Elon Offers Jensen a Lifeline
Elon Extends Jensen a Lifeline
When we left you yesterday, it was merely Day Four of the Jensen Huang Honeypot Saga.
Nvidia’s share price was rebounding after a vicious two-day sell-off brought on by the revelation that its rock-star founder and CEO had an affair with a woman portrayed in the media as a Chinese spy. Whatever the final fallout would turn out to be, the initial shock had passed.
And then…
Then came word that Huang had another affair, this one with an underling. That was soon followed by word that NVDA’s board was looking good and hard at whether Huang should remain as CEO.
Seeing the writing on the wall, Huang resigned about a half hour before the U.S. market opened this morning.
Chief Financial Officer Colette Kress was named interim CEO. For all the hand-wringing in the media about how Huang had no succession plan, Kress is “the obvious candidate,” observes colleague Davis Wilson. “She’s been with the company since 2013, has prior experience at Cisco and Microsoft and has been a staple on Nvidia conference calls for years.”
With that, NVDA shares trade around $162 as we write this morning — down 31% from their record high six weeks ago, and no better than they were in June of last year.
It was on Oct. 29 that Paradigm trading pro Enrique Abeyta warned his Truth & Trends readers that Nvidia was setting up “to lose investors more money over the next three years than any stock in human history.”
He reinforced that point last Thursday during the Paradigm Shift Summit in Nashville — and the following day in a guest edition of this e-letter.
Now, you ask? “At last night’s lows, the stock had lost investors more than $1.9 trillion — easily the most ever.
“I said at some point over the next three YEARS… little did I know it would actually be three WEEKS.”
Meanwhile, Nvidia is no longer the biggest stock in the S&P 500. Apple has reclaimed the crown today.
If Huang has no future with Nvidia, he might have one with Elon Musk.
As rumors swirled late yesterday about Huang’s fate, here’s what turned up on Musk’s X platform.
Musk and Huang “have known each other for at least a decade,” says Bloomberg — “and both men joined U.S. President Donald Trump’s high-profile visit to China earlier this year. Musk previously expressed his admiration for Huang and said he expected to continue ordering chips from Nvidia.”
Tesla relies big-time on Nvidia’s GPUs to train AI models for both autonomous driving and robotics.
Meanwhile, the broader market continues to demonstrate resilience in the face of NVDA’s considerable woes.
Checking our screens, the S&P 500 is down about a third of a percent on the day — back below 7,600. The Nasdaq is down about two-thirds of a percent, a hair below 26,300. The Dow is flat. Not bad in light of NVDA being down 5.5%.
After being closed for the holiday, the bond market has reopened to a sell-off — prices down, yields up. The 10-year Treasury is back up to 5.07%, the highest in three weeks.
At least on this day, higher yields are translating to lower precious metals prices. Gold is down 3% and back below $3,900 while silver is down 3.5% and back under $50. Crypto can’t catch a break either, Bitcoin sinking toward $71,000 and Ethereum cracking under $2,000.
Three Carriers
When it comes to Iran, “Get ready for more fireworks and higher prices for gas, diesel and everything else as far as the eye can see,” Jim Rickards advised his Situation Report readers the day after Election Day.
Events of the last 24 hours bear out Jim’s warning.
The aircraft carrier USS Theodore Roosevelt is headed toward the Arabian Sea, on a mission to relieve the USS George Washington. Meanwhile the USS George H.W. Bush, also in the Arabian Sea, is set to head home to Norfolk, Virginia by year-end.
In other words, “it is almost certain that, by the end of 2026, the Roosevelt will remain as the only carrier deployed in the region,” tweets the military analyst Will Schryver. Thus, any new U.S.-Israeli attack on Iran would come “very soon, in the brief window when the U.S. Navy will have three carriers in the vicinity of the Persian Gulf.”
Iranian leaders say they’re ready — and this time they won’t content themselves with hitting U.S. bases in the Middle East.
“If the Americans make a mistake and attack us,” says Mohsen Rezaei, head of Iran’s Supreme National Security Council, “we will not content ourselves with targeting nearby bases, but will strike all nearby bases, and we will also target distant American bases.”
That could mean American bases in Europe, Rezaei tells the Al Mayadeen outlet: “If American aircraft take off from an American military base, even one located in a European country or some other distant region, to bomb Iran, we will strike those bases as well.”
That might be mere bluster were it not for Rezaei’s claim that Iran’s “defensive and offensive capabilities are much greater now than they were on the first day of the war.”
We know that in the early days of the war, Tehran fired a couple of missiles toward the U.S. base on Diego Garcia — in the Indian Ocean, about 2,500 miles away.
“Two missiles make a demonstration, not a campaign,” writes former CIA officer Larry Johnson. “The comforting assumption in Washington is that Iran’s intermediate-range force is a handful of prototypes. If Rezaei means what he says, that assumption has expired.”
In which case, even U.S. bases in Germany and the U.K. are now in range.
That said, “Iran doesn’t have to hit anything in Europe. It only has to make European governments believe it can. Each capital that says no to Washington shrinks the U.S. bomber campaign back to the Gulf bases, which Iran has already shown it can reach with ease.”
None of this is priced into U.S. oil futures this morning. They sit a hair below $87, on the low end of their trading range going back to Labor Day.
IBM: AI Winner… or Casualty?
IBM may be one of the few companies that loses whether the AI boom keeps rolling or falls apart.
That's the case Zach Scheidt made in a Nov. 5 alert to The Income Alliance subscribers.
If companies keep pouring money into AI, tech budgets shift away from IBM's traditional businesses. IBM warned in July that AI spending was hurting its established operations, and its shares plunged more than 25%. If AI enthusiasm cools instead, the stock loses the premium investors have assigned to its own AI prospects.
“Either way, IBM looks like it loses,” Zach wrote.
IBM plunged more than 25% in July on mainframe weakness. On Oct. 21, it beat earnings expectations, and the shares still fell. Analysts have been cutting estimates. Zach sees the recent rebound running into resistance and stalling.
Zach owns in-the-money IBM puts in the Income Alliance portfolio. We’ll restrict the strike price and entry price to his paying subscribers.
At the same time, James Altucher sees a different IBM.
In July, James argued Wall Street was wrong about mainframes. These machines handle tens of thousands of transactions per second, around the clock. Forty-five of the world's 50 largest banks and two-thirds of the Fortune 500 rely on them.
Replacing a mainframe is no small undertaking. A bank that processes millions of transactions every day isn't eager to find out what happens when its replacement system fails.
The bigger opportunity, James says, is consulting.
Companies are spending billions on AI equipment, only to discover that much of the information they need is buried in aging software and databases that don't talk to each other. IBM's teams help companies put that information to work. When a bank or insurance company needs help with its most important systems, IBM is already a familiar name.
James made a similar call in 2007: “The last time Wall Street was this wrong about IBM, the stock outperformed the S&P 500 by 11.5X within five years.”
Zach is betting on another decline. James is willing to wait for IBM's AI consulting business to pay off.
Both can be right. A solid business isn't always a buy at today's price.
Security Theater, PreCheck Edition
And now a 5 Bullets travel alert: TSA PreCheck is no longer a guarantee you’ll avoid body scanners at the airport.
Your editor learned this the hard way coming home last Friday from the Paradigm Shift Summit in Nashville. The PreCheck line split in several directions — some with a metal detector, others with a body scanner.
On principle I refuse to go through the body scanners — or as they were dubbed years ago in some corners of the internet, nude-o-scopes. Until I got PreCheck in 2021, I always opted out and chose the patdown as the lesser of two evils.
Before I realized what had happened, and much to my irritation… I wound up in a body scanner line. And so I opted out and went through the patdown ritual, my vetted PreCheck status notwithstanding.
Apparently this is brand-new — a pilot program introduced last month at seven airports which at the time were not named. I can confirm Nashville International is one of them.
Combined with other measures such as less strict scrutiny of carry-ons, the aim is to double the number of passengers each PreCheck lane can handle. As the Grok AI engine summarizes, “PreCheck lines have become crowded due to the program’s popularity, so TSA is betting that these tech upgrades will preserve (or improve) the expedited experience while handling higher volumes.”
Yeah, whatever. I refuse. If you have PreCheck and the nude-o-scopes offend you, do likewise.
Demand a pat-down. Monkey-wrench the system.
It’s the least that freedom-minded Americans can do after 25 years of worthless security theater.
“To the editorial board at Paradigm Press,” begins a very serious mailbag entry…
“I find Gonigam’s use of a static meme of Jensen’s wife crying following the news Jensen had an affair incredibly offensive, misogynistic and tone-deaf. If this type of content clears editorial review, assuming any review in the first place, please raise your standards.
“I am not sure how many women you have on staff let alone in a leadership or spokesperson role. It seems few given all your emails, videos and statements are always from men.
“Please improve and limit such offensive and skewed content in your outreach and communications.”
Dave responds: This is a serious allegation — if it were true.
I had to spend a couple of minutes racking my brain, trying to figure out what in the world the reader was talking about. I’m not above a cheap laugh now and then — but not at the expense of someone experiencing the deep pain of infidelity as Lori Huang surely is.
And then it hit me. The reader objected to my use of a darkly humorous tweet during a brief mention of Nvidia in Tuesday’s edition.
And yes, it would be thoroughly objectionable if the woman depicted there was actually Jensen Huang’s wife. But it’s not!! It doesn’t even… remotely… look like her, for crying out loud!
I went and did further research in the cause of clearing my good name. The image is drawn from a commonly used social-media GIF called “crying girl dancing.” It’s been around since at least 2019.
Just for reference, here’s the original, in full motion. And here’s what Lori Huang looks like. And in the context of that tweet, the crying was about NVDA’s share price. It had nothing to do with Lori Huang!
I don’t mind owning up to something I actually did wrong. But c’mon!
On one level I guess I’m not surprised. It’s a Fourth Turning. Everyone is VERY SERIOUS. Everyone has a hair-trigger.
Except us Gen-Xers. We hail from a “Nomad” generation. We don’t get what the generations before and after us are so worked up about all the time. We just want to have a drink or smoke a bowl and be left alone. (And we marvel at how the boomers are so angry and the kiddos so puritanical. Heh…)
