Tech Rally Rolls On, Nvidia Extends Record Run, Musk's xAI Raises $6B 5/28/24

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 Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer. David Faber's back at Post Night in the New York Stock Exchange.

Holiday shortened week, but tech, looking for some fresh footing with both Apple and Nvidia, up two to 3% pre-market. NASDAQ is looking for a sixth weekly gain, and of course, PCE Friday. Our roadmap begins with Minneapolis Fed President Kush Khare telling CNBC he is in no rush to cut rates, adding he needs to see, quote, many more months of positive inflation data before making the move.

David Faber (0:37)

Plus some new numbers are showing that Apple iPhone sales jumped as much as 52% in China for the month of April. The stock is also on track to open in positive territory for the first time this year.

And Elon Musk raising the stakes in the AI wars. His company XAI receiving $6 billion. That's the latest round of funding. It does value that company at some $24 billion.

Carl Quintanilla (1:00)

Speaking of which, let's talk about this tech rally following the fresh record closing highs for the NASDAQ and NDX on Friday. Jim, this OpenAI thing is going to feed right into that flywheel.

Jim Cramer (1:09)

Yes, it's a great way to look at it because when you see that valuation, what you say is that's a confirmation again of what happened last week. There are a bunch of notes today. And boy, there was an analyst in Frank Holland's show this morning talking about a $10 trillion valuation of Nvidia.

Carl Quintanilla (1:25)

I saw you give him a shout out this morning on that one.

Jim Cramer (1:29)

I think that it was a, it wasn't a completely absurd valuation. It was kind of the ineluctable moat. You can't really take them on.

The index, the AI is going so quickly that perhaps this is the biggest story ever. Now that's even bigger, I think, than aggressive than even Jensen Waumey said. So what we have is people just starting AI. We know we like Musk.

He's got a valuation. I thought maybe that thing would go actually to Tesla, but no. Let's just say there's no governor on what people can say last week on AI.

David Faber (2:05)

I mean, to your point, Musk raises, and I've been aware of this, at least from a couple of people who've been on presentations that were made a while back for Musk's XAI, raises to six billion. Where do you think that's going? My understanding is they're gonna be building as much as a million square foot data center in Tennessee that's gonna have, and again, now I'm hearing this second hand, but you tell me how many H100s are gonna be in there, or Blackwells are gonna be in there.

So most of the money being raised here is going to end up in where else?

Jim Cramer (2:36)

Yes.

David Faber (2:37)

Nvidia.

Jim Cramer (2:37)

Nvidia, and now we know that Musk left that, and then he's come back.

When you talk to Nvidia, you don't get about their AI business. What you get is that they're developing autonomous machines that aren't really, they don't think of them as cars, and then you layer this in. Well, this would be part of an autonomous machine. So I'm confused, David. I'm confused about how much of this new company would be used by Tesla.

David Faber (3:11)

I think you're right to be somewhat confused, and I don't have the answer for you in that way. They're separate, the AI efforts at Tesla in terms of self-driving and XAI, and in fact, I think the union here would be more closely X, Twitter, the old Twitter, and this because you can use the data set from Twitter, which is real time and is very valuable potentially for a large language model.

So that may be more where you see it. Obviously, he owns all X, so it's a private company. He can do whatever he wants with it. So it may be there that there's more opportunity for his efforts again in AI, which of course are competing against the much larger still that we know about, obviously OpenAI, and then you go on from there in terms of everybody else's, whether it's Meta, whether it's Microsoft, with OpenAI and its own. We'll see what Apple comes up with.

Jim Cramer (4:07)

Right, something.

David Faber (4:08)

And obviously Alphabet, which was the leader here so long ago at DeepMind and continues to be right in the race.