The AI Trade: Alphabet $4T Watch, Meta Rises, Nvidia Slides 11/25/25

David Faber (0:00)

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David Faber (0:46)

Market insight and analysis. You're listening to the opening bell of CNBC Squawk on the Street.

Carl Quintanilla (0:52)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer and David Faber at Post 9 of the New York Stock Exchange. Future is a little soft today as the bulls were not quite able to get above the 50-day yesterday. Retail sales are a stale number, but still the lowest since May. The control group actually goes negative. Ten years trying to hold on to four. Our roadmap begins with Nvidia, though, and the AI trade stocks under pressure on these reports that Meta is planning to use Google TPUs.

David Faber (1:18)

And in a related development, shares of Alphabet continued that incredible rally of late, up yet again, closing in on that $4 trillion market cap. And best by Kohl's and Dick's Sporting Goods, all retailers out with earnings this morning. We got a lot of economic data as well. We'll try and get to it all.

Carl Quintanilla (1:36)

Let's begin, though, with the rally and the shares of Alphabet. The company is on the cusp of hitting a $4 trillion market cap today. Stocks rising on this report by the information, which does say that Meta is considering using Google Design Chips in its data centers in 2027 Jim, I thought of you and I wondered if it's too late to rename your dog.

Jim Cramer (1:56)

No. Wow. Let's break this down a little. First of all, the information does have a good story about Google. We don't know how much is their licensing. But I think that if you go to Gemini, because I wanted to go to the source, and you ask who makes it, who is the vendor, so who's the vendor? Well, it's Broadcom and who's the general contractor?

SPEAKER_6 (2:24)

Well, it's Broadcom.

Jim Cramer (2:26)

So I see Alphabet up and I get that. Yesterday Broadcom was up 10 percent and Alphabet was up 6 percent. If you're really going to trade this, there's two ways to do it. I think obviously you can buy Alphabet, everyone can do that, or you can buy the company whose CEO is on the board of Meta, which is Hock Tan. And I think that Hock Tan and really David, I think that when you look at this thing, it's Broadcom all over. It's Broadcom.

David Faber (2:55)

Well, I think that's a very interesting point you just raised, which is of course Hock Tan is on the board of Meta. And these are chips designed with the help of Broadcom. And we've talked a lot about the TPUs of late at Google. I've been talking about them for weeks in part because of the cost differential perhaps that they give Alphabet in a positive way, given that they don't have to buy as many Nvidia chips to power so much of what they're doing on the AI front. Obviously, they still have to buy some, but that can be really beneficial in terms of, again, what Satya Nadella, the CEO of Microsoft, calls the cost per token per dollar per watt, right, battle, so to speak, between the large language models.

Jim Cramer (3:36)

If Jensen were here, let's say Jensen were here.

David Faber (3:39)

I wish he was. Can you bring him sometime? I'm going to do my best.

Jim Cramer (3:42)

I'm going to do my best because I think what Jensen would say is, look, we have great competitors and they're terrific. When you see the Vera Rubin, you're going to say, why would you ever buy that TPU?

David Faber (3:55)

Right.

Jim Cramer (3:55)

Because the changes, the leapfrog, I mean, look, this Gemini has been, I don't know, I'm not on anything, but I'm on these things constantly because I'm just like, now look at him for like, what do you think about this lousy offensive coordinator, the Eagles? And he'll explain to me that, don't forget the Eagles have a great record. It's so damn smart. But David, Meta is the winner. Because Meta stock is going down endlessly on the amount of money it's going to have to spend.