Squawk on the Street SOTS 2nd Hour: The Inflation Debate, El-Erian’s Bull Call, & Nvidia: Buy, Sell, or Hold? 7/16/25
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Jul 16, 2025 Ben Reitzes, the Head of Technology Research at Melius, brings his insights on the tech sector, predicting that Nvidia could soon be the first company valued at $5 trillion. The conversation shifts to inflation's impact on corporate margins and the tech market's resilience amid economic uncertainties. Meanwhile, economist Mohamed El-Erian discusses potential Fed rate cuts sooner than anticipated. The podcast also touches on recent banking earnings and the legislative momentum for cryptocurrency in Congress.
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Tariffs Boost Treasury Without Spiking Inflation
- Tariffs have increased tariff revenue significantly without causing the expected surge in inflation or economic weakness.
- The U.S. Treasury benefits from $26.6 billion in tariff revenue in June, indicating the trade war has not hurt consumers as feared.
NVIDIA and AMD Gain from China Sales Resume
- NVIDIA's CEO demonstrated strong diplomatic skill resuming chip sales to China, benefiting both NVIDIA and AMD.
- AMD may capture 5-10% of AI inferencing market, adding billions in revenue, especially from China.
Leverage AI to Cut Costs and Grow
- Public and tech companies should leverage AI to reduce operating expenses and boost sales leverage.
- Expect a shift from seat-based software models to outcome-based models, favoring infrastructure software providers.