Morning Brew Daily - Nvidia Calms AI Bubble Fears & Target Nearing Rock Bottom?

Episode Date: November 20, 2025

Episode 718: Neal and Toby dive into Nvidia’s Q3 earnings that topped expectations while CEO Jensen Huang reiterated his confidence in AI. Then, Target reports another stinker of a quarter causing many to believe the retailer is on the ropes. Also, a new study believes this year’s Thanksgiving dinner will be more affordable than last year’s. Meanwhile, Neal shares his favorite numbers on Gustav Klimt’s most expensive artwork sold at Sotheby’s, the truest underdog in the World Cup, and the origins of kissing.  Learn more at usbank.com/splitcard  Get your MBD live show tickets here! https://www.tinyurl.com/MBD-HOLIDAY  Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here:⁠ ⁠⁠https://www.swap.fm/l/mbd-note⁠⁠⁠  Watch Morning Brew Daily Here:⁠ ⁠⁠https://www.youtube.com/@MorningBrewDailyShow⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. Freiman. And I'm Toby Howell. Today, the wild backstory to the most expensive modern painting ever sold. Then what AI bubble? Invidia crust earnings once again. It's Thursday, November 20th. Let's ride. The year is 3,500. You walk into your home after a long day from work, and a small furry animal scurries to greet you. It's your pet raccoon. It's not as crazy as it sounds. A new study found that raccoons living near people in urban areas are showing early signs of domestication, reflecting many of the same evolutionary characteristics that led to the domestication of dogs over thousands of years. The physical appearance of city slicker raccoons is already changing.

The study found that raccoons living near people are developing snouts that are 3.5% shorter than raccoons living in rural areas. That shorter nose, combined with traits like white patches, flop your ears, and softer features are telltale signs of domestication. Toby, dogs are never going to be replaced as a man's best friend, but raccoons are on their way to becoming man's best nemesis. I'm so for it. Honestly, raccoons are sick as pets. This study is interesting, though, because domestication is often viewed as something that is forced upon animal species, but clearly it can happen without us influencing it really at all. But that's not to say humans have nothing to do with it. One of the leads in the study, Dr. Lesh explained, trash is really the Kickstarter. Animals

love our trash because it's an easy source of food. All they have to do is endure our presence, not be aggressive, and they can chow down. But it also begs the question, if raccoons do eventually become our new pets, do we call the domesticated version something else? And I am voting yes, and I am voting for trash pandas.

I mean, if it was part of the reason they evolved to become pets, you got to name them a new species, so I'm advocating for trash pandas. And now a word from our sponsor, US Bank. Hey, pet parents, this one's for you. Remember the last time your daughter dog or cat or raccoon ate something they shouldn't have in the resulting panic trip to the vet.

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every purchase with the U.S. Bank's split card. Learn more at usbank.com slash split card. That's usbank.com slash split card. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the unreal college deal, everything you need to study and play with select Windows 11 PC's eligible students get a year of Microsoft 365 premium and a year of Xbox GamePass

Ultimate with a custom color Xbox wireless controller. Learn more at Windows.com slash student offer. While supplies last ends June 30th, terms at AKA.m.m.m.m.com slash college PC. If the stock market and society as a whole are really being held up by NVIDIA's performance like some have joked, we can all breathe a sigh of relief because the biggest company in the world knocked it out of the park yesterday. Invidia's gargantuan data center business beat analyst estimates once again, growing revenue by 62% to $51 billion compared to the $49 billion expected. Even more importantly, it projected revenue of $65 billion for the fourth quarter, exceeding Wall Street's expectations.

Nvidia CEO Jensen Huang summed up the past quarter pretty well saying, AI is going everywhere, doing everything all at once. A proclamation investors were happy to hear and also sounds like a great movie idea. Where is all this demand coming from? At this point, it would be easier to list who Nvidia isn't working with after a quarter spent announcing deals with OpenAI, Anthropic, Intel, Oracle, Microsoft Palantir, Nokia, and others.

Its CFO started off the earnings call by confirming that they have $500 billion in Blackwell and Rubin orders booked through the end of 2026. Showing demand for their current and future GPU models remains insane, especially from so-called hyperscalers who are contributing half of that total. Neil, this earnings call was especially intense because AI bubble fears have been growing in the last few weeks, with 45% of global fund managers citing an AI bubble as a top market risk, according to a Bank of America's survey.

But this report helped dispel some of those fears showing demand for the high-end chips, NVIDIA cells, is still off the charts. A fact, reflected in its stock chart, which popped another 5% yesterday. Yeah, Jensen, Juan got up there on the earnings call and acknowledged there's been a lot of talk about an AI bubble. He said from our vantage point, we're seeing something very different. There's this mantra that as NVIDIA goes, so goes the stock market. We're seeing that this morning. S&P futures are up over 1%. The NASDAQ is up 1.6%. Stock markets in Taiwan and Japan are doing really well this morning. And that is a huge sigh of relief because over the past few days and weeks, we've seen a huge

stock drawdown, the worst since April and Liberation Day in tariff chaos, as there's been growing concern. that a lot of these AI companies are not going to be able to meet their spending commitments. They've pledged hundreds of billions of dollars. At least when it comes to Nvidia, it looks like they're still paying their bills. And it's a sort of all in this together moment, too, because big tech is basically propping up the stock market. The S&P 500 has been propped up by the magnificent seven stocks, which have accounted for 75% of the gains that have happened since October of 2022.

And remember, members of those clubs, Amazon, Alphabet, meta, all. account for more than 40% of Nvidia sales. So when we talk about these circular deals that are powering the AI economy right now, you want to make sure, you know, the apex per capita at the top Nvidia is showing strong future guidance is showing that people are going to continue spending and continue buying their chips. The other thing that has been percolating in the background is Michael Burry and others have been advancing this theory that Nvidia's chips are going to depreciate faster than these companies are saying. Some people have started pushing back against that saying, hey, the useful life cycle for these chips are actually a lot longer than people think.

It's not two to four years. It is to that six to seven to eight years. So that was another thing that we're seeing a countering of a narrative that has been arising from the likes of Michael Berry and saying that these things do have a lifespan that can be extended and depreciated further than you think. Yeah. So Nvidia's stock has kind of been through the ringer because some large investors have been betting against it. Michael Berry, who's famous from the big short, took out a position on NVIDIA and then also in the recent weeks, Masayoshi Sun's soft bank group, a huge Japanese investor sold its entire $5.8 billion stake in NVIDIA to fund other investments

in AI. Peter Thiel, another major investor, unloaded his entire $100 million invidia stake, saying that AI is not a nothing burger, but it's not going to change the world as well. So Nvidia stock, along with other major AI names like Oracle and Palantir and even Microsoft offer all down at least 10% over the past few weeks. Looks like Nvidia is putting some of those fears to rest, but you also have some analysts coming out after this earnings call and saying, yes, Nvidia is the Apex predator, as you mentioned, but it also feeds on everything in the ecosystem.

And so if you're looking for an AI bubble, maybe it's not even best to look at what Nvidia is doing. It's whether it's looking at the other folks in the ecosystem that are buying Nvidia chips and saying, well, how are they doing? Are they able to monetize AI? That's the big question. They're spending so much on AI and data centers that is being fueled by debt, which is raising a lot of concerns. Are they actually able to monetize?

Are they making money off of AI? And there's still major questions around that. So I think this is a small sigh of relief, but it's not going to put total fears to rest around whether we are in a bubble. Yeah, major questions around if they can make money, but Nvidia is making money. NVIDIA's net income was up 65% year over year to almost $32 billion. That is more than Apple made in its last fiscal. quarter actually in terms of profit. So, NVIDIA is doing just fine.

So if NVIDIA is the sourdose starter of the stock market, we can be assured that it is still being fed. It's the sourdose starter and the apex spreader. What else is it? It's just everything at this point. I'm sure you can think of any type of metaphor. Okay, Target's long-awaited turnaround is going to have to wait until next year. Things are still going very poorly at Retail's version of the New York Giants, which seems to take two steps backward for every glimmer of progress. Yesterday, Target reported its 12th straight quarter of weaker falling sales, making that four years of essentially zero growth. It said visits fell to its stores, and among the brave souls who did shop at Target, they bought less stuff. Maybe a change of leadership will help stem

the bleeding. CEO, Brian Cornell is stepping down after more than a decade to make way for company life from Michael Fiddock, who will move into the corner office in February 23 years after he first interned at Target. Fiddleki seems to understand the daunting challenge ahead of him. He told analysts, if you're frustrated with our recent performance, we are too, saying that mission one through 10 is getting back to growth for us. Getting back to growth means fixing targets many festering problems, including higher prices than competitors, merchandise that feels dated, and messy stores. Toby, think he's got the right vision? I hope so because we are looking at 12 straight quarters of weak or negative sales at this point. It is just an abysmal period for this company right now.

And he does have some ideas of how this turnaround should be operated. One is just invest a lot into the stores. Target plans to invest $5 billion next year, 25% increase on store remodels, on inventory quality and freshness, more exciting merchandise, especially around holiday seasons. That's number one. They do want to lower prices as well because as you said in the landscape of Walmart and, you know, the Costco's of the world, Target is just comes in a little bit higher than that, which is not great for, you know, inflation-strapped consumers. And then they just want to make better merchandise overall. They're going to double the number of new holiday items. This is where Target kind of makes it spread in butter here is around the holiday period,

but they have observed some changes in consumers' spending habits, which is the nomer that you use in retail is they are spending more on what goes under the tree versus what goes on the tree. So people are buying, you know, presents, but they're not necessarily buying the decor, the stuff that you drape all around your house, the purchases that feel a little superfluous when times get tough. That's where Target really thrives and that's where consumers are pulling back. So not a great combo for them. And there's another initiative I know you have a lot of thoughts on, which is called 10-4. And this is all about the shopping experience in Target. So Target employees have now been instructed. If a shopper comes within 10 feet of a target employee,

staff are instructed to smile, make eye contact, wave, and use friendly approachable, and welcoming body language. So that's 10 feet of a target employee. Once you get within 4 feet, employees should quote personally greet the guest, smile and initiate a warm, helpful interaction. Now, this is not a new concept in retail or hospitality. It is called the zone of hospitality. Walmart has a 10-foot rule where it encourages workers to greet shoppers who come within 10 feet or at least smile at them. And then many in the hotel industry have a 15-5 rule in which staff are expected to smile when someone gets within 15 feet and say, hello, when they are five feet away. You think this is going to work for Target?

It just raises the question of absurd edge cases that if someone is five feet away, do you just not say anything? You just stare at them and smile. If you are behind a paint of glass, but you're still five feet away or four feet away, do you then start talking to them anyways? And it just raises the idea of you're infantilizing your. workforce, you're taking away autonomy, thinking that they don't know how to just do basic human interaction. So, yes, the thrust of the idea is great. Like, let's make our workers more welcoming to people, but also it raises some edge cases. We're like, do we really need to define an exact foot barrier for when people should be friendly? Maybe, maybe not. As Thanksgiving fast approaches,

retailers are engaging in a turkey price war so intense and makes your uncle's political arguments feel calm and reserved. With inflation ripping through grocery aisles like Neil and a new pair of Healy's retailers are adopting a surprise tactic this year, slashing turkey prices, driving the total cost of the meal down for the third straight year. The classic Thanksgiving meal for 10 that economists use as a price gauge will set you back just $55 this year, down 5% from 2024, though still 13% higher than 2019. That relief is driven almost entirely by a 16% drop in retail turkey prices. Dive into specific retailers and you'll find some insane deals.

Walmart is selling a kit for 40 bucks that feeds 10 people. Aldi is matching that price with a 14-pound turkey meal deal that comes in $7 cheaper than last year. Those price points are even more surprising considering USDA data shows that the national turkey flock is at its lowest point in four decades, meaning these chains are using cheap turkeys as a loss leader to get people in the door. Neil, it's certainly surprising to see that turkey prices are down this much since it seems like literally everything else is getting more expensive. What is the strategy behind these price cuts?

Yeah, I think retail turkey prices are down this year, which is very important to make that distinction because if you're looking at the wholesale rate for frozen hens, that's up 40% higher than 2024. And that's because turkey flocks are down, avian flu is back. But when you're looking at retail prices, they're 25 cents per pound less than a year ago. You said the term, loss leader. That's exactly what's happening. Walmart, Aldi, Lytle, Target also has one of these turkey Thanksgiving meal deals. All just want to get people in the door by that headline grabbing. This is what you can get. This is the value you can get for your Thanksgiving meal. Once you're in here, then you can scoop up all of our more expensive, higher margin items.

But we're going to get you in the door with these, you know, pretty eye-catching turkey deals. Yeah, retail analyst Bruce Winder told Axios that this is the most aggressive pricing environment since the pandemic. Obviously, grocers can't afford to keep losing money on the food that they are selling forever, but they see now as a make-or-break-it moment where they want to shore up customer loyalty rather than shore up profits. And if having a turkey deal that comes in a little bit cheaper than a competitor means that people will stick in your shopping ecosystem, they think that that is a risk worth taking. It is crazy, though, because it doesn't make sense. How is the turkey flock at its lowest point in decades? And yet here, turkey prices are

falling from the last couple of years. Again, people are still maybe feeling the pinch, though, because prices are elevated compared to 2019, which is the last time things felt affordable in people's mind. So that is just a psychological anchor that is difficult to get away from. But still, you are seeing prices ease a little bit, at least compared to the last few years. All right, we're going to take a quick break and come back with Neal's numbers. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill 3-burner gas grill. Or get $50 off a select Weber Spirit grill and bring big flavor to your backyard.

Then set the scene with Hampton Bay string lights that bring it all together. Shop spring backyard days for seven days at the Home Depot. Now through May 6th. Exclusion supplies to homedipo.com slash price match for details. Welcome to Neal's numbers, the segment where I share three stats in the week's news that will make you think, gosh, that's interesting. My first number is $236.4 million, which is how much someone paid for a Gustav Clint portrait at auction on Tuesday. That sounds like a lot for some oil on canvas. It is. It's a record price for a modern art piece and the second most expensive painting ever sold at auction behind a Leonardo da Vinci that went for $450 million in 2017.

Sutfby's declined to say who bought the Klimt, but whoever did acquired a portrait with a pretty incredible backstory because it helped the subject of the painting evade the Nazis. Painted between 1914 and 1916, the work depicts Elizabeth Lederer, the daughter of one of Vienna's richest Jewish families. After Nazi Germany annexed Austria in 1938, Lederer invented a story that Klimt, the painter who wasn't Jewish, was her father, which could be believable because of how long he spent working on her portrait, Letterer ended up acquiring a document saying that she was a descendant of Klimt, which allowed her to stay safely in Vienna until her death in 1944. I'm not sure how much that factored into the historic sale price, but it's a remarkable story. It is a remarkable story.

It also signals a possible reinvigoration of the art market because tonight, also a Frida Kahlo self-portrait could become the most expensive artwork by a female artist ever sold at auction in New York City. and you combine that with the Clint painting, and then you also combine it with the fact that at this same auction, a 220-pound fully functional solid gold toilet titled America sold for $12 million. So you're having a couple of art deals come through that are showing that, hey, this industry is actually coming back into fruition. Art auction sales this week could exceed $1.4 billion alone. That would be a 50% increase from last year. So the art market has been in the years of decline right now, but when you start to see the absolute upper echelons roar back to life, that's when you see these insane figures out there. The painting totally exceeded expectations. We have to talk about this gold toilet because the question was, would it be sold for more than its parts, then the precious metal, the gold

that made it? And the answer was not really. So it cost $9.9 million in gold to make. And it went for $12.1 million. Now, that gap, 12.1 to about 10 million, is accounted for by Sotheby's fees that it charges. So there wasn't a huge premium place on the fact that this gold was formed into a toilet. It was done by the same artist that taped a banana to the wall that sold for $6.2 million last year. So a little bit of a disappointment when it comes to the gold toilet. I love that it's functional, though, that at one point it was on display and people could use it. They would wait in line. They had five minutes to actually use it.

There were two toilets originally before one was stolen, so this has more lower, so I was surprised that it didn't fetch a higher price. For my next number, Kurosau, a country of 156,000 people or smaller than Fort Collins, Colorado, just miraculously punched its ticket to the 2026 World Cup for the first time following a draw with Jamaica. That makes the tiny Caribbean island the least populous nation to ever qualify for the soccer tournament. The previous record holder was Iceland in 2018, which is gigantic in comparison.

at 350,000 people. To round up a competitive soccer roster, Kurosau leaned on players who were born and raised in the Netherlands, which Kurosau is a part of. And the team is helmed by a legendary Dutch soccer coach, Dick Advocate, who at age 78 will become the oldest person

to coach at a World's Cup. This squad just cannot stop making history. Before you go all in on rooting for Kurosau next summer, there are a couple of other Cinderella stories you should at least consider. This week saw Haiti qualify for the first time since 1974. their only World Cup, and Scotland will compete for the first time since 1998 after Braveheart

level heroics on Tuesday got them in. If you're wondering about the U.S., we qualified by default because we're hosting the tournament alongside Canada and Mexico. Toby, we're still seven months away from the World's Cup and the tears are already flowing. This was great story after great story after great story yesterday because, yeah, when Curacao qualified, everyone was looking at that, but then I was like, Scotland is actually an incredible story as well. It just shows that, you know, the parody is getting better with the, you know, the diaspora of all these national team players that go and play all around the world and come back

and represent their countries. It also has to do with the fact that the World Cup is expanding their field. There's now a 48 teams in the field, which gives these smaller nations a pathway in a chance that they never had before, which leads to these awesome stories. So, yes, it is a bigger tournament at all. But who's mad that Curisal is making its first appearance ever? That is, it is just a tiny nation. It's pretty incredible that they can put together a team that can compete at this high of a level. For my final number, when you kiss someone today, and I hope that's in the cards for you, you will be taking part in an evolutionary tradition that goes back tens of millions of years far before humans existed. According to a new paper in the journal Evolution

and Human Behavior, researchers estimated when the first kiss happened more than 16.9 million years ago among a common ancestor of all the large apes, which includes humans. For context, humans began our timeline much more recently around 200 to 300,000 years ago. You might be wondering, why would someone spend their time studying the history of kissing? And that would be a great question. Thing is, the old smooch is a topic that is perplexed scientists for a long time, because not only is it difficult to define, but also it's not clear whether swapping saliva is a product of culture or evolution.

In other words, does kissing help a species find food or? reproduce. This finding produces evidence that yes, kissing does have some evolutionary basis, though it's still not yet clear why people or other animals kiss in the first place, because it's true. Other animals like orangutans and bonobos do kiss each other, and scientists are still trying to figure out the reason. As lead researcher, Dr. Matilda Brindle of Oxford said, we should be studying this behavior, not just dismissing it as silly because it has romantic connotations in humans. Yeah, kissing is a confounding concept because 90% of today's cultures have kissing in one type or another, but the majority of it is usually

parents kissing their children. It's non-romantic kissing. So why the heck do we have this exchange of fluids that hypothetically opens you up to disease? It's not necessarily something that makes a lot of evolutionary sense. If you go back, the earliest knowing reference to kissing in culture is a $3,500 sanscript scripture. So it's a relatively modern phenomenon when you think about the, you know, the scope of humanity, but now we're dating it back millions and millions of years, which does show maybe there is some evolutionary thrust to it. It is fascinating, though, because when you start really thinking about what kissing is, you're like, it's a little weird. Why don't we just like, you know, pat each other on the head? Why do you have to, you know,

exchange saliva like this? But it's clearly, you know, somewhere along the evolutionary tree, it made a lot of sense. Well, it's hard to define. And there was some contention around this study about how they defined kissing in this particular situation. study, they defined it as non-aggressive directed mouth-to-mouth touching contact with some movement of lips or mouth parts and no food transfer. Some other scientists have said that this is actually too broad. This Adriano Limerra, who's part of the England's England's Warwick University, defines kissing in humans as protruded lips with a slight suction movement, particularly because the large majority of kisses humans give are not mouth-to-mouth. Don't ask for a kiss. As for

directed, non-aggressive mouth-of-mouth contact from your significant other today. I'm sure. they will love it. All right, let's sprint to the finish with some final headlines. Lost most of your savings betting on sports. Now you can lose the rest by betting on Labuboos. Yesterday, the resale marketplace StockX linked up with the prediction market Kalshi to launch product event contracts, where you can place wagers on the price of goods on StockX, including popular collectibles like Air Jordan sneakers, Pokemon cards, and Labibos.

How will this work exactly? The companies say you'll be able to bet on, for example, whether a sneaker hits a certain resale price a week after its release or predict the best-selling brands on a shopping holiday like Black Friday. Akashi spokesperson said physical collectibles have some of the most hardcore data-obsessed communities in the world. Until now, there's never been a liquid global marketplace to price them. They're hailing it as further proof that prediction markets have hit the mainstream.

I mean, they did just go after the one sector of nerd culture or, you know, obsessive culture that they hadn't hit yet. And it is true because hype culture people track price floors. they track sales volumes. They are tracking resale values. So they are very data-driven. So it does make a lot of sense that you would just add on another layer to this.

But people are going, like, people are going to wager their entire life savings on Labibu futures. Is this really the world that we want to go down? But it is the world. Pandora's box has been open. Pandora's box truly has been open. And I mean, I am just very interesting

to see how prediction markets have gone from politics to sports to weather to Labibu floor prices. I don't even want to know what is next. The newest leading actor in Hollywood isn't Glenn Powell or Florence Pugh. It's cheese. The Parmigiano Reggiano Consortium yesterday announced it's signed with United Talent Agency to secure placements for the King of Cheeses across movies, TV, and streaming.

Product placement is a big business. A well-placed Coca-Cola can, a label out, can go a long way. But now it's time to keep an eye out for a big old wheel of cheese popping up on a screen near you. As the consortium puts it, Parmigiano Reggiano is not just a symbol of excellence, but increasingly a truly iconic global brand. With experts rising more than 53% this past year, the group sees Hollywood as the next logical stage to showcase its cheesy goodness. Neil, how do you even negotiate with a wheel of cheese?

No, my client is not happy with appearing in Safeway. It's Whole Foods or Nothing, please. I'm just so happy for her. This big break has been a long time coming. Loved her performance in The Sopranos. hold your own against James Gandalfini. Very impressive. Then, of course, she was absolutely snub for an Oscar nomination in Rat Tatooie. The cheese and strawberry pairings, so steamy. Look, some find her work a little grating, but in my opinion, she's aged beautifully.

Oh, my God. I'm rolling my eyes in case you can't see it here. Usually I love a nice pun, but, you know, that one was a little too much. Well, there were like 30. All right, that is all the time we have. Thanks for starting your morning with us and have a wonderful Thursday. Our live holiday show is coming up fast December 4th in New York City. So grab your tickets now by heading to the show description or our Instagram for the linked tickets. We can't wait to see you all there. For any feedback on this episode, send a note to Morning Brew Daily at morning brew.com or DM us on Instagram at MB Daily Show. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lute is our producer. Our associate producers are Olivia Graham

and Olivia Lake. Hair and makeup likes a dry brine for their turkey. Devin Memory is our president and our show is a production of Morning Brew. Great show, Danielle, let's run it back tomorrow.