Why this tech investor says Jensen Huang and Elon Musk are the best CEOs

By Steve Goldstein

Critical information for the U.S. trading day

Happy Nvidia results day to all who observe, and as this social-media post suggests, congregants even have a meet-up point.

It would seem amiss to talk about anything other than Nvidia (NVDA) and AI on Wednesday. Gavin Baker, the chief investment officer at Atreides Management, is a huge fan of Nvidia CEO Jensen Huang, though, at least according to the firm's latest 13-F filing, not currently an investor in the company.

"Elon [Musk] and Jensen are, for sure, the two best CEOs I've ever seen, with Lisa Su right behind them at [Advanced Micro Devices]," he said on the Invest Like the Best podcast.

(Per the 13-F, Marvell Technology (MRVL) is his firm's top holding; AMD (AMD) is the firm's number-three holding, and Musk's Tesla's (TSLA) is number eight.)

What ties Huang and Musk together is their willingness to work on the main problems at their companies and their willingness to hear bad news. "At those companies, if there's bad news, it must immediately go to them. And that's very differentiating. No hierarchy," said Baker.

The investor said the biggest disruption in our lifetimes will be the combination of AI with robotics. "The one thing I would say that Elon and Jensen profoundly agree on publicly is that humanoid robots are the future, not the specialized robots," said Baker.

"And the reason is just, of course, a specialized robot could be better than a humanoid robot at any given task, but the humanoid robot could do any task that a human can, the world is optimized for humans, and there are massive scale efficiencies in manufacturing. It's almost like humanoid robots are going to be to the field of robotics as GPT was to AI. GPT was a generalizable type of AI, and these humanoid robots are going to be a generalizable form of robotics," he said.

First, however, there needs to be a new generation of Nvidia chips. "The Blackwell delay plays into this," said Baker of the reported difficulty Nvidia is having with its next-generation offering. "It's really, really hard to create what's called a coherent trading cluster of tens and thousands of [graphics processing units], and coherent just means each GPU, we could say, knows what the other is thinking. Technically, it's more like they have a shared memory space. And that cluster has to be coherent to train."

After Blackwell is available, there will be up to 300,000 GPUs in a cluster, he says. "And that is going to be a massive step function change and then that's where you can get maybe a GPT-5, 5.5, 6 class model," he said.

At that point, Baker asks, what will be the point of content producers and owners? "What's the value of Netflix in a world where I could say I want to watch a mashup of Star Trek and Star Wars tonight? Search might just go away and be replaced by agents. It's important to have a lot of humility about this," he said.

The market

After another record day for the Dow Jones Industrial Average DJIA, U.S. stock futures (ES00) (NQ00) wavered between small losses and gains. Oil (CL00) was sliding again.

   Key asset performance                                                Last       5d      1m      YTD     1y 
   S&P 500                                                              5625.8     0.51%   3.48%   17.95%  25.08% 
   Nasdaq Composite                                                     17,754.82  -0.35%  3.54%   18.28%  27.33% 
   10-year Treasury                                                     3.823      1.80    -21.20  -5.79   -29.00 
   Gold                                                                 2542       -0.32%  1.95%   22.70%  29.01% 
   Oil                                                                  74.62      3.73%   -5.10%  4.61%   -8.68% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

The Nvidia results come after the close. Expectations are for adjusted earnings of 65 cents a share on revenue of $28.7 billion.

Also after the close, Salesforce (CRM), CrowdStrike (CRWD) and HP (HPQ) report financials.

Super Micro Computer (SMCI) said it was delaying its annual report, a day after a short-selling research firm alleged accounting issues and undisclosed related-party transactions.

Shares of Nordstrom (JWN) rose after the department-store chain nudged the low end of its full-year sales outlook higher.

Calvin Klein parent company PVH (PVH) saw its stock drop after saying there's a challenging environment in China and Australia.

Foot Locker (FL) also saw its stock drop as the athletic apparel retailer announced store closures in Asia and Europe.

The Treasury will publish the results of a $70 billion auction of 5-year notes at 1:00 p.m.

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Top tickers

Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.

   Ticker  Security name 
   NVDA    Nvidia 
   TSLA    Tesla 
   GME     GameStop 
   HOLO    MicroCloud Hologram 
   TSM     Taiwan Semiconductor Manufacturing 
   AAPL    Apple 
   SMCI    Super Micro Computing 
   NIO     Nio 
   AMC     AMC Entertainment 
   AMD     Advanced Micro Devices 

The chart

Bank of America produced this data on seasonality, not just by month but by what period of the month. The first 10 days of September in a presidential year are typically rough. The good news is that closer to Halloween, the backdrop typically becomes more favorable.

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-Steve Goldstein

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08-28-24 0921ET

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