Closing Bell - Closing Bell Overtime: Rally Off, Fed Focus & Nvidia takes center stage 3/18/25

Episode Date: March 18, 2025

Stocks snapping a 2-day win streak as Tech & Communication services drag down the market. Bespoke’s Paul Hickey says he thinks the market is trying to find a bottom right now and expects that to happen over the next few weeks. Envestnet’s Dana D’auria says she still sees big opportunities overseas. Apollos Global Management Chief Economist Torsten Slok tells us what he’s expecting from the Federal Reserve’s interest rate decision on Wednesday and how President Trump’s tariffs will impact the economy.  Nvidia CEO Jensen Huang giving the keynote at his company’s developers conference and announcing new Blackwell Ultra chips. Moor Insights & Strategy CEO Patrick Moorhead tells us whether those announcements are enough to help the stock rebound. And Quantinuum’s CEO discusses his new quantum research and data center partnership with Nvidia and when he plans to take the company public.

Well that battle marks the end of regulation. Bank of America, Accordion and Exponent Women are getting the closing bell at the New York Stock Exchange. Crescent Capital, BBC doing the honors at the Nasdaq. Stocks snapping a two-day win streak with nearly every sector lower. Crypto too. That's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, tech and communication services really dragging down the NASDAQ, which is the biggest underperformer today as investors await tomorrow's interest rate decision by the Fed.

Coming up, Apollo Global Management Chief Economist Torsten Sluck on what he is expecting from J-PAL and Co. And if he's worried that software economic data is increasing, the risk of recession. Plus, Nvidia CEO Jensen Huang just wrapping up the keynote at the company's Developers Conference. We've got the highlights and what his announcements could mean for the stock and more.

And we have an exclusive interview with the CEO of Roblox on whether a new sweep of AI tools to help spark sales could help turn around his slumping stock. Now let's break down today's market action with bespoke investment group co-founder Paul Hickey and Investnet co-chief investment officer Dana D'Oria. Guys good to see you both. So Paul, NVIDIA didn't rescue the mega caps today. What does that mean for reaction to the feds tone tomorrow you think? So I think in NVID you know, it could be the greatest thing

since sliced bread. Jensen can say whatever he wants, but the most important thing, as we said when I was on the day they reported earnings, is the reaction to the news. And you see what happened in Nvidia today.

The stock peaked right at one o'clock, and investors sold into the news there. That's been happening with every rally in Nvidia over the last six months. And until that pattern changes it doesn't matter what they say investors are selling into any strength in the stock. So I think in that respect- for the stock itself that's not a great sign. But for the nasdaq itself in

media close near the lows of the day to day. But the nasdaq since from about. Just a little before 10 to the close, it traded in a relatively tight range there, and we didn't see the late day sell off, which has become so common. So I think going into tomorrow, the Fed decision, I think there's not going to be much of a surprise in that. So I wouldn't read too much into what the Fed's going to say. I think the market's just going to try and find its bottom here. And, you know, we're going to see that over the coming days, maybe weeks. Well, Dana, investor sentiment certainly seems to be souring, but U.S. stocks still aren't cheap by historical standards. So at the same

time, huge day for Europe, its largest economy largest economy Germany votes to open the debt floodgates So where should investors place their bets? Well, I think you're onto something there right with international I mean look at we're proponents in general of international diversification What's happening right now in the u.s. Is is a prime reason for that, you know having a portfolio With you know, not only ballast and fixed income but also diversified across economies because you just you know having a portfolio. With you know not only ballast and fixed income but also diversified across economies. Because you just you know look I mean the U.S.

markets have dominated for so long if there's- I do a lot of CIO panels if there's any theme that seems to be- constant in the last couple months it's been U.S. predominance so you know for sure- you should you should have international

diversification right so. I think. For precisely that reason for the country and signal right? So I think for precisely that reason, for the country and signal of it. I think investors in general need to diversify just in order to deal with the uncertainty that we have right now. I mean, you look at what happened when we were going into this administration, you know, we thought we'd be moving away from China, more Mexico, maybe more Canada, more friendlies near us and then of course tariffs completely upset that so I mean I think the market is dealing with such uncertainty

you really do that the what you gain from a diversified portfolio is even more important in a market like this than than typically. Paul in the New York term here I just wonder how much noise is in this market and I ask that knowing that Friday we've got an OPEX options expiration it's expected to be one of the largest expirations of all time you've had this Footsie Russell adopting new rules that limit the influence of the largest stocks aka the MAG7 that's expected to affect more than seven trillion dollars worth of equity equity funds that are having to reshuffle in light of that how much should we be thinking about or factoring in the impact of some of those moves technically here at least in the near term versus the bigger picture as we do come out of this correction which I know you've got some historical context for us on as well. Yes, I mean, I think in that respect, there's always going to be a multitude of factors impacting things and you know, so some of these mechanical adjustments like you just mentioned Morgan that that

can impact things. And to. Dana's comments before about talking about international versus domestic you always want diversification and is as exceptional as the strength has been in international stocks over the last two months. On a

relative basis they're back to where they were- in in October so. They saw historic under performance from that period- right when the economist put the- U. S. exceptionalism on the cover they saw a historic under performance up until

January and that. And now international stocks are seen a short term burst of historical historical outperformance. So I think that respect for the market overall though- you know historically when we've seen the sharp pullbacks in these extreme

moves. They tend to reverse themselves- over the course of the coming weeks and months. So in that respect I would think that you've seen some oversold conditions in U. S. stocks. And you should see a bounce here going forward it may be not in

the next week that tends to you know the market tends to. You know make the most people upset as possible but as we go out to the next couple of months I think you'll see the US stocks start to rebound. It rebound relative to

Europe and on an absolute basis okay Dan what do you think of fixed income here I mean we had a twenty year auction today that Rick Santelli gave an A plus it's very rare to get an A plus from Rick Santelli. We've seen yields moving lower really across the curve particularly on the longer end lately. Yeah so I mean we're definitely you know proponents of having a strong solid fixed

income position. I mean look it's unclear right where this equity market is going to go. I think a lot has to still unfold with. Policy tariffs obviously- what are the changes in you know and government jobs are relatively small percent of the overall workforce but- you know we had pretty good February numbers we

haven't yet seen the impact of what. Tariffs you know some of these layoffs in government are going to do. And so you're in a position where if you're in equity markets and we and we cater to retail investors you want to make sure that fixed

income position is solid that you're not overweighted in equities either just because you haven't rebalanced lately or because maybe a tilted a little bit into equities with all the pro growth you know excitement right and making

sure that you do have. The balance and fixed income but I will say look I mean we're in correction territory right we're not in bear market territory. The balance in fixed income but it will say look I mean it weren't correction territory right we're not in bear market territory. Three quarters of the time corrections don't necessarily

indicate a recession. So I don't think where we stand today you know the comment is hey you should switch to cash or switch to fixed income it's more that there's uncertainty to unfold you know there there's a lot more policy uncertainty

that's yet to come. And investors should kind of be where their risk tolerance tells them to be. Okay. Dana, Paul, thanks for kicking off the hour with us. Well, NVIDIA CEO, Jensen Huang, just wrapping up his keynote at the Companies Developer Conference.

Our Christina Parts-Nebulous has the highlights. Christina. Well, NVIDIA unveiling new strategies to maintain dominance in the face of increasing competition data centers, of course, still the major focus with Jensen reiterating its trillion dollar market cap by 2028. He did announce largely expected Blackwell ultra for this year, Rubin for 2026 and Rubin ultra for the back half of 2027, promising that Vera Rubin that's the and Rubin Ultra for the back half of 2027 promising that Vera Rubin, that's the whole

family, will drive down operating costs. And that comment really stuck to me because it comes at a time when hyperscalers really are nipping at Nvidia's tail with cheaper options. AWS, the information article, a perfect example today and many others, Meta, Google. And then in terms of other announces coming from this keynote, we had more about Dynamo, which is inferencing software. Dynamo, I should say. The company's expanding beyond its core business, announcing other reiterations as well. There's a partnership with General Motors, which they plan to develop autonomous vehicles,

which did impact competitor Mobileye. You saw the stock drop on the announcement. There's also a partnership with Yum Brands, parent of Taco Bell, KFC, to build AI drive-throughs. And they also plan to open up a quantum computing office in Boston and introduce the world's first humanoid robot, which is customizable and can reason. But when I

mentioned quantum computing robots, those revenue impacts are going to be minimal for the next few years or so. Still, this speech went on for two hours unscripted, no prompter, was highly technical. And as long detailed projects, many that were already previewed at CES in January, clearly catering to a technical crowd rather than maybe some retail or Wall Street investors, which may explain why the stock barely moved or much of this was already priced in. So that's the takeaway. There will be a Q&A with press and financial analysts tomorrow, which could move the stock

as well. Jensen, Juan did make an argument that the hyper scalers, the big cloud players, just one of six major pieces in an overall strategy, including robotics, automotive, and other. Important for him to make that case given what they're working on? The case that the hyper scalers are still partnering with them? Or just one piece of Nvidia's strategy, one of six key pieces? Yep, six key pieces, but the source of revenue from several of those pieces are not in the near term.

And I think, if anything, from Jensen Wong, we're seeing more of a... I don't want to use another word for defensive, let's just say that, that he's really changing his tone because competition from hyperscalers is ramping up because there's concerns that you can build large language models on chips that are not as advanced, which would mean you don't need to buy every single iteration of a GPU coming out every single year. So I feel like what we heard today

was all of these other streams of revenue, which could be great, but it's almost like you're trying to focus the audience on that, so you're not realizing maybe he's to be eventually losing market share in the near term. All right, Christina, parts and Abelis. Thanks for bringing us the highlights.

And of course, we will be talking a little bit more about quantum later this hour as we continue to dive into Nvidia and GTC. In the meantime, though, one one market winner today was gold that was hitting another all time high earlier in the session. We're above 3000 Mike Santoli digging into that move Mike. Yeah Morgan of course this latest running gold above three thousand dollars an ounce has gotten a lot more attention maybe less recognized is that it's also catching up to

the S. and P. five hundred over the ten year time span right now you see that really aggressive move higher recently that is almost brought it intoity parity with the price return of the S. and P. always got to point out total returns the S. and P. with dividends included. Well outpaced gold- but I would say on the short

term on a technical basis the moving gold is looking just a little bit overheated it's pretty far above it sort of longer term trend lines but obviously- it has a place emerging markets investors lot more central banks.

The idea in general that when central banks have maybe less control than gold is a little more of an option. Interesting too that it's been outperforming Bitcoin for several months now as well. Now turning to the inflation outlook, obviously that's only one piece of sometimes what motivates buying in gold.

This is the implied forward inflation rate over five years in the treasury market, treasury inflation protected securities. So this is not surveys, this is market-based inflation expectations. You see it settling here right around 2.4% annual inflation, which obviously is above the Fed's target, but it's not far above where we've been for most,

at least on the upper end of the range for the last couple of years. So it is a little higher than it was late last year when the Fed initiated its easing, but it's still in the ballpark of suggesting that disinflation at least is a pretty decent probability right here, but it'd be very interesting to see how the Federal Reserve tomorrow characterizes the outlook.

There's probably some ammo there for the Fed to kind of raise its inflation outlook for the rest of the year versus what it was last report and also perhaps cut the expected growth rate. So that creates a little bit of a tricky situation, which arguably the market has already been contending with. Yeah. Economic forecast and the SEP, the dot plot are really what's going to be in focus with

the FOMC decision tomorrow. I want to go back to gold for a minute, Mike, because perhaps more than a hedge against inflation, it's a hedge against uncertainty. And I feel like every market guess we've had come on has used that word in some capacity in recent weeks, even just earlier today. But the other one that gets my attention that you, I know you watch, but is kind of tracking below the radar in general right now is Berkshire Hathaway because that's been clocking new

record highs including today. So when you take that you take gold what does it tell us about the defensive nature of this market. Yeah I mean Berkshire Hathaway is defensive on so many different levels.

Obviously the balance sheet is is kind of unmatched. Just the general idea the long term orientation the fact that it's sort of the insurance business itself just kind of unmatched. Just the general idea the long term orientation the fact that- it sort of. The insurance business itself just kind of. Reduces so much cash I do think that

there's something else going on with Berkshire which is insurance stocks have been very strong. And there's a lot of chatter around. You know whether in fact the huge cash position means. That there's just a lot of potential energy

inside there but- you're right parallel with gold. It does show that- that there's this been reach for. Some sort of offset in portfolios relative to cyclical risk policy risk- and you know maybe hyper concentration. In those growth stocks that cause so

much the S. and P. return in recent years. All right Mike Santoli thank you we'll see you later this hour. Up next Apollo global management chief economist Torsten Slockach on what he expects the Fed to announce at its meeting tomorrow and how President Trump's tariffs could impact that decision. Plus Alphabet buying cloud security startup Wiz for $32 billion, planning to be its largest ever deal.

We're going to look at how the strategy behind that acquisition could affect the ecosystem. And Nvidia and Quantinium, just announcing a new quantum research and data center in Boston. Coming up, Quantinium's CEO discusses that partnership and a potential IPO timeline in an exclusive interview. Stay with us. Welcome back to Overtime.

So what does Google Alphabet's planned 32 billion dollar all cash acquisition of Wiz mean for tech investors? Well you only do something like this if you think it can transform your place in a market. Buying EMC for 67 billion dollars put Dell in a different stratosphere from HP. IBM's 34 billion dollar Red Hat acquisition gave it a foothold

in the hybrid and multi-cloud world when IBM risked irrelevance. So what's Google's play with WIS? Well, on the surface, WIS is about cloud-native security, a hot area now that organizations of all types are migrating their data to multiple clouds and need security strategies that stretch across them all. Deeper down though, it's about the number three

cloud hyperscaler buying leading software in a category every major enterprise customer needs, earning an opportunity to grab a bigger share of enterprise trust and budgets. So keep an eye on cloud security players like Sentinel One and CrowdStrike and Backup and Recovery Stocks, Commvault and Rubrik. But on the multi-cloud front,

also watch names like Nutanix and Informatica, which could get attention if the strategic cloud M&A conversation heats up from here. All right, we'll be watching it. Now let's turn to the Fed. Stocks closing lower today as economic uncertainty continues to weigh on Wall Street. Investors await tomorrow's Fed decision.

Well, joining us now is Torsten Slock, chief economist at Apollo Global Management. Torsten it's always great to have you on I don't think anybody at least not the market is expecting any kind of actual rate decision they're expecting the Fed to sit on their hands tomorrow but a lot of focus on the dot plot a lot of focus as we were talking about with Mike Santoli just a few minutes ago on economic forecasts especially amid the fiscal piece of the picture and what that'll mean from a data-dependent standpoint.

What are you watching for? Well, the key backdrop for the meeting tomorrow, Morgan, is that we have a situation where the soft data, meaning consumer sentiment and corporate sentiment, has really deteriorated since the last meeting. Consumer confidence for people making more than 100,000 has dropped more than consumer confidence for people making less than 100,000. So if you look across

the board on the consumer side there is a significant worry about business conditions deteriorating over the next 12 months. On the corporate side you're also seeing CAPEX planning in the Fed regional district surveys that that's beginning to show signs of weakness. So the key backdrop here is that there is a lot of uncertainty when it comes to sentiment among households and firms. And that's the key challenge for the Fed and also for Jay Powell and the press conference tomorrow, Amy.

How do you talk about the hard data has still been okay, but the soft data has been very weak? And there's a lot of nuance there, to your point. I'm interested in what is triggering that uncertainty. Is it all of the trade and tariff angst right now and all of the back and forth that we're seeing with that, especially ahead of this April 2nd deadline? I asked that knowing that you wrote

a really interesting report here recently called Sharing the Benefits from Trade More Evenly, and you note the fact that the US actually has lower barriers to trade than really any of the other countries in the world, including some of the ones we've enacted trade wars with. Absolutely, and it is definitely the case that the US both when it comes to actual tariffs pass at much lower level than the rest of the world, but also when it comes to non-tariff barriers, meaning other restrictions on trade,

the US is also much more open than many other countries. So in some sense, the trade war, much more open than many other countries. So in some sense, the trade war, it does come from a fair point, namely that the US is more open when it comes to the level of tariffs, and the US is also more open when it comes to non-tariff barriers. So from that perspective, the trade war is exactly an attempt to try to level the playing field with other countries that have had more tariffs and that have had more non-tariff barriers.

That, of course, issue, of course, becomes important when you think about how do you then get to the point of leveling the playing field? What is that process? And what are the mechanisms through which you level the playing fields? And that's, of course, what markets have been responding to, namely that the introduction of very significant tariffs, including on Canada and Mexico, of course, also on China, has created probably some increase in uncertainty. Combined with those, the risk of course of government workers,

remember for every government worker, there are two contractors. That means that the true number of people in the federal government is of course around nine million, also creating some uncertainty for households. So Torsten, more broadly, here in the US, the people who buy stocks seem to feel very differently about the economy from the people who pay rent right now.

And the people who buy stocks are looking forward to tax cuts, corporate tax cuts later this year. The GOP is trying to get there in part by cutting Medicaid. Seems like somebody is going to emerge from this situation unhappy. Who do you think it is, and how should investors prepare? You're right, John. I mean, there's always a discussion when you change anything in the tax system.

It is almost always the case when you change anything in government policy, there will be someone who is winning, there will be someone who's losing. It's very rare that you have one simple policy and everyone is winning. So that's of course why if you raise taxes, if you lower taxes on certain households, if you raise taxes, lower taxes on certain companies,

it will have different implications. And you're right, all the things that you listed, they are indeed factors that at the moment, of course, we are trying in the economic profession to put into the spreadsheet to figure out what is the net effect is this good ultimately for the S&P 500 and the economy or is this something that's going to drag things down and of course uncertainty and the elevated level is probably going to be

somewhat of a drag for a while but other things if we do get more tax cuts if we do get more deregulation if we get more energy production will all be tailwinds to growth and that's why you put all that up on the scale and try to figure out exactly what's coming in the near term and what might be coming later this year. As soon as you get an answer out of that spreadsheet, Torsten, you come right back here to overtime and let us know. For now, thank you.

Well, it's been a rough ride for Roblox shares, plunging nearly 30% since early February. Up next, the company's CEO joins us for an exclusive interview on whether new AI tools that were just announced can help generate more revenue, turn the stock around. And later, the CEO of Quantinuum on his new data center partnership with NVIDIA and his big speech Thursday with Jensen Huang

during NVIDIA's Quantum Day. Stay with us. Welcome back to Overtime. Roblox is rolling out a preview of its new AI model at the company's developer conference this week, allowing people to generate objects via plain text. Roblox CEO David Buzucki joins us now in an exclusive interview,

along with our own Steve Kovach. Steve. Hey David, thank you so much for joining us on this day, day after rather, after you announced that big AI model. Thanks for joining us. Steve, it's great to be here. Thanks for having me on the show. So, Dave, we talked so much about these chatbots,

their text space, you can have text conversations with them. Now, there's some voice incorporated, you can generate images. What we don't see so often are 3D generated AI chatbots or AI models that let you build into these video games and that seems to be what you guys announced this week. Can you talk a little bit about this because the way I'm reading it is that eventually people are going to be able to maybe don't have the design skills to build and sell stuff in

Roblox this will make it a little bit easier for people like me maybe to start getting into Roblox and start making these items start selling these items when are we going to start seeing these things go for sale, AI generated items on sale for Robux on the platform? Hey Steve, it's bigger even than things being for sale. It's really the future of not just how games are created, but how games are even played on the platform. So you can imagine if you and I were walking down the street and whether we like cars or houses or fashion and we were simply talking like I would like a red sports car or I would like a piece of clothing like this, we're introducing and literally shipping this quarter 3D in-game

generation, which means the ability for anyone who wants to be a creator to create interesting things just by talking about it. And you mentioned that very correctly. AI has typically been in the 1D or the 2D space, text or images. We're moving to 3D and ultimately moving to full game creation with what we're calling Cube 3D,

our foundational model built from the bottom up inside Roblox. So Dave, we're just showing some pictures of that product in action. You're also making this open source. I think this is a really interesting moment to talk about open source because today MetaLlama, they announced they had 1 billion downloads already.

DeepSeq, of course, changed the entire conversation around generative AI. It's also an open source model. You guys are making this open source. You guys are gonna put it out, I believe, on GitHub later this week, so people can start playing around with it. How does that benefit Roblox, though,

when other people can use this technology to use it elsewhere? I think 3D foundational models are something we're going to continue to be expert at because we have so much good 3D content to build this model out of. And we started this actually in the safety and civility space. We open sourced our voice model, which all voice on Roblox runs through, and it's been shared and downloaded over 20,000 times and we joined a open source consortium called Roost including

Google is in there around open sourcing models for safety. Our 3D foundational model we believe can show really the the amazing model we've built and allow other industries to take advantage of this as well. David, how much do you know at this point about the economic impact of plain language coding within the platform? Does this commoditize creation and flood the market with merchandise and in effect drive down the price of items or does it increase paid engagement? Yeah, I actually feel taking a step back, this is almost similar to when we were all drawing by

hand or using oil paint to make imagery and all of a sudden an explosion of photography and digital tools came available and we have so many more people participating in image creation. We're very optimistic and what we see AI doing is powering human acceleration, not human replacement. We're going to see better creations. We're going to see our top creators on Roblox making more immersive, more amazing experiences. But we're also going to see you and me and others who never thought

they could, for example, design and build a house, maybe build that house in Roblox in 3D by talking about the house, the shape, the size, the texture, the features. So this is akin to us to just another revolution in creation that's going to increase quality and span rather than replace people. Dave, it's Morgan. We're talking about Roblox user generated content platform. So you don't make the games, you enable the games.

There's also this social element to Roblox. And now of course we're talking about the implementation of all this generative AI applications. What does all of it mean for online safety, especially when it comes to parents like myself who are concerned about the exposure that their children are going to have? Yeah, we're, this is our top priority really since the founding of the company, we've really leaned into safety and civility. I've shared in the past with Steve,

we ship safety functionality almost every week. We're running over 200 AI models behind the scenes. And we've adopted a philosophy of building safety and not just for people under 13, but for everyone on our platform. All of the text on our platform, all the voice goes through AI. And more and more, we're really starting to open source

some of these models because we're really building the best in the industry. So it's a top priority. We started actually AI at Roblox four years ago before it was really hip and in the news, building over 200 different models that we use for safety. So this is a huge priority to us, and AI is really supercharging it.

Dave Buzucki, CEO of Roblox, thank you for joining us. And Steve Kovach. Thank you, Steve. Thank you to you. Well, it's time now for a CNBC News Update with Bertha Coombs. Bertha. Morgan, the Pentagon is planning on cutting up to 60,000 civilian jobs.

But according to a senior defense official today, fewer than 21,000 workers took voluntary resignations. The official added that the department plans to cut about 6,000 positions a month by not replacing workers who routinely leave. Meanwhile, a federal judge has ruled Doge's dismantling of the US Agency for International Development, USAID, likely violated the Constitution. The US District Judge blocked Doge

from making more cuts to the agency and ordered the Trump administration to restore email and computer access to all USAID employees, including those on administrative leave. The White House and Doge have yet to respond for comment. And in about an hour and a half, two astronauts who have been stuck on the International Space Station for nine months now are due to splash down off the Florida coast. Butch Wilmore and Sonny Williams traveled to the ISS last

noon on a Boeing Starliner capsule, but issues with the vehicle eventually led NASA to bring the Starliner back without anyone on board. They were only supposed to be there 10 days. Unbelievable. So great they're friendly coming home. Yes. Going to be watching that one closely this. So great they're friendly coming home. Yes. Going to be watching that one closely this evening.

Bertha Coombs, thank you. Up next, a top analyst on the key takeaways from Jensen Huang's keynote at NVIDIA's Developers Conference and whether they will move the needle for the stock. And don't miss Jim Kramer's exclusive interview with Jensen Huang. That's live tomorrow from GTC, 10, 15 a.m. Eastern. Welcome back to Overtime. Nvidia shares moving lower today. One of the worst performers in the S&P,

despite CEO Jensen Huang's highly anticipated keynote address this afternoon at the company's GTC conference. As expected, Juan revealed new Blackwell Ultra chips that'll ship in the second half and next generation Vero Rubin GPUs for next year. More insight than strategy, CEO Patrick Morehead is at the keynote, joins us now.

Pat, did Jensen Wong make the argument successfully between Rubin and Dynamo that price performance leadership will remain for the next couple of years? So I think he said the right words, there are no doubt, and I think he did a very good job at it, correlating tokens and cost per tokens, and how much revenue you could derive from those. But I think, quite frankly investors want to see customers say the

same thing. They want to see a revision in the guidance to an upward basis to get higher levels of confidence. So I can't help but link this also. Adobe is making announcements that are AI related at summit. We've seen a step back from Apple in Apple Intelligence for Siri. All of this software would arguably create demand for the hardware running on Nvidia. How does the demand picture look in the medium term for these chips that Jensen keeps executing on and announcing on this yearly cadence? Yeah, I mean even, even start short-term demand isn't great and you can look to enterprise SaaS companies and software companies that are trying to make money off of that. There are what I would like to call green shoots but there is still a challenged environment

to be able to monetize those downstream impacts. With that said, we aren't too mass reasoning engines. And I think everybody needs to be calm and collected until we get to those capabilities that truly could move the dial in particular agents. But those take a lot of times for an enterprise and even for enterprise SaaS company to implement. With all that said, I do think we have a good 12 months

of runway left on all that CapEx without the downstream economic benefits. Patrick, how much do you read into the fact that Jensen Huang plays a long game here? And what I mean by that is he's had a big economic moat around his chips and their capability, and now we're starting to see more competition come into the marketplace. But even as that's happening, he's striking all these deals around Dynamo or 6G, self-driving and autonomous vehicles, industrial AI. He's even making moves in space right now.

And I realize, or quantum, I realize these are partnerships that may not come to fruition for a number of years, but is he already building the next mote? He is. And if you look at this on a time scale, right, we go from Blackwell to Rubin, enterprise AI to physical AI to quantum. He is laying the groundwork for the next 10 years. And if you notice, he started heavy on CUDA.

And CUDA is that software moat that permeates every one of these long-term bets that he is making here. And he knows there's competition coming. And he knows even at RackScale, the silicon that, and AWS, Microsoft, a Google and Meta are producing, he will lose percentage share there,

and he's creating all of this these new opportunities to make sure that that growth keeps coming. Patrick Moorhead thanks for joining us. Thank you. And a fun fact to Aide Vera Rubin is the scientist who discovered black holes hence the name Rubin. But for much more NVIDIA still ahead we have the CEO of quantum computing company, Quontinuum. He's going to discuss his new research and data center partnership with NVIDIA. But first, Mike Santoli is going to look at how investors think companies should use their excess cash right now and whether it's possible for CEOs to make everybody on Wall Street

happy. We'll come right back. Welcome back. Investors are torn on how they think companies should be spending their excess cash. Mike Santoli's back with a closer look. Mike? Yeah, John, so in the Bank of America Global Fund Managers survey,

I always like to look at this question, which is how should companies be spending their cash flow? And right now it's unusually split among increased capex improved the balance sheet or share with investors through dividends and buybacks now there's a net positive here which means there's no glaring

weakness in corporate finances or strategy at least in investors eyes when you see everybody saying you better improve your balance sheet you're in a recession or a debt crisis and so we're certainly not there. And here in this period in the

twenty tens when it was basically all about increasing capex investors thought companies were too cautious in the post global financial crisis environment- and then sometimes they say just give us the cash that's not really the

case. So it suggests to me we're on somewhat stable footing in terms of you know corporate. Situation and essentially investors are agnostic about things and so you know there may be a lot of questions about- government

policy and fed policy but not as much suspense about how companies. Should be spending their money Morgan. All right Mike Santoli thank you up next. Details of a big new defense partnership involving. Autonomy and AI that could help

make military spending more efficient. Welcome back. Booz Allen Hamilton announcing a new partnership today with defense tech startup Shield AI. Booz Allen is the top provider of AI and cyber to the federal government and Shield AI makes AI pilots to fly aircraft, including an F-16 fighter jet that autonomously flew the former Air Force secretary last year. Now the partnership is centered on defense. It combines Booz Allen's engineering expertise

with the Shield AI's hive mind platform. Think faster development and deployment of unmanned weapons systems. Booz Allen also participated in Shield AI's funding round, which valued the startup at $5.3 billion just earlier this month. Now Booz Allen has been partnering with startups and so-called Neo primes as the defense industry changes, both due to AI and the implementation there, but also as

defense spending priorities shift as well. Also worth noting, the news coming from Andres Horowitz's American Dynamism Conference in Washington, where just this morning Vice President JD Vance, also a former venture investor himself, talked about the importance of U.S. leadership in AI as well as the need to build out the American industrial base. Now, shares of Booz Allen finishing up 1% on this news today, John. Well, up next, Continuum's CEO on when Wall Street can expect the company to go public and details of his new quantum research and data center partnership with Nvidia. Be right back.

Welcome back. Nvidia announcing earlier in the hour a new quantum research and data center and they're partnering with quantum computing company, Quontinuum, to carry it out. Well joining us now is Rajiv Hazra, CEO of Quontinuum. Rajiv, it's great to have you on the show and that's exactly where we want to start because you're going to be at GTC. You're actually going to be in a panel with Jensen Huang later this week in the dedicated Quantum Day.

But what does this announcement about a research center in Boston enable when we're talking about the still-nascent quantum computing industry? Thanks for having me today. Here at GTC, we are going to be announcing on Thursday our continued work that started with the announcement today around us being a founding partner in NVIDIA's Center for Quantum Acceleration. This is a milestone moment for the industry because it's the best in the AI business,

coming together with the best in the quantum business and really starting to lay tracks for commercialization of this technology that has had a lot of promise using Nvidia's hardware and artificial intelligence knowledge to actually improve quantum computers while we work on those quantum computers to then solve real problems for customers

thereby paving that way to value creation and value gathering. You know, it's interesting, because we started this year with a sell-off in quantum computing stocks, because Jensen Huang had made a comment about the fact that quantum computers, useful quantum computers, could still be more than a decade away, maybe more. How do you see that commercialization happening and how quickly can it accelerate?

So we have a different view than Jensen. And what we are seeing is very, very important uses of quantum computing use cases becoming real in the next three to maximum five years, certainly by the end of this decade. And I say that on the basis of two things, where the maturity of the technology has come, even two or three years ago, maybe Jensen would have been right, but where we have brought the technology

in terms of being able to get to reliable quantum computing at scale. And the second part is customers, who are actually engaged with us in accelerating their journey, creating the software, getting the use cases adopted into a production flow. So we think useful quantum computing is here today. It only accelerates real uses in the next three to five years

that create a significant amount of economic value, and then it's onwards and upwards from there in terms of that becoming an essential fiber of our computing framework that the industry is used to today. Rajeeva, along those lines, tell me about the progress you've made with quantum origin, your quantum random number generator for security. How's the monetization of it? How quickly is demand the market expanding for it? We're seeing great demand for our quantum origin product, which is essentially quantum hardening,

the seed that goes into a quantum random number generator, which is at the heart of every encryption task of what you protect as your assets. We are seeing good pickup, particularly post the decision by NIST to standardize on post-quantum algorithms. And we couldn't be happier with the fact that we've architected a unique product that not only does

move the encryption hardening a significant ways forward with a provably unbreakable or unguessable seed, but also is architected in such a way that it eases the transition of current cybersecurity infrastructures into the next generation of quantum safeness. So we're very excited by that product. We are seeing very good customer pick-up across segments, and we think this is just the start of that journey of bringing quantum into cybersecurity and making it really, really real.

Yeah. For folks that maybe don't know, Quantinium is the most powerful quantum computer on the market. It also touts Honeywell as the largest stakeholder. We know Honeywell is getting ready to split its portfolio into three businesses. Is an IPO in the cards for Quantinium? We are going to be part of the Honeywell portfolio as Honeywell has announced. We are an increasingly valuable asset. Our focus is on doing what we do to create value through the development of the world's

most powerful quantum computers. As you said, we have the world's most powerful quantum computer. That's not just our statement. That's validated by external benchmarking. And the machine that we are going to introduce in about six months, certainly by the end of this year, will be up to a trillion times more powerful than just the one we had 18 months ago. So that's the rate and pace at which we are moving the quantum technology and its capability forward.

Trillion with a T. Rajiv Hazra of Quentinium, thanks for joining us. Thank you very much. Ahead of those comments later this week at GTC, NVIDIA's GTC. Now we will be... On the lookout, yeah, for much more AI news tomorrow in an exclusive interview with Adobe chairman and CEO Shantanu Narayan that's live from the Adobe Summit I'll be there in Vegas. Looking forward to that but that's not all we will also have an all-star reaction to the feds latest interest rate decision we get that

tomorrow that's going to feature Dan Niles, Jeffries chief market strategist David Zervos and NewVee and chief investment officer Sarah Malik. In the meantime we did have major averages finish the day lower. Gold, another record high here, but FOMC will be in focus, and again, tech as well, come tomorrow. All of these AI announcements tie together

as we were talking about with Pat Moorhead. You've gotta have software to drive demand for the hardware and drive demand for the chips, which then should feed more powerful software. Alright, well Nasdaq in the meantime, worst performer today, that's going to do it for us here at Overtime.