SOTS 2nd Hour: Trump Tariffs Latest: Nvidia’s $5.5B Hit, Rare Earth Metals Probe, and More 04/16/25

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Jim Cramer (0:59)

It's Jim Cramer here. You're listening to the opening bell of CNBC Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (1:12)

Good Wednesday morning, welcome to another hour of Squawk on the Street. I'm Carl Quintanilla with Leslie Picker and David Faber, live at post night of the New York Stock Exchange. Sarah Eisen has the morning off. Opened a bit lower, losing some steam here. S&P down about 1.4%, really NASDAQ's bearing the brunt of the pain on some of this chip news, down two and a quarter. 10 years actually pretty stable around 433, busy day with retail sales, trade and tariff news, and Powell this afternoon.

David Faber (1:36)

We are also getting some economic data that's crossing the tape just now. Rick Santelli has that for us.

Rick Santelli (1:42)

Yes, David, business inventories. Now, everybody is watching inventories. I want to caution, this is two months in arrears. This is February data, expecting up 2 10s, and it arrives exactly up 2 10s, following an unrevised up 3 10s. So, if we are pulling forward, we have had a couple of positive business inventory builds in a row. Last month of 24, we finished down a couple of 10s, but nothing totally jumps out. Another number out, a much more real-time number, National Association of Home Builders Housing Market Sentiment Index, an April number comes in 2 points better than expected at 40, and it's 1 point better than 39 in the rearview mirror for March. So, we see some bright spot there, even though housing, well, interest rates have been volatile, haven't seen a lot of dropping in the mortgage arena, and as Carl just pointed out, 432 in a 10 represents down a couple basis points, and it's been awfully steady as equities get a bit more red. Leslie, back to you.

Leslie Picker (2:49)

Relatively steady, we should say, Rick, compared to last week. Let's get to the big stock stories of the day. Nvidia and AMD shares sliding both warning about big charges related to export restrictions. Christina, parts of Nevelis has the latest. Christina.

Christina Parthasarathy (3:04)

Well, it's been quite the policy reversal, Leslie. Nvidia announced Tuesday it faces, like you said, $5.5 billion charge after the US government imposed new export restrictions on its H20 AI chips that are made specifically for China. The charge will be taken in Q1 and it'll cover H20 inventory and purchase commitments, as well as some related reserves, but comes just over a week. I remember reporting this two Fridays ago after CEO Jensen Wong reportedly secured a reprieve during a high-profile dinner at Mar-a-Lago. The licensing requirements though are set to remain for the indefinite future and come despite Nvidia's announcement just on Monday about plans to invest $500 billion in US-based AI infrastructure. There's the art of the deal. While significant, the impact may be contained though. China accounted for approximately $17 billion in Nvidia's fiscal 2025 revenue representing just 13 percent of total revenue, which is the smallest percentage in over a decade. But based off of a lot of sell-side research this morning, they are expecting an impact to Q1 EPS, which is why you're seeing the stock fall about 6 percent. AMD also said it would take an $800 million charge in the quarter. And this is in a filing today. AMD said it will seek licenses to export to customers in China but cannot be sure of securing them. That's because these licenses could take up to six or 12 months to actually procure. But a bigger threat looms. Potential AI diffusion rules could take effect in May. These would limit Nvidia as well as AMD sales to many more countries and customers. So this regulatory whiplash really highlights the unpredictable nature of tech trade policy under the Trump administration, where even personal appeals at million dollar dinners don't offer guarantees.