3 key things Nvidia's CEO said in Paris, plus Capital One strikes a positive tone

CNBC

11-06-2025

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Stocks were slightly higher in afternoon trading Wednesday, as investors digested cooler-than-expected inflation data and signs of progress on trade between the U.S. and China. Sentiment also was helped by the 10-year Treasury note auction at 1 p.m. ET, which observers graded as largely successful. As we wrote earlier , cautious optimism is the best way to describe where things stand on inflation and U.S.-China tensions right now. They are not the all-clear sign to start aggressively buying stocks, but they are still welcome. Nvidia update: A few comments caught our attention from CEO Jensen Huang during a question-and-answer with equity analysts at Nvidia's GTC Paris event. They came after Huang's keynote presentation and a flurry of announcements related to AI infrastructure projects in Europe. Our colleagues at CNBC abroad have a story out on those updates . Now, here are some of the highlights from the Q & A. As more devices such as smartphones and computers become capable of running AI applications "on device," Huang was asked about what that means for Nvidia's business model, given its market-leading AI chips run in vast data centers. "The more AI they use on the device, the more AI you're going to use in the data center because you still have to train the model. You have to develop the model and verify the model, evaluate the model. And all of that's done in the data center. Our business is not on the phone." Huang said Nvidia and its supply chain partners have made a lot of progress addressing the supply shortages that plagued the company during the early years of the generative AI boom. "None of the supply is horribly difficult to get now. It's constrained, but we're still growing fairly fast. So nothing is sitting around. We don't have ... a bunch of these supercomputers sitting around. They build what we ask them to build. So, we have to forecast it. But we're not limited by CoWoS. We're not limited by HBM. I just have to forecast, and our lead times are probably more than a year." (CoWoS is a method of chip packaging that had previously been a bottleneck for Nvidia's chipmaking partner Taiwan Semiconductor Manufacturing Co . HBM is shorthand for high-bandwidth memory chips, and tight supply also has been a sticking point in recent years.) Finally, Huang was asked about Nvidia's visibility into demand for next year, particularly in light of some of the European AI infrastructure announcements. While U.S. cloud computing giants like Amazon and Microsoft are Nvidia's biggest customers, the company has wisely been diversifying its revenue streams with "sovereign AI" projects in other parts of the world. Last month it was the Middle East, and now Europe is the focus. "Everything that I told you guys today is in addition to the [U.S. cloud service providers]. And most of Europe is underserved today. And even the parts that are served, the newest generation of [Nvidia] chips don't come out. You know, there are so many developers and researchers that are still using Amperes. They don't even have Hoppers barely. So that's the opportunity for the local [cloud service providers]. They could deploy the best as soon as possible. ... So all of this is incremental." (Ampere is Nvidia's AI chip architecture that went into full production in 2020, followed by the Hopper architecture in 2022. The generation that is ramping up now is Blackwell.) Consumer health: Capital One CEO Richard Fairbank struck a fairly positive tone on the state of the U.S. consumer despite macroeconomic uncertainty from President Donald Trump's tariffs, speaking Tuesday at Morgan Stanley's U.S. financials conference. "Despite all the noise out there and the tariff news and everything, even when we look at the very latest daily data on things like spending data or anything related to consumer behavior, we just don't see an effect. It's as if our consumers aren't really reading the same newspaper that we are. So, I'm cautiously optimistic about what I see." For the company specifically, Fairbank pointed out that since the fourth quarter of 2024, Capital One's delinquency trends have steadily improved. Zooming out further, the longtime executive also cited Friday's nonfarm payroll numbers , which indicated that overall job and real wage gains were both better than feared in May. All of this bodes well for Capital One's own financials. Its clients are not only able to pay back their minimums on their credit cards during a period of economic uncertainty, but also are still managing to spend consistently. At face value, Fairbank's remarks also are encouraging for our other consumer-facing names. Think retailers like Costco , Home Depot and Amazon , or chains like Starbucks and Texas Roadhouse , to name a few. If the consumer continues to spend, that's more sales for companies like these — and it's supportive for the U.S. economy overall, given the importance of private consumption to gross domestic product. Not every Wall Street executive is on the same page as Fairbank, though. At the same Morgan Stanley event Tuesday, JPMorgan CEO Jamie Dimon warned that the U.S. economy is vulnerable to a downturn. "I think there's a chance real numbers will deteriorate soon," he said. Up next: Oracle is set to report earnings after the bell, providing another look at data center demand and, perhaps, some thoughts on the energy requirements needed to build more AI infrastructure. On Thursday morning, we'll get the May producer price index report. The CPI report on Wednesday certainly carries more weight given that it revolves around what consumers actually pay. However, this PPI report should be a particular interest as investors look for clues as to what import tariffs have been doing to input costs and whether that could raise consumer prices in the near-term future. As of Wednesday evening, economists polled by Dow Jones are expecting see a 0.2% monthly increase, or 0.3% when stripping food and energy. Lastly, BlackRock's Investor Day ( webcast ) kicks off at 8:00 a.m. ET, which should provide more insight into how private market investments like Preqin are expected to contribute to growth in the future. — Investing Club portfolio analyst Zev Fima contributed to this report. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. 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