Closing Bell - Closing Bell Overtime: The Moment is Finally Here: Nvidia Earnings; Plus, Salesforce’s Marc Benioff & Anthropic’s Dario Amodei. 8/26/26

Episode Date: August 26, 2026

Much of the market traded sideways this week as traders awaited Nvidia’s latest quarterly numbers. The day is finally here and we have you covered from every angle. Preview and reaction with our Kristina Partsinevelos, Deepwater’s Gene Munster, Moor Insights & Strategy’s Patrick Moorhead, Bespoke’s Paul Hickey and Benchmark Company’s Coddy Acree. Plus, Jim Cramer interviews Salesforce’s Marc Benioff and Anthropic’s Dario Amodei to discuss their new partnership. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell is bringing an end to the trading day at the NYSC innovative industrial properties and at the NASDAQ, Scholastic, marking the start of school book fair season. Welcome to Closely Bell overtime live from Studio B at the NASDAQ market site. I'm Mike Santoli. Melissa Lee is off today. And it is Nvidia earnings day, the moment the markets have been waiting for. We expect those numbers out in about 19 minutes. We have a great panel to react and to break down the results, the guidance and what it means for chips and tech and the rest of the market. but that's not all. Several other big names reporting, Salesforce, crowd strikes synopsis among them,

and in just a few minutes after those earnings come out, we'll be hearing from Salesforce CEO Mark Benioff. Ahead of all that, news stocks remained in their holding pattern. The Dow down about 100 points, the S&P 500 just barely dipped into the red before the closed, the NASDAQ and NASDAQ 100, also down just slightly. There were, as always, some individual stocks making some big moves. Let's get to Christina parts nevel us with those. Christina. Yeah, and that's exactly going to start. The consumer and where they're still spending. Abercombe and Fidge jumped after raising its full-year profit outlook.

A roughly $100 million tariff refund did help. The namesake Ambercombe-Abrand, I should say, did the heavy lifting, offsetting softer sales at Hollister. American Eagle and Urban Outfitters rose in sympathy. Urban Outfitter's earnings are coming out soon. You can see up 9%. 9. 9.5. Footwear, though, was kind of the soft spot yesterday. the read-through from Diggs warning on Foot Locker kept the pressure on Nike today,

still hovering near its lowest level since 2014. Smucker spread this some cheer, lifting its full-year outlook on higher coffee prices. I shouldn't be smiling because I have to pay those higher prices. The CEO told us on Squawk Box, Tair of free funds will help invest in the business and help them also pay down debt. And now, quick pivot to software because there's a lot of movers there where guidance specifically did a lot of the damage. Into it slid on a weak outlook and a Bank of America downgrade to neutral with Bank of America

warning, cheaper AI-powered tax tools are just taking share from turbotags. A reminder, though, that just AI is still very disruptive, price-pressuring force in parts of the software complex, a big concern. And then lastly, Zoom fell about roughly 6% today. Even after EBITA's soft profit guidance really overshadowed its strongest enterprise growth in three years. Mike. Christina, thank you. Well, sales force earnings are out. Kate Rooney has the numbers. Kate. Hey, Mike. It's looking like a beat on revenue for Salesforce and then slightly ahead as well on Q3 guidance. It was $11.34 billion in revenue for the quarter versus about 11.32 on the estimate. Bottom line, we've got an adjusted EPS number, $5.95. I should say. That is the adjusted number.

We're not going to compare this one. There is from what we're seeing a massive investment. gain about $2.6 billion does appear to be from an investment in Anthropic. They don't say that specifically, but it has been propping up other big tech earnings that we've seen. It's a similar dynamic to what we saw with Microsoft, for example, and the company did raise a massive round in the quarter. So a lot of these companies have needed to mark that up. It has helped boost earnings net income for Salesforce in the quarter of $3.5 billion. Some key segment revenue came in better than expected as well. Subscription and support was in line, billions in line. And then I mentioned guidance. That ahead of expectations, at least at the midpoint, both on Q3 revenue and EPS. Full year revenue

guidance finally, slightly higher at the midpoint of that range. And then the EPS guidance number for the full year. We're also not going to compare because of that hefty investment gain in Q2 as well. It looks like stock is up more than 6% here after hours. Mike, back over to you. Yeah, absolutely. It takes it back several months until last time we wrote these prices for Salesforce. Kate, thank you very much. As we wait for InVVity's results, What could the report mean for the overall market? So far, it's managed to rally without Nvidia. So can it continue to do so?

Joining me now is Paul Hickey from Bespoke Investment Group. Paul, good to see you. Good to be here, Mike. As a matter of fact, you go back to NVIDIA's last earnings report three months ago. Invidia shares are down, say, 5%. S&Ps up 3.5%. What does it say about the stakes for their numbers and part of the overall AI picture for the market? Well, it's funny.

It's the biggest stock in the market, so it's going to obviously have an impact just what does on the market. And you mentioned on the market and AI, you didn't mention semiconductors. Sure. And semiconductors, it's the largest component of the semiconductor or the socks. But it has zero correlation to the socks over the last three months. It's less than any other stock in the socks. And what's really interesting is I did something this morning. I bought a pack of Marlborough this morning. And that's because Altria has more of a correlation to the socks than NVIDIA does. So in that respect, we say what's good for NVIDIA is going to be good for the

It's actually the opposite. Earlier in the year when the semis were doing great, Nvidia was underperforming. And now when the semis have been doing poorly, Nvidia has been outperforming the semi. So I wouldn't put too much weight into it. It's a big market player and it's going to have an impact. But I think the days of the hyper growth and the stock price are behind it. There's so many people focusing on the stock that it's hard to surprise the market.

I mean, you know, Invidia, along with Broadcom to a lesser degree over the last year, have really just traded as these slower-moving mature versions of what's going on in semis, and obviously all the excitement is in memory and CPU makers, all the rest of it. But it's also reflective of how the overall market has managed to just kind of absorb these areas of the market that had to correct. Right. Semis in the last couple of months, you know, and rotate around and stay in this incredibly narrow band. You know, you have the VIX. The VIX is some of the well-below average for August.

The range for August is on pace to be the narrowest, It's 1994. So it's incredibly nothing at the index level, but there's lots of noise outside. We've seen Madurna, biggest move of an S&P 500 stock ever. You saw Bitcoin hit its most overbought levels on record last week. So you've seen these big moves, but the rotation. And so whereas growth has lagged, you've seen value pick up the slack. The value index has just been making steadily new high after new high.

And it hasn't even had a pullback of 2% since April. So you've seen this massive push pull between growth and the value. value ever since COVID, actually, where you see this massive underperformance for value, and then it snaps back. So I think right now, we're in one of these periods where value has having its day. But again, we always come back to the fact that this is an AI bull market. And so eventually, if this bull market's going to continue, you're going to want to see the AI stocks continue to lead. We do actually have more news also involves Salesforce. Let's get back to Kate Rooney for that. Kate. Hey, Mike, just down the heels of earnings from Salesforce, we do have a headline here from

Anthropic and Salesforce. This is about a deeper partnership between the AI giant and Salesforce. They're calling it Claudeforce. It's bringing Claude, which is the chatbot from Anthropic, a lot deeper inside of Salesforce and Slack as well. They say here it's meant to help companies integrate Salesforce and their data so Claude can pull some of the relevant data, generate the customer interface as well. And agents in this announcement appear to be a big highlight, talking a lot about AI agents, and basically helping take actions on the behalf of customers. It does also look like Claude is becoming a bit more of an interface to Salesforce and Salesforce here, at least according to this press release, is becoming a bit more of a

data layer. It does look like an acknowledgement that some of these AI assistants are becoming, in some ways, more of a front door to enterprise software. Again, though, a partnership, joint partnership here, and Salesforce does want to own, they say, the secure plumbing behind all of this. And also for Anthropic, I would say, big distribution win for Enterprise. That's a key area that they've been going after as well. And they are trying to get access to some of the systems that actually have the customer data. Sorry, I'm going to mute that call in the background, guys. But big news. It looks like you can see Salesforce reacting here up more than 10%. Yeah, you do. You got to keep the hoot and holler on at all times, Kay. Thank you very much.

Yeah, Salesforce up now 11 percent, extending the gains that it was registering right after the results came out. And coming up in just a few minutes here on overtime, Jim Kramer will be talking to Dario Amadeh of Anthropic and Salesforce is Mark Benioff about that partnership. Paul, reflective of the fact that every company that was, I guess, targeted as a potential, you know, victim of the AI revolution is going to want to, you know, obviously make itself into part of the solution, aligning with Anthropic here. One of the critiques, of course, is that Anthropic and Open AI are ultimately the source of so much that's going on in semis and the buildout and everything else, and they still have to raise the money, you know, for a lot of the backlog of orders and

everything, but for now the market says you have to be in league with them. Yeah, no, and I think, so they're the big customers, but you come back to Nvidia and the prospects for the stock. You have, you're in a situation where you're seeing competition. Everyone talks about the memory stock saying there's going to be increased supply down the road and down the years. In, AI, with the GPUs, you're starting to see companies competing on inference, whereas, where Invidia still has the lead on learning. But the inference side, you're starting to see competition there. So you're starting to, everyone said Nvidia had this moat that couldn't be conquered. And on one side, they still do it. But on the other side, we're seeing a lot more competition come in. And that's just

going to, you know, has a potential to keep margins in check, which we'll see in 20 minutes. No, exactly right. I think that's one of those things hovering over this whole story. Paul, thanks very much. Talk to you again in just a bit. So what will Nvidia mean for the overall AI trade? Let's bring in deep-water asset management, managing partner, Gene. Monster. Gene, pretty much everybody acknowledges the numbers themselves are great. Guidance is probably going to be in line. The market's viewing this, though, I guess, as some level of we got it or its maturity. What's the next move or potential turn in the story for Nvidia? Well, maybe I'll give the potential move in 20 minutes from now, Mike. It's just to kind of set what

the bar really is here, is this is about navigating, predicting the slope of decelerating growth rates. Actually, the size of NVIDIA, we often talk about the law big numbers. And it's actually smaller than Google than size of NVIDIA's business. But this quarter, if you look at what the bar is, it's for $92.5 billion, call it. But last quarter, this is in the topic of navigating those decelerating growth rates. Last quarter in April, if you adjust for China, basically take China out because that ended in April of 25, it would have grown 107%. So the magic number tonight if they hit 96.8 billion again the street's at 92 so that's 5% upside if they hit 96.8 billion and you adjust out for April that would imply a similar growth rate 107% as we saw in April that

would be a huge win so I don't think we're going to get there but I just want to flag that number the guidance they're going to give a guidance they're going to give a plus or minus 2% the magic number for that is for a similar guide up that we saw three months ago and that would put us just above of 109 billion. Now the street's at 104. So I just want to kind of start there because your question about what does it say about the market, it starts with what the reaction is going to be to these numbers. And I think those are the two most important numbers kind of going into this. As far as the bigger picture, I think that the setup that CNBC has done near is because really fleshed out most of this, I would just add that the piece, the dynamic around what's happening with hyperscalers

and the non-hyperscalers, that handoff, that's really the narrative that's developed. here. If we look at what the growth rates are going to be next year, hypers are expected that business to grow 41 percent and the non-hyperscalers about 60s. That's going to be a flip flop from what we saw on calendar 26. That's the other piece. We're going to get that breakdown when the 10 Q comes out, which is probably going to be about 15 minutes after earning. So those are the kind of the key things I'm going to be focusing in on, Mike. That's right. Yeah, the company has started to break that out, two separate categories of customer. So Gene, The first two and a half years of the whole AI monster theme here after ChatGPT,

it was such a simple story for Nvidia. It was all the hyperscalers are handing what would be their free cash flow to Nvidia. Literally half of that falls to the bottom line of Nvidia as net income. The market was happy to put it like a 30 times multiple on Nvidia's earnings. All of a sudden, that was net additive to the overall market. Now you have compression in the valuation of Nvidia. it looks a whole lot like Apple did after the iPhone profit bonanza in 0708, and something had to happen to convince the market that there was a next phase.

And I guess if you're an investor saying, if I'm worried about margins and market share for Nvidia, isn't it more likely they go down than up over time? And is that okay? Well, I think from margins and market share, I think the margins probably are going to go down. They've talked about the 75% number, which has been kind of consistent.

But I think the bigger picture here is this is ultimately this conversation comes down to a leap of faith that, and we're going to see two groups of investors, and this comes to margins. And my comment is I think margins come down by a little, maybe a percent over the next year, two years, but I don't think they come down by much. And ultimately, the question is, is like, how early are we? This is a similar theme. But if you believe, and I'm in this camp, that we're in probably a third of the way through of the buildout and not even at the first pitch when it comes to the development or the development or the. deployment of AI. I think what we're going to see is that the sustainability of NVIDIA's business is going to be much better. The street right for next year is at 44% growth. I suspect that number is probably better than 60. Now whether they get

credit for that as a question, but to answer the bigger picture question is we're still very early and Vita is going to be a clear beneficiary. I don't know if the stock is going to reward investors. We sold the stock a few months ago because we knew things were great, but we just didn't know if that would yield necessarily outperformance. And then the other thing, obviously, and whatever you believe about all of the equity stakes and the financing deals that Vida is doing to sort of kind of foster the growth of this whole ecosystem, it does add complexity, right? It does create claims on the balance sheet. And yeah, I guess the question will be is whether we can get comfort with that.

And if the company can kind of delineate exactly why it all fits together. That the whole, I mean, all these questions come back to how disruptive do you think AI is going to be? If you think it's going to be as disruptive as the expectations are, then this off-balance sheet financing is a risk. If you think it will be more material, if the impact is going to be greater, I know these are soft conversation, soft kind of themes here, but ultimately if you think it's more than the market, then it doesn't matter. It doesn't matter where the money is coming from. What matters is the brain of AI is getting substantially bigger. I mean, these 20 gigawatts of data centers are expected to come online next year. I mean, just to put it into perspective of the magnitude of these, one of those data centers will add almost a half a percent to the overall strain on the U.S. grid.

Gene. One of those data centers. Gene, we're going to come back to a little bit later after we get those numbers. But right now, we actually do have to break away. Thanks very much, Anthropican Salesforce announcing that Claude Force, an expanded partnership between the two companies that will launch Salesforce within Claude. joining us now to discuss the partnership is our own Jim Kramer, along with Dario Amadei Anthropic CEO and co-founder and Mark Benioff, chair and CEO of Salesforce. Jim, take it away.

Gentlemen, couldn't have really a more exciting combination. This is terrific, and I want to thank you both for being with us. Mark, I'm going to go right here. Oh, yeah, we're thrilled to be here, Jim. Thanks for having us, Jim. All right. Well, it's great. I've not interviewed before.

This is very exciting for me. We're at the top of salesman. It's great to meet you, Jim. Thank you. And I look forward to talk to you more. Maybe next week it's Dreamforce. I don't know. I want to start with Mark. Mark, I've been a customer of Salesforce for a long time. All I can tell you is I always thought I knew how to query Salesforce. Why do I need Anthropic to help me query Salesforce? But Jim, this is really the best of both worlds. This is the number one AI in the world Anthropic and the number one CRM, Salesforce, coming together for the first time in an incredibly powerful way to be. build a new product called Clodforce. And you're right, Jim, Claudeforce gives you the ability to look at all of your Salesforce data, all of your data systems, all of your applications in what we call our semantic layers, all of our agents as well, and even building incredible new applications

on top of this kind of stack. This idea that you can use Cloudforce to not only query your systems, but build applications dynamically. It's really a first in the industry, Jim. We've never seen anything like it. It's completely exciting. I think that this is the way all enterprise systems are going to run in the future. All right, so, Dario, I think that the combination is terrific, but I also know when I go to my Asian Force page, I see open AIs there. I don't know how exclusive this is.

I don't know what you get out of it. Tell me how this distinguishes you from other LLM models and why this is so exciting for you. Well, look, our view is that, is that Claude is the big. best model for integrating complex amounts of information. We've been using Salesforce and Claude within Anthropic. We're huge Salesforce customers. And as you can imagine, the pace of things that Anthropic is incredible. And we have to both manage individual accounts and we have to answer all these incredible strategic questions that change every time a new model and a new product comes out and and we've found that this this combination product that we've built together

is is the most useful thing in accelerating it you know within anthropic for a long time we've been accelerating the research teams within clod but but this is the first time that we've really been able to incredibly accelerate our go-to-market efforts within clod and we want that for all the other enterprises and we want to we want to me and mark want to bring it together to everyone. Look, we see the numbers. We also see the tape underneath you, Salesforce, fantastic numbers. But I do want to ask it. I know I normally should ask Mark this, but I want to get to Dario. There's this whole Saspocalypse thing, of which we thought that you were going to destroy Mark. I know Mark has a big investment in you, but I was waiting for you

to put him out of business. What do you think about the Saspocalypse thesis? We're not interested in destroying anyone. You know, we think of this as a very positive of something, right? That's the way markets work. We're creating new value here. And the question is just, you know, it's not about destroying anyone. It's about how much of these enormous gains go to various, various people and various companies. And our philosophy always has been that we want to work with our customers. We want to empower our customers to share these gains with us. And so we've already worked with Salesforce in a number of ways. We're big users of Salesforce. Sales, Salesforce is big users of Claude code, of co-work, of other tools.

We've put products like Claude Tag in Slack already, which is a part of Salesforce. And now this combination is a way to gain something that's, you know, it's one plus one equals three, something that's bigger than the sum of its parts. And I think that's the right way to think about things. I agree with you. I think another point you really have to add to that, which is that, number one, this isn't our first product, you know, with Anthropic, we've got several products with them that we're so excited that we've built, including Slack code. But Jim, you have to think of it like this.

Salesforce is very much a deterministic system. It's a system that is all about security and rules and governance and workflows. And if this happens, that happens. It's about determinism. And now you have this incredible probabilistic system, these large language models, you know, this incredible technology that Dario has built. It's non-deterministic. But when you put these two things together, the idea that you could have a probabilistic L-LM and AI that's working now perfectly with a deterministic system like Salesforce,

the result is incredible. We would never have seen this kind of power, and our customers are going to be able these amazing new applications dynamically. That is what is so exciting for us. All right, and we want to be sure everyone always worried down all these days, Mark, about is your data safe? You've got a terrific partnership. I just want to be some surety that when you do this kind of thing, anyone who has Salesforce and uses Salesforce knows that data is safe with this agreement. We've put a huge amount of effort into managing permissions here.

One way to think about it is Claude is a little bit like an employee using Salesforce. And with employees, of course, we've put in decades of effort into management. managing what permissions do they have? What do they have access to? Who's allowed to see what? Right? That's an enormous effort that's that's gone into this industry and to Salesforce in particular. And Claude is keeping and respecting those things. We're also working with Salesforce on something called Enterprise Frontier Safeguards, which is a way of making sure that we keep all the data on Salesforce's side using Salesforce's ability to keep its data price. for its customers, while at the same time we have automated processes that make sure that the models

don't run out of control. They don't do things like cyber attacks. So you might think there's this trade-off between data and privacy and security and safety. We're working on a solution that allows you to do both. And another way to think about that, Jim, is that this is all about... I just did one for a second. We do have Nvidia's results crossing. Please stick around. We're going to come right back, okay? Jim, thanks. Let's get to Christina Parsnevels with those invidion numbers. Christina. So it's a beat on the top and bottom line, $2.22 adjusted. Street was anticipating $2.10 on revenues of $96.2 billion. But you can see shares are dropping roughly

2%. Could be because of two reasons. First, the Q3 revenue guidance coming in at $108 billion, which is higher than what the street anticipated, but lower than what the buy side numbers were, around $109 billion. This revenue guide, again, does not include anything from China despite all the back and forth headlines. For data center revenue in the quarter that just passed in Q2, data center revenue came in at $89 billion, slightly higher than the 86th the street anticipated. And then a growing concern was gross margins. For the quarter, gross margins came in at 75%, exactly in line with what the street wanted.

But it's the Q3 gross margin guide that is light at 74%. Again, we know that they had promised mid-70s and that there was going to be some tapering off because of memory costs. And so now we're starting to see that right now. So only slightly lower than what the street anticipated. And I'll come back to you with a few more numbers. Mike? Yeah. So, Christina, just summing up what you gave us there.

So for the quarter that just reported revenues, $4 billion beat, the third quarter guidance for revenue, also up $4 billion relative to forecast. but it looks like that gross margin anticipated for the third quarter, you're saying 74% the street was at 74.7%. And Mike, you were just talking with Gene that was expecting at least a $5 billion beat for the guide, and so we're seeing only $4 billion. So perhaps that's adding to it. We're not seeing a major sell-off because these are incredibly high numbers, and we've got to break it down further in terms of like, is it the hyperscalers or the

AI, cloud industrial, et cetera. But overall, you're seeing just a little bit of a drop because of those two numbers. Yeah, just off 1%. And obviously the stock had backed off a little bit into the number. We'll see what happens over the call. It always or often changes. Christina, thanks, Jim. Back over to you.

All right. Thank you so much, Mike. And I'm going to look at more obviously into the invidion numbers when Jensen Wong comes and speak to us later. Okay, so, Dario, I want to try to understand it. I mean, for people who aren't that, who are not that close to how technology works, right now you have a query, you query data. Can't you build an immediate app as soon as you have this relationship that's much, better than a query? So I guess the way I would think about it, right, with combining what Salesforce does

and what Claude does. Salesforce has all the data. It's basically a machine for managing your CRM. And Claude is a machine for interacting with that in a fluid and more flexible way. And so, you know, I was just, my chief commercial officer was just demoing this for me with some of the internal stuff we do within Anthropic. Just just half an hour ago where he asked, you know, what are the biggest accounts that Anthropic is trying to close now? Like give me a list of the biggest accounts. Talk me through the risks of each one. All the data, all the information

comes from being managed in Salesforce. But the conversation, the interaction, that comes through Claude. And so you can see how these two things can be more than the sum of their parts. And that's exactly right, Jim. As we said, why this is exciting is it's a perfect compliment. You know, Anthropic builds this amazing model, and now the model has this incredible user interface, co-work. And when you take co-work and then you're able to put it right on top of Salesforce, it's able to bring the data, the applications, the semantics, the agents themselves,

and build complete applications, a total user interface. to let you get all the value out of Salesforce that's been trapped. So customers have put hundreds of billions of dollars into Salesforce. You know, there's a huge amount of value that can be unleashed through this combination. Well, okay, and now we do know, Mark, your numbers have come out. And I did not know how close you were in the dark. You guys are both from San Francisco. Probably know each other.

I don't know, maybe most of your lives. But, Mark, I think you have a big position in Salesforce ventures in Anthropic. I mean, I don't know. By looking at your earnings per share numbers, I have to believe that maybe it's conceivably worth, say, $30, $40 billion? Well, I don't know what Tarrio's valuation is. I think it goes up every single day. But I am very fortunate that we did make a large investment in Anthropic.

We believe so strongly in this company. And you're right, it is probably consequential. I mean, I think when you look at some of the great, assets at Salesforce. It's amazing. Slack, of course, is a huge assets of Salesforce, but so is our anthropic investment. Oh, yeah, we also have our cash flow, and I'm sure you've seen our cash flow and revenue numbers are actually quite good, Jim. So we're very excited about all the combinations of how Salesforce is adding up in its position today. I don't blame you at all, Mark. And I, Dario, look, it was great to talk to you. I mean, I hope to meet you when we

go out to Dreamforce. You're a delightful person whom I've always wanted to talk to. I'm glad you're willing to put up with my joint interview. I hope to see you soon. And Mark, I'll see you very soon. It was fantastic to meet you, Jim. Oh, Dari, you're

terrific. And Mark, I'll see you for your earnings at a moment. And I think the stock being up as much as it is, SESPoc, what was it, Sass? Something? I forget it. Sath Dad? Zombie Sass? I don't know. Maybe you can help me with that term later on. Thank you, guys. That wasn't my first Sasspocalypse, Jim.

but you know what? We're going to talk about why that's nonsense. And also, Jim, we're going to talk about all the great quarter results on Matt Money. Look forward to seeing you there. Oh, thank you, gentlemen. Thank you very much. All right. Well, Jim, thank you very much. Thanks to Mark and Dario, of course, as well. Let's get back to Christina Parks and Nellos with more on NVIDIA. Yeah, so one of the things that InVedia has been doing is that they split their revenue of hyperscalers and everyone else

because they want to show that they are diverting away from the hyperscalers, not as reliant, specifically for the hyper-scalers group, it did actually more than double, so there's still a lot of strength there. Another part that really stood out to us right now is that they've partnered, and this is a quote from the CFO commentary, they've partnered with extensive network of suppliers

to secure the critical components needed to meet demand for the next several quarters. Our commitments increased from $119 billion last quarter to $279 billion right now, primarily related to the procurement of memory. This is a strength of Nvidia. If you argue, okay, open AI, coming out with a jalapeno pepper and all these other chips are coming out great.

You can build these chips, but can you actually procure all the components that go in it? In video is showing its dominance. It's TSM's number one customer outpacing Apple. In this case, it's showing that it's procured all the memory out there when everybody's complaining about how expensive and how difficult it is to get. So this is an opportunity for them. Didn't really move the stock that much, but it is something that stands out. Hyperscale revenue again. So switching to that up 100% year over year, AI cloud industrial enterprise, that other bucket up 138% you over year. So that growth is outpacing.

So I just hit two points right there. The revenue breakdown, strong, you know, X hyperscalers growing faster. And then the procurement, they're getting all their supplies and components, you know, doubling it from just last quarter. Got it. Yeah. I mean, that's supposed to be the next phase of the story, right? All right. Christina, thank you.

Let's bring back Deepwater Asset Management, Managing partner, Gene Munster, along with benchmark company, semiconductor analyst, Cody Acree. Cody, I mean, most of the boxes got checked off. Maybe the street had bigger eyes for some of these guidance items. What's your first read on the numbers? Yeah, Mike, I think you're right. I think it's just a matter of heightened expectations. I mean, everybody knew that InVidia was going going to come in and blow away numbers. It's just a matter of the magnitude. I think $4 billion beat and raise should have been enough to keep even the most optimistic investors happy. stocks off a little bit after hour, but at about a point to half. And so it just is a matter of heightened expectations. The gross margin is a little bit concerning the deflating gross

margin by 100 basis points sequentially into the October quarter. But what is encouraging is hyperscaler growth and non-hyperskaler growth. As you mentioned earlier, the non-hypersuiler up faster than a hyperscaler up 138% versus hyper scaler, you know, up 100%. And so they are showing the diversification across the customer base, which is key. If we happen to see any risk in Vindia's model, it would be customer concentration, but they're showing that that's manageable. And then they've got to make sure they can continue to keep the supply chain fed, and they're doing that with these partner commitments.

Gene, you know, you had set out some benchmarks there in terms of where guides to get to show that there wasn't much deceleration. We came up a little short of that. Yeah, we did. And the reported number, we were really close on that, that 96.8 kind of number. It basically comes out to 105, 106 percent year-over-year growth. That's versus 107 percent. I still think that's a win. It didn't hit that magic similar growth rates quarter on quarter, adjusting for China. but it is, I think that is a win. As far as the guidance, you know, that was 3% upside. Last quarter, they guided 4.4% upside.

So that magic number of 109, we did miss that. The stock initially, that initial tradeoff was related to the gross margins. That one surprised me. I was expecting more of a gradual decline of the next year, not seeing that step down in the October quarter. But at the end of the day, we're splitting hairs here. I mean, this is, we have the metrics. They miss fractionally.

That's what we do. But, I mean, the aggregate of this, this store. story is still very much intact. They're beating at a similar rate that they have over the past year. They're raising at a similar rate despite higher and higher numbers. And you have some of these big drivers still. Let's just look at SpaceX, for example. They want to do eight gigawatt hours next year with the data center. I mean, just that alone, just SpaceX alone, can become a 3% customer last year to a 10%. That will take the hyperscalar growth rate from the streets looking for 38% next year to the low 60%. There's still still.

some meaningful drivers. So, Mike, I think that, yes, we didn't check all the boxes perfectly, but the kind of the story is very much intact. So, Cody, I look at, you know, the kind of the setup here. Obviously, investors, the buy side has a little bit of skepticism where they haven't felt motivated to really rush and urgently pay up for Nvidia shares for a little while now. On the sell side, 63 to 67 analysts have buy ratings. The consensus price target is for a 50% gain from here. The consensus price target implies a $7.5 trillion valuation for Nvidia. So there's enough optimism as people who are looking at projecting the fundamentals. What do you think clients need to understand if, in fact, this stock is going to get unlocked to the upside?

Well, I think you've just got to factor in the continued growth of the name. And I think the stock will eventually follow when you've got this kind of growth rate, even on the $100 billion of revenue continuing to double their hyper-scaler and their customer base year over year. And as Gene mentioned, there continues to be a lot of new opportunities out there in the future. And so I think if you put up the numbers, the stock will eventually follow. But I think the prudent investor going into this call, invidia has been off for the last four quarters of more than 5% after the print.

And so the expectations have been that this would be a repeat of that. And unfortunately, I think the gross margins are giving the skeptical investor reasons to continue to pause. But I think, to Gene's point, the strength of the revenue numbers and the drop through to earnings is almost in all year. And, Gene, just a final note, the margin pressure that they're handicapping here. I mean, do we assume it's memory costs? We think other things are involved? It's memory costs. We also need to look at what they're going to say about the pricing of Rubin.

There's rumors that they're going to raise that at the beginning of calendar 27 by 15 percent and additional price raise. So they may talk. I mean, this all comes down to the call, Mike. Like this might be kind of a one-quarter blip here and we kind of gravitate back. Either way, we're going to be in that 74 to 75 percent range probably for the next year. All right. Most companies would take it.

Cody, thanks so much. Really appreciate you jumping on. All right, and don't miss Jim Kramer's exclusive with NVIDIA CEO Jensen Wong coming up at 6 p.m. on Mad Money. It has been a busy hour of news. Much more reaction to the results from Nvidia and Salesforce, plus the big Claude Force deal. That's coming up. And we want to show you the closing bell at Cebo in Chicago, which ended the regular trading day for options. You're watching Closing Bell Overtime, live from the NASDAQ market. Welcome back to Overtime. Let's look at some. Other earnings movers besides Nvidia and Salesforce, Octa shares are jumping after it beat estimates for both adjusted earnings per share and revenue. Its subscription backlog up 17% from last year. That was better than analysts were expecting.

Third quarter adjusted EPS guidance roughly in line with forecasts, but it gave stronger than expected guidance for Q3 revenue, as well as for full year adjusted EPS in revenue. The stock up 18.6% right now. Meanwhile, crowd strike shares also moving higher. Earnings of 31 census share, topping the estimates by two cents, a narrow beat on revenue as well. Guidance for next quarter seen is right in line with consensus. The shares up 11%. So at the heart of the AI ecosystem, Nvidia, the chip giant reporting earnings just moments ago, the stock down slightly after the results. The company saying hyperscale of revenue more than doubled from a year ago and that the AI infrastructure buildout is at full steam. So what does it mean for the overall AI ecosystem with me now to discuss. The key takeaways is Patrick Moorhead, CEO and

Chief Analyst at More Insights and Strategy. Patrick, great to have you. You know, we did a kind of initial breakdown of the numbers, not too far from expectations. It feels as if, I don't know, the market has moved on to other ways to express a view about which way AI is going. So what's NVIDIA's continuing role from an investment perspective? Well, NVIDIA is still the bellwether, right? you have more software companies consuming their GPUs than anybody else by a factor of 10, and therefore they're very much relevant. I think from an investment standpoint, people got used to the big increase. It still had a huge increase, right?

The revenue was up 106%, which should impress people, had a quadruple beat. But it's that they did not hit the whisper number on the buy. side and there are still questions on the gross margins that may or may not be addressed on the call. But Nvidia is very much the bellwether there. The great part is, you know, Mike, you and I were discussing, I think the last time we were on here, is, well, is anybody making money? Who's making money here? And I think what we've seen is particularly even Salesforce's numbers.

They came in. Their CRPO was up. but more importantly, the frontier models are making money. Anthropic is very profitable, and Open AI is reported to be profitable by the end of Q3. And so we're not necessarily even having those debates anymore, and that's good for the AI trade. Yeah, I mean, I certainly think on a kind of an operating basis in terms of today, they are profitable. However, if you just project ahead in terms of the commitments that they have for, you know, computing and everything that they're all the deals that they're arranging right now.

I mean, that assumes a whole lot more revenue than they have and or, you know, raising of capital. So not to say they're not going to get there. I just wonder to what degree the market is going to keep asking these questions about, you know, exactly what the destination point is, how fast we can get there. Yeah, if the top line doesn't continue to grow with the frontier models and the profitability, we're going to be having a very different conversation. But what I can guarantee you, though, is if those KAPX commitments and those buildouts of AI factories are not going to go forward, I can guarantee you that that revenue won't lock into gear. And one of the elements we don't talk about a lot here is the growth inside of industrial.

And that's a longer poll than what we see in the data centers, but we should never forget about robotics business, the industrial IOT. is the next big wave that we haven't even contemplated. You know, the dominance of Nvidia for the first phase of this whole buildout and the clarity with which, you know, you could just see their revenue and earnings, you know, projected ahead for years in advance. Maybe that did pull forward a lot of the credit that Nvidia deserves for where, for its position in all this. But you have the news flow every day of Open AI had come up with a custom chip. maybe it outperforms on some level, kind of could be a competitor to Nvidia on some level.

I saw that, you know, the Chinese models are kind of like outpacing the U.S. frontier models in terms of token consumption. Who knows how we measure these things. But it just seems as if there's a lot of static around exactly how sustainable all the growth lines are. Yeah. So the threat of, you know, the recent ship from OpenAI called Halapeno got everybody up in arms. But we've seen this movie before. And as I've said on the show before, every hyper-scaler will have their own chip. Every model maker that's large enough will have their own chip. It costs $300 to $500 million just to roll a single chip. But when you have a market that is growing like it is, the ability to take share, meaningful share that would impact Nvidia is very difficult. And then you look at

one of the biggest strengths of Nvidia, in addition to its technology, is also its ability to make investments and buy ahead. And by default, Nvidia has secured the majority of high bandwidth memory going to the market, which starves most of the other competitors, the smaller competitors out of this market, even though many of them are getting help from companies like Broadcom and Marvell. So it's not that it's not a threat. It's just the timing and the degree of the threat that I think is a little bit overblown. Yeah, I mean, just for, you know, kind of rough numbers, this year and next, NVIDIA is expected to have half a trillion dollars in free cash flow.

So the balance sheet and the money coming in is obviously a competitive advantage on all those fronts. Pat, before we have, before we leave, do you have a quick thought on this Salesforce Anthropic link up and what it means for enterprise software in any way? Yeah, so I think it's good for both companies. So first of all, for Anthropic, right, Dario has been under assault for some of the things that he has been discussing, and also the fact that he competes with his customers by looking at their data and creating competing companies. And I think him getting out there making a statement with Salesforce that, quite frankly, is one of the companies that is most dedicated to keeping their clients, data private is a big win. And I like the way that Mark Benioff described it. And it's really, this is a UI that is going to help their users be able to use Salesforce even better. And I think

that's a big win for this. They're users. And I also think the affiliation between Anthropic and Salesforce is positive from a technological point of view. And even Dario coming out there and talking about the Saspocalypse. Great question from Jim Kramer. And not that he, he didn't put the debate to bed. We'll continue to debate on shows like

this, but I think it's the risk should be mitigated listening to what Dario said. I think his line was, we don't want to destroy anyone. So that's, you know, hopefully a lot of people in the business want to hold

him to do that. Patrick, thanks very much for the time today. Pat Morehead. Thank you. Up next, much more reaction to this wild hour of earnings as we count down to Nvidia's conference call with analysts at the top of the hour. Invidia shares slightly lower, but Salesforce jumping right now up 13 and a half percent. Closing bill over time. We'll be right back. It has been a busy hour of earnings with Nvidia moving lower, but actually firming toward the flat line. Octa and Salesforce, those shares up double digits. So what do we learn from those results? What's next for the markets? Joining me now is Paul Hickey from Bespoke Investment Group.

So, Paul, it's fascinating. We've established that Nvidia has not really been a broad market, bellwether or directional tell for a little while now. Sometimes I feel like the market just has to get through these widely anticipated catalysts, figure out what it was otherwise going to try to do anyway. So we do have Jackson Hall on Friday. I think we came into this week in a bond market panic. That's kind of cooled off a little bit, too.

Yeah, and, you know, Jackson Hole, we make a big deal of it. And if you look back at history, there's a couple of them that were, big market impact, but most of them are non-event. So I think, you know, we'll be, you know, all hyped up looking at that on Friday, and then by, I would bet that by Friday afternoon, we'll be on to the weekend and moving. But I think with the market as a whole, just looking at the entire market structure, because earning season is behind us right now. We've seen volatility low, but the dispersion, which in the index, what's called the CBO dispersion index, it hit one of its highest levels ever right before the end of at the end of July, only higher during the

depths of the COVID crash. But since then, it's come in a lot. And when you've seen these prior declines of this magnitude in it, it's a small sample size. It's four other periods where you've seen a similarly large move. The most recent was right after the tariff tantrum last year. Market performance, it's a small sample size, but uniformly positive over the next one, three, six, and 12 months. So I think in that respect, it's a positive, the overall economy is doing well. You've seen housing's not great, but, you know, the labor market's holding in there. Manufacturing's accelerating. So I think in that respect, I think the market continue to go higher. You talk about the volatility in August and going into year end, but it's more likely that the S&P 500 trades has a 10% gain

between now and year end than even experience is a drawdown of 1%. Yeah. I would just note, I mean, I did look at that study you did about when dispersion comes in this way. You pretty much had some kind of a stiff pullback before those other episodes. You did have a stiff pullback. In some areas of the market, we did have a stiff pullback in July in the semis and the AI trade. You saw a big pullback in some of those areas. But, yes, it was not nearly the magnitude of the pullback that we saw in some of those other periods. Although in 2018 and 2019, those weren't monster pullbacks.

They weren't. They got a little interesting for a while. We got some volatility. We'll see how it goes. Interesting is always good. Yeah. Well, for us, for sure. Paul, thank you. Good to see you. Thanks, Mike. See you. All right. Retail earnings take center stage tomorrow as well. All the names you need to keep an eye on are up next.

Closing bell overtime, live from the NASDAQ market site. We'll be right back. One more check on some of this hour's big earnings reports. InVIDIA, down slightly, just about a quarter of 1% after hours, despite strong results. But huge gains for Salesforce as well as CrowdStrike and Octa, all of them up at least 10% after hours so far. But HP, down big. not comparing the earnings number to or forecast because it includes a gain from tariff refunds. That could also be affecting its fourth quarter guidance. Revenue of 15.7 billion was better than expected. It'll be another big day of retail earnings. Best Buy tomorrow, Dollar Tree, Dollar General, Burlington stores, and Hormel all report below the bell. And then after the bell, we'll break down results from Gap, Ulta Beauty, Affirm, Marvell, and Autodesk. A lot to do. That does it for

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