SOTS 2nd Hour: EXCLUSIVE: Nvidia CEO, plus AI Expert Takeaways & Trump’s Fired FTC Commissioner Fires Back 3/19/25

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Sara Eisen (0:45)

Good Wednesday morning and welcome to Squawk on the Street. I'm Sara Eisen with David Faber and Mike Santoli. We are live as always from Post 9 of the New York Stock Exchange. A big interview just moments away are Jim Cramer sitting down with Nvidia CEO Jensen Huang ahead of the company's analyst meeting today, talking everything from AI demand to the road ahead. First, let's show you what's happening with markets today. A better day for the bulls, the S&P rising 6 tenths of 1%.

And technology is playing a role. You do have the NASDAQ coming back by about 8 tenths of 1%. It's still down for the week. It's been a bumpy road lately. Financials are doing well today. Industrial, so some of the cyclical groups are having a good day. But communication services and information technology are higher and that's what's different, for instance, from yesterday, where we saw big declines in that space take the market down. As for treasuries, it's a big Fed Day today. We are seeing the 10-year yield a little bit firmer, just above 4.3%. The 2-year yield, a little above 4%. Got some good industrial production numbers out. Record high. Hard to see going into recession with record high industrial production. It is a big day for the Fed. A rate decision 2 p.m. Eastern followed by Chair Powell's news conference 30 minutes later. We're going to get into that later in the show. Also, what to expect as far as the dots. We get the forecast for the Fed on inflation and growth and where they see rates. But the stock story of the day is Nvidia. At least 17 Wall Street firms reiterating their buy ratings on the stock this morning. After a headline-filled keynote from the CEO, Jensen Huang, at the company's GTC conference, our next guest joins us live from the event, ahead of our big interview, Harsh Kumar from Piper Sandler. Has a $175 price target buy rating on the stock. Harsh, the big headline seems to be the CapEx, right? The trillion dollars of CapEx spending on data centers by 2028 Was that your takeaway?

Harsh Kumar (2:35)

Yes. So the company is incredibly well-positioned. If you look at the history of companies, there have been extremely few companies that are as well-positioned as Nvidia.

They're addressing some of the most tremendous high-growth end markets, such as data centers, such as robotics, such as autonomous driving. And each of these can be a multi-hundred billion dollar opportunity. But yes, specifically within data center, it's entirely possible that you can get up to one trillion dollars each year of annual CapEx spend. We're already several hundred billion dollars. And you know, famously Microsoft is eighty-something billion dollars and others are following. And these guys are not slowing down. And so we can certainly see that cadence continuing to several hundred billion dollars going up to a trillion dollars somewhere around that timeframe of 2028

Sara Eisen (3:25)

So what happens to your estimates at this point? And why do you think the stock didn't react more? Is it just not trading on company fundamentals right now?

Harsh Kumar (3:35)

So we're at a point in time where we're caught between the macro and potential calls of slowdown and all the stuff associated with tariffs. It's causing a little bit of uncertainty. There is an argument that is being made that the capex growth has stalled just because the capex numbers have gotten so big. But I think it's a little bit misplaced. I think we are only looking at the data center market at this point in time. When I was talking to Jensen, for example, and other folks at Nvidia, it was very evident to me that the next step on the horizon is possibly software. And software could be a trillion dollar market for this company as well. You have the AI Enterprise Suite, which is generating a couple of billion dollars, which will continue to grow. Autonomous driving potentially coming on by the end of the decade. We think Mercedes-Benz alone could be a 5 billion revenue number. And now you've got GM on top of that. And then you have robots. And the training of robots is incredibly complex. And it will require much more amount of compute, just as reasoning does. So we expect compute to go up, you know, exponentially in the future.