Closing Bell - Closing Bell: Investors Eye Communacopia Headliners 9/11/24

Episode Date: September 11, 2024

Altimeter’s Brad Gerstner joins Scott Wapner live from Goldman Sachs’ Communacopia conference talking all things tech. Plus, New York Life Investments’ Lauren Goodwin and Jason Snipe of Odyssey react to that big interview and discuss their forecasts for the market. And, shares of Novo Nordisk got a big boost thanks to some new weight loss drug data. We drill down on the details and what it could mean for the stock in the long run. 

Welcome to Closing Bell. I'm Scott Wapner, live today in San Francisco, the Goldman Sachs Communicopia and Technology Conference. Some big interviews are on the way. In just a second, we're going to be joined by Altimeter Capital founder and CEO Brad Gerstner. That's a big one. And a little later, George Lee. He's the head of the Goldman Sachs Global Institute. He's going to be here as well to talk all things AI, and we are excited about that one, too. In the meantime, let's take you to the markets here with 60 minutes to go in regulation. What a different picture it is at this moment because it was a rough open. It has turned around, though, thanks to some buying in big tech. NVIDIA leading the way today.

CEO and founder Jensen Wong telling this very conference he is still seeing, quote, great demand for the company's chips. Financials have been the weakest part of the market today as well. Some of those have turned, too, including Goldman Sachs. Chairman and CEO David Solomon telling us earlier in an exclusive interview that things look pretty good in the economy right now. And that was a big deal. Look at that stock trending higher throughout the afternoon and now in the green by one half of one percent. Let's bring in altimeters Brad Gerstner now. He is live here at Communicopia with us. Thanks for joining us. Great to run into you here and see you. It's good to be here. Good to be here. There were there were two moments I think today you know the markets were a little rattled and Jensen

Wong was on the stage downstairs and just continued to talk about AI and the great demand that he's seeing. David Solomon, as I said, sat with us and said things in the economy look pretty good. You were sitting in on the Jensen conversation. It's now your biggest holding, isn't it? It is. It is. I mean, as you know, really going all the way back to January 23, it's been among our biggest holdings. It is our biggest holding today. You know, there's been a lot of concern over the last couple of months, whether or not there's an AI air pocket. You know, Satya and Sundar got on their calls and said it's more important to overinvest than underinvest at this moment in AI. But we heard a few things this week, Scott. Elon Musk and Sergey Brin down in L.A. earlier this week at the All In Summit both said that the pace of AI is faster than any other tech development they have seen in their lifetimes.

Yesterday, Dario from Anthropic was here. Kevin Scott from Microsoft was here saying that, you know, demand is continuing to outstrip supply. We heard the same from Thomas Kurian. So when Jensen took the stage for NVIDIA this morning, he said nothing's changed. Of course, there was some concern about a Blackwell delay. He took that off the table. He said Blackwell is on target for Q4 ramping and scaling of production. So I think that as we look at 2025, we're at about $5 a share for NVIDIA. It got as low as $100.

That's 20 times earnings for the most important company in compute today. So I think that people are starting to lean back in to some of this big tech ahead of the election. Is that when you made it your largest position during that disruption a little more than a month ago? We added a bunch to our position, almost doubled the size of our position when it was disrupted earlier in August. And again, it's been very volatile. I think we'll continue to be volatile while people await that print in Q4. But how are you thinking about the return on investment? I mean, you alluded to the concerns in the marketplace about all the money that's being spent, the CapEx up 40 or 50 or even more percent on an annual basis. At what point, though, do we really need to see the fruits of all of that cash?

A critical thing to remember is NVIDIA is not just in the business of generative AI, right? What Jensen has reminded us is that we're going to have to replace the trillion dollars of CPU-driven data centers. This is stuff that drives things like data processing, everyday workloads in these data centers. And so you have a trillion dollars over the next four years of generative AI workloads that we're going to invest in, and a trillion dollars of CPU replacement that we're going to invest in and a trillion dollars of CPU replacement that we're going to invest in. And so I think you're seeing incredible returns. He said this

morning for every dollar invested by the hyperscalers, they get five dollars out of the generative AI workloads. He also talked about data processing. He said for a company like Databricks, they can drive down the cost of data processing by 95%. Their operating costs on a certain workload goes from $20 million to $1 million. So I think this, you know, the red herring about ROI here is one that Wall Street spends a lot of time thinking about. But when you look in the boardrooms of all the hyperscalers and the big enterprises, they're all leaning in and investing the other thing he talked about that

i thought was pretty interesting was a lot of what we hear when folks talk bullishly about apple he talked about their installed base not only on the gaming side but on now the super computing side as it relates to ai and it got me thinking about the way people talk about Apple. It also goes to the question of moat versus first mover advantage. He implies that he thinks they have a moat because of that installed base. Well, I mean, when you think about the stack, this is no longer a computer chip. Blackwell has seven different chips in the system the system is the entire data center and so the advantage you know we also talked about CUDA a lot of people point to CUDA as a

as a moat for Nvidia but he said CUDA is just the beginning of our moat we have 350 libraries that sit on top of CUDA. These are things like CUDA.io and CUDA.dn that are specific algorithms targeting things like data processing or image generation or things like recommender models. And so I think the width of the stack is one that is much greater than people think. And he said the only thing that really competes is Google's TPUs. And he actually gave a pretty good shout out for Google's TPUs this morning. Are you as optimistic about the other companies in which you have positions in, whether it is still, you know, the Meta?

Obviously, you will forever be identified with Meta because of the letter urging them to get fit, in which they sort of push back at first, but then listen and look what the stock has done since. But whether it's Meta, it's Amazon, now it's Apple, it's Microsoft, Alphabet. Let's just take Meta as an example, because I think it's representative of the opportunity we're going to see over the next three to five years in large cap tech and in tech generally. I just got out of a meeting with a smaller tech company. And the question I asked them is, can you do more with less? Right. Over the next five years, are your margins going to expand?

And they said, absolutely. Why? Because they're getting 30 percent more productive in terms of code generation. They're getting more productive in terms of customer service. They're getting more productive in terms of customer acquisition. You know, Zuckerberg gave an interview last night to the acquired podcast guys here in the city. And I think that that was one of the great takeaways. He said, I'm in founder mode. I'm sitting in the seat.

I'm driving the big opportunities. He thinks that, you know, glasses, which are going to be fully capable of doing everything an iPhone could do, is the next, you know, computing platform. But I think the most impressive things is that, remember, when you and I sat there in the fall of 2022, about the time we wrote the letter, they had 87,000 employees. Today, they have 65,000 employees, 20,000 fewer employees,

and the company is growing as fast as it ever has. The overall exposure you have right now to the equity market is what? You always give us a real-time update on sort of how you stand, what your scorecard is. Yeah, that's right. What is it? We started the year with about 80, 85 percent net exposure. So, you know, we had a lot of chips on the table. By this summer, where the markets had run up a lot, we were more worried about economic growth, some of the things that we're seeing in the election, we took our chip stack all the way down to 30 percent. And today we're back around 55 percent. So we're about half in in terms of the market. We're not all in. We think there are some things the market's got to get through. It's got to get through this election. Right. The election is

going to have a big consequence on risk appetite. Right. Is do we have a split government? Is do we have a government that's controlled, you know, full stack by Democrats or full stack by Republicans? We don't think that the markets would take too kindly to that. And so we've got to see that card get turned over. What's going to happen on rate cuts? We heard this morning we're likely to get two or three rate cuts between now and the end of the year. I think we're going to get 50 in September. But, you know.

You think you'll get 50 next week? And the reason I think it, not because the Fed's worried about the year. I think we're going to get 50 in September. But, you know, you think you'll get 50 next week. And the reason I think it not because the Fed's worried about the economy, I think it's because the level of restrictiveness is greater than we've seen in two decades. We don't need this level of restrictiveness. Right. When we see these CPI prints and when we see the jobs report, we should be more worried. And I think the Fed is appropriately saying we don't want to be the cause of the recession. Let's hit it with 50 up front and then we'll do you know, we'll do our 25. But whatever they do, I don't think it's not bailing out the economy. It's just getting back

on sides. They're way off sides in terms of their restrictiveness at the moment. Should they have cut already in July? I mean, I think there's a case to be made for that. But listen, they wanted to show that they were going to put a stake in the heart of inflation. And so they you know, they're on a path here. Nobody would have guessed that they could have slayed, you know, inflation the way they have without putting us into a recession. Remember when Mike Wilson was calling for the hard landing in the spring of 2023? There was the consensus was there was no way that they could pull this off. Some are still calling for it.

I think as of now, Jerome Powell deserves a bunch of credit. They were late in getting on the game. I was highly critical, as you know. But I think that they've stayed the course. I think now we'll see whether or not they're, you know, get back on sides. I think they need to get on sides. Wow. So you're, sounds firmly in the soft landing camp at this point. I would say that that's the fat part of

the distribution curve, you know, but there is, you know, there are tail risks on both of these. If I, if I was firmly in the soft landing camp and I believed we were at the start of an AI super cycle, I may have all my chips on the table. You wouldn't be 55%. I can paint a scenario for you where between now and the end of the year, we're down be 55%. I can paint a scenario for you where between now and the end of the year, we're down by 10%. I think the market would not like, you know, a full stack Democrats controlling, you know, both houses of Congress plus the White House. I can also paint a scenario for you where we have a real takeoff, right, where the Fed gets on sides, where we have split government, where we see these, you see these AI tailwinds come through.

And so I think when you walk around this conference and you talk to people, everybody is like, they're saying, we need to be agile. We need to be agile in terms of our trading and our exposure management. Are you leaning more towards the former or the latter? Where you get, because of what's happening in AI, inflation is conquered. Everybody got so grumpy at the beginning of August, we took up our exposure, right? Price of entry matters. Buying NVIDIA at $100, I think, was a layup this year. But NVIDIA at $140 would be a bigger, you know, a bigger question, right?

You would have pulled forward a lot of those returns. So I think for us, we're doing what other managers get paid to do. We've had a good year. The market's up a lot of those returns. So I think for us, we're doing what other managers get paid to do. We've had a good year. The market's up a lot. And we're just managing our risk until we get some more of these cards turned over. The election, rate cuts, economic growth. Let me ask you one more question before we go. Outside of AI, the most exciting position you think you have, because you have a couple dozen positions right is what you look at companies like mercado libre or a company like coupang in korea um uh you know these are there are a lot of companies that people have kind of forgotten about as they moved in

to the mag 7 right i think there are going to be a lot of internet companies that are benefited by ai like i said not only margin expansion but re-acceleration at the top, where they can acquire customers, improve their products, you know, in a way that make it easier for customers to buy, take friction out of the system. I'm still excited. I think the improvements that we're seeing in Instagram and the core products at Facebook, nobody would have ever thought we would see this re-inflection and growth. And then I think, of course, the trillion dollar question remains, which we talk about on this show. Five to seven years from now, we are not going to be using 10 blue links. My children don't even consider using 10 blue links as a way to find information.

Is it going to be chat GPT? Is it going to be meta? Is it going to be Google reinvent themselves? Who is going to sit at the top of the funnel to help people get answers to their most fundamental questions? That's going to occur both with consumers and in the enterprise. We just invested in Glean, which is chat GPT inside the enterprise, which we're really excited about. So those are the big questions we're going to see play out over the course of the next two to three years. I think we'll leave it there. It's so great to catch up with you here and especially now, just given the questions that are being asked. And you've given us some really good answers on perspective on where all this is going. Brad Gerstner, of course, he's the founder and CEO

of Altimeter. Thanks so much. Great to be here. All right. Let's bring in now Lauren Goodwin of New York Life Investments and Jason Snipe of Odyssey Capital Advisors. Jason's a CNBC contributor. Lauren, I'll go to you first. Just look, the price action alone today is a good place to start. And just what your thoughts are based on what we've heard here and your overall view. Well, the inflation report that we saw today is confirming a trend that we've acknowledged over the past couple of months, where now that the Fed is and I think appropriately so focused less on inflation and more on economic growth that completely changes market reactivity. It means that now good economic news and I would include today's

inflation report as relatively good news a little stronger than the markets were expecting. That's going to be good news for the market. It's going to be good news for the tech sector at the expense, probably, of financials like we're seeing today. Bad economic news, though, any sort of data that comes in will be the opposite. I think we'll see tech lose leadership in those moments, as has been the case in the past couple of weeks. I would just say on the note on the economy, let's play for you what Goldman chairman and CEO David Solomon told me exclusively a little bit earlier today on the halftime report about how he sees things shaping up right now. I think generally speaking, the economy is still in pretty good shape. I think we're going to get a couple of interest rate cuts here that has been widely telegraphed at this point in time. And so, you know, base case, I can point to things that are slowing a little. There's

some consumer spots. You've heard it through earnings, et cetera, where there's a little bit of softness. But generally, I think the economy is in pretty good shape. And my base case is we're going to continue to chug along through the fall with a lot of attention to the news, whether political, geopolitical or otherwise. All right. That was David Solomon with us earlier exclusively. Jason Snipe, I felt like that clarity today from Mr. Solomon helped the market overall. Absolutely, Scott. I thought it was a phenomenal interview from Solomon and you, of course. So for me, as it relates to Goldman, I mean, that's one of our favorite names in the whole financial space. And what we always say to folks, I mean, the financial space is obviously very diverse.

There's a lot of different companies. There's a consumer banks, there's a regionals, money centers, obviously, and investment banks and capital markets. And when I hear what Solomon had to say, which I was excited about, and we've been hearing this from him for quarters already, they are exiting the consumer business. That is in full play. Yes, there'll be a $400 million hit to earnings. That's okay. I think they'll get through that. And they did talk about a 10% reduction in trading revenue off a humongous base. So that, as we look through the end of the year, and obviously we're 54 days away from the election, that vol will continue to perk up.

So I'm not concerned about, you know, trading revenue. I think that will be solid for me. And then, you know, the capital markets piece, yes, obviously M&A, IPO, underwriting business has been anemic this year. And we've been talking about it really getting started in earnest in 2025. I think that likely will be the story as we watch Fed policy come into play and rates starting to ease somewhat, maybe 100, 150 basis points over the next 18 months or so. So I think there's a lot of good things that we see here in Goldman, and the price action has been very solid thus far this year. And I see it as an opportunity in the pullback that we've seen over the last few days. Lauren, next week, it's a big,

the moment of truth, really. The Fed, we think or expect, is going to cut interest rates. Does 25 or 50 even matter? It does matter, Scott. I think, first of all, the difference between 25 and 50 basis points really plays into that story of market reactivity, where if the Fed were to cut 50, signal maybe they're a little bit more concerned. That's more liable to be a defensive move for the market risk off. I don't expect that to happen. Today's inflation report signaled a strong push toward a 25 basis point cut. But even at 25 basis points, it is so important for investments and for the economy that the Fed

is now moving in this direction. And I say that for a couple of reasons. First, I completely agree that the Fed moving lower in its interest rate policy is likely to kickstart deal flow. This is an environment where private credit growth has been stale as a large part because of yield curve inversion. The Fed moving towards yield curve normalization is likely to

kickstart private credit growth, which helps in the private markets, the IPO market, the M&A market. But also for everyday investors, maybe outside of the private markets, income generation opportunities change in a meaningful way when the policy rate or the cash rate starts to move lower. And so no matter what we think about market sentiment, the sector moves one way or another, the election volatility that we're likely to see moving towards capturing the higher interest rates that we have while we have them, I think is pivotal for asset allocation in these next few months. Jason, I'm looking squarely here at NVIDIA today on my computer up near 7%. One of the big stories of this market and the commentary we got downstairs earlier this morning here from

the founder and CEO of that company, Jensen Wong, who spoke about the great demand that he's seeing among other things. You're a holder of that stock. You heard Brad Gerstner here talk about the great demand that he's seeing, among other things. You're a holder of that stock. You heard Brad Gerstner here talk about the weakness that it had at the beginning of August, which presented an opportunity. Your thoughts on that? There's no doubt about that, Scott. Obviously, the stock has pulled back 20% over the last couple of weeks with the unwinding of the carry trade. But if you listen to Jensen and listen to obviously all that he said,

there's no shortage of demand. And that was obviously on the earnings call. All we've heard from all the hyperscalers is all the CapEx that's being spent here. And I think I agree completely with Brad in focusing on really what's going on internally in these companies. What are the executive staff focusing on?

How do we implement these AI solutions for our customers and our providers? How is this going to exclude it? How does it really affect productivity? I think that's really what folks are focusing on. So the CapEx is there. Obviously, NVIDIA is right on the interstate as far as the demand for the actual technology, what folks are obviously looking for. So for me, maybe this was a little gap in the story. Yes, AI has been a lot of the story for the better part of this year. But I think hearing from him today and hearing from him on the Ernst call

only is further confirmation of what's to come to pass in the future. And I think we're very excited about that and the opportunity that the price action has presented over the last few weeks. Lauren, this is going to be three days in a row for the Nasdaq, assuming for the next 40 minutes we hold these gains. And there's been a pretty good bid today in these other mega caps, as I see. And certainly the chip space, a lot of these stocks are down tremendously from their highs, but this space has been looking better, too. Do you have a good feel that whatever broadening story was being told before is now going to find its way back towards the growth trade and these tech names? I'm a little tentative on it, Scott. And the reason for that is that in rate-cutting cycles, including in the 1995-96 soft landing

rate-cutting cycle, that move lower in interest rates came at the expense of the technology sector. Now, I don't think that's necessarily a nail in the tech coffin, because the structural story underpinning semiconductors, infrastructure, and the manufacturing renaissance in the United States is very much still at play. But on a tactical basis, if we do expect growth to slow, interest rates to move lower over the next 18 months, that is at least for the next six months in an environment where tech as a sector is likely to be more tentative, where sectors like materials, industrials, more defensive sectors as well,

may be more likely to outperform. We'll leave it there. Lauren, thanks so much for being with us. Jason Snipe, you as well. And of course, our thanks to Brad Gerster for kicking it off today. Now we send it to Seema Modi for a look at the biggest names moving into this fast-changing market today and certainly into the close. Seema. Yeah, 38 minutes left in trade.

Scott, with GameStop tanking today, the video game retailer reporting a steep decline in second quarter sales compared to a year ago. The company also announced an at the market stock offering of up to 20 million shares. The meme stock is up about 14 percent year to date. Let's talk William Sonoma added about three percent after Jeffries upgraded the stock to buy from hold. Jeffries said the home furniture has, quote, hidden gems within its portfolio and could benefit from an even modest recovery in the housing market. William Sonoma up more than 30% so far this year. Scott? All right, Seema, thank you very much for that. That's Seema Modi. We're

just getting started. Up next, the co-head of the Goldman Sachs Global Institute, George Lee, joins me right here on set. We discuss the future of AI, the sectors that it could impact the most. We're live from the Goldman Sachs Communicopia and Technology Conference today in San Francisco. You're watching The Closing Bell on CNBC. I think it's fun to be inventing the next computer era. It's fun to see all these amazing applications being created. It's incredible to see robots walking around.

It's incredible to have these digital agents coming together as a team, solving problems in your computer. It's amazing to see the AIs that we're using to design the chips that will run our AIs. Well, that, of course, NVIDIA CEO Jensen Huang speaking with David Solomon earlier today right here at the Goldman Sachs Communicopia and Technology Conference. Joining us now for more on AIs road ahead is George Lee. He's the co-head of the Goldman Sachs Global Institute.

It's nice to see you. Welcome to our program. You too, Scott. Great to be here. I feel like Jensen set this up perfectly for my first question to you, which is, where are we in the AI cycle? Yeah. I mean, first of all, it's great to hear Jensen. First, it's great to have him at the conference. But to hear that sense of wonder and excitement that he brings to leading what is arguably the most important company in this revolution, I think it's inherently exciting.

And the buzz after his presentation was terrific. So where are we? Like the national anthem is finished, but we're in the very early innings. And I would emphasize this is a nascent technology. And Jensen mentioned this in his remarks, it's a new form of computation. And so that new paradigm takes a while to make its way into consumer habits. And more importantly, it takes a while to make its way into the habits, and more importantly, it takes a while to make its way into the enterprise. So enterprise adoption, enterprise readiness, you know, it's going to be a slower burn. But make no mistake, this is an exciting era, a brand new paradigm for the way that we experience computation as humans.

On that note, I looked back at a conversation you had in the spring with Tony Pasquarello, colleague, of course, of yours, very well known to our viewers because he comes on our program. And you said the following, and I want to bring this up again. You said, quote, the degree to which this technology just dropped on the face of the earth and seemed immediately consequential to people is quite unusual. And that degree of unanimity is building up rather than dissipating. Now, you could take that one of two ways. I mean, you could say, well, that's incredibly bullish, or you can say, wow, everybody's on the same side of the same boat. How should we take it? Yeah, it's a great question. You know, per my comments, it is fascinating in the sense that there was this moment,

November 30th, 2022, where the public at large got a sense of accessing and having a conversation with a machine. It was like a fundamentally new way to think about computation. And it attracted enormous amount of attention. And yeah, I think the unanimity, the confidence that this is going to be transformative for businesses, for nation states, for our world, you know, continues to build. That having been said, I think there's a healthy debate that's going on, a set of divergent views about how fast this is going to happen, whether or not the scaling laws persist into perpetuity, what bottlenecks and constraints we're going to face,

the data wall that people are talking about. So I'm actually encouraged that while the enthusiasm's building, there's an enormous amount of investment, obviously, there's also a good two-sided market about the pace, timing, and ultimate scale of impact to this technology. I think that's healthy. How quickly, though, do we need to realize the investment on the spend? Yep. The return on the investment, obviously. Yeah. I mean, our investment research folks have done some really interesting work on this.

And I do think we have to look at this in the sense of we're building a platform. The platform, it will take a while for that platform to translate itself into applications and use cases that create the kind of economic impact we're all looking for and waiting for. extremely encouraging early evidence of this. And you've had CEOs like Andy Jassy and Doug McMillan and others talk about tangible dollar savings and speed ups, you know, reduction of latency. So, you know, I think there's real impact. It's just going to take a while to make its way through the system. And again, enterprise, changing enterprise habits, fastening this technology into enterprise architectures, making it safe, reliable, authoritative. All of that takes time and effort. The other point you made with Tony that I thought was really interesting was as much as you travel around and you meet with different CEOs, whether older, younger, it's generationally unanimous, the excitement.

Whether you're talking to an older CEO or a founder, a young founder of a company. I thought that was fascinating. Yeah, I don't run into many CEOs who are older than me anymore, unfortunately, having been around the game for a while. But you're right. This is a multigenerational phenomenon. I think one of the fascinating things from the Apple announcement the other day was the adoption of AirPods for, you know, basically hearing, essentially hearing aid kind of thing. So, look, this is a technology that is widely accessible. We've got this platform of, you know, billions of phones in the hands of consumers.

The ability to just access intelligence, to have a conversation with an infinitely smart, patient, nonjudgmental machine, pretty impactful no matter what your age or station in life. I think we're trying, you know, certainly the investor base, the investor class is trying to assess which sectors are going to be most impacted by AI. How should we think about that? Yeah. Look, at the highest level, I think you'd say knowledge work in and of itself is going to be transformed at some level. We have the opportunity to reduce the latency, inefficiency, and toil of knowledge work,

which is manifest. And not only that, we also have the opportunity to expand the envelope of creativity that knowledge workers can bring to bear. When you remove the space taken up by rote, low-value tasks, it allows you to spend more time being thoughtful, creative, innovative, et cetera. So I think this opportunity to ask and answer questions in the moment that have been prohibitively difficult in the past, really going to change almost. I think it might be easier to say what billion-dollar market is not going to be transformed at some level. So obviously the developer community, you know, clear traction in that area, customer support, law, medicine, you know, almost across

the waterfront. There's real tangible impact and more to come. What about your own firm? Yeah, absolutely. How are you thinking about that? Yep. We, you know, Knockwood, we're a firm that has been deeply engaged with advanced technology for many, many years. It's been kind of a signal dimension of our strategy. We have a great group of engineers. We have great leadership in our CIO, Marco Argenti. And so from the very beginning of this generative AI wave, we've been trying to be thoughtful about how to deploy these tools to create efficiency and allow our people to be more productive and creative. That having been said, we're a regulated financial institution. We have to move carefully, thoughtfully, deliberately.

But we already have a handful of applications out there making a big difference, probably most frontally for our developers. And we're seeing kind of productivity and giving them access to that salient, timely, and creative information right at the point of engagement with clients is very exciting. You mentioned at the outset, which is not lost on me, in terms of when I asked you sort of where we are in the cycle and those who are going to be impacting, those who are investing. You said nation-states. It got me thinkingically, how we need to be thinking about artificial intelligence and the role that it's going to play. Yeah, it's fascinating. I've been in technology for 30 or 35 years. This is, you know, a technology wave that is distinctive by

the fact that nation states view this as being highly consequential to their productivity, their culture, and their defense. And so one of the cool things about building this Goldman Sachs Global Institute that I'm doing with my partner, Jared Cohen, is traveling the world talking not only to CEOs and board members, but world leaders and policymakers about what the influence of this technology should be, how they should position their countries. And I think, and Jensen himself speaks often about sovereign AI. So I think it's going to be fascinating to see whether AI is expressed in a sort of regional dimension, their regional blocks of models, whether they're national models or whether, you know, it's a little bit more like the internet with a few exceptions.

It's largely a single global platform. I think TBD. All right. TBD for us. We'll have this conversation again. Great. I hope. It's great to see you. Thanks for coming on our program. Always a pleasure. All right. It's George Lee Goldman joining us here at Communicopia. Still to come, we're going to break down the new data that is sending Novo Nordic stock higher today. Bell's coming right back. We're back on the bell live today from San Francisco, the Goldman Sachs Communicopia Bell is coming right back. Right now it's Nvidia because it's been trending higher throughout much of this day. The founder and CEO, Jensen Wang, was here earlier this morning, bullish. You can see the trajectory of that stock throughout the day. Brad Gerstner sat with us about 40 minutes ago and said he added to the stock during the August weakness there.

Now his largest position, as bullish as he's ever been there. Stock's up 7.25%. Joining me now on set with the big takeaways from this conference today is Kate Rooney. It's good to see you. You too, Scott. It's great to be here. That's a good place to start. But what are your big takeaways from those you've spoken with and the rooms you've been in? Yeah, so Jensen was a big highlight. I've been talking to a lot of people more on the sidelines, sort of the investor group here, a lot of private equity folks, a lot of venture folks, a little bit of late stage growth equity. AI is the big

theme. But interesting, I'm hearing a little bit of what someone described as AI fatigue. So the difference in this disconnect between what you're hearing from Jensen, what you're hearing from some of the CEOs on stage, AWS CEO as well, and all of the bullishness on stage versus behind the scenes, there's a lot of people saying a little more skeptical. They're a little bit burnt out from the AI conversation. And they're wondering about ROI. I know you've been asking people that today. When are we going to see this actually return to investors? And then they also brought up Copilot as one example of Microsoft.

And Copilot really being the big example of, oh, yeah, that's a tangible thing that people can point to and say it's working. It's not working based on, you know, what people are saying here. I would also say the consumer is a big focus. There's a lot of tech investors here. They're not necessarily focused on consumer spending, but they want to know the read-through to the economy. They pointed to Uber, DoorDash, Lyft, and some of the panels here. They said they painted, those CEOs painted a pretty rosy picture of the consumer.

So they were actually quite bullish on some of the spending patterns. And I would say those are two of the big themes. I think there's a good amount of conversation, too, about M&A, IPOs. Of course, we asked David Solomon the very question, because they're at the heart of, obviously, that business. Let's listen to what he told me about that. As more banks report earnings as we go through the fall, you're going to see that there's a material improvement in investment banking activity, particularly strong improvement in debt capital markets activity, and improvement in both M&A and equity capital markets activity. But what I would say, Scott, is I would have expected at this point in time more of an acceleration back to what I'd call normalized

levels. We're still on equity capital markets and M&A running below 10-year averages. I see no reason why we're not going to get back to 10-year averages somewhat quickly. Now, that said, there's nothing that's fundamentally changed that says all this pent-up activity that's been held up won't come through. And when it does, we're incredibly well correlated to it. And I do think it's going to come through. So I do think you'll continue to see a pickup through the fall of 24 and into 25. Okay, so that's Goldman's chairman and CEO David Solomon here with us earlier. Does that match up with what you're hearing? Absolutely. I would also say one of the big themes is sort of this mismatch between the buyers and sellers and the pricing. The vintage of the fund is really important, especially in private equity. If you,

and your private company that raised money in 2021, you're not going to make that money back if you go public now. So that's something I've been hearing from investors saying those companies, that cohort, that vintage of companies that raised at the peak, they're waiting. And there is this pipeline. There is this sort of backlog of companies. I've been talking to people who say that the IPO window is open. It's possible to go public. And people are pointing to Databricks as sort of a blue chip example of a company they hope goes public, probably has a pretty good chance of listing. But there is this hesitation right now. There's also a little bit of talk about what November means for all this sort of a hesitation to go out before the election, even if there's no big policy changes. There's kind of a flurry right now of VC deals getting done and then other people saying, you know, we're going to wait

until the new year. So that's that's been an interesting theme. All right. Good stuff. Thanks for all that. That's Kate Rooney joining us right here. Don't miss Kate's interview, by the way, with Affirm CEO Max Levchin. That's coming up on Fast Money tonight. We're looking forward to that, too. Up next, we're tracking the biggest movers as we head into the close today. Seema Modi standing by for us again with that. Seema. Well, Scott, the big talker today beyond the markets is the presidential debate.

A number of stocks are moving on it. We will reveal the biggest ones right after this break. We're less than 15 from the closing bell. Let's get back now to Seema Modi, who's tracking the biggest movers into the close today. Seema. Scott, let's start with solar stocks. Climbing today after last night's presidential debate with some investors seeing Vice President Kamala Harris as more supportive of the industry. Former President Donald Trump said during last night's faceoff that he's, quote, a big fan of solar.

But then he also slammed the industry for taking up too much land. We're looking at shares of First Solar leading the pack higher by nearly 15 percent. Let's take a look at insurance stocks getting hit on growing fears that another Democratic administration may freeze M&A activity, seen as a potential source of growth for the entire sector. Travelers, Chubb, among those in the red, both down about 2 to 3 percent right now, Scott. All right, Seema, thank you for that. Seema Modi still ahead. IBM shares hitting a record today. We're going to tell you what's driving that pop when we come back. We're now in the Closing Bell Market Zone. CNBC Senior Markets Commentator Mike Santoli here to break down these crucial moments of the trading day. Plus, Angelica Peebles on big moves

and Novo Nordisk and Roche today and IBM hitting a record high for the first time in more than a decade. Seema's going to tell us exactly what's going on. Mike, if you're just tuning in now, man, you missed a day. Yeah, I know I've been I've been tracking it, but many people maybe would be surprised to see the green. You know, it's very hard to assign any specific sequence of cause or even to decide if this is a decisive reversal or not. But a few things happened around the same time that seemed to set things up. One, obviously the reaction to the CPI report seeming to solidify the idea that a quarter point Fed rate cut is in the offing

really got the markets far down the path of saying the Fed might be making a policy mistake by going too slow, bond yields crashing. And at 10.50 a.m. Eastern time, bond yields just stopped going down. After a 30 basis point drop in the 10-year yield this month, they finally found a little bit of a floor because they had rallied so much bonds had. So they start going up. The indexes follow right at the same moment. 5,400 on the S&P tested. It

was exactly Friday's low. You got this big flush of volatility. The debate and the CPI were the two nodes on the forward calendar that a lot of people had assigned maybe a possibility of a volatility event or a clearing event. So that all gets cleared away. Who knows if it means anything? You've been pointing out the leadership of tech. It's a very narrow rally today. It's not all inclusive. But the pressure came off once bonds started to have some profit-taking hit.

All right. We'll come back to you in a moment. Mike, Angelica, tell us what's going on with Novo and Roche today. Yeah, there's a lot of obesity news coming out of a medical meeting in Spain this week. Novo Nordisk showing that its experimental weight loss pill helps people lose up to 13% of their body weight after three months. Now, that's double what Wagovi saw at the same time, so hopes for this pill are pretty high. Now, this pill targets GLP-1 and amylin, but remember, this is a small phase one study,

so Novo needs more studies to prove these results, and it'll be a while. Novo also saying that it's older GLP-1, sexenda, effectively helping children with obesity lose weight. The company is asking the FDA to expand approval of the drug to include kids between the ages of 6 and 12. Now, Roche is not having a great meeting. Remember, that stock got a big lift earlier this summer on encouraging early data from an experimental obesity pill. Well, Roche sharing the full results this week, and it turns out that those were just based off of six patients,

and there are some concern about unpleasant side effects like nausea. Again, it's early, so we'll have to wait to see more. Scott. Angelica, I appreciate that. Thank you, Angelica Peebles. Seema, tell us about IBM and this new record. Well, this bullish note, Scott, from Evercore ISI, they think that IBM's growth will accelerate going into next year. They think the current street estimates of 5% growth are just too conservative and that should the macro environment remain stable. Analysts think IBM could see room for upside, especially following the closing of its HashiCorp acquisition. Their target is 240 a share. The stock is currently

trading at 209, a new record high. And we've been seeing software stocks quietly outperform chips over the past three months. IBM CEO Arvind Krishna spoke to CBC earlier this summer and remained positive about the AI opportunity with bookings up on a sequential basis. He said he remains that remains a big priority for Big Blue, Scott. All right, Seema, thanks for that. Mike, I'll come back to you. We're about to get that sound effect of two minutes left to go in the trading day. A lot of pressure coming off the banks today as well. You know, those couple of moments today, by the way, NVIDIA right now, as I look at it, is up more than 8 percent. Jensen Wong speaking here at Communicopia.

David Solomon speaking here to us earlier today exclusively on halftime at Communicopia as well. And really giving some good clarity on how he sees the economy shaping up from here. Yes. And I guess coming after two days of investors kind of getting twisted up pretty tightly around the weakening consumer story and the worsening credit story from banks, from financial institutions, I guess there was a little bit of a receptive audience for slightly reassuring tones. You know, I don't think we're going to free ourselves from this treadmill of constantly having to go toward the next data point, need reassurance that the economy is holding together. I do think there's some suspense around the Fed next week.

Look, 25 basis points with a really dovish message probably should be enough right now. Both inflation and real GDP are between 2% and 3% annualized. That's a pretty comfortable zone if it stays that way. But I do agree that it does require people day to day to suggest we're not seeing any sudden or worrisome weakness in the economy. And the market was primed to be receptive to that. Now, look, we're still in this zone we've been in for a while. The indexes are not getting anything like escape velocity here. But it is very much worth keeping in mind that there's kind of two sides to the story. Just because the bond market got itself kind of priced for something

bad in the economy doesn't mean we're going to get it right away. Yeah, we're going to be watching rates moment by moment, that's for sure. We're watching the majors right now. They're going to go out green across the board. What a turn with the NASDAQ leading the way today. NVIDIA is going to go out better than 8%. I will see you tomorrow from one market here in San Francisco.