Closing Bell - Closing Bell Overtime: Nvidia Earnings: AI Momentum Rolls On 5/28/25

Episode Date: May 28, 2025

Markets braced for a massive after-hours earnings slate, including Salesforce, Nvidia, C3.ai, Synopsys, and Pure Storage. Nvidia dominated the agenda: analysis from Moor Insights & Strategy’s Patrick Moorhead and CFRA’s Angelo Zino while Byron Deeter of Bessemer discusses what Nvidia’s print means for the broader AI and semis trade. Paul Hickey of Bespoke gives a read on sentiment as yields ticked higher. Jefferies’ Brent Thill weighs in on CRM. 

That's the end of regulation. Measured risk portfolios ringing the closing bell at the New York Stock Exchange. First advantage doing the honors at the NASDAQ. Stocks losing early morning gains, closing near-session lows as investors await in video earnings later this hour. All 11 S&P sectors lower. Utilities, Energy, the worst performers there. Retail in focus today too.

Capri, Macy's, and Abercrombie & Fitch all reporting all cutting full your guidance due to tariffs shares of Abercrombie though did post their best day in two years box soaring after reporting strong results giving better than expected guidance FICO recovering from yesterday's losses Barrett upgrades that stock to outperform saying it has an attractive market position home builders though lower across the board as yields rise again, the 30 year crossing back above 5% earlier today. That's where so much of the action has been. And in the last hour, shares of Cadence and Synopsys

moving sharply lower on reports that the president has ordered companies that offer software used to design semis to stop selling services to Chinese groups. We've got more on that straight ahead. Well, that's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime.

I'm John Ford along with Morgan Brennan and the big news we are waiting for today, results from Nvidia. That stock slightly lowered today, up 24% so far in May. That's its best monthly gain since May of 2024. Before we get to that, a host of other reports expected in the next few minutes,

Salesforce, Synopsys, C3 AI, and ELF Beauty among them. And as we await those results, let's focus on today's action. As the markets pulled back slightly, losing their early morning gains, with the S&P finishing down about half a percent here. Bespoke Investment Group co-founder Paul Hickey and Evans-May Wealth managing partner Brooke May join us. It's great about half a percent here. Bespoke investment group co-founder Paul Hickey and Evans-May wealth managing partner Brooke May join us.

It's great to have you both here. Brooke, I'll start with you. What are you watching in this market, especially as we do see stocks diverging from bonds, a dynamic that's been going on for really a couple of weeks now, but is certainly in stark contrast with the pop we saw yesterday in the S&P.

You know, we think there are reasons out there to be optimistic. For months now we've been waiting for the hard data to deteriorate, jobs numbers and retail sales to be specific, and we haven't seen it. We expect those to align with the soft data over time like consumer sentiment and consumer confidence but the labor market's held up. We've got unemployment at 4.2 percent. We added 177,000 jobs last month. Average hourly earnings are of 3.8 percent year over year. In addition to retail, sales are decent. So over the last few years, the labor market has been what's held up this economy, while a lot of strategists were expecting a recession. And if have jobs they're going to spend so we think that there's reason right now to be optimistic. Okay we're starting to get some earnings reports Salesforce

included we're going through those results we'll bring them to you momentarily here so Paul as we do await those okay and we're ready to go with Salesforce. Steve Kovac has those numbers for us. Hi Steve. Yeah Morgan-Anne's beats on the top and bottom lines here We're looking at EPS beating at two dollars and fifty eight cents adjusted Street wanted to see two dollars and fifty four cents revenue A slight beat here nine point eight three billion dollars Street wanted to see nine point seven five billion. We see shares up four and a half percent I'm still digging through the report, but those are the top and bottom lines there for you. I'll send it back over to you, Morgan. Morgan Hickman, CEO of Salesforce

Okay. The share is up about 4.5% right now. Don't miss Jim Cramer's exclusive interview with Salesforce CEO Mark Benioff. That's coming up at 6 p.m. Eastern on Mad Money. Paul Hickman, I'm going to go to you because we're talking about a blue chip name, a Dow component with Salesforce, and it is very much the focus is agentic AI. So as we await Nvidia earnings, how does this set the stage for where we are

in this broader AI trade? Yeah, so I think we'll want to see how they're monetizing the their AI agents. There's a lot of promise there, but the market's looking for results. But the fact that they beat earnings and revenues is pretty impressive based on just the last four quarters. They've missed one of at least one of those three out of four times.

So there's been some erratic reports in Salesforce over the last year. And the fact that they were able to beat on both the top and bottom line is encouraging. And then I think going back to Brooks point about the broader economy and market overall, everyone's been waiting for the hard data to catch down to the soft data. What if the soft data catches up to the hard data? And we've started to see that a little bit in the flash PMI readings last week which both saw sequential improvement.

And then yesterday's consumer confidence report was one of the biggest jumps off of a 52 week low that we've seen in the index over throughout its entire history, especially the expectations component. And when you see those types of big moves higher off of a multi-year low or a 52-week low, it's generally been positive for the market going forward as showing a shift in sentiment. Wow, sound like Billy Crystal, better to look good than to feel good. We'll see what the data says.

Meantime, Pure Storage results are out. That stock heading a little bit higher here in overtime. Pure Storage reporting a fiscal Q1 that beats on the top and bottom lines. Let's see, it's a little lower now. Guiding to Q2 revenue above consensus as well, but not raising the full year outlook just one quarter in. Well, Q1 revenue came in at 778 million

versus 770 expected, non-GAAP earnings per share at 29 cents adjusted versus 25 expected. On the guide, Q2 revenue, Pure guiding to 845 million versus 842 expected. I spoke to Pure storage CEO, Charlie Charlie Giancarlo earlier about the results. He told me product revenue is a particular standout in part thanks to Meta. Also with tariffs and macro uncertainty, he's not going to raise the guide for the back half of the year just yet.

Also the CFO is transitioning out after more than five years with the company but will stay through to a successor being named. Let's get back to Steve Kovac now on Salesforce with that stock up. Let's see, I think about 5% plus right now in overtime, Steve. Yeah, John, that seems to be on the guidance here, which is just beating expectations all across the board, both for Q2 EPS and Q2 revenue, which is the current quarter we're in right now, and full year EPS and revenue, also beating expectations.

And then another little interesting note here that's expecting a currency tailwind, Salesforce saying, we know what the foreign exchange rates have been doing recently there with the dollar, so that seems to be boosting Salesforce as well. We see shares, now they're up 5% here aftermarket. Guys, I'll send it back over to you. Indeed, Steve, thanks.

Brooke, what should investors do with the top heavy S&P? Quite a few large stocks, technology stocks in particular had been powering that for quite a while. We'd seen some broadening out, but now we've also got these yields to contend with. Are large technology names safe right now or not? We think the biggest names are. Not all technology companies are created equally.

Some are trading at much higher multiples than others, but companies like Nvidia trading at a similar multiple to what their earnings growth rate is, is a buy in our opinion. And any weakness we think would be a good buying opportunity. So we continue to like big tech. We think that it will be continued leadership in the market going forward. But the broadening and the other 493 names of the rest of the market is welcome.

So Paul, what about the smaller caps? I know you've paid a lot of attention to those in the past, but they can be interest rate sensitive sometimes. So during these times when we do look like it's higher for longer and tariffs are affecting arguably smaller companies more than the larger ones, how should investors play it? Yeah, I mean, I think those are concerns with the smaller companies when you get to the real small caps, but within the large cap space, I don't think it's as much of a worry. And the thing we look at is if you just go back through history, the largest stocks of a certain era are generally 10 to 15 years later, not the same stocks that will be the largest stocks going forward.

You tend to see rotation there. So I think you don't necessarily have to see these stocks, you know, fall precipitously, but they can underperform and look for new leadership to emerge in the market. There's plenty of growth stocks that are, aren't trillion dollar market caps where you have, you know, where you have, where it's easier to have strong rates of growth relative to these, you know, like a stock like Nvidia with a $3 trillion market cap and revenues in $300 billion range. So I think you'd wanna broaden your perspectives. Okay, Paul Hickey, thank you.

We'll see you back here in just a little bit. Brooke May, thank you for joining us as well with all the major averages taking a breather today, down about half a percent. Now we got some breaking news in the last half hour that the US is suspending some export licenses to China for certain software companies. Megan Casella has the details.

Hi, Megan. Hey Morgan, that's right. The news here being that the Trump administration has told U.S. chip designers to stop selling their software to Chinese groups. Now that's according to the Financial Times citing several people familiar with the matter. They say the Commerce Department sent letters

to electronic design automation groups that those include Cadence, Synopsys, and Siemens EDA, all of which had been down initially. Now back up, it looks like after hours. But they say it's not clear that all electronic design automation groups got this letter, but this is of course the latest step as the Trump administration is looking at different ways continuing the Biden administration's moves to try to slow

the Chinese rollout of advanced AI systems. Now I spoke with people inside the building here about this story and a Commerce Department official on background told me this saying the Commerce Department is reviewing exports of strategic significance to China that in some cases, commerce has suspended existing export licenses or imposed additional license requirements while the review is pending. So not a specific confirmation or a denial of this story here, but clearly there is some action

going on and we have seen so far in the last 30 minutes or so, the impact on those stocks. Morgan? All right, I'll take it. And of course there is a trade negotiation going on at the same time. Megan, thanks. So speaking of synopsis, I'll take it. And of course there is a trade negotiation going on at the same time. Megan, thanks. So speaking of synopsis, its earnings are out.

Christina Parts-Nevelis has those numbers. Christina? Yeah, and that's why we're seeing a little bit of a turnaround in the stocks. Let's talk about the beat for earnings per share coming in at $3.67 adjusted, higher than the street anticipated. Revenue in line, we'll call it $1.6 billion. In terms of the guidance, Q3 guidance, EPS is a little light, $3.82 to $3.87 billion. The she was anticipating $3.97, so a little bit of a miss there. There was a line in the press release, quote, from the

CFO, we're poised to deliver a solid second half and we're reaffirming our full year revenue and operating margin guidance, reflecting our confidence in the business and demand for our products. And we're not seeing any impact for the tariffs either in this guidance. There's no comment in this whole release about China, given the news that we just heard from the FT and the White House in terms of what portion of share, revenue share comes from China. So it will see in the coming days.

But I did reach out to Synopsys and they're not commenting on this story thus far. Okay, Christina Parts-Neveles, thank you. And shares Synopsys are up about 1% right now after falling in the final moments of the regular trading session. Well, we are moments away from Nvidia's earnings. So let's bring in senior markets commentator Mike Santoli

for a look at the stock's performance relative to the market over the past year. Hi Mike. Yeah, Morgan, it's been pretty much sideways. This is now a two year chart of Nvidia relative to the S&P 500. What you see here is blast off after its February earnings report back in early 2024.

And then the May earnings report a year ago, that's when you got your last leg higher relative to the market. report a year ago, that's when you got your last leg higher relative to the market. In absolute price terms, we got up into the 135s area in June of last year. It's been over 11 months, pretty much flat. The S&P's up seven or so percent in that time. Does it mean that the fundamental has caught up?

Well, a lot of people talk about the valuation compression in Nvidia. Basically the PE is lower now that it was right before the huge AI Investment boom and and the huge surge in earnings well it is true And this is basically the peak you want to look at right there That's after chat GPT But this to me is the market kind of front-running the fundamentals and knowing that there was going to be this bonanza of massive Earnings growth and so it's a question of how much you pay on a forward-going basis

We are still up near 30 times earnings. We've talked about this before. To compare this to Apple, back when it entered its hyper growth profit phase after the first generation of iPhones became ubiquitous. This is back here in the early 2010s. Look at how low the PE got. Below 15, it was a super cheap stock forever,

even though earnings went up by 7X between 2009 and 2012 or so. So it shows you not that this is gonna happen to Nvidia, but sometimes the market kind of gets ahead of it and then needs a show me situation to say, okay, maybe this is a viable ecosystem for services and everything else and we can re-expand the multiple later.

That's what happened with Apple, guys. Interesting, well, we are looking for it, Mike. And in the meantime, on the AI what happened with Apple, guys. Interesting. Well, we are looking for it, Mike. And in the meantime, on the AI trade, C3 AI earnings are out. That stock popping 15% plus. Kate Rooney has the numbers. Kate. John, so it was a beat on the top and bottom line for C3 AI.

You can see that reflected in shares here after hours. We'll start with that EPS number. It was a loss, but it was smaller than expected. 16 cents versus 20 cents what the street was looking for. That was on revenue of 109 million dollars. Better than expected subscription revenue. Also looking stronger than expected here. That came in at actually, excuse me, it was slightly light. 87 million versus 96 million, which is what the street was looking for. And it was up about 9%. Also some news after I was at C3 AI

and Baker Hughes are renewing a joint venture that's gonna extend through 2028. Stock is down more than 30% this year. As I mentioned, it popped here. It's up more than 17%. I would note, this is a highly shorted name. The short interest is about 19% of the flow. That's about four times the average. So you tend to see these outsized moves but

it was a beat in the corner for this name guys back over to you yes we went around a lot Kate thanks we're gonna keep watching it so lots of earnings including C3 already out but several more still to come when we come back we're gonna get results from HP and at 420 the big report everyone is waiting for we'll get numbers from Nvidia an And at 420, the big report everyone is waiting for, we'll get numbers from Nvidia, an instant reaction to those results. Overtime is back in two.

["The Daily Show Theme"] Welcome back, HP earnings are out, Steve Kovac has the numbers, hi Steve. Yeah, and shares are down about 16 and a half percent here on these results We got miss a miss on EPS here and some warnings about tariffs here So let me just go through the numbers EPS is a miss 71 cents adjusted Street wanted to see 80 cents adjusted revenue was a slight beat though 13.22 billion Street was looking for a thirteen point one four, but it's really the guidance here

We're seeing drag things down and all because of tariffs. Let me say what the CFO says in this press release quote, in light of the increased macronomic uncertainty, we have adjusted our outlook to reflect moderate demand and the net impact of trade related costs. They say it's going to take them until Q4 of this year to get everything in order. I also was talking to the CEO Enrique Lora's about these results and he tells me kind of what Apple's doing here, moving production

for products sold in the United States to places like Vietnam, India and Thailand instead of China to get around the worst of those tariffs. They think again, they think they'll be through that by Q4. But right now, lowering guidance below well below expectations

because of this, we see shares off 13 and a half percent, guys. All right, Steve Kovach, thank you. So we're gonna talk Nvidia now, are we gonna, yep, okay. So let's talk some Nvidia, and we've got a panel coming up to help us do that. The earnings we expect in just a couple of minutes. Patrick Morehead, I believe, is with us.

Yeah, Angelo Zeno as well. Patrick, I want to start with you on this, in part because of the indications, I won't call it news just yet, that we're getting around the administration's actions on chip design software makers. There's a whole ecosystem out there that companies need in order to make products that work end to end.

These software design players are part of it. How much does this factor into how even Nvidia's customers are gonna be able to optimize and make the best use of the product. Yeah, so John, I'm surprised it took the administration this long to get underneath the hood here, whether it's Synopsys, Cadence or Siemens, because you cannot make complex chips

without this type of software. Now, there are one-off alternatives in China, right? We've talked about the Huawei hedge in China with against Nvidia. There are multiple Chinese companies who are in this business, but it will take time for that to permeate because the Chinese are still using these three companies' tools in mass.

And Angelo, at the same time, Jensen Huang, CEO of NVIDIA, has argued that if you don't compete head-to-head with a lot of these in the China market, that you open the door for other competitors who might have an inferior product to step in. Does that hold here as well? Hold on. Nvidia results are out. We are going through it. We're going to have to interrupt you, Angelo, with that as soon as it's ready.

But your thoughts on this situation as it applies to Nvidia and the design software players? Yeah, no. I mean, listen, I actually agree with Patrick in the sense that it probably took longer than I thought for this to actually come down. And I wouldn't be surprised if part of this was for trade bait and if we potentially see them get even more aggressive, maybe even on the chip equipment side of things. But we'll kind of wait to see how that all plays out.

But no, I would agree with the context in the sense that, hey, listen, if you're empowering some of these Chinese players, specifically Huawei, in many respects, you're doing Nvidia a disservice. But also in the same respect, if you're not selling or if you're preventing some of the EDA software from going into China now, that does crimp some of the competition or competitive challenges out there for Nvidia. So it could also or competitive challenges out there for Nvidia. So it could also be a positive out there for Nvidia. So Pat, we're still doing some tap dancing here

as we go through these numbers in what's expected to be a perhaps somewhat noisy quarter for Nvidia since we know that they took a charge, a $5.5 billion charge tied to China and those H20 chips. The counter to this is the fact that the Trump administration is opening up other markets with deals, Saudi Arabia and some of the sovereign AI deals that maybe had been gridlocked before now. How much does that offset some of this disentangling we're seeing within the Chinese market?

Yeah, I think those details should come out on the call because Nvidia's been pretty mum on everything it announced in the Middle East. There were some dollar figures. Okay, we've got the numbers, Patrick. Hold on one second. Let's get to Nvidia and Christina Parts-Navales. Everybody's cheering here, but we're getting a beat on the top and bottom line. 96 cents adjusted.

The street was anticipating 93 cents adjusted. That was wavering just over the last few days So it is a three cent beat revenues forty four point zero six a billion dollars slowly higher than what the street Anticipated to your point about the write-downs as a result of these new requirements in video has incurred a four point five billion charge in The first quarter remember they said that they were going to take a five point five billion So possibly some more details coming as to when the rest of that will be hit. Oh, and then data center revenue, because that's an important factor for their revenues. $39.1 billion, which was a little bit light of the street estimates on FactSet, guys.

And I'll come back with a little bit more details on Q2 guidance. Okay. We'll be ready and waiting. In the meantime, do not miss Jim Kramer's first on CNBC interview with NVIDIA CEO Jensen Huang. That's coming up at 6 p.m. Eastern on Mad Money. Patrick, I'm going to go back to you, your initial reaction to what we just heard. Stocks popping.

I told you in my note we were going to have a double beat for the quarter, seven consecutive quarters of double beats, and here we have an eighth. I'm not surprised at all. And this was going to be one of the noisier quarters now, but second half is all about upside with Blackwell. Okay, Angela Zeno, I wanna get your thoughts here too, especially with data center coming in, perhaps a hair light, but we also know there have been capacity restraints

and that demand has far outpaced supply at least up until now. Yeah, I mean, I think results overall were solid. I mean, thirty nine billion or so is pretty much in line with our expectations. And it definitely shows you that momentum is building for Blackwell. It was eleven billion in the January quarter. Interesting to kind of see what it will look like here this quarter. But clearly the shift towards those large scale rackable systems will continue

to drive that momentum on a sequential basis. I think that the number implies about 10 or 11% growth. So it is a deceleration from what we've seen in past quarters. Again, we'll see what that guidance looks like. I would expect another quarter of deceleration because of the China uncertainty out there before we see a pickup again,

as we progress through the following quarters. Pat, lots of questions out there about the runway for Nvidia. It's done so well, but I was talking to Charlie Giancarlo, the CEO over at Pure, and it certainly is part of this ecosystem with enterprise class flash storage being so important.

He said really the AI driven demand is only just beginning. They're not even really factoring it up. Hold on, we got some more on Nvidia's guide. Christina Parts-Nevelis has that. Let's get back to her. Christina. The guidance for Q2 is coming out at $45 billion. We are actively choosing not to compare two street estimates.

That's because of the write down from the 5.5 or I should say 4.5 billion dollars in loss from the H20 chip ban the company is saying their outlook reflects a revenue of loss of approximately 8 billion dollars due to the recent export control limitations So 8 billion dollars will be hit in the July quarter. That would be Q2 this upcoming summer. Just two weeks ago, Jensen Wong, the CEO, said that they would be getting about a $15 billion hit in losses. It seems like he's quantifying it for July quarter at $8 billion. Q2 revenue, again, the guidance is coming in at $45 billion. Back for you guys.

Christina, thanks. Pat, you know,, 53 billion would have been a different number for the outlook, huh? Yeah, it would have. And we have to keep in mind too, you write down something that doesn't mean it's scrap, right? There's a lot of stuff that's work in progress. And like other companies we've seen,

there's potential to be that worked off, but they do have to take the hit this quarter. And on the guide, right, I get a lot of questions on, well, will the Middle East make up for it? And there was a little bit of discussion of that before. China was 13% of Nvidia, now it's 5%. It's going to be tough in a short period of time for the Middle East to make it up on 8%, but it certainly is possible, just not probable.

Right, not a lot of people comparatively in that region. Pat, Angelo, thank you. Thanks. Coming up, more reaction to Nvidia and Salesforce on a busy day of earnings. Also some big moves for HP, Elf, and C3 AI. Busy Elf overtime continues next. ["The Daily Show"]

["The Daily Show"] Welcome back. Elf Beauty earnings are out. The stock is making a move lower. Gabrielle Von Rouge has the numbers for us. Hi, Gabrielle. Hey, so Elf Beauty reporting adjusted Q4 earnings of 78 cents, beating expectations of 72 cents on a small revenue beat. Elf said it's not giving fiscal 2026 guidance, citing the wide range of

potential outcomes related to tariffs that might be what's weighing on the stock here. Elf has about 75% of its supply chain in China. I spoke to CEO Turing Amin and he told me he's worried about high degrees of tariffs because they end up being a tax on the American consumer. He's hoping, quote, cooler heads will prevail in Washington and there'll be, quote, greater certainty long term. Now, Elf also announced plans to acquire Haley Bieber's beauty brand Rode for $1 billion. That might also be what's weighing on the stock here, depending upon how the street sees it.

Amend said this acquisition will fuel the company's expansion into skincare and also allow it to reach a higher income consumer. Morgan? All right. Gabby Fonrush, thanks for joining us. Coming up, much more on Nvidia's big reports, but we'll also dig into the other big report

that we got earlier this hour, and that's Salesforce. And stocks have had a huge comeback over the past two months after a sharp decline earlier this year. We're gonna look at what history says could be next after such volatility. Be right back. And we'll be right back.

And we'll be right back. And we'll be right back. And we'll be right back. And we'll be right back. And we'll be right back. And we'll be right back. And we'll be right back. And we'll be right back.

And we'll be right back. And we'll be right back. Welcome back to Overtime. Let's get back to Christina Parts-Nevelis for more on Nvidia. Christina? Well, this is now coming from the CFO comments that are on Nvidia's website. And so we remember we talked about the $4.5 billion write down that Nvidia had to take because of the H20 ban.

The CFO comments are saying that that write down is lower than expected. Originally, they were expecting $5.5 billion. And the reason it's lower is that they were actually able to reuse certain materials. And this is a little bit of information because a lot of people, a lot of analysts thought that these H20 chips, because they're so low spec, they wouldn't be able to find another home anywhere else.

It seems like maybe possibly at least a billion dollars was able to find a new home. And then for Q2, that revenue guidance that was given does reflect an eight billion dollar hit from the H20 ban so possibly it could be just Q1 and Q2 taking the brunt of this and then we move on but I'm sure we'll get more details as to any long-term Q3 and Q4 impact from this H20 ban coming from the US government. Okay investors seem to be taking in stride. Shares of NVIDIA are still up 3% right now

here on Overtime. Christina, thank you. Let's talk about NVIDIA and what it means for the broader AI landscape and for the VC world and all those private companies. Let's bring in Byron Dieter, partner in Bessemer Venture Partners and a noted cloud AI and software investor.

And Byron, it's great to have you back on the show. Let's start right there. What does this report from Nvidia tell us about what we're seeing in terms of this phase of AI rollout and adoption? Thanks, Morgan. Great to be back. I think what this tells us is that they're still able to deliver on the supply side

because there's never been a question on the demand side. We hear it from the foundation model companies. We hear it from the hyperscalers that they are, you know, begging their supply chains to deliver these chips. And so it all comes down to Nvidia's ability to continue to meet the supply demands that are coming through and keep up with production. The short term, we think this will continue and it's no surprise that they beat and put up another fantastic print. The question is all about the medium and long term as silicon competition comes online, as the hyperscalers produce their own chips in a really credible way, we expect to see

this massive market share lead start to pull back and that might put some pressure in the medium and long term on Nvidia's performance. This reflects to me, whether it's these charges and revenue guidance that we're seeing in video, the deals that have been struck with, you know, Middle East sovereign nations like Saudi, these export controls we're seeing where Nvidia chips are concerned with China and even the software companies that we reported on here in the past hour as well like Synopsys and some of the others. What's increasingly clear to me is that AI

has become a geopolitical lightning rod, whether it's from an economic standpoint, a military standpoint, just a technological standpoint, and what it means for the future of the world, to put it very dramatically. And I wonder what you think that means in terms of this intersection of investment and policy and how it all shakes out.

Well, you hit on the fascinating two core drivers here, which not only is this an economic imperative for the U.S. to win in and at, but it's also a matter of national security. Geopolitical dominance depends on winning the AI battle. And so this should be first and foremost at the top of our US policy. And I applaud the government's initiatives recently to support and embrace the AI ecosystem. But this is front and center. And so as we think about job creation ahead, as we think about wealth creation, as we think about cyber defense, it all comes back to AI these days and the imperative for us to lead. Byron, it seems to me we have a really important test case here with the Trump administration. Do walls work with intelligence?

And I'm thinking about what's happening with international students and the holdup in those visas being approved. I'm thinking about synopsis out with earnings just minutes ago, but the stock move in synopsis was all about potential effectively export controls, and that's a big part of NVIDIA's report as well. A number of ideas and opinions out there, including from Jensen Huang himself in recent days saying, look, we need to compete head-to-head with the entire world. How do you think that's going to shake out?

Yeah, I think there's two very big differences. One is the connected markets for economics and for talent, which generally the tech industry is very supportive of. I think that's very different with China in particular because of the national security imperatives. And so you'll generally see the tech industry in support of broad open markets and the free flow of talent to get the best people

to gravitate to the US to work for our companies and for our causes. However, when you start to get into situations where you're exporting the leading chips and really frontier edge capabilities, both in hardware and software, that's where we understand the lines that are being drawn and generally support the policies

to have some bifurcation here, given the strategic imperative for US to win. From an investor perspective, what do you think the likelihood is that some of these tough stances toward China, whether we're talking about Nvidia, Synopsys, and that group really have to do with the trade negotiation that's going on now,

and when that clears up, perhaps these limitations clear up as well. Of course they're intertwined, and that there will be some holdover. However, we do think of AI chips as part of national security, much like you think of defense tech, and so where that line is drawn will be a matter of the cutting edge chips and really

the nuances of the tech innovation cycles. However, we don't expect them to come off entirely. And in fact, I think this will continue to be a matter of top debate and it really will cross DOD and national security imperatives much more than economics when you get into really the cutting edge technology. Byron, quickly, the fact that you just bought into the San Francisco 49ers, what does it say about the business of investing in sports right now in valuations? I think it's a comment on the value of live entertainment, of sports, that people are seeking more and more of this balance and that the business of sports is real and open for business. It's exciting to see the emergence of private equity

and venture capital into the sports world. We've been long investors in sports tech and sports adjacent things like StubHub. Now you're gonna see more and more private equity and venture participation directly into teams and leagues in a really powerful way. All right, Byron Deter, thanks for joining us. Cheers. The recent market comeback has been one of the fastest ever. Up next,

find out where history says the market could be going next following such a fast and furious rally. Plus Salesforce losing some of its earlier gains following results. The stock is now, let's see, about flat. We're going to dive into the quarter just ahead. Welcome back to overtime the S&P 500 tracking for its first positive month in four climbing six percent after falling 15 from its all-time high. So what does history tell us about where the market could go next after this fast rally?

Bespoke Investment Group co-founder Paul Hickey and CNBC Senior Markets commentator Mike Santoli back with us. Mike, sort of a curious hour of earnings. Salesforce now maybe up about a percent after coming way off the highs. Nvidia has continued to sort of maintain its relatively high levels here, but the S&P hasn't necessarily over the past few quarters been swung by Nvidia, right? No, it hasn't acted as a particular catalyst, inflection point. In fact, in a few cases, what really happened was the market was sort of held in place until

Nvidia cleared through and then it sort of proceeded along its path. And for the last three quarters, it just so happens that that was either in plateauing after a rally or initiating a little bit of a correction. So I'm not sure there's going to be that title link. I do think what you generally are watching here is like it's the tail end of earnings season. I do think that most stocks are down off their highs. So there's the room for

some relief in there. But you know there's just a hesitancy to extrapolate whatever we just heard in the last quarter out for the rest of the year. So that to me is that is a little bit of the opposing currents at the overall market is caught in

as well. So Paul how much do you tune out policy as an investor and say, hey, if not for that stuff, here's how these companies would be doing? Or how much do you really hone in on it and think about what the long-term implications of these fundamental shifts will be? So, I mean, I think as far as the policy is concerned, you wanna try and tune it out, you can't tune it out fully, but far as the policy is concerned, you want to try and tune it out.

You can't tune it out fully. But what we've seen is that the initial announcements always get walked back a little bit, at least. So the bark is worse than the bite, so to speak. So I think in that respect, you can try and ignore part of it. The market overall though I think Nvidia here higher is you know caps off what has been an unmitigated successful earning season we've had you know you

look at where expectations were coming into the period versus what we had coming out more come just as many companies raised guidance is lower guidance no one thought that was even remotely possible. In early april so things have been good in videos been good.

So far and. You never want the market as michael saying to be you know. Reliant on one stock for the game so the fact that. It isn't the bellwether for the market is an encouraging sign to. And then you know just going back to what you were talking about in the intro, when you have the market, when you've seen a 15% pullback, and then you rally back within 3% of that high like we did last week, it's been you're at a new high 13 out of 15 times within the next two months and only once did

it take six months. So the forward return six months later, you were higher every time. What's unique about this period is that it only took 62 trading days to do that almost round trip. The only period faster was in the only period even less than 100 days was 1998. And there's a lot of parallels between the market performance now and the market performance in the 1998 period.

And you can substitute headlines AI versus internet. They're interchangeable, and you wouldn't know which period they were in. Interesting. And Mike, I know you've touched on this before. I think about a dashboard you did for us, a chart you did for us last week know on this topic of 1990s versus now one of the things I'm curious about though is the fact that you've seen this divergence through all this tumult to the last couple of

months between retail investors and institutional investors and I wonder if the fact that you've seen so much volatility across so many different types of markets and asset classes and the institutional guys and the hedge funds and the folks that are doing this 24-7 with lots of dollars have been levered across markets and that that's added to all the volatility, whereas the retail folks, maybe not so much. And that's why you've seen such a divergence and now why you're seeing such a recovery so quickly. Yeah, I mean, there's absolutely a chance

that basically if you were to key off of the fact that we had this sort of high correlation move lower, it was a very rapid move lower. If you had any kind of discipline that says, you know, when the market backs off below its 200 day average really quickly, whatever that might be, all the trend followers and a lot of the models are gonna say de-risk.

I think for retail investors to really surrender, it has to be more prolonged. There have to be a lot more of these kind of false dawn rallies, it has to basically grind you lower. That's what happened in 2022. I think you should remember, there was a retail trading bubble in 2020 and 2021. And in the first decline in 2022, retail bought it.

And we almost got back. It wasn't quite down 15% and up to within 3%. It was down 14.5% back up to within 4%. That was the first rally in the first quarter of that year. And then it failed. And by the fall of 2022, you had retail outflows and people had all the favorite SPACs and the unprofitable tech were left for dead

So I think it takes a really long period of time for retail traders who are very energized and really have ammo and are almost Playing with house money for them to kind of give up that trade. Okay, Mike Paul Thanks to you both for sticking around and Nvidia is pretty much at session highs up more than 4%. We're just moments away from Salesforce's earnings call. Up next, a top analyst is gonna tell us what he wants to hear from management there at the top of the hour. What's up, guys?

I'm Mike Hicholsky, and welcome to the show. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA.

I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. I'm the CEO of NVIDIA. Welcome back. Let's take a check on Salesforce. The stock is off of its highs here, just up about a percent now. We're moments away from the earnings call and joining us is Brent Thill, Jeffrey's tech sector lead, has a buy rating on Salesforce. Any idea what took the wind out of this overtime rally?

It was over 290 a share. I think CRPO was good 12% versus the straight 10. I think the downside is their core sales and service cloud growth rates continued to decelerate. And then you have the overhang of M&A's back. And as you know, when Benioff's doing M&A, everyone worries, are we out of organic growth? They haven't done a big deal for a while.

So there's some concerns around, why are they going back into the M&A pool on that side? I'd say the last factor, John, really is just, there's more dynamic, exciting growth assets right now and software, you see many other storage growing a lot faster. So I think there's an element of, the new CFO in, are they gonna be more conservative, is M&A back and ultimately we've got a decel

in both the core sales and service clouds on the growth rate. Agent force isn't necessarily ready for prime time across their install base. They said 8,000 customers, half are paid. So a good stat there, but I think it's super early in age of AI, and that won't be a material revenue driver until 2026. You said a little downbeat to me, Brent.

I am curious as well, what you think of Salesforce, their latest acquisition. I mean, this is a company that hasn't necessarily had the best history in recent years with their acquisitions, but does this actually turn the tide for them? Yeah, I'm not dumb, I'm just kind of calling the numbers as we see them, Morgan, so I'm not trying to be super dumb, Pete, they're fine, it's just there's no dramatic acceleration or exciting fireworks in the print, so the numbers are the numbers.

I say for Informatica, we're excited that this wasn't an expensive asset. They got it for $2 billion cheaper than they were going to bet on it last year. It fulfills a really unique area around data integration, so they need to get the right data to their data cloud to do AI. So Informatica, along with MuleSoft and some of the other infrastructure assets, help them get to the age of AI, which is how do you get the data cleansed, centralized to then do AI on top of.

So I think the deal's a smart deal, but again, Informatica wasn't a growth company, it was a single digit growth company, good margin, but again, most investor feedback on Informatica was kind of like blah, nothing super exciting, everyone kind of expected it would come back. All right, Brent Thill, thanks for joining us. You do have a buy rating on the stock.

Up next, one more check on Nvidia ahead of the call. Welcome back to Overtime. Nvidia results out earlier this hour and the stock is at the highs of after hours trading it's up more than 5% now earnings and revenue both better than expected 44 billion dollars of sales in the last three months with demand for its chips remaining strong company did take a charge for those chips it diet designed for the Chinese market but wasn't allowed to export their the charge less than expected data center revenue did miss estimates, but ever so slightly. Conference call starts in just moments, and Jensen Huang, the CEO, will join Jim Cramer live at 6 p.m. Eastern on Mad Money. You don't want to miss that.

And John, we talked about it earlier in the show, but it does feel like geopolitics is really at the heart of the tech trade for NVIDIAs and others on the front lines of AI right now. Yeah, we're just talking about Cadence Synopsys as well, the design software for chips. C3 AI also reported it's up about 13% right now in overtime.

Nutanix reported as well, that was up about 17% year to date. It's up just about a percent here in the after hours. We're gonna be talking to both CEOs tomorrow, hopefully get some sense of how business is going overall outside of all the politics. Yeah, we also get more retail earnings, more tech earnings tomorrow. We get a number of macro data points too.

I thought what Paul Hickey had to say about maybe soft data is going to catch up to hard data is interesting dynamic. That does it for us here at Overtime. Fast Money starts now.