Power Lunch - Nvidia’s Record Buyback, SpaceX Starship Rocket, Graco CEO Interview 9/28/26

Episode Date: September 28, 2026

Stocks are dropping to start the new trading week as treasury yields are on the rise once again.Brian Sullivan and Kelly Evans bring the latest headlines and start off the show with Nvidia’s announcement to raise its share buyback plan a record $150 billion. Seaport Research Senior Analyst, Jay Goldberg, kicks off the program with his initial reaction to the news and breaks down some of the best-positioned semiconductor stocks in his coverage.MoffettNathanson’s Craig Moffett also joins the show to discuss the state of SpaceX as the company successfully launched its Starship rocket into orbit for the first time.Later on, Mark Sheahan, Graco President & CEO, joins the anchors on-set to explain his company’s business model and how they are participating in the AI and industrial buildout across the country. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A record stock buyback, an historic launch and more reports of progress and negotiations with Iran. Welcome to Power Lunch, everybody. I am Brian with Kelly. Borrowing costs. They keep going up, but stocks largely, they just keep shrugging it off. Case in point, NVIDIA, stock near session highs as they make a couple of big moves. We are also following two other movers for you. Oil on the move today on reports that President Trump is willing to offer Iran's sanctions relief

and to release frozen funds for concrete progress on a nuclear deal. and SpaceX launching its massive starship rocket into orbit for the first time, marking a new chapter in satellite deployment and space economy. Both of those stories are ahead this out. We are here for the space economy, but we begin with arguably the most important stock in the world, maybe in outer space too. It is Nvidia.

It is the top stock in the Dow right now, and there's really two good reasons why. Number one, Nvidia, just authorizing $150 billion in a share buyback, And if that sounds big, it is. It is the largest buyback authorization in American and maybe global stock market history, surpassing all those Apple buybacks. InViA also unveiling new software designed to help developers put guardrails around AI agents. Here's CEO Jensen Wong on Squawk this morning.

And so we want to accelerate the advancement of AI. And today we're putting forth this new technology, open shell and Vivida Century. that these two technologies make it possible for us to contain and to monitor, but it takes a lot of technology to make this possible. A record buyback and a new push to make AI safer. Does this further cement Nvidia's place is the king of everything AI? Let's ask Jay Goldberg of Seaport Securities. He's got some stocks in the halo of Nvidia that he likes.

But first, Jay, what's your take on the Nvidia news by itself? So I think Nvidia launching this massive buyback, It's good for them. It shows that they care about shareholders. It's obviously in absolute terms of a massive dollar amount. But I'm not sure it sort of assuages any of the concerns that people have around the stock. You know, Nvidia's stock has been pretty flat for the last year just because it's so big. It's tough to see getting much bigger.

There are a lot of concerns now about its growth. And so we start looking into next year. There are concerns about data center construction. Everyone's obviously very worried about AI safety and it's an election year and how that impacts it. And then not for nothing, you know, Nvidia is facing a lot more competition and they're starting to use their balance sheet in order to compete. So the

buyback is, you know, I'll give them credit where it's due, but it doesn't really assuage those sort of bigger questions around the company. Although, Jay, they've done everything they can to kind of inflate their couple of things. I mean, they're on the one hand trying to not be too cyclical, right? We all know the cycle will turn at some point. They have all these

other investments, all this broadening out. And on the other hand, for the very, very near term, which is that regulation could slow down AI, here they come out with this new, what is it, open source technology that the company can use to detect hacks. So they're being proactive on some of their vulnerabilities. That's fair. They are, you know, I'm sure that they're sincere in looking to protect us all from AI and, you know, making sure that AI doesn't wipe us all out. But, you know, Jensen was on another podcast last week, sort of downplaying those fears. And so I read this, this news today

is a little bit sort of, the timing of it is very sort of, uh, opportunistic. I don't, it's unclear what these new tools can really do. It's important. We all need to take AI safety seriously, but it's going to take more than just Nvidia coming out with some software to save us all. Right, but that said, shouldn't they be opportunistic? I mean, it's not a bad thing to read the signals, to read the room and see where the threats are coming from. As a human being, absolutely. I'm all for things that will protect us from robot overlords overwhelming us. As an investor, I don't, you know, I don't think this moves the needle that much in the grand scheme of things. Because a lot of, a lot of the AI safety concerns are beyond Nvidia's control.

They're things that are going to take place in the frontier labs like OpenAI and Anthropic. And I think this is just one small piece of a much larger, more complex, regulatory question. You got buys on Semtech, on Semtec, on Semmy and Marvell, $200, $270 price, targets respectively. Jay, quickly, pick one. Tell us why you like it. I like Semtech. I think that's the easiest one. This is a company that made a bad acquisition three years ago, really one of the really bad M&A deal. They replaced the CEO, but the street's memory is still long.

They remember that deal. They have bad feelings about it. And I think it's a new company. It's a new CEO. They've really focused the company on the growth opportunity in front of them, which is AI. And they have really tremendous exposure to growth in AI data center. Yeah. All right.

We'll let you go. But, Jay, I mean, a sell on Nvidia? Not just, I could see market perform, but a sell? And how long have you had the cell on? on them now? A couple, it's been a while. It's, you know, I launched in May of 25, and I mean, not for nothing, Nvidia is the worst performing stock in the SMH and the SOX index. They've definitely underperformed everyone else. All right, fair point. Yeah, it is. I guess there's a difference, though, between underperforming and what are they still up during that period of time? They're

probably doubled or something. Maybe it's less. Maybe it's 30, 40 percent. I don't know. I, you know, in my defense, I've always positioned this declines as an underperform. We don't, that's just the way we name our ratings as sell, but I've always positioned as the clients is underperform. And so, right, right. It's not my worst call. No, and it has underperformed. You're absolutely right. Jay, thanks so much for joining us. Good to see you again. Check in. Jay Goldberg from Seaport. Stocks more broadly are under pressure, and the villain today is Treasury yields. The 10-year hit 527 earlier. Its highest level since June of 07, almost took out the 07 highs, by the way. Oil is always.

also on the move, and yet the S&P is just 2% below its all-time high with tech hitting a new record today. So when do higher yields and oil even matter here to talk about that. Anastasia Amoroso is the chief investment strategist at Partners Group, and Todd Sone is the chief ETF strategist at Barrett Stratigis. It's great to have you both here on set. Good to see. Anastasia, I'll just start with you. We don't need to argue about Nvidia, I guess, or should we?

I mean, do we need to choose Nvidia or choose everybody else in the chip space or choose AI stocks or get away from them? I mean, what do you do? I don't think we need to choose one or the other. I think all of those things have a role to play. Clearly, Nvidia is going to continue to play. It's a big role in the build out of computing. By the way, agentic AI, the move to agentic AI.

And at the same time, we can do AI without memory chips, and the bottlenecks have not been resolved. So, no, we still stick with those. But at the same time, you know, Kelly, we talk about rising yields. And actually, there's a good reason for why those yields are rising, and that is growth. That if you look at some of the economic data that came out last week, we're now pacing something like 5% nominal GDP growth for the latest quarter. So that's part of the reason why yields are moving higher. So in that good, favorable backdrop environment, you do also want to do things that are not just NVIDIA. And I guess, Todd, we now know that higher yields are not going to necessarily kneecap

the entire market. They did it in 94, 95. They're not going to do it now, except I do wonder, is there a price point at which a yield on a, you know, a fairly risk-free, fairly. I didn't say entire, nothing is entirely risk-free. Fairly risk-free bond becomes juicy enough. And I'm like, you know what? Maybe 5% on a 10 year is better than a hope for 8% in the stock market. I think we're there now. We are there. It seemed like 5% was the number. Now of a sudden now we're 5 and a quarter. Capital competition, I think is what they call. There's absolutely capital competition. You are seeing it affect utility stocks, consumer staple stocks, REITs, anything that is rate sensitive is selling off. And the result of that,

frankly, to the Nvidia discussion, is invidia is almost larger than consumer discretion right now. Amazingly. Like the entire... The entire segment. Including Amazon and Tesla and home building stock, which are rate sensitive. Wow. 8.4% when I left Midtown Manhattan. And that's Nvidia's weight and discretion is 8.5%.

So we're in this world where Nvidia and AI swallowing up the SMP 500 and rates obviously are... To the point we were just making with Seaport a moment ago, I mean, is that a reason to underweight them? I mean, like, if you were, I do get this question a lot from people who are like, do I, should I buy Nvidia, just lock it up, put it away here, or? I think for a common investor, if you own the S&P, if you own large cap growth, and you own a couple of thematic ETFs, you have far more Nvidia than you need. So I think this is all about surrounding that core of the portfolio with low tech, low correlation, commodities, short duration bonds, and energy, so to speak.

So as long as Nvidia and those surrounding stocks, Anastasia, do well, they can sort of drag the entire market up with them. ran a sort yesterday because I'm boring and it was raining all day. 194 stocks in the S&P 500 are down 20% or more from their 52-week highs. 38% of the S&P 500 is in a technical bare market. And yet the market itself is not at record highs, but it's close. That's right. So what happens if NVIDIA stops not underperforming other stocks, but let's say NVIDIA drops 30%.

Then what? But again, I don't think it's just Nvidia. I think it's Nvidia in all of the adjacent stocks. Look, you know, we very closely track the adoption and the monetization of artificial intelligence and I will say, you know, we are in the point of acceleration, both in terms of adoption,

the paid subscriptions for AI and clearly, you know, that is accruing as revenues to some of the frontier labs. So that is ongoing. At the same time, you have monetization across the entire ecosystem, yes, for Nvidia, but also for data centers, also for servers, also for those

hyperscalers. So as long as that momentum continues, Brian, to your point, that does drag higher with it about, you know, 50% of the S&P. So, but I do also want to kind of point out that the rest of the market seems to be reacting negatively to rates moving higher, but there is a perception of reality issue. And I will point out that for most corporations, for example, the debt is either fixed or it is hedged. And so when I look at the economy, when I look at the stock market, it's not like just because rates are going up today, every single. single cash flow of these companies is going to deteriorate. No, that might eventually, a pressure might eventually start to build. So I would argue that perhaps the knee-jerk reaction in some of the

non-AI stocks maybe perhaps is overdone. And at 5.27% on the 10-year, we might be closer to pricing in all those different factors into the 10-year. Yeah, I think the most interesting sector right now, because it hasn't bounced with the AI-related names as industrials, right? And is it more because the space got too crowded? Is it rates or whatnot? It's funny because Sam Stovol called them out last hour, just noting that they were one of the three sectors, along with real estate utilities that had the highest net debt to EBDA. And to him, that was one reason for the underperformance. Right. And that's an important sector statistically for the SMPIP 100, I think, for the power generation story, right, data centers.

So I'm very curious to you going forward what is the appetite for power generation names. And then, frankly, you have elevated oil prices. How does that start to impact the transportation names? So I think if you're looking for one really important tellant to the fourth quarter, it's the industrials. Well, when you go back in the green room, we have a CEO back there, Mark Sheehan of Greco. That's going to be on set here in about 10 minutes. They're an industrial, based in Minneapolis, and they're involved in a lot of this construction. He could probably tell you where things are going, and he'll tell you, and he'll tell us on this there.

I don't want to steal the thunder. Mark, if you're out there, I know you're watching, hopefully because you're in the building, which is their operating margins are high, but investors haven't seen. to care, Anastasia. I know there's been a lot of talk about this broadening out of the stock market. It's happened a little bit. But to my earlier point, when do we get people really interested in all these great American companies that are not named Nvidia or Apple or Amazon? I think now this year, I mean, when? We've been waiting. Look, Brian, I'm actually super encouraged by the diversified, the much more diversified nature of the U.S. economy. You know, you're right, maybe, you know, several years ago it was all about the consumer. A couple of years ago was all about NVIDIA and artificial intelligence. But now I would say there are three pillars of the economy

that are really working. And one is the corporations. And it's not just the tech margins that are improving. Other things are improving, too, including energy. For example, then you look at the consumer and look, maybe we're just breaking even. Maybe we're not doing as well as we were a couple years ago. But actually, our wages are keeping up with inflation. And unemployment rate continues to kind of rebalance underneath the surface. But the unemployment market actually stays so strong. So that helps the consumer. And then finally, you have, well, speaking of industrials, you have this breakout and just capbacks in the United States to the tune of like we haven't seen since 2022. So that does benefit industrials, that does benefit materials, that does

benefit energy. And, you know, it seems like it's once again all about the kind of the semiconductor chips, but actually the power play is so significant. And it's not only because of data centers, but because of the electrification of localization of energy that we need to focus on, and that leads to energy, that leads to industrials. All right, we got to go, but Todd, is gold over? Is it, you know? Gold has a competition for capital problem. It was great when yields were sub-5 percent, and I found the flow is very washed out in the ETF world, but now at five and a quarter, it makes it very hard for an allocation of gold. All right, and I know people back, who own their gold and are saying, we've outperformed the ESF. I know since 2000, but anyway.

And they own it for different reasons, too. Some of them have like canned goods, ammunition. And a lot of gold. There's a whole, a lot of gold. That's a whole, that's a whole, that's a whole, gold's cases of all correlation to traditional assets. Right. Right. When it displays that.

Right. All right. We'll let it go. Thank you both for being here, Todd's own, Anastasia Amrosso. And let's get a quick check on shares of MongoDB, which are getting crushed today. After the company announced their CEO, C.J. Desai has left for a senior role at Meta to lead its enterprise unit. His former company is down 17% today. And this is just the latest of a handful of high-profile talent poaches by Mark Zuckerberg.

Just in the past year, that includes, and probably most notably, the hire of scale AI founder Alexander Wong, who has now made such a splash with the launch of Muse. We've got a whole lot more plan for you this hour as well. Oil prices moving higher earlier, but those gains have now reversed. Where does that leave the possible U.S. ban on diesel exports? Plus, we're monitoring the big SpaceX rocket launch. from this morning and why it matters for the entire connectivity and communications sector. But first, yields just keep moving higher. Those stocks are just marginally lower today.

Is there a level that will spark a broader sell-off? More power lunch after the brain. Welcome back, bond yields around the globe. It's not just here, but they do keep ticking higher. As a result, the U.S. 10-year touched 5.27% today. That's the highest since 07, and by a hair, almost the highest since the 90s. But the stock market is just slightly lower and near record highs. So does it matter? CNBC senior economics writer Matt Peterson is here with us. Why, Matt, welcome, doesn't the stock

market care? Because the stock market likes the reason that the 10 years going up. I mean, there's obviously a lot of reasons, but one of them is growth. We are seeing a strong economy reflected in higher interest rates, and that is broadly good for stocks. I mean, there is some level at which this relationship breaks. You know, I hope we do not find out what that level is. Maybe it's 6%. You know, a lot of people thought it was 5%. We got there.

We revised our expectations. And that had been true in the past. There were times in the past. We'd go near five. We'd go for 5. And there would be this huge reaction, like, during the, what was April of last year when he first did all the chairs? Liberation Day. Yes, Liberation Day.

And now, different story. Well, different situation there, right? It was not a growth story. Liberation Day, you know, there was a lot of worry. Yeah, there was a lot of panic in the market. This is, we've seen this, you know, relatively quick but long-trended run-up and growth, you know, that the Fed has sort of just caught up to and said, hey, wait a minute. Like, maybe the economy is starting to speed up and we need to sort of think about interest rates going higher. The rest of the market has already gotten there.

Yeah. And, you know, we had this conversation in the previous block. We were talking, you know, with our guests about at what point does that five, five and a half, five and a quarter, six, whatever number it is, percent return. steal capital from the stock market. A lot of our viewers may be retirees or nearing retirement. They're thinking, you know, five and a half is not that bad of a number. If I can sleep at night and don't have to worry about what may happen to the capital, not to say the bonds aren't at some risk.

We know that they are, but you get my point. Do we know where that number may be that kills the stock market because it's just too enticing to go to bonds? Right. Well, let me ask you a question. Uh-oh. How many years? Has the stock market had double-digit returns, right?

Past three years. So I think the answer is there may be no number. Or is there a number because people have gotten so rich they don't care anymore? It's higher because people are looking at stocks. They're looking at the possibility of things like Open A.I. The Anthropic, right? You know, there we see a lot of potential movement still going forward in the market. But they're looking out and saying, well, the stock market hasn't returned five or six percent in the last couple of years.

It's returned 20 percent. So, you know, why would I assume all of a sudden that I need to lock in this lower rate when the rest of the economy seems to be doing relatively well? There's nothing that's going to crash the stock market on the horizon other than these tempting yields, right? I can understand intuitively why, you know, we haven't quite gotten there. I mean, again, I think we can. The only thing I would say is the speed that this has happened to go from 3-9 to 5 and a quarter, it reminds me a little bit when you're on the highway and you see a car just flying by and go to yourself, like, that's not good. Like something's going to happen. And in this case, it could be a wreck.

Maybe not. Maybe it's just the police. Maybe it's David Zervos in his new role at Treasury who's going to go out with the team there and figure out more ways to intervene to slow it down. Do you think that we transition to the Bond Report now? He is going to Treasury. He wrote about this today. Do you think he's going to have more creative plans to try to get yields down, basically?

Well, let me put it this way. If David Zervos goes out there and crashes the market, he's not going to last very long in this job. You know, he's been a big backer of everything Scott Besant has done, and I think his role there is to amplify and find more ways for the Treasury to do what it is doing, which is to try to talk down yields, to try to use some of its tools, you know, creatively to use bond buybacks. But, you know, Scott Bethen has said there are a lot of other tools. I'm not sure that is really true. you know, the bond market is vast, far vaster even than the, you know, almost unlimited resources of the Treasury Department. So I'm not sure there's much the Zervos or Bessender or anybody can do, you know, to really change this trajectory. Besson has said this himself. He thinks, you know, you can nudge toward the equilibrium, but you can't, you know, change what the equilibrium is. I think probably the best tools, the yield itself. I mean, it's like the conversation we're just having at some point it's going to be attractive enough because, remember, it's not just the Treasury.

It's the whole, not just the tenure, the whole curve, you know, at all sorts of fixed income that gets people interested. Or the interest costs that all of our taxpayer listeners have to pay. The government doesn't pay interest costs, folks. You do. Matt Peterson, thank you. Appreciate it. All right. A huge milestone for one of the most important companies of the world, not named NVIDIA, why Rocket News is so consequential.

Next. Three, two, one. A historic day for SpaceX, Elon Musk's company sending Starship into orbit for the first time. The flight is a critical proof point for SpaceX's next chapter, which is turning the world's most powerful rocket into a reusable high-volume delivery system for Starlink and eventually for NASA's moon missions. SpaceX already operates 11,000 or so active satellites. Starlink has become the company's key connectivity business, and Craig Moffat is an analyst at Moffat-Nathson. Here, we're not going to go back through physics class. But it's important

to at least through the CliffsNotes version, the AI version, Craig, when you're here about how much a threat this can really pose to the likes of AT&T and Verizon. Your answer is not much because of science that I don't understand. But could it disrupt internet provision? Like for our former parent company, Comcast and Charter and all of that. Is that where the real disruption is? Hi, Kelly. Good to see you. Yeah, you're exactly right. It is a much bigger issue for terrestrial broadband than it is for terrestrial wireless. And for lots of reasons we don't need to go into. But the terrestrial broadband business, where they deliver ISP service, is a very credible product and will have a direct impact. It already is having a significant

impact. How is it changing your kind of earnings, trajectories, and what's going to happen to literally those stocks we mentioned or that would be affected by this? Well, I would say it has changed them already, but remember, this is not news. We wrote our first report about the impact that Starlink would have on the broadband market five years ago. So it's not like this is a surprise to anybody. I think that what people are grappling with now is the extent to which what Starlink brings to the table is only going to be limited to rural markets, or will it start to creep into suburban markets and will it even have some impact on urban markets? And the technology suggests it's certainly best suited for rural markets, or low-density markets.

But it can serve some customers in between. And I think we're all trying to figure that out at this point. Right. So if you're Comcast and Charter, again, I'm just going to pick the most kind of like the obvious candidates in that space. should they have done something more to fend off that threat, how much of a threat is it? And could it ever make more inroads into kind of the heavily populated suburban and urban areas? Well, let's unpack that. So first, what they've done to protect themselves or protect their franchise from competition is largely the same for how they compete against fixed wireless access, say,

as it will be for Starlink. The Starlink product, what made today such an important milestone for Starlink, and it really wasn't a spectacular milestone in a lot of ways. But what makes it important is they're now launching their so-called V3 satellites that have much more capacity and will offer a much better product. But even now that product with the V3s, and remember, they got 26 V3s into space, it'll be past 2030 before the constellation of satellites is mostly V3s. But even with V3s, it's still a product that is not going to match the speeds of what you get with terrestrial broadband,

whether that's from fiber or from cable. So in direct competition, it's not just price. It's also the quality of the product. And we're trying to figure out sort of, well, where does the market shake out? how much of the market is in sort of the value segment, how much of it is in the premium segment. And the value segment today is where Comcast and Charter are struggling the most to compete against fixed wireless access, which again is a much lower quality product by most metrics, but is cheaper. And so the cable operators have competed by offering a bundle with wireless,

and that's proving to be pretty successful, but that's what the market's grappling with, Kelly. As important as all of this is and will be, people still want to know, your calciades on SpaceX Tesla. I mean, do you think they are, is Tesla being prepped for a sale here? We can't have you on without asking this question. I'm not going to make a guess. I think everybody that knows these companies well says they're bringing more and more of the parts of the business together. And you can make the argument that why Elon Musk is so interested in, the broadband business is not because he's interested in broadband people's homes,

it's that he wants to have broadband to every movable object in the world and eventually connected to every Tesla car and eventually maybe every car and that the D-to-D wireless business won't be to power your phone. It may be to connect robots. So there are lots of places where you can see that the vision over a very long term brings these companies together. Whether that means they have to merge is a little less clear. As with many things, a little hard to predict, I think. But I'm glad that you also added that context about their ambitions here. Craig, thanks so much. Good to see you.

My pleasure. Good to see you, too, Kelly. All right. Speaking of Space, Planet Labs, a provider of satellite imagery data we spoke with just about one year ago, we'll launch a new generation of high-res satellites this week. SpaceX will take those satellites into space on Thursday. But before that, the CEO of Planet Labs, while Marshall will be here. On Wednesday, by the way, stock up nearly 40% since we spoke with Planet Labs last year. All right, on deck.

Do you know who builds many of the things that help move all the other things that you may see and use everyday hint? Companies based in Minneapolis. It's 100 years old this year. And many on Wall Street see a lot of upside. Know the answer? We'll tell you. Next. All right, the answer to our riddle before the break is.

Greco, the ticker is Triple G, G, G, G, G. Now, it may not be a household name. This is not the baby stroller company. But what they built goes into so many other things that you see or use every day, including, you guessed it, part of the data center supply chain. So how come investors aren't giving Greco a little more love? Joining us now is Mark. Sheehan, he is the CEO of Greco. Mark, really a pleasure to have you on CNBC. You know, again, not the stroller company. You guys are in parts of the AI supply chain, mostly through construction. and paint and things like that. Plain English, where do you fall in the American industrial ecosystem? Yeah, we're at the center of it because a lot of this build out that's happening, AI data centers, they have to build buildings, right?

So all this construction that's happening gives our customers the opportunity to come in and do work. So if you think about a building going up, like they're going to paint the outside of the building. Once they get in, they're going to do the inside of the building. They have to put floors into the building, and we have coding materials that go on to those. floors. The girders that support the building, we make equipment that does what's called intemescent fireproofing. So it gives people inside of the building more time to get out if the girders are corded with intemescent coating. So we're there as well. We do roofing materials. We do the parking lots. We put the line stripes on the... It's boring. But my gosh,

so everything is there, yeah. It's necessary. This is the stuff that makes the world work. And I don't know if you saw the top of the show. We had one of our market guests was saying, listen, he actually dropped the industrials. I mentioned you because he was like, they're getting no love. You're operating earnings are up 11% year over year. Some of that was tariff refunds. I get that. You're operating margins are among the highest in the business. And yet the Wall Street average price target is like 93 and change. You're not there at 77-ish. What are investors or the market missing here? Yeah, I think that we're not the shiny object right now. And we think that's okay. We make things shiny. We do. We've been around for 100 years. We just, we have.

the same playbook. We're always innovating. We're always launching products. We do generate very high rates of return on our sales we do get, I think, like 23 percent net after tax operate at profit margins after paying taxes. That's what we get. So if you look at the free cash flow of the company over the last five years, it's actually doubled. Yet the stock hasn't. And I think it's just a matter of time when you've been around for 100 years. You kind of know there's good times, bad times, things when you're in favor, things are you're in. you're not in favor, we just keep doing what we do really well. And that's worth for us.

Sorry, I didn't mean to interrupt you there. I'm just thinking about what you said about building out these literal edifices, these buildings for data centers. And at a time when investors are searching under every rock for what's a data center play, I don't know if you want to get caught up in that craze. I don't know if, you know, why is Lumentum up, you know, hundreds of percentages and you guys aren't maybe they can deploy, but you're fundamentally doing the same thing, aren't you? You're deploying your product into these data centers.

Yeah, I think the difference with us is that it's part of our portfolio, but it isn't like the major thrust of our portfolio. So if you buy Graco stock, you're buying a diversified industrial manufacturer that has exposure to a lot of different end markets, data center being one of them. We also have a business where we make high purity pumps that are used to produce computer chips.

And so we sell the customers like lamb research, and applied materials. And then they create the machines that go into the fabs, and the fabs create the chips themselves. But to your point, you're also exposed to infrastructure. You're exposed to auto. You're in the Oreo filling. We are everywhere.

You're exposed to Maha. I mean, I see your point that when you're, you know, that diversified, it's not like you're just to play on any one particular thing. Yeah, that's right. I mean, like, when your car was likely painted with Grego pumps that pump the paint out to the line that got the car painted, the windshield was probably glued in with Greco's systems as well. the water towers that you drive by, the two component materials that go on those water towers,

we have equipment that does that. And then like you said, you go into the grocery store, peanut butter, shampoo, tomato paste, all that stuff is pumped with. And buyback. You buybacks are up. Yeah, we've been buying back stock. I think we've, between dividends and sherry purchases, we've done more than a billion dollars in the last 18 months, which is a big number for a company that we're a $12 billion market cap business. But we generate so much cash, that we can't invest it all back in the company. So we've been buying back stock. We've also been doing acquisitions.

Well, based to Minneapolis, you've got a new headquarters being built slightly north of the city. But we'd love to hear about a great American company 100 years old this year. Paying the rent and mortgages for a lot of families. And Mark, we really appreciate you coming in. Yeah, thank you so much. Great to be here. Not the strollers. Not the strollers.

Let's get to Brandon Gomez now for the CNBC News Update. Hi, Brandon. Hi, Kelly. A federal judge blocked the Trump administration today from tying counterterrorism funds for local governments to new election rules. The judge agreed with cities and counties in Ohio, Texas and Tennessee that argued FEMA exceeded its authority by threatening to withhold 20% of the grants. The rules called for a number of changes, including using more paper ballots and phasing

out some electronic voting equipment. Meantime, General Motors says its technology costs will decline by more than $20 billion through 2031 because of new federal fuel economy rules. Now, the changes, which were finalized today, ease-reported. requirements for automakers to make vehicles more fuel efficient. And Florida's Attorney General asked a judge today to stop Open AI from developing new AI models. The request is part of the state's lawsuit accusing the company of harming children. The AG said OpenAI doesn't have guardrails in place to regulate its own technology, while Open AI said in a statement it is committed to

working with Florida and other states on advancing pragmatic AI policies that apply to the entire industry. A lot of AI concerns right now, Kelly. Something's back to you. Absolutely, Brandon, thanks. Coming up, what would it mean for the United States to actually implement a diesel export ban? We'll ask Goldman's co-head of Global Commodity Strategy about that next. Welcome back. We have some new reporting on what led up to NVIDIA's recent $13 billion deal to buy Hugging Face. Kay Rune brings us those details.

Kate? Hey, Kelly, I'm now hearing from multiple sources that OpenAI offered to invest about $100 million in Hugging Face. and that from what we're hearing sparked other M&A interests from multiple companies. This was all ahead of NVIDIA's deal to ultimately buy the startup. This is, again, according to multiple sources, with direct knowledge of the matter. The OpenAI offer that I just mentioned did come after the company's AI agents broke out of a test environment and hacked into the open source platform. As part of this deal from what I'm hearing, Hugging Face would have also been a distribution channel for OpenAI's custom chips.

The talks did fall apart in the early stages, according to one source. This Open AI overture, though, guys, did get the attention of NVIDIA's CEO Jensen Wong, who has, from what I'm hearing, privately complained about OpenAI and Anthropics moves into custom semiconductors. This is according to multiple sources familiar with that topic. And OpenAI is also a major customer of Nvidia has also received about $30 billion in terms of investments from the chip giant. While NVIDia was pursuing that hugging face deal, we are also hearing that AMD and Salesforce both also offered. to acquire the startup as well. Those companies declined to comment.

And NVIDIA ultimately swooped in, bought the startup for just below $13 billion. But it does, guys, underline the interest in open source of some of these cheaper models start to compete more with Open AI and Anthropic and major M&A appetite from some of the public companies out there that are on the hunt right now for startup deals. I still find the name Hugging Face.

Are I the only one like that we say it all the time? It's an emoji. I just, I want to laugh, but I don't want to laugh. It's the emoji. It's like a lighthearted, it's their whole, you know, yeah, it's the, yeah, that what you just did. It's that exactly what they, well, it's part of their logo. They all have it in their signatures and their emails. It's, it is truly the emoji.

But it is, that company has just, I mean, it speaks to the interest in open source. And I'm also told all of this happened extremely quickly. I mean, the Jensen Wong interest in this, I mean, the deal itself closed fast, but also it's just fascinating, and that all of these companies simultaneously tried to invest. Okay, I want monocle face with the thing. That can be your emoji. Thank you very much, exactly. I'm melting face.

You like that? I'm melting face. Melting face? Melting face or this guy? Yeah. All right, let's bring in Don't bring in Don't smoke. He is the head of oil research at Goldman Sachs. Don't worry, we're not going to ask you to talk about your favorite emoji, although you can throw that in there down.

We're not going to judge you no matter what it may be. All right, there's an on again, off again, on again, talk about a potential diesel fuel export ban. My sources. Prime Min of the same people you talk to say might lower prices, short-term, medium. in longer term, probably raise prices because companies will have to go offline because they have no place to put the oil. What is, but you're the expert. What is your take on a diesel export ban if we were to get one? Yeah, you're spot on. So I would think about the effects in three periods. In the first period, while the ban is in place, but while there is still room to store diesel,

it would mean lower diesel prices in the U.S., higher diesel prices outside of the U.S. while the ban is placed, and once you are near storage congestion, once diesel tank tops are met, we would likely see lower supply of not only diesel, but also other refined products such as gasoline and jet fuel, because they're produced together, and you would get upward pressure on gasoline prices that we estimate to be significant in the tune of 30 cents per gallon of upside gasoline price pressure per week. And in the third period, once the ban is lifted, international and U.S. prices would reconnect. And you would probably end up with higher prices for diesel, even in the U.S. than in no ban counterfactual because of the lost U.S. refinery output. Listen, you are Belgian. You've got family in Europe. So I want to make sure if they're watching, they don't feel too upset because Europe's in big trouble paying $12 an equivalent a gallon for diesel in many countries.

Now, what would this mean if this were to happen? What would this mean for Europe? Yeah, so the two key regions that are highly dependent on U.S. diesel exports are Latin America, importing more than 50% of diesel exports from the U.S. and second Europe, importing about one-third or so of U.S. diesel exports. And so initially, the tightening shock from a potential U.S. diesel export ban, which, to be clear, is not our base case, which initially would be felt the most in Latin America and Europe. But then pretty quickly, I would expect Europe and Latin America to start pulling hard, on the remaining diesel barrels,

including from large refining countries such as India, and then the tightness would spread also to Asia, and then the global ex-US diesel markets would be even tighter, and it's already very tight. And Don, I know it's really hard to predict what's going to happen around Iran, particularly the last couple of days. We've had a lot of headlines with the UN

and people speaking foreign on behalf of Iran. What is your base case? your base case right now. We're seven months into the war slash conflict. Do you even have a base case at this point about how this plays out? Yes, our base case is that shipping disruptions continue, but that adaptation of the oil market, which has been truly remarkable, both on the demand side and the supply side, continuous. We estimate that as of these weekends, exports of oil from the Persian Gulf countries were essentially at 95% of pre-war levels with a sharp ink freeze in ship-to-ship transfers at the Gulf of Amman.

And on the demand side, we estimate that Chinese crude imports are still down a staggering to two to two and a half million barrels per day over year. So our estimate suggests that the crude market actually is fairly balanced with a rough balance within supply and demand. That said, prices incorporate a significant risk premium because the risk. risks to supply are still definitely skewed to the downside. And this makes it a highly challenging environment for traders and for clients. Don, it's Kelly here. I just curious, I heard this line earlier today in what you make of it. They said that Iran has lost control of the, or is losing

control of the strait, meaning product is getting out and they can't stop it. Is that your read on the situation as well? We estimate pretty large oil exports coming through the straight roughly at 95% of pre-war levels. If I look at the Middle East exports in total, so not only straight-over-moose, but also Red Sea and Gulf of Oman, with very low exports from Iran, especially on the crude side.

So taking that face value, that does suggest that Iran's leverage over her moves, which has been its key source of leverage, is diminishing. But the implications for supply are not necessarily positive. The implications for price are not necessarily negative, because if that's correct, it may increase incentives for Iran to potentially escalate and damage energy infrastructure,

potentially, especially ahead of the U.S. midterms. Excellent point. Don, thanks. As always for now, I really appreciate them. I'm calling him, Dan, Don, you know, do you get the AA, Don Stroyven from Goldman? Oh, good. Thank you. Appreciate it. More power lunch right after this. It's time for today's trending ticker to see what many of you are keeping a close eye on, and it's a stock that is on pace for its worst day in more than four months. The answer, unfortunately, is.

Boeing down 6% falling after news over the weekend of a software glitch affecting some 737 Max jets. The issue could interfere with certain automated functions during landing. Boeing notified operators about the glitch in August and the FAA is now reviewing it. The sell-off has Boeing on track for its fourth straight monthly loss and that's its longest losing streak in more than two years. All right. More power lunch after this short break. All right, it is a rainy Monday. So a good time for something random but interesting, and this one is about a power play in the NBA. The Philadelphia 76ers basketball team have a new sponsor on their jerseys, and it is Bloom Energy, the battery and energy storage company coming out with a big deal with the Sixers.

There is a look at the New Jersey. Bloom Energy is the worst performing stock in the S&P 500, what, this year or today? I don't know. But if you zoom out, it is skyrocket as investors bet on its fuel cells can help power. the data center, and AI boom. In fact, over two years, Kelly, Bloom Energy is up 2400 percent. So whatever that deal costs them, they can afford it.

Do you believe there is a kind of the jersey patch is the sign of the top thing? That's probably putting it too strongly. But anytime you see a deal like this struck, let's put it this way, they're definitely on the map. They are on the scene. It must feel good if you're Bloom to watch this team and see your name up there.

But they've also been on such a good run. you just sometimes wonder if these things are kind of ringing a bell at the top. Yeah, stadiums, arenas. Yeah, jersey patches are new. We'll have to find out. Anyway, congrats to Blue Energy, I guess, and thank you for watching Blue Energy. Power Lunch. Closing bell starts right now.