CNBC Halftime Report
2026-05-22 · Hosted by Scott Wapner · CNBC
Executive Summary
CNBC Halftime Report opened with the Nvidia earnings aftermath — revenues up 85% year-over-year, data center revenue nearly doubling, an $80 billion buyback and dividend increase, yet shares roughly flat after a pre-earnings run to $220 from $170 — and then pivoted to the SpaceX S1 details, with panelists divided on whether the $1.5-2 trillion valuation is investable at IPO. The show also covered a $2 billion government quantum investment (IBM best day since October, Regetti/D-Wave up 30%+), Walmart’s worst day since November 2023, Target’s encouraging traffic and same-store sales recovery, Morgan Stanley’s emergence as a “best in market” wealth management machine, Spotify’s investor day, and multiple portfolio moves from Bill Baruch including buys in Southern Copper, Texas Roadhouse, China Tech ETF, and intuitive surgical. President Trump postponed an AI executive order he “didn’t like certain aspects of,” a development that generated market commentary.
Key Stories & Changes
1. Nvidia Earnings: The Aftermath
Q2 FY27 revenue guide: ~$91 billion (± 2%); data center revenue nearly doubled year-over-year
CPU business projected at ~$20 billion, flagged as tertiary business becoming material
$80 billion share buyback authorized; dividend raised
Physical AI revenue (robotics): $9 billion — cited as “so positive for robotics”
Non-hyperscaler segment (enterprise, sovereign, AI labs): up 74% year-over-year
Hyperscaler revenue: up 115% year-over-year
$1 trillion Blackwell/Vera Ruben pipeline: calendar 2025-2027
Stock trading at ~18-22x forward earnings vs. ~34x historical average
China conceded: “zero dollars in the forecast coming from China” — Jensen Huang “largely conceded” market to Huawei
Josh Brown: stock goes to $250; would not sell at 18x forward with 83% projected earnings growth
Malcolm: company is “underpriced” long-term but near-term will “continue to stagnate” because it can no longer surprise to the upside; dividend increase a small signal of potential growth moderation
Stephanie Link: derivative play on AI ecosystem; buying Rockwell Automation and Teradyne (industrial names); industrial backlog growth up 34% year-over-year vs. historical average of 3-5%
Bill Baruch: stock above 205-210 is like the prior 170 support level; consolidation before next leg higher
2. SpaceX S1: Debate on Investability
2025 revenue: $18.7 billion (+33% YoY); Q1 2026 revenue: $4.7 billion; net loss: $4.3 billion in Q1
Long-term debt: $29 billion; IPO expected at $1.25-1.75 trillion valuation (north of most recent $1.25T private round but below $2T)
Ticker: SPCX; Nasdaq listing
Anthropic paying $1.25 billion per month through May 2029 for SpaceX compute
Retail investors to receive ~30% allocation
Josh Brown: “good luck, have fun” — can’t value it on financials (wasted 13 of any 15 minutes spent on financials); would buy a small position at a 30% post-IPO decline
Malcolm Ethridge: “No way I would be looking to buy this at IPO” — Starlink alone and SpaceX alone are interesting standalone businesses; orbital data centers are “probably 20 years off”; the multi-business bundling makes valuation impossible
Josh Brown (rebuttal): Elon can’t be counted out; Falcon 9 has taken 8,000 satellites into orbit vs. Amazon’s 200; Amazon is 5 years behind
Consensus: will pop on opening day; lock-up is rolling (selling begins within ~5 weeks)
3. Quantum Computing: Government Doubles Down
US government investing $2 billion in 9 quantum firms; taking equity stakes
IBM: best day since October; receiving largest portion; 75 quantum computers in production; quantum TAM $1.3 trillion by 2035 per IBM
Regetti, D-Wave, Inflection: all up 30%+
Stephanie Link: views quantum as “AI on steroids”; thinks it “gets embraced by 2029-2030”; keeps IBM for AI book of business, not just quantum
IBM down 18% year-to-date even after today’s move; valuation cited as “pretty interesting”
Final trade (Malcolm): IBM
4. Walmart and Target: Retail Divergence
Walmart down 7% — worst day since November 2023; cautious consumer outlook
Stephanie Link: Bought more Target today; sold Gap and Shark Ninja to raise cash
Target traffic rose 4.4%; same-store sales up 5.6% — best vs. Walmart beat since Q1 2022
Wolf Research: “too early to tell if momentum holds” but maintained Outperform
Merger Monday: Dominion/NextEra deal — Malcolm sold Dominion because deal puts a lid at ~$72/share; prefers to redeploy capital
5. Spotify Exclusive Interview
Co-CEO Gustav Söderström (first interview since appointment): targets by 2030 — mid-teens revenue CAGR, 35-40% gross profit, 20%+ operating profit; long-term: 1 billion subscribers, $100 billion revenue, 40%+ gross profit
Biggest subscriber intake in Spotify history “last week” at 20th anniversary
Universal Music Group deal: AI licensing framework for remixes/covers of existing catalogs — first legal framework enabling existing creators to participate in AI
Concert ticket reservation: premium subscribers get tickets held before general sale (not purchased for them); uses listening data to identify true superfans
Stock up on the day but still down sharply from highs (~$500 vs. $785 52-week high)
Stephanie Link final trade: Service Now (up 8% on the week; down 3% today; services infrastructure resilient)
6. Morgan Stanley: Best in Class Wealth
Josh Brown: Morgan Stanley added to “best stocks in the market” list; wealth management pulling in $1.6 trillion in net new assets; doubled fee-based flows; 20 million client relationships; $7.4 trillion in wealth assets
Investment banking up 36% last quarter (best of group); trading up 26% (best of group); wealth NNA of 6% growing at 16%; ROTCE of 27.1%
50-day MA at $178 as key pivot; expects stock to $200
Best performing large bank over 15 years; only trails JP Morgan over very long term
7. Bill Baruch Portfolio Moves
Bought: China Tech ETF (CQQ) — China semiconductor/hardware focus; bet on Huawei ecosystem as Nvidia concedes China
Sold: EEM (30% Taiwan Semi / Samsung / SK Hynix — too US Tech-dependent)
Bought: Southern Copper — data center copper demand (25,000-50,000 tons/data center); copper futures hit record high last week
Bought: Texas Roadhouse — margins holding steady at 13% despite beef cost rise; operators have profit-share incentive; beef cost inflation may be peaking
Bought more: Intuitive Surgical (to be discussed)
Bought more: Allegris (to be discussed)
8. Trump Postpones AI Executive Order
President Trump postponed signing of AI executive order that would have implemented voluntary government review of advanced AI models before release
Said he “didn’t like certain aspects”; stated “we’re leading China on AI, we’re leading everybody, and I don’t want to do anything that’s going to get in the way of that lead”
Also: Iran’s demand for tolls on Strait of Hormuz; US “wants it open and free”; US will acquire Iran’s highly enriched uranium in any deal
Trends Identified
1. Nvidia’s Valuation Has Become Its Own Psychological Problem
The Halftime panel articulated clearly what drove the odd post-earnings reaction: at nearly $5 trillion market cap, Nvidia can no longer surprise investors to the upside, because the market pre-rallied on its customers’ earnings weeks before the report. Josh Brown’s framing — “think of it as an asset class, not a corporation” — is the most analytically useful: compute infrastructure priced as a perpetual dominant category generates a $500 and potentially $10 trillion destination value, regardless of quarterly gyrations. The consensus view is that the stock is cheap at 18x forward earnings with 83% earnings growth, but requires patience.
2. SpaceX Creates a Valuation Framework Crisis
The Halftime panel genuinely could not agree on how to approach SpaceX’s IPO — which itself is a remarkable signal. The company bundles so many optionalities (rockets, Starlink, data centers, AI, XAI, Cursor) that traditional DCF analysis is useless. Malcolm’s argument that you’d be “better off waiting for the lockup to expire and buying on a 30% pullback” reflects a rational framework — but only works if your mandate allows missing the opening pop that participants unanimously expect.
3. The Derivative Trade on AI Is Bigger Than Nvidia Itself
Stephanie Link’s pivot to Rockwell Automation, Teradyne, and Alcoa — all industrial names with 34% average backlog growth vs. historical 3-5% — illustrates that the biggest near-term actionable trade from Nvidia’s results isn’t buying Nvidia stock; it’s buying the physical infrastructure supply chain. Data centers require copper, power, real estate, and industrial automation equipment, and those supply chains have years of backlog visibility that doesn’t face Nvidia’s “priced for perfection” problem.
4. SaaS Sector at a Crossroads
Workday’s pop (discussed briefly) and Service Now’s performance suggest that enterprise software may be bifurcating between infrastructure plays (Workday for HR/finance workflows, Service Now for IT service management) and pure-play SaaS businesses that are genuinely vulnerable to AI displacement. The panel consensus: companies with deep workflow integration survive and may actually benefit from AI agents layered on top; pure-seat-license CRM-style businesses face the most existential pressure. —-
Sentiment Analysis
Overall Market Sentiment: Bullish on AI Infrastructure, Neutral to Cautious on Mega-Cap AI Stocks
The panel skewed bullish on the broader AI infrastructure ecosystem and derivative industrial plays, while remaining divided on whether Nvidia, SpaceX, or any individual mega-cap AI stock is a buy at current prices.
Risk Factors Highlighted
Nvidia cannot impress at current scale: Pattern of post-earnings underperformance vs. pre-rally despite exceptional fundamentals may persist; zero China revenue in forecast removes a key catalyst
SpaceX lock-up overhang: Rolling lock-up with initial selling starting within ~5 weeks creates persistent supply pressure on the stock post-IPO
SpaceX cursor deal uncertainty: $60 billion acquisition option with $1.5B termination fee; due diligence not completed; only ~1 month to decide
Trump AI executive order uncertainty: Postponement signals internal disagreement on AI regulation; potential for re-emergence with stricter terms
China Tech risk in ETF play: CQQ exposure to Chinese semiconductor companies faces geopolitical risk; regulatory crackdowns possible
Beef cost pressure on Texas Roadhouse: 13% margins holding but beef futures remain elevated; any margin miss would punish the stock
SaaS sector structural disruption: AI agents directly replacing seat-based software subscriptions; bifurcation between infrastructure plays and pure SaaS accelerating
Passive index forced buying: SpaceX’s fast-entry into Nasdaq 100 will force passive funds to sell existing positions; creates forced selling of profitable incumbents
This episode was covered in today’s The Market Signal — 2026-05-22, a cross-source synthesis of multiple podcast reports.