Closing Bell - Closing Bell Overtime: Microsoft CEO Talks AI ROI, New Copilot Features & Operating A Global Company; Qualcomm CEO On Diversifying Revenue 11/19/24

Episode Date: November 19, 2024

Jon sits down with Microsoft CEO Satya Nadella at his company’s Ignite conference. They talk customer demand for Microsoft’s AI products, the new features unveiled today and the ROI on AI spending. Qualcomm CEO Cristiano Amon on the company’s revenue targets and its plans for diversifying. Plus, Leon Panetta on the escalating tensions between Russia and Ukraine.

Well, that's the end of regulation. Quad ringing the closing bell at the New York Stock Exchange. And Vietris doing the honors at the Nasdaq. Stocks climbing back from an early decline sparked by geopolitical fears. The Nasdaq finishing up 1%. That's driven by big gains for NVIDIA ahead of earnings, which you'll get tomorrow here on this show. That is the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime.

I'm Morgan Brennan at CNBC Headquarters. And I'm John Fort joining you today from Microsoft's Ignite Developer Conference in Chicago, where I spoke earlier with Microsoft CEO Satya Nadella. We're gonna bring you the highlights from that conversation in just a bit. Plus we'll talk to the CEO of C3.AI here at Ignite. He's seated right in front of me. It's surged 24% today after announcing

an expanded partnership with Microsoft on enterprise AI. And we will be joined by Qualcomm CEO as that company hosts its investor day with plenty of attention on the chips today ahead of NVIDIA's results tomorrow. But let's begin with a market action. Joining us is Vital Knowledge founder Adam Crisafulli. Adam, it's great to have you on. It looks like a mixed session for stocks here. The Dow finishing fractionally lower, the S&P fractionally higher, and the Nasdaq, the real standout, finishing up 1% today as big tech really leads the gains here. It raises the question, where do we go from here? Because there are a lot of cross currents for this market. And typically after a presidential election, you see a rally into year end. But we also have rates that are elevated. Yeah. So, you know, to your point, there are a lot of a lot of real cross currents right now. I think, you know, two big tailwinds

are earning. So, you know, we've received the first few October end reports with Walmart, the big one this morning, and corporate America continues to perform very well. You didn't actually see Lowe's rally today, but really you had beaten raised reports out of the big names today, Lowe's, Medtronic and Walmart. You know, Cisco was decent. Home Depot was decent last week as well. So earnings continue to perform well. You have just normal year end seasonality. And like you mentioned, post-election historically has been a favorable time for stocks. So you have seasonality in earnings. The monetary policy backdrop has turned a favorable time for stocks. We've got seasonality and earnings. The monetary policy backdrop has turned a little bit mixed. The odds of another cut at the December Fed meeting have trickled down over the last few

days thanks to resilient data, strong indications that growth domestically remains on a relatively healthy, in a healthy position. We actually got some state level employment numbers today that really kind of, I think, underscore the fact that the depressed October jobs reading was a function of storms and strikes, which most people already assume, but that was kind of confirmed

by some of the state level data we got. So it looks like we'll get a rebound in November jobs in a couple of weeks, in which case the Fed probably will do nothing in December. And we actually could see the BOJ just a few hours after the Fed's December meeting actually hydrate. So the monetary policy backdrop is a bit neutral and mixed. And then the political environment is also a little mixed.

Now, I think markets always knew there would be some pitfalls associated with Trump with tariffs and deficits. But I think some of the initial cabinet decisions have spooked investors and just created some concern that the opening months of the Trump administration will be consumed by some of these battles over topics that, you know, stocks would rather not have to deal with. They want a pro-growth agenda. They want actually deregulation, a more permissible M&A environment, et cetera. And if there's, you know, political capital gets expended on some of these cabinet decisions, that's created some anxiety also. So there's certainly a lot of cross currents, like you said.

Okay. How much should investors be weighing geopolitics here, especially with U.S.-made attackams, which are made by Lockheed Martin, being launched by Ukraine into Russia? I mean, that seemed to startle the markets initially, but we did come back from that. Yeah, so, you know, I think geopolitics, we've been dealing now, you know, I think today was the 1,000th day of this war. So, you know, markets have been absorbing the geopolitical risks, both in the Middle East,

which has been ongoing now for over a year, and in Ukraine for, you know, nearly two and a half years. So the situation is certainly grim and bleak, and there are a lot of geopolitical risks. But the market's been dealing with it for such a long time that I wasn't surprised to see the rebound off of the news from this morning. The nuclear posture change had already been previewed by Russia.

It was just kind of formally adopted today. And if anything, there are some indications that you could see an improvement in the geopolitical front, especially in the Middle East. There's a lot of talk in the last couple of days about a ceasefire in Lebanon. And then there does seem to be some movement, especially among European capitals, to reaching some type of a detente in Ukraine. So, you know, the news today certainly is a lot more concerning, but it's something we've been dealing with. Adam, setting up for tomorrow,

of course, we've got NVIDIA reporting right here in overtime. How important is that report, especially given it was up, what, 4% today? App Lovin was up strong again, which speaks to me of optimism. Bitcoin's been doing well. I could name a few other names. How much of the momentum in this market, and perhaps with the the Nasdaq do you think is hinging on that report? Yeah, I mean, it's

going to be crucial. Tech really continues to drive a lot of this market. You saw today tech was the primary cause of the rebound in equity. So, you know, all of the indications that a big tech with the momentum, it still seems like it is all, you know, all of the indications at a big tech with the AM momentum, it still seems like it is all, you know, firing all cylinders. We had the Vertiv analyst meeting yesterday. They had a very bullish outlook on data center construction. You know, there's been some noise around Blackwell and whether or not there's some,

a heat issue, an overheating issue, but, you know, NVIDIA continues to own this market. They really are not facing a lot of competition and the major tech players are pouring CapEx into data center construction. And you're also seeing now the AI spend broaden out from beyond those hyperscalers. And this is something that Cisco and others have acknowledged that enterprises are now pouring money into AI. It's not just the Amazons, Googles and Microsofts of the world. So all signs suggest that the fundamentals for this market remain very strong.

It's just a question of how much is priced into the stock at these levels, where obviously expectations are very, very elevated. Sentiment's already extremely bullish on the story. All right. Adam Christofoli, Vital Knowledge. Thank you. Let's turn now to some big moves for retail stocks. Walmart hitting a record high, finishing near the top of the Dow after reporting solid Q3 earnings this morning, driven by strong revenue growth. The company also raised its full year guidance, and Lowe's is moving, though, in the opposite direction, despite beating on the top and bottom lines. The company

said it's expecting sales to decline in 2024. Let let's bring in Tulsi advisory group CEO Dana Tulsi. Dana welcome so it sounds like from the commentary out of Walmart conditions overall for the consumer aren't changing much consumer sort of hanging in there how does that bow do you think for the holiday season kicking off in just about a week. Thank you for having me John I thought Walmart's results were terrific it really shows what they're doing in order to activate the consumer. Keep in mind, they just got a bigger share also of some of their higher income households. And so they're gaining share in a time when the consumer wants value. What does it mean for other earnings coming up? Frankly, discounters and off price are what's working. I expect tomorrow when we hear from TJX, we'll continue to hear traffic drive the sales gain. I'm looking for sales to be up in excess of 5% for TJX. And I think, keep in mind, general merchandise improved at Walmart also, which hopefully bodes well for Target. But Target has 48% of their sales allocated to general merchandise, whereas Walmart, 60% is to grocery and essentials.

So what about Lowe's, especially in light of what we heard from Home Depot? What's the sense around some of that bigger spend, and maybe that spend that's not necessary to get through the day or through the week? I think overall, when you think about the home improvement retailers, the inflection point isn't here yet. We need continual rate cuts in order to be able to drive an acceleration in the top line. And think about what you saw at Lowe's where the big ticket goods still didn't work very well, they were softer, yet they were able to raise their sales guidance while trimming

the operating income a little bit. I think you're not at the inflection yet, but you're on your way both for Lowe's and Home Depot. So, Dana, looking to Target specifically tomorrow morning, I realize it's probably the most direct peer to Walmart, but it also tends to be more skewed toward discretionary spending as well. So not only the read-through from Walmart, but also what an incoming Trump administration is going to mean for some of these big box retailers, especially names like Target, where tariff exposure could be potentially large.

Yep. When you think about the tariff exposure, it's something we're very concerned about. We just wrote a big piece on it. Overall, what we're seeing is, look what Walmart said, 60 percent of their goods are made or grown in the U.S. You take a look at Target, where 48 percent is general merchandise. They're going to have work to do. It's been said that certainly with tariffs, apparel is going to be one of the areas that needs to diversify the most. And with those tariffs that could be incoming up to 60%, could we see double-digit price increases? That's not good for Target or for any of the apparel retailers. And that's why you're seeing more

of them accelerate the pace at which they diversify their sourcing. Product innovation and newness is definitely what matters. Target certainly has that with a lot of their collaborations and partnerships. But price matters also. We saw in the last time that tariffs were increased, companies were able to navigate, but you're watching in order to be able to see how much do you have to raise those prices, and that still remains to be seen. When you think about 2025 guidance that's given in January or February when companies report their holiday sales,

we could see operating margin pressure from the tariffs given it's not for free to diversify your sourcing because, as many say, there's no China like China in producing these goods at lower cost and expertise in manufacturing. One to watch as we look to the months ahead. Dana Telsey especially as companies like Target have been slashing prices on so many goods at least right now. All right. Thank you.

Thank you. Now let's turn to senior markets commentator Mike Santoli for a closer look at consumer stocks. Mike. Yeah, Morgan, you know, I've been focused on a bunch of parts of the market that had their peak about three years ago and that have been digging out from it. That includes consumer discretionary. That's what this is, the equal weighted consumer discretionary ETF. And over a three year period, you see this big trough and then finally nosing ahead of equal weighted consumer staples. Now, if you look for the last two years, consumer discretionary, that period of time, you see discretionary has really outperformed quite

a bit because it's up a lot while staples are down quite a bit. So it's not a new trend, but finally has surmounted in relative performance terms what staples is. Now, even within consumer staples, they'd be even weaker if not for the most consumer cyclical components of the staples. Take a look here at Walmart and Costco. Together, they are almost 20 percent of the consumer staple sector of the S&P 500 relative to that's the staples ETF XLP. Got my etch a sketch wrong here. And that's, of course, the equal weightedweighted version. So you see real laggard behavior on traditional consumer staples where you have the big box retail components, John, really kind of owning the sector. All right. I think you just shake it to get it to a race, right?

That's exactly right, yes. That's how that thing works, I'm like saying. Well, we're going to have much more from Microsoft's Ignite conference after the break, including the big highlights from my conversation with Microsoft CEO Satya Nadella, plus C3.ai CEO Tom Siebel is going to join me right here to talk about the Microsoft partnership news that sparked a major rally for his stock today. Overtime's back in two. Welcome back to Overtime.

I sat down in an exclusive interview with Microsoft CEO Satya Nadella here in Chicago at Ignite. We started on the announcements here, which particularly seemed to counter the idea that customers aren't really using co-pilot AI tools in Microsoft software. Just to put it in perspective, it's the fastest selling adopted suite of Microsoft 365 ever in our history. You know, 70 plus percent of the Fortune 500 have deployed it, they're coming back for more seats, so we are excited about this next phase. The other side of it is also pretty exciting for us because we are taking everything we have built as the platform underneath Copilots and making it first-class available to developers to build their own agents and their own Copilots and that's where what

we've done with Azure AI Foundry which is the new app server for the AI age of fabric at the data layer and of course GitHub Copilot. Today UBS has scaled it throughout their enterprise so is Vodafone so is BlackRock so we already have at scale deployment of big companies that's happening. And in fact, 200 plus customers that we're talking about who are going in through that. But the thing that we announced today is something called co-pilot analytics, right? Where you literally can take a high level KPI. Let's say you're a territory manager in sales and you want to say, hey, am I closing deals faster? I asked Nadella about the trajectory of AI adoption

because the market seems to be betting it'll be rapid and straight. He said he's more focused on where we'll end up, knowing it might be a bumpy road. I'm not obsessed about sort of exactly is this a linear path, which we know it cannot be a linear path because the adoption cycles are adoption cycles. The build cycles are no one, know the network effects happen so you have to sort of get out there build the product first and so I think we're in that phase one thing I'd say John is that perhaps having lived

through let's take even the last big one the cloud one what happened in the cloud over ten years let's say is happening with AI in a compressed period, like maybe half the time. I mean, if you think about, let's say we built two, three gigawatts of cloud capacity over the 15 years, we're going to add something like that in the next couple of years, right? So that's the time. And you can even say that's catch up because there's not a single application that's not going to be an AI application. So a little bit of the supply side you're seeing here is a real catch-up growth because applications are all changing and being morphed by the new platform. Last year, February, was to me a big moment. I was sitting down with you again. You were rolling out Bing search with AI added. The hope was gaining share from Google last I checked Google still got 90% roughly search share globally open AI is now

rolling out its own search capabilities what went wrong well nothing went wrong I mean like in the last quarter one of the fastest growing businesses at Microsoft outside from our commercial cloud is actually Bing search we talked about xStack, you know, strong double-digit growth, which is above market, by the way. So, that's fantastic. And so, Bing continues to innovate, MSN continues to innovate, and Copilot. So, that ecosystem, the three things that come together for us, has actually become a big business that's growing. So, is Search Share the wrong way to look at it? No, I mean, Search Share is one. Like, I mean, it's a game of let's call it a hundred basis points a quarter is great like i mean it's all progress you mentioned chat gpt we are thrilled about the success they're having uh

their partnership with apple guess what that's all incremental uh for even us because it's all running on azure and more importantly we are giving them them the Bing index and powering chat GPT search using our APIs. So overall, I'm thrilled about their progress, and it's a place where inches matter, and I'm good with the progress we're making. Now, two weeks from election day, two months from a second Trump administration taking charge, I also asked Nadella about how Microsoft will navigate a world post-globalism. What happens to globalization in a world where, let's say, the U.S. is a lot more focused on re-industrializing in the United States itself, which I think there's a clear mandate for that. And so I think the way as a multinational company

I'm grounded on is how do we earn permission, quite frankly one country at a time, to operate. You never can take your operation in a country for granted. You have to be able to invest in the country. In our case now we're even doing capital investments in data centers, doing skilling, creating jobs so that small businesses, large businesses, public sector are all getting benefits, health outcomes, education outcomes. So one country at a time, one community at a time, even in the United States, you have to sort of earn that. And so that's one side of it. The second side of it is on courts and what have you. There are many issues, right? Because after

all, there's a new technology, everything from what is copyright to what exactly are the big issues where the courts have to opine. And so, yeah, I think that there is a time of great change of technology. I think what matters is for us as a company to be able to stick with our mission, produce the products, earn the permission from communities and countries. You can watch that full interview over at CNBC Pro by scanning this QR code that's on your screen right now. But you can watch this full interview right now. Take a look at C3.ai.

It soared today after the company announced an expansion of its partnership with Microsoft to drive adoption of its enterprise AI software on Microsoft's cloud Azure service. Joining us now for an exclusive interview is Tom Siebel, CEO, co-founder of C3.ai. Tom, good to be with you here in Chicago. So it's the go-to-market part of this that I think is particularly interesting. Though it's all interesting, but tell me what selling with Microsoft

and developing product with Microsoft is gonna do for what you've already built at C3. This is a huge tailwind inflection point for C3 AI, and I think an inflection point in the enterprise AI industry. So as you know, we've spent 15 years, we started before Azure, before Google Cloud, before the GPU, now building, I think, 130 turnkey enterprise AI applications in order of 100 generative AI applications for mining, for banking, for supply chain, for manufacturing. All of those applications starting tomorrow are being sold by, are available for sale by the entire global Azure Salesforce. So in December, we'll be jointly selling to 100 accounts. I suspect in a year, we'll be jointly selling to thousands of accounts where we're teamed together using Azure, using the C3 AI applications. And between Microsoft and C3 AI, we can guarantee the customer's success. So this industry approach to selling AI,

it really seems like things are going more that way. It's not about just having generic LLMs or generic models. You've got to be able to do specific things within your industry. How much of that in your conversations with Microsoft are driving the expectation of where growth is going to come from, where value is going to come from for some of these customers?

We're in meetings real time this week, next week, the week after, last week, focused on federal, defense, intelligence, manufacturing, pharmaceutical, chemicals, oil and gas utilities. It's very clear that Microsoft goes to market with a very industry-centric focus. C3 has always gone to market with an industry-centric focus. C3 has always gone to market with an industry-centric focus. And we're delivering now combined industry-specific AI solutions that address the value chains of all these verticals, very, very tightly integrated with Azure, supported by Microsoft, supported by C3. This is huge. Tom, it's Morgan. You just mentioned defense intelligence in federal and so that's the question i'm gonna ask you because uh... there is this focus on incoming trump administration what it's going to mean especially with those

coming into being here what it's going to mean for the companies that do contract with the government maybe not so good at least based on what investors are gaining out right now potentially for traditional defense contractors, but maybe great for dual-use technology companies, like, for example, a C3 AI that can maybe realize greater productivity within government. How do you see it?

I suspect you're right that the administration, the new administration, will dramatically change the way they procure weapons systems and what have you. That being said, with Elon involved and many of the people involved in the administration, you could be certain they're going to triple down on AI for space, for subsurface, for hypersonics. The military system that they built will be entirely centered around AI, and I suspect that C3 will continue to be involved in many of those discussions. So going back to the partners, or I guess going back to this broader conversation, Tom, then, what inning do you think we are in, in terms of AI adoption and this notion of return on

investment, especially at a time where it does seem like there are some companies out there on the software side that are beginning to crack the code and deliver more value right now? Oh, I think that we're, you know, this will be, I mean, analysts expect this will be a $2 trillion addressable market, enterprise AI applications. So this is the largest market that we've seen in the history of enterprise application software. Now where are we? I think we're in the first half of the first inning and the first batter's on his way to the plate. I mean, this is, before this is over, as Satya says,

every application is an AI application. So everything we do, supply chain, demand chain, demand forecasting, customer service, customer churn, operating the military, operating shipping operations, manufacturing consumer packaged goods, all of this is being driven by AI and we're just getting started. And it is true that now we're seeing many companies like Shell, like Dow, like others receive, achieve substantial economic benefit from these investments. A couple of years, not a couple of years ago, but you shifted your model, right,

to being more about paying as you go versus the subscription model. People got nervous about that. The market got nervous. What can you tell me about the pace of adoption, the pace of demand, even as in the general enterprise, there seems to be some caution. Well, when we were on subscription-based pricing, we were charging 10, 20, 30, 40, $50 million contracts. Now it's pay as you go and pay 20, 30, 40,

50 cents per CPU hour. And as you result, you've seen first dramatic deceleration in the growth of CC and that we called it in the last eight quarters there's been dramatic acceleration I think today we've gone from 0% to 7% to 16% to 18% to 22% I think most analysts have our our company growing at you know 23% compound annual growth rate this year I think that's the third fastest growing company in the public software universe. So our growth has been accelerating. We expect it to continue to accelerate.

And the new pricing model really enables us to be able to work with our partners like Azure, like Microsoft, to bring, to utilize their entire global sales organizations to serve our mutual customers. Look forward to continuing to talk about it here on Overtime, in earnings season and out of season. Tom Siebel, the CEO of C3, thanks for joining us. Thank you, John. And shares of C3I finishing the day up 24 percent. John, great stuff coming out of Chicago today. Well, coming up next, a shifting stance on nuclear weapons from Russia sending a chill through the market early in the session. We will talk to former Defense Secretary Leon Panetta about the geopolitical risks that are facing investors. And later, don't miss our interview with the CEO of Qualcomm as that company hosts its investor day and as chip stocks remain in a sharp focus ahead of tomorrow's results from

NVIDIA. Welcome back to Overtime. The Russia-Ukraine war took a new turn today after Russian President Vladimir Putin amended the country's nuclear doctrine to lower the threshold for a nuclear strike. And this comes after Ukraine struck Russia with U.S.-made long-range missiles inside the country for the first time following President Biden's permission to do so. So joining us now is former U.S. Defense Secretary and many other positions across a number of administrations, Leon Panetta. Mr. Secretary, it's great to have you on. Thanks for joining me. Good to be with you, Morgan. So that's exactly where I want to start, because this was a significant shift by the U.S. to allow, in this particular case today,

attackums launched by Ukraine into Russia, these long-range missiles. I just want to get your thoughts on why that shift seemed to be necessary now, especially when we're talking about a lame duck president and administration and a new one coming in talking about conflict resolution? Well, let's not make any mistake here. Putin is the aggressor. Putin is the invader. And Putin has continued to be aggressive in Ukraine, launching a huge missile attack against Ukraine, and now with almost 10,000 to 11,000 North Koreans that are going to be deployed into battle as well. So it's very clear you can't just stand back and allow Putin to continue his kind of aggression without a response. And I think that's why the decision was made to give Ukraine the ability to strike those bases from which Russia is launching attacks on Ukraine.

It's the right thing to do in order to give Ukraine the ability to defend itself against this attack. Russia also amended its nuclear posture. It had conveyed that it was planning to do so a number of months back. I guess all of this, to put a sharp point on it, how is it not escalatory? Well, look, Putin has been threatening to use low-yield nuclear weapons for almost two years of the war in Ukraine. And that hasn't happened.

And the reason it hasn't happened is he knows if he crosses that line that the United States would be forced to respond. And the last thing I think the United States needs and Russia needs is a nuclear war. So I don't expect that they are going to take that step. They're obviously going to continue to be aggressive. They're obviously going to continue to be able to use missiles and drones. And now they've got these Korean soldiers, North Korean soldiers that they'll use in battle. They have plenty of ways to be aggressive here without resorting to any kind of nuclear warfare, which would be destructive of Russia as well.

Do you want to get your thoughts on this incoming administration and some of the picks we've gotten as investors try and parse out what this could mean for policy implications looking to 2025 and beyond. Hegseth, Gabbard, Waltz, Ratcliffe. How does this potentially position the Defense Department, the intelligence agencies, the national security apparatus of the U.S. to now shift in terms of policy, in terms of posture? What does it mean potentially for regulatory reform? Well, look, there's no question there certainly are going to be changes. And I take a kind of traditional approach here that a new president is entitled to name people that he wants to be on his team. But I also believe that the Senate has a huge responsibility to provide advice and consent on those nominees. So I think the Senate ought to be very aggressive at looking at each of these candidates to make sure that they have the experience and the qualifications and the ability to be able to serve in those very important decisions.

Leon Panetta, thank you so much for joining me today. Thank you. And time now for a CNBC News update with Julia Boorstin. Julia. John, President-elect Donald Trump named Dr. Mehmet Oz to lead the Medicare and Medicaid Services Agency, CMS. In a statement, Trump said Dr. Oz will work closely with Robert F. Kennedy Jr. to, quote, take on the illness industrial complex. Oz, who hosted a long-running TV talk show, ran unsuccessfully for Senate in Pennsylvania in 2022. Federal Reserve Vice Chairman Michael Barr appearing today in front of the House Financial Services Committee, where he testified

that the banking system remains sound and resilient, that capital ratios have increased this year to better position the system to weather potential losses, and that liquidity conditions remain stable. And Delta is teaming up with Shake Shack to bring its burgers to in-flight dining. The partnership will start next month on flights departing from Boston

and expand to other U.S. markets all through 2025. First class passengers will be able to preselect the meal, which includes a customized cheeseburger, Caesar salad, chips and a brownie. Didn't say anything about a milkshake, John. Well, there's always room for improvement,ia thank you well when we come back qualcomm ceo cristiano amon joins us for a first on cnbc interview fresh off the stage at the chip company's investor day where the company just announced long-term revenue targets including eight billion dollars in auto chip revenue in five years four billion dollars in pc chip revenue by fiscal year 2029, 2 billion in AR chip sales by 2029 and 4 billion in industrial chip revenue by 2029. And speaking of chips, Mike Santoli is going to return with a look at the

setup for NVIDIA with less than 24 hours to go before those critically important results. We'll be right back. Welcome back. We've got less than 24 hours before NVIDIA's earnings hit right here on overtime. And Mike Santoli returns with a look at the company's valuation ahead of those results. Mike. Yeah, John, it's become so commonplace to mention that NVIDIA's valuation, as measured by its forward price earnings multiple, is way down from the peak, even though the stock is up a few hundred percent over the last year and a half or so. And this shows it, right?

We were at 62 times forward earnings back in May of 2023. Right now, about 36, call it. Now, obviously, we were only at 62 times what the estimate was at that moment for what forward 12-month earnings were going to be. At the time, it was about 50 cents a share. What did NVIDIA actually earn over the subsequent four quarters? About $1.80 a share. So that's how far below reality the estimates were at the time. So clearly, we were really at 17 times forward earnings back then or thereabouts, not at 60. So the question is whether current

earnings trajectory more reflects the likely outcome here. So here's the path of the next of the current and next fiscal year earnings for NVIDIA. According to the street consensus, you see how much it's up over that same period of time covered by that PE chart. So just ramping to no end, although the current fiscal year, as you can see, kind of flattened out right there. The current forward 12 month is at around four dollars per share forward. It gives you a pretty reasonable valuation. But the question is, is the street finally caught up to reality when it comes to figuring out what those earnings are going to be? All right. Mike Santoli, thank you. Up next, a first on CNBC interview with Qualcomm CEO after the company just laid out its long term

sales targets to investors. Overtime, we'll be right back. Welcome back. Elon Musk and SpaceX are counting down to the sixth test flight of the powerful Starship rocket system. Literally, it's T minus 16 minutes and 30 seconds. If you look at your screen right there for SpaceX's Starbase near Boca Chica, Texas, where liftoff will occur as of right now at the top of 5 p.m. Eastern. Now, when Starship launches, it will be carried to space, detached from the super heavy booster for a suborbital flight and then splashed down in the Indian Ocean. Meanwhile, about seven minutes

after liftoff, that launch tower we just showed you on your screen, it's going to attempt to catch the 23-story tall super heavy booster as it returns to Earth using metal chopstick arms. Now, you'll recall SpaceX made history doing that for the first time ever in the last test flight just last month. Now, Starship is Musk's solution for making life multi-planetary. It's contracted with NASA to bring astronauts to the moon's surface, also potentially cargo, as that seems to be in the works with NASA right now. It's developed to carry people and cargo to Mars.

It's the most powerful rocket system ever flown. It's two times the thrust of the Apollo-era Saturn V rocket, and it's designed to be fully reusable. This is an engineering feat that has never been accomplished before. Adding to the stakes today, not only is Musk on site, but President-elect Trump is there as well. As you can see on your screen, he's at Starbase signaling a focus on space exploration for this incoming administration, as experts widely expect that the plans for the Artemis Moon program are now going to accelerate and that deliveries to Mars could also be mapped out and begin soon as well. You can check out my podcast, Manifest Space.

Scan that QR code on your screen to hear more about all of these possible space policies come 2025. John? Sounds great. Well, up next, Qualcomm CEO Cristiano Amon joins us to break down the company's just announced growth targets from investor day we'll be right back welcome back qualcomm hosting its investor day in new york today laying out some new long-term growth targets for its business units and joining me now fresh off the stage is christiano amon qualcomm's ceo in the first on cnbc interview christ, good to see you. So some big targets here, especially IoT, Internet of Things, 14 billion fiscal year, 2029.

What changes between now and then growing that business to that size? Hey John, great talking to you. Look, we have said before, we are really, really focused on diversifying the company and grow. We said that there are many markets that could benefit from our technology in addition to mobile.

And we see now the opportunity to start scale revenue on PCs. As we said in the last earnings call, the number of platforms now is 58, 2.5 times expansion of design wins since the launch in May. We see an opportunity to continue to grow in XR mixed reality, augmented reality, especially augmented reality because of Gen AI.

And we took our time to develop an ability to grow organically industrial building and complete software platform. We'll lay out those targets. We expect by 2029, IoT to be 14 billion. And as we head towards 2030, our goal is to get the company that is only 50% of the revenue, it's mobile,

50% is from auto and IoT, and we're going to have a much more diversified company going forward. Yeah, wow, and I take it probably after that, then the company becomes majority not mobile is the implication there, since sort of mobile's been your bread and butter. So tell me, particularly for that PC number to get where you want it, I think $4 billion revenue is your target. How much of that hinges on you being able to figure out this legal stuff with ARM? Look, we are very confident in our position. We're heading towards a trial in December. And Qualcomm has broad rights to the instruction set based on our license, and we expect the

court will decide that. But I think the real answer to your question is, we have seen significant traction increasing in PCs from our OEMs. We have successfully launched and started the RAM volume on X-Series. And it's also good to see ARM showing our devices when they message to investors about that there's now arm into the pc ecosystem i think that's another validation

so we haven't seen you on t b at all since you did have earnings not too long ago a few days ago tell me about this premium wave in phones right now because the mid-tier really seems to be suffering with the global economy doing what it is what are you seeing for snapdragon which seems to be a little bit above the fret like we're very we're very happy about that and by the way just to comment even though we're working to diversify the company and get out to an iot to be 50 or more as we get to the end of the decade. We still love phones, and we're not missing the pace in phones, and we still have a big upside with AI.

And we're basically preparing for that with Snapdragon 8 Elite. Snapdragon 8 Elite restored the performance leadership to Android, and it was kind of reflected in our earnings call. The premium tier continues to grow. In a market that does not grow, we see the premium tier expanding.

As a matter of fact, we announced today that our premium tier revenue is five times our nearest competitor. And it was really show that people want a better phone, they do more on their phones, and that's going to become even more of a reality when AI applications starts to grow in number. I want to go back to industrial IoT. For years now, particularly a couple years back,

pre-pandemic even, there was all this talk about how 5G was going to drive massive digital transformation in manufacturing, in industrial. I think that hasn't really happened to the extent that many had projected. What does AI do for that transformation process? It's an excellent question. I think it's 5G plus AI. And what is really happening right now, I think you should start thinking about the industrial IoT.

It's evolving to its next platform, which is about running AI at the edge, running large language models at the edge. There's first of all a significant economic incentive. Actually, we had display testimonials from some of the largest ecosystems on Investor Day. You saw Amazon, you saw Microsoft saying about the role of the edge on AI. You create and train models on the cloud.

You deploy them also at the edge. That is the opportunity. The industrial, that's a no-brainer. When you think about the number of use cases across different verticals, the opportunity to disrupt with AI is significant. And what we have done and described in Investor Day is we took our time in the past

few years to develop a comprehensive platform including products that can run that ai with industrial standards and now we're ready to start to scale that business where does automotive go from here since your growth there has been pretty significant thus far? Yeah, automotive, we're not updating the pipeline. Having said that, we are very happy with our position. We've been participating into a number of RFPs, and we like the outcome. But we chose not to update the pipeline at this point. What we did show, however, a new data point on our scale. So we said we're going to get higher than 4 billion revenues

in 2026. We're going to head toward 9 billion towards 2030. One we actually provide now that is going to be $8 billion by 2029. And one big announcement is our joint developer stack for ADAS and Autonomo BMW is going to be available in 2025. And we're starting to see traction for other OEMs' interest in that stack as well. Interesting stuff. Thanks for joining us with it first on CNBC.

Cristiano Amon, CEO of Qualcomm, fresh from Investor Day. Thank you, John. We're busy and we're going to keep executing. And we'll be watching. The countdown is on to NVIDIA's earnings, which will happen right here during overtime tomorrow. So up next, what you need to know ahead of those closely watched numbers. Welcome back. Tomorrow will be a huge day for earnings. Before the bell, we will get results from retailers Target and TJX.

And then the main event will happen right here on Overtime when NVIDIA releases its highly anticipated earnings. Plus, we will also get numbers from Snowflake and Palo Alto Networks. And we will have full coverage of all of those results with an all-star lineup of guests including Patrick Morehead, Gil Luria, Brent Thill, and Dean of Valuations himself, Oswath Demodaran. John, this is going to be one to watch and we know at least in the near term this is the big catalyst now for where the market goes from here, especially since the NASDAQ finished today up 1%. JOHN BENNETT, NASDAQ FINANCIALS CORRESPONDENT, I'm a little biased, but I think the main event is always here on overtime,

but particularly tomorrow. And I think today sort of set us up for it in a way because really Microsoft Ignite was very much about demand for AI and the argument that that continues. Tom Siebel was talking about that in conjunction with Microsoft and Satya Nadella. And now let's see how many of those nvidia chips microsoft and others are buying yeah meantime john 2.4 million viewers on x for the spacex starship launch which is literally seconds away i'll

be monitoring that here and i look forward to seeing you back here on set tomorrow