is the longest streak in 14 years. And the real fear is not just around Nvidia, but sort of around the entire EI ecosystem that it helped run and fund. Look at some of these declines right now.

Nebius Group, Irin, Iron, CoreWeave, they're all down and some are down big. But those are not the only stocks reacting down and up to what is really becoming a trillion-dollar scandal. Let's kick things off there with Seema Modi, the details, what we know and the trade. Seema.

Seema Modi (2:50)

Brian, we are watching arm holdings trade down by around 6 percent. The Financial Times reporting that CEO Rene Haas has been approached by Nvidia as a potential successor. He's been CEO of that company since 2022 Here's a new comment here from the board to CNBC. This is Nvidia's board to CNBC. We are in the process of selecting a search firm for Nvidia CEO role. We have not formally engaged any potential candidates, any speculation regarding individual candidates, whether internal or external is premature. So that's a comment there from Nvidia's board. Beyond Arm Holdings, a down day in general for chip stocks, down about 5% for Broadcom and AMD, down about 9% as investors sort of count down to Nvidia earnings next week. In fact, if we zoom out, revelations around Jensen Wong have certainly fueled shares of Nvidia's competitors, like Advanced Micro Devices that recently reported Blockbuster earnings. That stock is up about double digits this week. It's best week since May. For Nvidia, a lot of interest in understanding leadership, as we were just discussing Morgan Stanley writing that, interim CEO, Collette Cress, can manage the transition, but interim status could complicate customer commitments, financing syndications, and strategic planning. We're looking at the stock down about 2% at this hour. Kelly and Brian.

Kelly (4:04)

All right, Seema, thank you very much. We appreciate it.

Despite today's slide, the major indexes are still trying to close out the week in the green, and that includes the NASDAQ 100, which has outperformed Nvidia. You can see it on your screens there by about 15 points, and its valuation is near a six-year low. In other words, trading at discount, so it's now the time to buy. Let's ask Interactive Brokers Chief Strategist Steve Sosnick, and Hightower Chief Investment Strategist Stephanie Link, who is also a CNBC contributor. Steve and Stephanie.

SPEAKER_6 (4:34)

Steve, whatever.