SOTS 2nd Hour: Nvidia/Microsoft/Anthropic Deal Details, AI Bubble Fears, & The Home Depot Breakdown 11/18/25

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Sara Eisen (1:01)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live as always from Post 9 of the New York Stock Exchange. Today, new warnings about an AI bubble from Google CEO, Bank of America, JP Morgan, and others. Just a day ahead of Nvidia's big earnings report. We'll talk about the red flags for tech as the NASDAQ sees pressure again this morning. Plus, former Fed Governor, Randall Krosner, on the increasingly divided Fed and whether or not he would vote for a cut at the December meeting. And new details on this cloud flare outage that disrupted large parts of the market this morning.

Carl Quintanilla (1:34)

Let's get some economic data now that we're back in the swing. Rick Santelli's got it. Hey, Rick.

Rick Santelli (1:39)

Yes, indeed, Carl. Now, these are playing catch up, of course, because we're in November and this is August data. Factory orders and our final read on durable goods. Factory orders up 1.4 percent. That is better than expected. That would be the best number since May. If we look at ex-transportation, it drops down. So we see that transportation airplanes push that number up. It drops down to one-tenth, one-tenth. That would be actually the weakest going back to March when it was a minus half a one percent. Now, let's look at durable good orders. 2.9 was our mid-month read. Well, 2.9 remains. So, it is the best number going back to May of this year. If we look at durable goods, X transportation up three-tenths. That replaces up four-tenths. If we look at capital good orders, non-defense, X aircraft, it moves from up six-tenths down to up four-tenths on the mid-month read. Four-tenths would be the weakest going back to June when it was a negative number. And finally, let's go from orders to shipments. Shipments are down four-tenths. That replaces down three-tenths. And those are both the worst numbers since May of last year when it was down three-quarters of a percent. For our home sentiment index on the housing side, let's head to Diana Olek head east. Diana?

SPEAKER_6 (2:59)

Well, Rick, homebuilder sentiment in November rose 1.38 on the NIHB survey. The street was expecting unchanged, but anything below 50 is considered negative. The index stood at 46 last November. Now, the builders cite market uncertainty exacerbated by the government shutdown, along with economic uncertainty stemming from tariffs and rising construction costs. Of the index's three components, current sales conditions increased two points to 41, buyer traffic rose 1.26, and future sales expectations fell 3.251. That last one though is still the only measure in positive territory. Now, mortgage rates are now lower than they were over the summer, but higher than the recent lows in October, builders say that was a positive, but buyers are still worried about job security and inflation. They also note more builders using incentives to get deals closed, including lowering prices. Forty-one percent of builders reporting cutting prices in November. That is a record high post-COVID, and the first time this measure has passed 40 percent, Carl.

Carl Quintanilla (3:59)

Interesting. Maybe some implications there for shelter inflation too, Diana. Thank you, Diana. We are getting some breaking news, crossing on another big AI investment, and for that, we're going to turn to Steve Kovac. Thanks, Steve.

Steve Kovach (4:10)

Hey there, Carl. Yeah, here we go with another big AI deal. This one is involving Anthropic, Microsoft, and Nvidia. So let me tell you what's going on here with all the numbers. Anthropic is saying it's going to spend $30 billion in compute from Microsoft. That would obviously be through the Azure service and Nvidia, obviously through their GPUs and chips, and they're going to contract up to 1 gigabyte of compute power on top of that. Also, on top of that deal that Anthropic is committing to, Nvidia and Microsoft are going to be investing in Anthropic, with Nvidia saying they're going to invest up to $10 billion, Microsoft up to $5 billion. Now, no details on what that up to exactly means and what performance metrics or what have you Anthropic needs to meet in order to attract that investment. But very significant here because of course, Microsoft is the primary backer of Anthropic's biggest rival, OpenAI. Now, we're seeing Microsoft starting to take it, not only open up its computing platform to these other AI companies and AI models, which it's been doing for some time, but also investing in these rivals to OpenAI. This is a very significant moment with respect to that. Also, we should just talk about these Anthropic models are now going to be hosted on Azure.