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All right, good Thursday morning, everybody. Welcome to Squawk on the Street. I'm David Faber. That's Jim Kramer. We're live in Post 9th and New York Stock Exchange. Carl has the morning off. Let's give you a quick look at futures. Of course, we get started with trading on this Thursday. In August, you can see we are expecting a higher open. We got a lot to talk about this. Oh, my. Don't we? And let's get right to it. Our roadmap, well, you know, we'll call it the AI trade, of course. NVIDIA's forecast, you know, I don't even know. It says disappointing here. I'm not even sure that's the right word. No, I mean, look, wait, what turned out that NVIDIA was this world? Yeah. And that they basically said that they had a chip they couldn't make, and it turns out that the yield's not that good. All right, we're going to talk about that. That was it? No. Okay. We're doing the rundown. Have you never done the show before? It's time. All right, let's move on from there to Salesforce and Apple. I'm telling people what we're going to talk about. We're going to talk about Salesforce and Apple. Apple reportedly ordering 10% more iPhones. That at least according to Japan's Nikkei. Of course, as they get ready for their Gen I enabled phone. And we'll check on the consumer. We got DG, that's Dollar General. Not good, but Best Buy looks pretty good. So both of those and so many more. We'll talk you a steal. We'll talk the markets. Let's get to it, Jim. Have a question. You ready? Let's get to it. All right. Let's start with NVIDIA, of course, lofty expectations. Down as much as 7% right after the earnings came out. Right now I'm looking at a stock that may be down as little as four bucks. Well, because you're trying to figure out on, say, a five bowl, $5 in 20, 27. Thank you, Ben. Ben Wright, just for noise. What should it really sell? I mean, could you really, do you think the stock should sell it 20 times earnings? I mean, no. This is a really great company. This is a premium bull. Premium bull. Premium bull. It's blowing with the revenues. But David, have you ever been to a, if you've ever been to a founder? I've been to a founder when they're first starting a new run. And they just throw away, use your mouth. And I think that not that Jensen necessarily got it wrong, but the yields were very low. So in other words, like the first, like when you know what actually we have him talking about it on the conference call, let's take a listen to what he had to say in particular about that ramping up a production of those new Blackwell chips. The data center worldwide are in full steam to modernize the entire computing stack with accelerated computing and generative AI. Hopper demand remains strong and the anticipation for Blackwell is incredible. Well, I guess that wasn't really the way I am. I can't. And so there's a hit to Gross Martens and that bothered people. But I also think that David, when you have Nvidia Watch Parties, Allah, when you have, say, like in a Premier League, these teams that they will talk about, I don't know, they're in strange British cities. What happens is that, well, there you have it. That's a watch party. What's good is that what they're watching is us. Well, as in CNBC. So I'm happy about that. Right. And you got that is the correct takeaway, of course. Thank you. But I do think that that plus the national Nvidia Day and how the nation kind of stopped at a certain point? Yeah. No. I mean, we have to go back to reality, which is that Nvidia is a company, a sense is a man. And they did have some product issues in terms of what I regard as just being, look, we didn't make as many as we'd like. But 2020. But demand remains unabated, clearly, we've talked about, of course, the continued CapEx plans of all of the largest companies in the world. 45% of the business is them. And data center revenues at $26.3 billion, again, to put it in perspective, you're talking about what is two and a half times what it was not even that long ago, what- In the whisper, I'm sorry- Whisper, I'm sorry. I'm sorry. With the prominent- April of 2022. Semi-executive. And I said, short sellers who then give it to their compadres on the sell side so that the number is too high and they have to be $2 billion and they can't so the stock gets wrong. So let's come back to multiple. I mean, the one thing- What do you- And I'm reading here from Stacey Raskin, who's typically- It's Stacey- The most significant- Distinguished himself. Yes. Of analysts in this area. He says the one smudge on the report was end of your gross margin outlook. Right. It seemed down a bit as Blackwell begins its ramp and the H-200 mix increases. That's true. Although he says he thinks the overall gross margin into the fourth quarter should still be very respectable. I mean, by the way, the gross margins, just look at it as a business step back and just look at this business. 75%. 75%. They used to try to get to 60% at the height of Intel, then we get to 63%. During the period where everyone knew that Intel was the greatest company on Earth as a manufacturer, and these guys are blowing that away. They're just blowing it away. Should it get with giving that- When do you want to give it? 25 multiple- Well, that's my question to you then. All right. Revenue growth, more or less at least for the near-term, seems unabated. We can have the longer conversation about when the CapEx spending starts to slow or when, frankly, Gen AIs taken in all the data available in all the world- And therefore- And that's the word. You don't need the chips anymore. That's years down the road, perhaps. But right now, revenue growth's strong, gross margins, the likes of which we've rarely have ever seen. So what's appropriate multiple for this company? Okay. So let's say they're going to do a calendar year. Let's say they do $5. Calendar year 26. ES number. Do a- Yes. Correct. So give it a 30 multiple. Why not? Why not? Give it a 30 multiple and you've got a stock that's down $30 now from where it will be. But now it's become a little more show me, because we now realize that Jensen Wong, in the end, is valuable. We didn't think he was valuable. Now he is. Maybe some people feel like we can't give it that multiple. I don't think that's a big poll order and give it a 30 multiple and a $5 number, what the hell? Yeah. Why not? Yeah. But I think, David, we all were kind of surprised to hear that there were yield problems. We kind of felt that it was turn-keep. We should never have thought it was turn-keep. It's not easy coming up with a new chip, but they were putting some- Well, then what are the things that he emphasized over and over and over again, is the return on investment is radically great. In other words, you get it and you do really well, because accelerated computing is one part of it. Right. And then the gender of AI. And he emphasized accelerated computing. He emphasized the need to replace the trillion dollars in current- In the fourth quarter, they expected to ship several billion dollars in Blackwell revenue. Yeah, but people were thinking about tens of billions. So they're not going to get that. Right. But when you're hopper demands strong- Right. You're still taking over to trillion dollars. You're still taking over to trillion dollars. In the second half of fiscal year 2025. And how about the industrial implications? They were very good. The auto was very good. It was not just meta, and not just Amazon, and not just Google, and not just Microsoft, which by the way, was mightily attacked when the Marc Benioff co-host will get too soon. Yeah, well, let's get to it now. Really? Let's go with NVIDIA. Well, we're not- Do you want to critique the watch party? Jim. This is Squawk on the street. We're never done with NVIDIA. Thank you. But we may not mention it for the next 45 seconds. Okay. It's fair. Okay. You want to talk a little Salesforce? No, I first week should talk about Paramount first. You play that game with me? You play you. Hey, listen to me. You play that game with me. You play that game with me. You're going to get burned. Do not play- Do not get into my part of the field. Do you think I'll talk about Paramount? I will tack with you. You think I want to? No. I have to. Okay. But not anymore. All right. Let's talk Salesforce. There is. You want to talk something? Let me read- How rare. It's on the leaders on the S&P 500 at least. Well, Marc. Let us become part of the story. So I'm going to ask for a particular piece of tape that demonstrates how integral we are to the story. Boom. Boom. Ah. They don't have it. No. He doesn't know. Yeah, we have it. We have it. We have it. We don't have it. No, it's already. I'm going to turn it- I don't know what we're talking about in the control room. Boom. God, look at you. God. I'm all right. Yeah, geez. Let me tell you about Salesforce. We're above most analyst expectations. It did lift. It's full-year profit guidance. Also announced that Amy Weaver has decided to step down from her role. His fifth CFO. Let's not- I mean, I like Amy very much, but a lot of people are saying- Jim, you're too bold. And you want to hear from Benny off. This is what he had to say last night, at least, on Mad Money when Jim spoke to him about the benefits of building AI into the company's platform. I've never seen so much money wasted by customers trying to build their own AI. It's crazy what has happened. And some of these huge companies like Microsoft have told those customers to go train their own models and build their own models and then retrain their own models. Jim, we've built all that right into our platform. So you can build your model and train your model and fine-tune your model in our platform. You don't have to go do that to some hyperscaler. Right. So here, let me just explain a bit. He's saying that this do-it-yourself thing that people are doing is wrong. You have to let the pros come in as Salesforce and the pro. And he did talk about, for instance, that their agent forces, what he calls it, is now resolving in this trial 90% with a 90% of patient increase. So what he's really saying is, we're finally there. He passes service now as being the company that harnesses AI the best, because what happens is that- It's a pretty big statement you just made. Yes, it is. Yes, it is. Generally, the textbook company, they have a big spike in September, August, September, because of schools. Sure. So typically, they hire a huge number of people and then they train them, and they've got to figure out whether to lay them off or keep them. That 90% of the inquiries for the textbooks are solved by the bot. You don't know the bot. The bot is smarter. So they don't need to hire those people anymore. Right. It's generative. So you finally have a situation where, why use Microsoft Copilot? Why use Microsoft? Why give the order of Microsoft? Give it to Mark, he will solve the problems. And that was major. It was the first time I heard your gross margins are going to go up if you hire us. Right. Typically people say, "Oh, salesforce, salesforce." Speaking of gross margins- Speaking of gross margins at salesforce, of course, I can remember when the big battle was- Oh, do you see that up 200 dips? Between the activists and Mark, and obviously he committed to gross margins, and they have been moving up. Right. So he had two parts to say on the call. One is that he satisfied everything that the activists wanted, and more. And he feels really great about that, and the numbers did accelerate for the previous quarter. But the second is that he can for a hospital insurance, for a hotel instance, bookies insurance, for what I would regard for textbooks, but also for lots of other companies. What he's done is say, "Okay, listen, we now have it. We now have..." Right. Like he's looking for Walgreens to get Walgreens' little challenge financially. We haven't talked about that. But Walgreens. Oh, yes. We talked about Walgreens yesterday. But you have to understand that the use cases, you can have so much gross margin gains. So what did he have to say about that comment from Klarna, that private company that we highlighted yesterday? You know what? I'm not going to take the private. Let me just have- I'm just going to quote him. Okay, let's take a listen. My colleague, David Faber, who appreciates your work greatly, was talking about Klarna, which a very good company. I've worked with them. I love David, by the way. Who doesn't? All of a sudden, that's put that in to be his mother. And we were talking about Klarna, and he mentioned, you know what, Klarna's now cutting off Salesforce. They don't need Salesforce. They're trying to figure out exactly what to do with AI. To me, that seemed like I'd like to know more. Let's put it that way, because what to do with AI may mean using Salesforce to do better with it. Well, I think what customers are doing is transforming, changing how they use information technology. That's a great story. In fact, you probably saw on LinkedIn, Jim, that Klarna just posted how they're using Slack to deliver a whole operating system to run their company in a whole new way, using our new artificial intelligence capability that is manifested through Slack. Well, okay, so other than the fact that you guys- A lot of love goes all those both ways, yeah. I went to Mark and I said, "Listen, I need answers so far." Yeah. I said, "Look, they used Slack, something 80% of Fortune 100 uses Slack." Now, I think that Slack has become something that a lot of people felt was an Albatross that's now pretty popular. But what I like about this call is, again, I think that we have had a series of people talk about how you have to have AI, and then suddenly we have a person who has a way to be able to use AI that will help the company save you a huge amount of money versus that he's very disappointed with the huge amount of money that is wasted hiring Microsoft. Okay. People, it's really interesting, Microsoft has been taking a little heat. And CrowdStrike, but- Well, that's a separate story. Yeah, that is definitely interesting. You might just want to come back to something I talk about occasionally. It doesn't seem to be something that is forefront for most investors, which is the difference between gap and non-gap between adjusted and non-adjusted, so to speak. For example, I'm going to mention Nvidia first, hardly any difference between their gap and non-gap, which quality of earnings, let me just finish, non-cash compensation is very small. I think it's four cents a share. Salesforce, salesforce, I believe, I believe gap is expected to be only 60% of adjusted EPS. Right, that's why we thought that the buyback, huge non-cap comp, non-comp, non-cash compensation excuse me. Well, look, I like Amy Weaver, retiree CFO, I obviously like Mark, but they have paid people and they hit by that. Colette Crass, the CFO of Nvidia, is a little like Luca Mistry. Okay. Don't mess with it. She's going to, you're going to get a real number. Does that matter to you at all? Yes, it does. quality of earnings. Again, it's back to multiple. It changes my nature. It's the multiple. I feel like that I can very, I think I can pay 25 times earnings, which is the proctor again, but multiple on Nvidia. I don't know whether I shouldn't pay a little bit less than that for Mark, for Salesforce, but Salesforce has got the momentum and you know how much people love the momentum growth model. I love all that. But last, I just see last time is one of the most exciting nights we've ever had, because we had a major disappointment, allegedly, in a video that wasn't simultaneously with a conference call from Mark Beniock, which was incredibly bullish, and then a crowd strike call for where they had that nasty problem, where they talked about how the fourth quarter is bad, and then I'll have a wait, you know, maybe I'll talk for incentives, and then Opta blowing up, which is cybersecurity too. You didn't see that when it came to CrowdStrike, they had a lot of orders. But I just say that they were coming fast and furious this night, and there were people who literally were like trying to keep track was like, last time was at the end of August swivel head. It was, it was quite something. It was CrowdStrike as well, I guess, you know, typically we'd take a break now, but maybe we're just going to keep going. No, because George Kurtz, okay, I think it was a monumental feat that had so little lost business. But he did then say, look, later on, we may have to have some incentives. But I think a lot of people felt that CrowdStrike was going to lose a lot of business. It is not. All right. But that doesn't mean joining you and not a mad mind. Yeah. I got to get him on. Okay. I mean, where do you want to mention dollar general, or you want to do your impact? Next. We're going to take you. Take the pulse of the consumer, Jim. Best buy dollar general. Well, the pulse is going in different directions. The pulse is going in different directions. The pulse has no pulse and the other places got hypertension. This morning, that's what we're going to talk about when we come back. At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care, and we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. Whether you're scouring business financial sites or listening to economics podcasts like this one, you'll find there's no secret to successfully managing your company's finances for the future. You just need PNC corporate and institutional banking, whose team of dedicated relationship managers bring 160 years of experience, advice, and an array of tools and tech to scale to any size business. PNC Bank, brilliantly boring since 1865. PNC Bank, National Association, member FDIC. Support for this program is provided by Chevron. The anchor offshore platform is utilizing breakthrough technology to enable us to produce oil and natural gas in the U.S. Gulf of Mexico at pressures up to 20,000 PSI, a new industry benchmark. Anchor is part of Chevron's plan to produce 300,000 net barrels of oil equivalent per day by 2026 in the U.S. Gulf of Mexico, home to some of our lowest carbon-intensity producing operations. That's energy and progress. Visit chevron.com/anchor. Revenues were up 4.2%, same store sales at half a percent, traffic growth partially offset by lower average transaction amount, consumables up 6%, seasonal down, home down, a parallel down, and then we get to the guidance, which is why the stock is on my quarter of its value being cut off. Okay, so let's either talk about the disappointment that they see and the hard luck of the consumer. You know, consumers got stretched by inflation. Or, David Walmart has become a driving force where people who of lower income recognize that the prices have come down and feel like they're getting the everyday low price that Sam Walton created. And that return to Sam Walton's roots, which is stellar what Doug McMillan is doing, is just rocking everybody. So what do you do if you're a dollar general and you're competing that with Walmart in a way, perhaps, as you at least put it, that you haven't previously? Right, well, type of message, what does he have to do? He has to come up with some sort of lost leader the way what actually Sam won't just do. They get people in, because all the categories that you said are weak are where all the gross margin is. So I cannot, now look, this can this bounce, he's actually a loved guy, okay? Yeah. But if you look at the three year, David, this has been a loser. And the reason it's a loser is nothing to do with them. Walmart changed. Walmart decided to go after, with a couple of $5 and under products, David, meanwhile dollar generals products go up, and Walmart's products go down. The Walmart stores are fantastic. They started to incentivize managers to be able to get it right for the areas they're in. I just, it's a clinic Walmart, and so is the stock price. As is Costco. Yeah, new highs, new highs on Walmart. The guidance, let me just give people the guidance on dollar general, same store sales guidance is now between 1 and 1.6% previously had been between 2 to 2.7%, that's very big. And fiscal year 24 EPS, now 550 to 620 versus 680 to 755. So you use 550 to 620 off of a stock price, obviously it's going to be the nice. This is an elongated earring season, and this is one of the biggest misses, and that's what happened. It's also used to have a reputation for never missing, and that's nowhere the case, Dollar Tree actually has a better record now. But I just think that people have not been to, the snobs on Wall Street have to go to several Walmart's to see the pricing, and they will be grown away. I mean, when we go to, you know, like the orders of Baker, if you want a cheap product to be able to make it so you can make cookies with a gross margin, you have no choice, you have to go to Walmart. It's really quite extraordinary. All right. So we're going to cover Best Buy, of course, earnings are which are sending that stock higher, and so many other earnings movers this morning, and don't forget it for us. We'll talk a firm, you can catch us anytime and anywhere, listen to them, follow us, walk on the street, opening bell podcasts. I love David. Whether you're scouring business financial sites or listening to economics podcasts like this one, you'll find there's no secret to successfully managing your company's finances for the future. You just need PNC corporate and institutional banking, whose team of dedicated relationship managers bring 160 years of experience, advice, and an array of tools and tech to scale to any size business. PNC Bank, brilliantly boring since 1865, PNC Bank, National Association, member FDIC. Support for this program is provided by Chevron. The anchor offshore platform is utilizing breakthrough technology to enable us to produce oil and natural gas in the U.S. Gulf of Mexico at pressures up to 20,000 PSI. The new industry benchmark. Anchor is part of Chevron's plan to produce 300,000 net barrels of oil equivalent per day by 2026 in the U.S. Gulf of Mexico, home to some of our lowest carbon-intensity producing operations. That's energy and progress. Visit chevron.com/anchor. Are you just saw, of course, Dollar General Tumbling in the pre-market, a very different story for Best Buy, that rallying at the Retail Erase Profit Guide, as opposed to quarterly results that also were above Street Consensus, revenues $9.29 billion versus estimates of $9.24. Again, as I just said, beat on EPS as well. We look to the back half of the year, we expect our industry to continue to show increasing stabilization is commentary. It's a big position for my child of trust. We happen to think the world of Corey Barry. She's well ahead of where I thought she would be in terms of the turnaround, so to speak. I think what's most significant, David, and we talk about this a lot of the comp schools, the cadence, which means how did you do during the quarter, minus two in May, minus four in June, flat in July, August continuing for flat. That's why they can lift their full year guidance, which really matters. They're talking about innovation driving inflection. Obviously, they don't even have the right PCs yet, the AIPC. They're getting it. They just think that the $500 million buyback, coupled with the fact that there's a tremendous short position. Tremendous. Yeah. It's gonna cause a real squeeze. It's a squeeze, right? Now, did we buy it for the squeeze? That check. Great. All right. We're gonna get the opening ballot course, and very soon after we're gonna check some of the biggest movers, including Nvidia, which we've been talking about so much, but here at the Big Board, best college commercial bank is celebrating its 25th anniversary. That's a mass action, that's from the provider, which is communication. I'll go anywhere you want, and you want to throw it after? It's very big comedy, obviously. There's a great Korean Stanley piece today called "It's Glow Time," which is actually what they call the event starts. It's 1 p.m. eastern, 10 a.m. eastern, Pacific, they should have said that. On Monday, September 9th, and this is probably a very strong statement, obviously, Bank of America also puts it as number one AI. David, it's so great to have the best AI, and not have to pay for it. Yeah, that's just made that point. That's why Apple is such a winner. You know, look, I own it, don't trade. It's hitting for a video frame. There's also this story at a Japan that Apple orders are up over 10%-- orders more-- 10% more iPhones than last year. Now, this is interesting. We had Mike Seibergorn. Okay. Do you remember the Seiberg interview? That was the singular by Apple, because what he said was, "We'll be competitive with whatever rise you make." He did. He didn't say that we're going to back off, or that we're expecting it. Yeah, he was like, "Whatever they do, we'll do," in terms of this is the carriers, in terms of subsidizing to the extent that they have to for new phones. Plus me, purchases. When you're on the Apple call, you realize what they're trying to do is create a new narrative of these countries that have 200 million people that people don't understand or populate it, and ready to buy Apple, and they buy the used Apple, then they take the service. We have service being much higher than people think. Service quotes margins are incredible. I continue to believe that Apple is one of the best stories out there. Even though I know the P.E. multiple and the price earnings multiple is a little higher than what most of the people are used to. Yeah, we had the ubiquitous Dan Is where this was a couple of days ago when he was talking Apple. I mean, since then, I'm sure he's also talked sales force and Nvidia, because basically two-thirds of the world is covered by water, and the rest is covered by Dan Is. That's what it was. Yeah. Maybe it is. He was talking a big game as well about suppliers and his channel checks. He was. He was. I don't wonder though, there is this alternate view amongst, I think, a small group, but nonetheless, who say, "Hey, you know what, as things move to the device, as AI computing moves to the device in a way, will you need apps at all anymore? And therefore, is Apple going to lose control of its ecosystem?" Well, I think that on the enterprise, yes, but Apple's not an enterprise player. Apple's considered you're fine. And so for the individual, it's still going to be about going or about... Yes, absolutely. I just think, without a cat, I'm all in on that, because it's just not an enterprise software. I wish I were a more enterprise software. You get a higher mobile still, but Apple's fine in the new product. The fact is, it does trade on handset units, it doesn't trade on a watch, it doesn't trade on an iPad, it just trades on that. But now it's beginning to trade, you know, now it's at the $100 billion service revenue. That's extraordinary. I remember when it used to be a little bigger than a red box on it. I remember one time he said, "It's larger than every, I said, it's not larger than Northwestern Life." He said, "Are you really going over the Fortune 500 to try to pin us down?" It's amazing. I said, "Of course, I'm picking you." And by the way, as we pointed out many times, they've got a margin there, it's recurring revenue, and it's a large number, and so you pay a higher multiple for that recurring. There's only one thing that can stop Apple from going to $250. Tell me, John Buchanan is just an attorney general for Antitrust, who has it in for anybody who's big. Remember, they're looking at Nvidia for having been really smarter than everybody else, looking at Apple for producing a superior phone. And I think there's an article from the FTC, when the company's a little bit younger, talking about maybe there's a CHOCO, that is certainly one argument that some people say that these companies are being penalized somehow for their incredible success, for executing better than their competitors and their competitive set. The other argument, though, would be, and I know you also share this to a certain extent, is they are so involved in our lives in every way, that the size and power of these platforms, so to speak, is unrivaled in terms of really corporate history, until you're a student of this history. Maybe there's a period in the 1890s, but I don't know. Yeah, no, there was one, when Teddy Roosevelt was president, Standard Oil had 100 percent. Yeah, there you go. And they did that by driving everybody out, by putting flash flood lower prices when anyone came in, and they wrecked every single player. It's always hard to prove the alternative, which would be, well, what would the world be like if these companies weren't quite as large and powerful? Would more flowers bloom? It would be a poorer world. Don't use them now, term, it would be a poorer world, David. The world that we would not want to inhabit, it would be like the world of that slaveholder who wrote to Buchanan, because I immediately bought the book that you mentioned before. What you did? And I saw that Buchanan was very good. That was, what a great call by you to get that book. And I was shocked to see slaveholders writing to the president, saying, "Listen, you could really change our lives if we had no slaves." Okay, so you are shocked. You are not. You don't believe there's an argument to be made then on the antitrust front since you brought it up. And when it's innovation, when it's innovation, if it's stifling, or if it is the airlines overly merged. But remember, even here I think that the FTC is wrong on the Alberts and Safeway, because that is just to combat Costco and Walmart and Amazon. That's a cloud working. Amazon, no one's talking about Amazon for a second. 278 down to 270. Amazon's just been pitiful, helpless, giant. Wait, Amazon's 172. Oh, I'm sorry, it's been drifting, drifting, drifting down. I think that Amazon is a buy here. But let me tell you what, I think it's just an Uber buy and not Uber, because it's going to lose Tony West to Harris if she gets President AMD. Okay, so AMD, David, here's the story with AMD that I love. Yes. It's not like that, you know, people weren't saying it's down and sympathy to the problems of NVIDIA. The problems of NVIDIA are positive for AMD. Blackwell's not ready because AMD, you know, gives AMD a little chance to catch up. Oh, yeah. The catch up is that really a possibility or just to have something. No offense to AMD. No, that's a good point. And I want to be very specific about this. It's going to take a while to catch. I mean, NVIDIA has such a large lead. They do. They have the similar lead, I think, that Intel had against AMD at 1.1. Jerry Sanders, but first of all, the Redoubtable Lisa Su is going to be scrappy and a competitor. But Jensen is charging a great deal for his, AMD comes under, but David, I don't want to talk about that for a second. I want to talk about traditional computing. Like, traditional computing? Yes. Okay. PCs and servers. Okay. How do you think they're going to do in the coming two years versus Intel? David Intel's balance sheet is so hideous. May I suggest that you, I'd rather have you look at the sun for 10 seconds, unaided. During an eclipse. During an eclipse. Yes. A total eclipse of the sun. Yes. And I've got to tell you, David, I don't like what I see in that balance sheet. And Brookfield shouldn't, and Apollo shouldn't be as other than the private equities that are involved. The same, if they complete the fabs, though, and they own 49% each, those two private equities. For alternative asset management firms, you can't wait. When? And the U.S. Government's going to be their partner as well at Intel. Well, it brought this up many times. You have to be competitively. You have to be competitively. AMD is well ahead of Intel now in traditional computing. And then AMD has all freezing. In, look, GPUs, they have a very successful GPU that's selling out. You can't get any of these market value is, you know, it's deservedly bad of threefold. Think about where that company was. And Lisa Sootelko. Incredible. I just think that AMD is the winner here. Look at it. No, I should know. AMD should not be down one and three. And the CEO is, is, is amazing in terms of what it's meant for shareholders. Not in short of amazing. Really is. Yes. Because she is a charitable. All right. By the way, Nvidia shares are down less than two percent. There was nothing wrong with Nvidia. There was nothing wrong with Nvidia other than the fact that they couldn't get to you, right? Right. And by the way, there was a debate about air cool versus water cool, which was a total side show. There was a debate about actual use cases, total side show because he's telling you what the ROI is and how magnificent it is. He gave you every use case. Well, when I spoke to him, David, I said, well, it's your cancer. He said, no, but here's what it will do. It will be able to very quickly go through databases and find out what are the genes that commonalities say no, no, no, no. No, I do. And then be able to work backwards. There's a hope for generative AI. Yes. And I think an expectation almost when it comes to drug development and discovery, it will speed up that dramatic. He calls that tech bio. And what chances said to me, it's still not the big, the big drug companies have not adopted this yet. Oh, it's still early, Jim. Right. Well, that's what I'm saying. People years ahead of you, and people just continue to think, like, I'll all the watch party, that it was an NFL draft, and it was the Giants, and they drafted poorly. No, not true, no, I mean, true about the Giants, I mean, not true about a video. Giants, yeah. Well, they got one good offensive lineman a couple of years ago, but otherwise, man, it is not that right. They have a wide receiver. Yeah, this year, our neighbor's going to be good. But I think, David, that the theory of last night is reality, which is that AI is going to begin, service now, then sales force, obviously meta, he's furiously, Mark Zuckerberg, meta AI, which is his GPT, he's furiously trying to catch up to the others. But does he catch him? Pass it, because he has all this data about social media, what are you looking at? I'm trying to get a quote on a firm, because we haven't talked about a firm, and the loss was far better than had been anticipated. Revenues were above estimates, and I know the stock is up, I'm just not up for whatever reason. I mean, his credit card's selling really, really well. The Apple Pay is doing very well for him, he made that point. The company is much, much closer to gap profitability than we thought. Yeah. And that's under, do we have tape? I don't think we did tape. We do have tape. Maybe we can run some tape. Sure, let's try. Let's give it another try. We have to adjust, and we've shown over the last year plus that we know how to win in a relatively high rate environment. As the rates are expected to come down, we'll certainly benefit over time. It will be a tailwind. But we know how to win under any rate scenario, as I hope we have shown. So that's it. There was, I compared that to master part of the reason, remember, they don't have to be ratings coder, versus so many of the companies that do. Yeah. Now, Capital One is the intentions to them. Yeah. This, this is one, this is a low fee versus high fee. But Capital One is brilliant on the high side, and they're brilliant on the low side. They have very few defaults. It's an exemplary situation. Let's come to CrowdStrike. We looked at the stock, but we haven't really discussed it much. You have, obviously, George, joining you tonight on Mad Money. CrowdStrike shares are up 5.7%, obviously, as our viewers well know, the stock got crushed during that outage of a number of weeks ago. The revenues were a bit above estimates, as was EPS, and, you know, they said the outage reduced EPS by 2 cents in the quarter, 30 million subscription revenue impact in each of the remaining fiscal quarters, as a result of incentives related to their, what they call their customer commitment. And the incentives were the, the bummer in the call. Everything else was like, I can't believe how well they maintained and got new contracts, giant, nine-fear contracts. George told me, look, it's proud of how he finished, given the circumstances, again, the focus is on, is on hugging every customer as they work through the next few quarters. But I, as I said the other day, 2.30, I called the bottom, I'm proud of that, I could be wrong. But I have George on tonight, and people should read the beginning of it, because it's- >> Textbook crisis map. Textbook. Really fabulous. >> I look forward to, to watching that interview tonight. Jim, I want to hit U.S. Steel because it's a situation that I've been following closely. I know you've been hearing from Lorenzo at Cleveland College with some frequency. >> Yeah. >> And there was some news overnight that we should get to. Again, this is an interesting situation, in part because you got a stock in the 30s where there's a $55 share bid from, not bid, deal, excuse me, from Nippon Steel, Japan's steel champion, so to speak. And this is what we got. They're going to add, remember I talked about this when we spoke about it a few days ago. >> Of course. >> Another $1.3 billion, an incremental investment. Now they said we're going to, you know, $1.4 billion, but that's just for sort of keeping things going, so to speak. The $1.3 is a billion for the Mon Valley Works, at least, to increase capacity for high-grade steel to make the plant more efficient. You're talking about something that was built in 1938, I think, or completed in '38. And then also in Gary, Indiana, again, another $300 million. So that's a $1.3 billion investment. The idea being for Nippon to say, hey, we're here for the long term. We're putting money into these facilities to show that we expect them to operate for many, many years to come. And therefore, U.S. steel workers, don't you think that that's the kind of commitment you want to sign on to? You get an immediate response from U.S. steel workers in a letter in which they basically say, you can't trust what they're saying. >> Close one U.S.W. operation if you're not there. >> And Nippon's still trying to hide behind a North American shell company, wants to shield itself from contractual obligations through our retirees and communities, it's just more of what we've seen all along, words, no real change. >> President Biden and Vice President Harris are descending on Pittsburgh on Monday Labor Day. Do you think they're going to just be positive about this deal? >> Well, absolutely not. >> You know, the question becomes, I mean, because Cleveland Cliffs, obviously, which was the cover bid, you know, they were second in the bidding for this, has been after it all along. And they are closely aligned with unions. But what happens? Are they really, they're not in a position, now, this is an area where investors disagree to a certain extent with Lorenzo Congavas, the man who runs Cleveland Cliffs, the outspoken member, who told me the other day via text that I was riding the wrong horse. I don't know what that means. I said, I never rode horses, I'm from Queens, but don't you think that Belmont Raceway? >> That's true, not far. >> Right. >> Not far. >> Beautiful. Cliffs has repurchased $733 million of its own stock so far this year at 1879 a share. It's spending $2.3 billion of cash to buy Stelco at a significant premium. It will be 2.6 times levered post-completion of the Stelco acquisition. It has a $6 billion market cap. How are they going to be in a position to buy U.S. deal? And my point in asking that is, if you say no to Nippon, what happens to these under-invested plants and can you really rely on Cleveland to actually complete a purchase where they're going to put more money? And he would, of course, say yes. >> Yes. >> There are others who say no. >> And they do need a cessation in the dumping of steel in this country via Mexico. >> And they even say the Japanese are still also dumping, yay, claim. >> They need whatever person at the White House to crack down on the smuggling, so to speak. >> But he did say that previous time of school that he could do another day. >> Well, I would only end with section 5.2c page 59 of the Cliffs' Stelco merger agreement which does outline restrictions on Cleveland-Cliffs' behavior through the pendency of the transaction. And there is language that would seem to make it very difficult for them to do an acquisition while at least they were in the midst of buying Stelco. >> Right, right. I don't think that this thing's going to take a while, but I do point out that there's only one thing. >> Not to mention the antitrust. Not to mention antitrust. They would have 100% of blast furnace production in the U.S., 90% of the U.S. advance high strain steel used for automotive under-body panels. So there's an antitrust question too, right? >> And remember, this is an FTC that is challenging to buy a nice crispy sky. >> And by the way, I call Dave McCall, I call Dave McCall who runs the U.S.W., he hasn't returned the call. I look forward to speaking to him. I'd love to bring him on to understand fully the union's continued complete opposition to this deal, even though they seem to be awaiting the union company. >> The idea of more money. Interesting deal from a stock market perspective, but also from a political one, as Jim mentions, Pennsylvania, as we all know, is a swing state. All right, let's quickly get to five below, because I'm told that there's something we're talking about there. >> I have always had a contentious relationship with five below under Mr. Joel Anderson, because I felt that they were going to scrub because they kept putting up stores regardless, not irregardless, that's bad English, but regardless of what the company was doing. So if you take a listen, maybe we listen to the challenge that I offer Joel Anderson before he was, before he left, okay? >> Do you feel confident that you should stick by your goal of 3,500 stores by 2030? If right now the growth may have been so fast that you didn't realize that you had this kind of theft problem as bad as it was? >> Yeah, it's a fair challenge. The timeline is not our problem right now, though, Jim. And in fact, you would argue that if we could shrink back under control to pre-pandemic levels, you'll even see more growth on that. But we're really excited about the pipeline. We announced yesterday, we're going to open between 225 and 235 stores this year. Our pipeline for next year is almost full as well, so there's a lot of demand for five below stores. >> That was just you, Bruce, you need to talk about stock being a 200. It's just you, Bruce. You can't do that. Starbucks did that too. Anybody who doesn't, Dutch bros, I think is flirting with that kind of over-expansion. The only company I've ever seen do a expansion that works seamlessly is Chipotle. And they have this chicken honey dish that I hope to have for today for lunch. But I just think that when you do what five below did, it's imperative upon us as journalists to question whether that isn't an ill-advised strategy. Anderson's gone, the company hasn't been able to recover from their over-expansion. By the way, CVS over-expanded, Walgreens over-expanded. You know who hasn't over-expanded? >> Amazon Prime. >> Oh, fuck. >> Yeah. They got an awful lot of trucks though, don't they? >> Oh my. But if they can package all those through AI, make it so you-- >> Think about how many trucks you--Amazon trucks you see now in the highway versus five years ago. It's amazing. >> Yeah, they did. >> What they did. >> I love you. >> Excuse me. You love me? >> I love you. >> Thank you. I love you too, Jeff. And we love Mark Benioff as well. Why not? He's a big man. Lots of love. All right. Before we go to break, let's give you a look at the bond market. Check out how treasures are fairing this morning. There they are, 3, 8, 7, 5, and 4, 1, 6 on the 30 year. We're back right now. All right. And we finally get to stop trading. >> Okay. So last night, we obviously had a video we had sales force over tonight. We have Dell. And I think Michael Dell is going to tell a good story. I think he's taking a lot of share away from Super Micro. We hadn't talked about that today. It's a little bounce back. There is a piece today, Morgan Stanley, saying they've just learned that shipments are going to be lower based on their channel checks. I would tell you that, of course, given that they're the way you install Blackwell, Blackwell is a little bit late. So Dell could miss. But no one is going to take business away from Dell from missing. And I do think they took a lot of business with Super Micro. I do not, at this price, at 111 with the stock down from 179 bet against someone like one of the most charitable and put all this crap you guys in the world, which is Michael Dell. >> Right. Looking at some notes here about it. >> Yes, SNCI, cute focus on Dell's ISG margins with investors setting the line in the sand to 10% operating margin. >> Yeah. I mean, look, they still share. Who cares? >> Yeah. >> They just have to still share. >> Now, I do have to notice that people had the arduous cool attack for Salesforce. >> Yeah. Salesforce shares. Not up that much. All right. What do you got on the big show tonight other than, I mean, we know you have George Kurtz from CrowdStrike. So that's a big one. >> That's going to be very important. And then I have gap stores where I think the turnaround, Richard Dixon, the turnaround is a pace. David, it is huge. People aren't paying attention. He's turning around gap. This is the function. >> They're here last week, ringing the opening bell. >> Well, you bring the open bill 50 years. The focus for tonight is the turning banana Republic, which is just extraordinary. >> Really? >> Yeah. I think this is a very inexpensive stock that people are looking for the next retailer to go. Some people feel A&F on a bounce back gap store. >> All right. You did a good job today. >> Don't feel bad. >> I feel very in that. >> Very hard on himself. More reaction to Nvidia shares. They are down post earnings, but not much. >> You've been listening to the opening hour of CNBC's Squawk on the Street. >> All opinions expressed by the Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information Squawk on the Street participants consider reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. 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Jim Cramer and David Faber drilled down on the much-anticipated earnings report from Nvidia: Shares fell despite second-quarter results and guidance that exceeded consensus estimates, as some investors were expecting blowout numbers. What does it all mean for the AI boom? The anchors also discussed Salesforce rising on better-than-expected results and raised full-year profit outlook. Apple shares get a lift from Wall Street calls along with a Nikkei report on iPhone orders and AI. A tale of two retailers and the consumer: Dollar General plummets and Best Buy surges on earnings news.
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