Closing Bell Overtime: Nvidia Faces a New Crisis 11/9/26

NVIDIA

Across the shows: 86 speakers in other episodes, 69 bullish and 42 bearish calls, past 30 days

• Eamon Javers · CNBCUncertain

  Scrutiny of China-linked shell buyers could materially restrict Nvidia sales and cut key clients.

  Javers says a key unknown for investors is how much of Nvidia's sales went to Chinese entities through pass-through buyers, and whether that is material to earnings. He cites allegations from short sellers and investigators that many of these buyers are fronts for China. He argues that new management would have to review that business and get on the right side of US law. That could meaningfully restrict sales and force Nvidia to drop entities that were significant clients.

  “if there is new management that comes in at NVIDIA, they are going to have to look at all of that business. They are going to have to get on the right side of U. S. Law on that and that could be a meaningful restriction”at 8:01

• Eamon Javers · CNBCBearish

  Multiple investigations will drain Nvidia's CEO and management time and weigh on the company for months.

  Javers says Nvidia faces as many as four probes: a congressional inquiry, a reported Justice Department inquiry, an intelligence community review, and the board's own inquiry. He expects Republicans to run a stripped-down effort until January, then Democrats to run a more political one once they take the gavels, so the story will not die for months. He argues a CEO facing this must spend time on lawyers, depositions and hearings, which takes attention from building the AI business and will be a drag on the company.

  “if Jensen Huang remains CEO of this company, he is going to spend a lot of time practicing and rehearsing for depositions and hearings and that is going to be a drag on the company.”at 9:10

• Eunice Yoon · CNBCBearish

  Beijing wants Chinese firms to shift to homegrown chips and wean off Nvidia, threatening its China business.

  Yoon describes Beijing's conflicted stance. Chinese companies want Nvidia's chips, which are seen as superior for AI training, and Beijing approved the H200 chips. But the government also wants Chinese companies to keep using homegrown chips to try to quit Nvidia. She notes a Reuters report of 600,000 H200 chips sitting in Hong Kong awaiting import approval, and says the impact on Nvidia's China prospects is unclear.

  “on the other hand, they want to encourage the Chinese companies here to continue to use, homegrown chips in order to try to quit NVIDIA.”at 11:32

• Ben Reitzes · Melius ResearchNeutral

  Nvidia's China-linked sales are tiny, far below what critics speculate; not material to revenue.

  Reitzes argues China exposure is de minimis. Nvidia said last quarter that China was less than 1% of its data center business, and Reitzes says he has to take the company's word for it. He concedes speculation that unauthorized Singapore-based pass-through buyers make China sales bigger, but says the figure given to the Street is far smaller than people assume.

  “In fact, they said that last quarter, it was less than 1% of the data center business.”at 13:44

• Ben Reitzes · Melius ResearchBullish

  Nvidia's CEO and leadership bench can keep the company running through the investigation; he backs Huang.

  Reitzes says he has to accept the board's finding of no wrongdoing for now and would change his view if secrets were shown to have leaked. He calls Huang nothing but a great leader in AI, notes many companies and Nvidia staff rely on him, and says the bench is stronger than people think and can keep the engine running. He wants management to show this on the November 17 report and to explain how it will run the company amid distractions. He does not want to speculate on Huang's future.

  “He's been nothing but a great leader within the AI world. ... I know he's got a strong bench. It's stronger than you guys might think, and there's a lot of folks there that can keep the engine running.”at 16:38

• Ben Reitzes · Melius ResearchBullish

  Nvidia is the cheapest name in the chip group, at about 11x next-year consensus earnings.

  Reitzes argues the stock is cheap. It trades at about 11 times consensus next-year earnings, probably lower on real numbers, and in single digits on 2028. He says management has orders for 70% growth next year and has identified land, power and shells to deliver it. He calls chips a great long-term place to be, and says analysts are struggling with the valuation even though the news on Huang is poor.

  “I will say this about NVIDIA. It's trading at 11 times consensus for next year and probably, you know, on the real numbers, less than that and a single digit multiple on '28.”at 18:58

• David Fitzgerald · Global and National Security Institute (University of South Florida)Uncertain

  Huang-linked Singapore and Malaysia shells routed Nvidia chips to China, a clear national security concern.

  Fitzgerald says the alleged Chinese operation set up companies in Singapore and Malaysia, which gave the alleged spy access to Nvidia's CEO. He says her firm Mega Speed had a Malaysian affiliate, SpeedMatrix, which became the largest purchaser of Nvidia chips in Southeast Asia, and that it looks like a shell set up right after Mega Speed. He says the chip purchases appear to have succeeded in getting Nvidia chips to China. Whether proprietary technology was also obtained is still unknown and will play out in the investigation.

  “SpeedMatrix was actually the largest purchaser of NVIDIA chips in Southeast Asia, which when you look at the company, it's really kind of a shell company that is established in Malaysia right after Mega Speed was established in Singapore.”at 34:18

• Nick Del Deo · MoffettNathansonBullish

  CoreWeave is a critical Nvidia partner offering an alternative to hyperscalers' own chips.

  Del Deo says Nvidia's current controversy is not necessarily going to derail CoreWeave, as long as Nvidia can produce and deliver the chips it has promised CoreWeave reliably. He argues the relationship runs the other way too: CoreWeave is a critical partner for Nvidia in standing up an alternative outlet for its chips versus hyperscalers, which have their own chip programs. That makes ongoing Nvidia support for CoreWeave important.

  “I do think that CoreWeave is a critical partner for NVIDIA... In terms of standing up an alternative outlet versus the hyperscalers that have their own chip programs. So that ongoing support is gonna be important.”at 44:32

CoreWeave

Across the shows: 88 speakers in other episodes, 25 bullish and 95 bearish calls, past 30 days

• Nick Del Deo · MoffettNathansonNeutral

  Texas policy changes add friction to CoreWeave's data center buildout but won't derail it.

  CoreWeave has a reasonably well-diversified data center buildout underway, though it mainly leases capacity rather than building it, so partners must construct the sites. Texas is the epicenter of AI compute buildout, and CoreWeave has a lot of exposure there. Del Deo expects the Texas policy changes the incoming governor may pursue, including possible changes to commissioners at the Texas Commission on Environmental Quality, to add friction: some projects may fall out and costs may rise. He still expects many Texas data centers to be built, and the governor-elect has said projects already underway would not be affected. He therefore describes the risk as sand in the gears rather than something likely to be too disruptive to CoreWeave's model over time.

  “The changes we can see in Texas will probably add sand to the gears. We'll probably see some projects fall out, add some cost. But ultimately, I think at the end of the day, we'll still see a lot of data centers constructed in Texas.”at 41:33

• Nick Del Deo · MoffettNathansonBearish

  CoreWeave's financing is acutely strained: unsecured parent debt yields about 16%, and it needs equity.

  CoreWeave has leaned heavily on debt since its inception to grow without diluting shareholders, and its capital intensity is high. Its debt stack is multilayered (secured debt, vendor financing, unsecured parent company debt and convertibles), and the problems are concentrated in the unsecured parent company debt. That debt yields about 16%, which Del Deo calls uncommon for a company with a roughly $30 billion market cap, so one of those facts must be wrong. Financing costs are clearly up and CoreWeave is largely shut out of the unsecured debt market, yet it needs tens of billions of dollars over the coming quarters. Del Deo expects leaning more on equity or equity-linked securities to be increasingly necessary over time.

  “Clearly, their financing costs are up. Their unsecured parent company debt is yielding approximately 16%... One of those two things is wrong... that financing challenge is pretty acute for them because they are largely shut out of the unsecured debt market today.”at 43:51

Berkshire Hathaway

Across the shows: 5 speakers in other episodes, 3 bullish and 0 bearish calls, past 30 days

• Michael Santoli · CNBCNeutral

  Berkshire's heavy buybacks suggest Greg Abel will be more generous returning cash despite high valuations.

  Berkshire spent nearly $10 billion buying back its own stock in the quarter, which Santoli calls a pretty heavy pace. He reads this as a sign that under Greg Abel the company is willing to be more generous with buybacks even with the stock at upper valuations. He notes the quarter's accounting adjustments on investments drove much of the weaker results, and that the stock is within 2% of its all-time high.

  “It shows that maybe under Greg Abel, they're willing to be a little more generous with the buybacks even with the stock at these upper valuations.”at 38:11

US stock market outlook

• Joe Amato · Neuberger Berman

  Cut equity risk in late September on rate hikes, rising long yields and peak earnings growth; now reassessing.

  Amato says Neuberger Berman pulled back on equity risk at the end of September for three reasons: a rate-hike cycle, long-end rates rising as capital demand pushed them up, and peak earnings growth, since 20-30% earnings growth cannot be sustained. The firm is now reassessing. The AI stocks have repriced meaningfully since June and September, and he expects time to jump back in because the underlying economy is healthy.

  “we felt that between a rate hike cycle, move up in the long end, and the demand for capital pushing long end rates up, and thirdly peak earnings growth... was a reason to pull back on your equity risk.”at 23:53

• Joe Amato · Neuberger Berman

  Beneath the flat index lie many opportunities; most S&P 500 stocks sit below their 12-month highs.

  Amato responds that AI names dominate index returns, but there are still lots of opportunities underneath the surface. He says about 60% of S&P 500 stocks are below their 12-month high, and about 20% are more than 20% below it. That creates many opportunities beneath an index that looks placid, and investors can still deliver good returns.

  “there's still lots of opportunities. You can still deliver good returns... I think the number is like 60% of the S and P five hundred stocks are below their twelve month high.”at 27:34

AI infrastructure & data centers

• Ben Reitzes · Melius Research

  Data center build-out will continue long term despite modest delays in places like Texas.

  Reitzes says the Thursday selloff on data center slowdown worries was overblown. Places like Texas may see modest delays but will still bet on data centers long term, provided companies doing the buildout meet the needs they set. He says the AI build-out will go on and that the current slowdown in sentiment and sticky points will be worked through.

  “I do feel like places like Texas, while there might be modest delays, do bet on data centers long term. Just do it in, quote, unquote, the right way”at 18:27

US inflation

• Joe Amato · Neuberger Berman

  AI is disinflationary long term, but the short-term supply-demand imbalance will lift core inflation.

  Amato says AI is disinflationary, arguably even deflationary, over the long term. In the short term, a large imbalance between supply and demand for AI build-out will push prices up and probably seep into core inflation. He says a slower build-out would give the Fed more flexibility, since the price pressure would ease without pushing prices harder.

  “AI is disinflationary, maybe even arguably deflationary, but in the short term, if you've got this huge, imbalance of supply demand, right, that's going to push up and probably, you know, seep into core inflation.”at 24:54

Enterprise AI adoption & AI software

• Joe Amato · Neuberger Berman

  Favor AI adopters over AI enablers; adopters' AI tools should lift margins and earnings.

  Amato says Neuberger's broadening theme avoids chasing AI enablers, whose stocks went vertical in the first half of the year. The opportunity is in companies that adopt AI tools. Adopters can gain margin enhancement and an earnings tailwind. He says non-AI capex is also showing strong signs, so the broader capex cycle is intact.

  “chase the sort of AI enablers that have been performing so well and whose stocks went vertical in the first six months of the year. Think about where those, you know, the adopters are going to embrace AI technology tools, not just AI, you know, create some margin enhancement, some tailwind to earnings”at 25:48

Oil & fuels

• Joe Amato · Neuberger Berman

  Oil prices unlikely to fall meaningfully; expect a range while the Iran situation is resolved.

  Amato says the Iran situation will take time to work through, even if the administration wants to extract itself, which is easier said than done. He does not expect oil prices to drop meaningfully from here. They will probably stay within a range, after the sharp drop from a big weekly slide on diplomatic hopes.

  “So we don't necessarily expect oil prices to drop meaningfully from here. They're going to probably stay within a range because this is going to take some time to work ourselves out of the situation in Iran.”at 26:48

US–China AI & chip race

• David Fitzgerald · Global and National Security Institute (University of South Florida)

  China's espionage has shifted toward economic and industrial theft in Silicon Valley and high-tech.

  Fitzgerald says China's intelligence services have used intimacy operations to gain access. Earlier, they targeted US government officials with classified access. Lately the focus has shifted to economic and industrial espionage, especially in Silicon Valley and other high-tech areas. He calls that the real national security concern, and says it is a major focus of his work.

  “lately, the focus has been on economic and industrial espionage, especially in Silicon Valley and other areas of high-tech.”at 35:22