SEC Chair Gensler "First on CNBC," Musk's Confirmation, Nvidia Marching Toward $3T 6/5/24

Carl Quintanilla (0:00)

Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla, on the opening bell hour of CNBC Squawk on the Street.

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Futures pretty steady as ADP becomes the latest in a series of soft economic prints this week at 152,000. 10 year drops to 431, that's a two month low. Although oil does bounce a bit off the lowest price since February. A road map's gonna begin with Elon Musk confirming the cnbc.com report, which says he redirected Nvidia AI chip shipments meant for Tesla to X and XAI.

David Faber (0:39)

Speaking of AI shares of Nvidia, yes, they continue to move higher, narrowing its valuation gap with Apple and marching toward a $3 trillion valuation. Also ahead right here, SEC Chair, Gary Gensler's gonna join us.

And what I mean here, I mean at Post 9 We're gonna talk crypto regulation, mean stocks, so any number of different things that we have in mind for him.

Carl Quintanilla (1:01)

Let's begin this morning with Tesla, now about a week away from that big vote on Musk's pay package. And separately, Elon Musk did confirm CNBC.com's story that he diverted thousands of Nvidia chips originally reserved for Tesla to his other companies X and XAI, as we said. In a post on social media X, Musk said, quote, Tesla had no place to send the Nvidia chips to turn them on, so they would have just sat in a warehouse. Jim, I know you've seen the Morgan Stanley report from Adam Jonas saying he's not bluffing about taking his talents, or some sort of energy elsewhere.

Jim Cramer (1:37)

Well, I think that we gotta divide this thing between the actual issue of the pay package and the vote, versus what Jensen Huang wants.

Now, Jensen's the CEO of Nvidia. He's very different from most CEOs.

He actually wants to know where his product's going. He doesn't want his product hoarded. We know from the HPE, we'll get to tonight, earlier today, what happens is that there is a very close, let's say, understanding about what chips are gonna be done. And David, you cannot take Jensen's chips and put them in a warehouse, because other people need them. So when Musk talks about how he would have to put them in a warehouse, Tesla's had no place to send the Nvidia chips to turn them on, so it would just have to sit in a warehouse. That would violate the, let's say, the immutable law that Jensen has.

David Faber (2:34)

Well, it's just an understanding, isn't it? It's not like in a contract. I mean, if he's selling you the chips, can't you do what you want with them? If you're buying them, they're yours, aren't they?

Jim Cramer (2:42)

No, it's conditional. It's conditional.

David Faber (2:44)

Conditional on what?

I paid you the money for the chips. Well, what's the condition?

Jim Cramer (2:48)

It's different.

It's a contract. It's a contract that allows them to work with you to develop this. So it's not just you and I ordering, and then we say, you know what? We're gonna put them on eBay.

David Faber (2:59)

Because the relationship goes on, because there's a lot of other things that go along with the chips.

Jim Cramer (3:03)

Right, and if we remember, if we go back to a time when Jensen was selling game chips, there was just a lot of stockpile.

And then the market fell out, and it was catastrophic. But Jensen knows that he got gold here. Now he's not trying to scalp, but he is saying, look, there's so many people want these chips, you can't just put them in a warehouse. So now I do think, and you can tell me David, but Musk is inartful in the way he tells this. It's almost as if, okay, look, look, this is what I had to do. At the same time, I want this vote.

David Faber (3:39)

X is not the best place to provide context. We've said that many times. That's one of the reasons, frankly, why I don't really engage on the platform, because you never really convey what you mean fully.

Jim Cramer (3:50)

Well, I think that's true, but when you read through his statement, there are people who will say, oh, give me a break.

He just wants to win the vote, or else he's going to hold the whole company hostage. I'm saying that that's not necessarily the case.

David Faber (4:03)

That may not be the case. Now, as for the vote, as you guys know, I've been focused on it. We're going to continue to focus on this vote because it's eight days away. And my sense at this point is it could be something of an uphill battle for them to win this. Really? Yeah. In part because the index funds are not now again, I'm not this is speculation. I don't want to they haven't made their decisions. Many institutions have not made their decisions. You heard from Ron Barron this morning. We may have a bit of that to share with you, but they voted against an 18 corporate governance given the contract was disallowed by the Delaware Court.