Steven Orr, CEO & founder of Quasar Markets, explains why Nvidia’s new partnership with Intel is such a strategic play.
Transcript:
CAROLINE WOODS: Joining me now, Steven Orr, founder and CEO of Quasar Markets. Steven, great to have you on.
STEVEN ORR: Thanks for having me.
CAROLINE WOODS: Let’s start with the news flow today. Steven, Nvidia betting on Intel taking that $5 billion stake, entering this collaboration with the chip maker. What are your thoughts on that?
STEVEN ORR: Yeah I think obviously it’s going to make the president very happy. I mean, we have now got 10% invested now as a country into Intel, and I think it fits the narrative of bringing everything back home. And when you look at Intel itself, it has been a great chip maker over many, many decades. And it’s faltered a little bit here. So I like the fact that Nvidia is making a home play here and bringing everything back home. I love this play. This is great. And you know, as rates come down that’s making money cheap making chips here. I think this is a great play and I think it’s going to play out in the stock too. I think you see it now. Yeah, jumping 30% But Intel could make an even bigger play here as we start to see. And I remember the days with Intel inside, right where you couldn’t even buy a computer without Intel in it. And I think this makes a big move when you’re looking at the next level of technology.
CAROLINE WOODS: And Nvidia saying, look, I trust Intel, so I like this play Intel, as you said, a big on this news. And Intel is actually up more than 50% year to date, very close to those 52 week highs. Would you be a buyer at these levels, Stephen.
STEVEN ORR: Ouch that’s a very hard question because quite frankly, you’re right. It’s up 50% I think some of that euphoria is now in it. I think some of the repricing of it look, it’s, when you look at the market cap of, of NVIDIA and look at the market cap of Intel, there’s a big discrepancy, right. And Intel $5 billion is really not a lot of money when you’re looking at a $4 trillion company right. So right now no I’m not I don’t think the valuation is a little rich for my blood right now.
CAROLINE WOODS: OK, but you’re upbeat overall on the upbeat on Intel. Not so upbeat on the economy though. The Fed of course cut interest rates. Yesterday I was taking a look at your notes and you seem pretty downbeat. You said, cutting rates doesn’t solve the structural cracks in the economy. What are those cracks, steven?
STEVEN ORR: Yeah you know, Caroline, when? About six months ago, I was calling for these cuts. I mean, I thought that the Fed was so far behind the curve, and it got worse and worse and worse. And I was like, I don’t understand why we’re not cutting these cracks were coming. Was talking about job losses coming in. And now we know that the numbers were wrong. So all of a sudden now another, you know, another crack in the economy. And when you saw the one thing that out of that Fed meeting that really I went, Oh my was the risk management cut. When Powell called it a risk management cut, I had to understand what that actually meant. Is he meaning there’s more coming down the pipe. Does that mean that well, we’re doing this to protect ourselves against these problems. And when you look at the other cracks in the economy, when you see people losing jobs, well, in the past, there’s been other jobs for them to go to. Now we’re not seeing that anymore. There’s not as many jobs we’re seeing. I also taking some of those jobs. We’re also seeing cracks in the economy with inflation. And we’re looking at something we have not seen. And I’ve been talking about it for over three months now. Is stagflation where inflation is still up, jobs are losses. That’s a very bad place to be. We’ve not seen that in a very long time, if not ever in the economy. And right now this is not a good place to be. But yet we are now seeing times where, where we could find some good stocks out there with, with this great positioning. But right now, I’m not seeing that the economy is not as good as this hopium that we’re seeing right now in the markets, markets making all time highs and people are losing their jobs. It doesn’t make any sense to me.
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