Michael Huber 
“My pathway led by confusion boats / mutiny from stern to bow.” That phrase, from Bob Dylan’s 1964 classic, “My Back Pages,” seeped into my head Friday afternoon, as I sought to reevaluate the role of tech in the Charitable Trust. We had just reviewed Eaton’s very good — though not excellent — quarterly results , and I was struck about how content I was with something I viewed as a big liability three weeks ago: that only one-fifth of this old-fashioned industrial company catered to data centers. And now, the electrical equipment provider is saved by having not that much data-center exposure when, only a few weeks ago, I wished the relationship had been four-fifths data center and one-fifth manufacturing reshoring. Confusion boats, sector mutiny from stern to bow. The contrast of what was wanted when the year began to what I want now is almost too hard to process. What I pledged allegiance to — Nvidia and Apple — are now just the old guard, hanging on as the dreaded “broadening” courses through the market. What is to become of this moment? Maybe it is worth considering, in the calm of a weekend, what has really happened, what the mutiny is all about. Why good stocks, as well as bad ones, went down last week. First, the election of a U.S. president who seems agnostic toward technology but may be agnostic one minute and then doctrinaire another — doctrinaire to a new, undefined, capricious ideology. When President Donald Trump sat down with Nvidia’s Jensen Huang, as he did on Friday, did he want to check on the CEO’s fealty given he was not at the inauguration and instead was in Asia, as always this time of year, for the traditional Lunar New Year celebration? Did he want to know about Jensen’s trip to Beijing, Shenzhen and Shanghai? Did he care? How much does Trump know about artificial intelligence? Who was at the meeting? Hardliners or Treasury Secretary Scott Bessent? Commerce Secretary Howard Lutnick? They may be knowledgeable, thoughtful dealmakers. Or was it just the president? The meeting was planned, but planned before the emergence of Chinese startup DeepSeek and its efficient AI model roiled Wall Street’s hot AI trade . Was it informational? Or was it punitive? Did Jensen want to talk about the absurd, last-minute Biden administration dictum that determined only 18 U.S. allies were friendly enough to get as many of Nvidia’s advanced AI chips as possible? Or did the topic change, and it just become a session about whether Nvidia was complicit in potentially allowing DeepSeek to access its best chips despite U.S. restrictions on them going to China? Did it matter that Jensen has complied with our rules at all times, or that Nvidia’s revenue tied to Singapore doesn’t suggest chips are being diverted into China? Did it matter that Jensen, after Tesla’s Elon Musk, is our nation’s greatest business person and has created incredible wealth for so many? So much we don’t know. So much we couldn’t find out. Confusion reigned, and so on Friday, the stock went from positive to negative to deeply negative in a matter of hours. After trading as high as $127.85 a share, the stock went on to close lower by 3.7%, at $120.07. A more than $7.50 swing in one session. Unlike the old days, it went the wrong direction. NVDA 1Y mountain Nvidia’s 12-month stock performance. Nvidia stock is in all the wrong hands. How much of that feverish reversal Friday could be traced to the game of roulette known as zero-days-to-expiration options ? Or all of the ETFs created to make even more money in the chaos of this stock that has done nothing since last June? King Jensen in reverse, a metaphor for the moment. A negative metaphor. Two, the tariffs. Were Trump’s tariff pledges responsible for the late day sell-off, one so powerful that it upended the extraordinary increase in Apple’s stock after the company reported revenue growth and gave a surprisingly sunny forecast ? A more than $9-per-share gain plummets to down more than $4, before settling lower by $1.59 apiece, at $236. A gigantic range for a company worth more than $3.5 trillion. Wrong direction. Was it the tariffs that caused Apple’s reversal? Was it the tariffs in conjunction with the S & P futures? Could they even have that much power? Yes, yes and yes. I thought of the tariffs as relatively painless and more the variety of, “We no longer tolerate you making so much money from us. The game must be evened out.” The confusion over Mexican trade, though, justifies selling for so many stocks. The Chinese and the Canadians, not so much. After the bell, Trump pointedly said he didn’t care about the market’s reaction, making a bad situation worse because the market might have shrugged it all off. It wasn’t as important until the president told us it was important but it didn’t matter to him. On Saturday, Trump made good on his pledges and imposed 25% tariffs on imports from Mexico and Canada, along with a 10% tariff on goods from China. Canadian Prime Minister Justin Trudeau announced retaliatory tariffs in response . A third reason for the mutiny, the “rotation.” We kept hearing about the rotation to midcap stocks or the rotation to value. In reality, there was no rotation. Just confusion. Something to talk about. Just like the much-ballyhooed small-cap rotation that never occurred last year, when the Russell 2000 dramatically underperformed the S & P 500. Still, when you hear this kind of talk, you can’t help but think you are in the wrong stocks, and your conviction is challenged when you are most weary. Four, the data-center downfall based on an outfit in DeepSeek that may be a brilliant Chinese government gambit to claim leadership in AI, or it may be something that makes Nvidia’s chips worth a fraction of what we thought they were worth. So much of this market depends on Nvidia and the data center denouement — that is, if this actually is the final act of a much-loved trade in recent years. We are losing faith in Nvidia because the stock did not mount a relief rally after Meta’s Mark Zuckerberg and Microsoft’s Satya Nadella on Wednesday night reaffirmed their plans to spend billions on the data center despite DeepSeek’s emergence, which presumably means many more orders for Nvidia chips. And yet Nvidia only eked out a 0.8% gain Thursday. It hurt the Nvidia case even more when Musk, in a disjointed explainer on Tesla’s earnings call Wednesday night, talked about the launch of its Cortex supercomputer and said it helped lead to improvements in the company’s self-driving car technology — but no mention was made that the Cortex is really just an agglomeration of Nvidia chips. And we can’t forget Oracle’s Larry Ellison and his dream to build thousands of data centers , again stocked with Nvidia chips. These are smart men who know technology. But in the coming days, what if Google parent Alphabet and Amazon break ranks and say they are backing off some AI spending, perhaps even hinting they’re changing their plans around Nvidia’s next-generation Blackwell lineup? Then what happens to Nvidia stock? Can you afford to own Nvidia for that moment when they play hardball and say they’re going to lean even further into developing their own chips? It’s a miserable gauntlet of Oracle, Meta, Tesla and Microsoft — all of which are onboard — and Google and Amazon, two question marks that could be devastating for the stock of Nvidia. Is it worth risking to be able to say you risked it? I’ve done that many times in my career, and it’s worked before. But maybe not this time, hence my written commentary on Thursday , which explained that wanting to own fewer Nvidia shares because the facts changed is not a violation of my “own it, don’t trade it” shibboleth. Do I really hang followers out to dry even as I want to sanctify “own, it don’t trade it” in a precarious moment? No, I do not. It is difficult when the CEO you are banking on and his team are silent because they’re in an earnings-related “quiet period,” and yet all we want to know is whether DeepSeek will obviate the need for Blackwell or make it more valuable. Oh, by the way, is Blackwell shipping in volume, enough to make the quarter? Or is a shortfall coming? A lot of ways to lose with this stock right now. And is the data-center thesis toast when we know that DeepSeek’s more efficient models may change the kind and quantity of computing facilities that need to be built? Will as much power be consumed? That could stop the greatest, most powerful secular trend — the great data-center buildout — right in its tracks. Does that send the money to Merck , Pfizer and Bristol Myers Squibb ? Novo Nordisk ? Eli Lilly ? All those companies report this week . Or does it send the money into cash? No matter what, I don’t see it sending the money to Nvidia’s stock without an acknowledgment of DeepSeek and a statement about how good it really is for Blackwell or even for the predecessor Hopper line of chips. Bottom line Any one of these four blockers could cause the market to fall. But to have four of them is so fraught that you have to believe the first half of Friday’s session, seemingly so bullish, was chimerical. The second half was so bearish as to leave us with doubt and fear. I kept hearing, “Got nothing for ya,” the send-off uttered by Jeff Probst at the end of so many challenges on “Survivor.” Not a lot of Survivors at the end of Survivor. Or at the end of Friday. In these circumstances, with the S & P Short Range Oscillator no longer overbought, at 3.3%, you couldn’t just dive in and be opportunistic about the moment not knowing what Monday will bring. We know some hotshot strategist will downgrade his outlook on the market in light of Trump’s anti-market behavior. Some analyst may conclude that Apple’s report wasn’t that good or else the stock would have rallied, or that Nvidia’s impact from DeepSeek is that bad or else they would have said something. Others may follow. Which brings me back to the confusion and the mutiny. I don’t want to dive in. I do wish I owned less Nvidia, but how do I own less without selling some? The paradox is painful. But the possibility of giving up so much of that gain — which, as I always say, isn’t a gain unless it is sold — simply because it’s been right not to sell seems foolhardy in the face of the challenge by the Chinese. Sell it and then buy it back lower if we see more weakness. That’s what I think this moment tells you to do. We will get through this one. We know that because there are so many people who tell us we won’t. I read the stories: Heed the bond market; the market is too narrow, too dependent on just a few stocks; the president is more anti-market after all; valuations are way too high; the economy too hot. Do any of those send systemic? Do any sound fatal? No. We just have to wait until the market gets hammered down to negative on the S & P Oscillator and all of the earnings have been digested. Things will sort themselves out. Pathways are not always led by confusion, and mutinies are always quelled. (Jim Cramer’s Charitable Trust is long NVDA, ETN, GOOGL, AMZN, META, MSFT, BMY and LLY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
“My pathway led by confusion boats / mutiny from stern to bow.”
That phrase, from Bob Dylan’s 1964 classic, “My Back Pages,” seeped into my head Friday afternoon, as I sought to reevaluate the role of tech in the Charitable Trust. We had just reviewed Eaton’s very good — though not excellent — quarterly results, and I was struck about how content I was with something I viewed as a big liability three weeks ago: that only one-fifth of this old-fashioned industrial company catered to data centers. And now, the electrical equipment provider is saved by having not that much data-center exposure when, only a few weeks ago, I wished the relationship had been four-fifths data center and one-fifth manufacturing reshoring.
