Huang gets the call

Nvidia CEO Jensen Huang was not on the list. When the White House released its delegation for the Beijing summit starting tomorrow, the roster included Tim Cook and Elon Musk among sixteen executives. Huang, whose company sits at the center of the most consequential chip export debate in decades, was conspicuously absent.

The initial omission was widely read as a signal that export policy would stay restrictive. Then, after two days of headlines about the snub, the president called Huang directly and asked him to join. Nvidia (NVDA) is up more than 2% premarket. Micron (MU) is up nearly 6%, and the Nasdaq is surging this morning, led by semiconductors.

What matters:

• Nvidia's China server revenue is currently at zero under export restrictions. Huang's presence at the summit puts a targeted relaxation on the table for the first time.

• The Senate is expected to vote today on Kevin Warsh as Fed chair. He was confirmed to the board 51-45 yesterday and inherits 3.8% headline CPI, the highest reading since May 2023.

• April PPI drops at 8:30 AM ET. Consensus calls for 0.5% month over month. After yesterday's CPI printed at 3.8% year over year, this is the second inflation read in 24 hours.

• Cisco (CSCO) and Alibaba (BABA) both report after the close today.

The zero is the story.

Before export restrictions, China accounted for roughly a quarter of Nvidia's data center revenue. That segment now generates north of $30 billion per quarter, which means the lost China business was worth billions a quarter at peak. Today the number is zero. Every dollar of potential China revenue sits entirely outside the current earnings model.

Huang has said publicly that the ban "largely backfired." His last-minute addition to the delegation signals the administration may be arriving at the same view. The summit is unlikely to produce a formal policy reversal, but Huang in the room puts chip access into a conversation that also covers rare earths, Iran, and tariff extensions.

The precedent exists. Late last year, H200 chips were approved for limited export to China, showing the framework for managed sales is already in place. The question is whether that framework expands, and Huang's presence changes the probability from negligible to meaningful.

The PHLX Semiconductor Index has surged 65% year to date, and this morning's premarket bid is pricing in a nonzero chance that some of that lost revenue returns. Nvidia's current valuation reflects aggressive growth assumptions, but it models zero from China. Any restoration, even partial and limited to older architectures, would be pure upside to estimates that include none of it.

That is a different kind of setup than most of this market offers. The typical high-multiple name is already priced for the best case. Nvidia is priced for a scenario that explicitly excludes one of its largest historical markets. Micron's premarket surge reflects the same logic applied to memory: if AI infrastructure demand in China can flow again, the entire semiconductor supply chain reprices.

One week ago, we flagged AMD's data center quarter.

AMD (AMD) reported 57% data center revenue growth on May 6, and Morgan Stanley responded by raising its price target to $360. Since then, AMD has held those gains through yesterday's 3.8% CPI selloff, while the Nasdaq dropped 0.71%.

When a semiconductor name absorbs a hot inflation print without losing ground, institutional conviction is behind the move. AMD is up 2% premarket this morning on the same Beijing tailwind.

Warsh takes the chair at the worst possible moment.

If the Senate confirms Kevin Warsh today, he replaces Jerome Powell on Friday with headline inflation at a three-year high and Brent crude around $107 a barrel. Rate-hike odds have jumped to 30% by year-end. His first FOMC meeting is in June, and every word of his opening statement will be dissected for any shift from the current hold.

The PPI at 8:30 either compounds yesterday's problem or offers the new chair a small reprieve. March PPI rose 0.5% month over month with a 1.6% advance in goods prices. If April matches that, the producer pipeline is still feeding into consumer inflation, and rate cuts stay off the table through summer.

For rate-sensitive investors, the sequencing matters. Powell's term ends Friday, Warsh's first public comments as chair could come as early as next week, and the June FOMC meeting is four weeks away. That is a narrow window for the market to reprice around a new central banker's stance in an inflation environment that keeps worsening.

That leaves a genuinely split tape. Chips are rallying on a Beijing catalyst that has nothing to do with interest rates. Rate-exposed sectors, from REITs to regional banks to dividend utilities, keep repricing on inflation that tightens financial conditions.

Both trades can work. But they pull portfolios in opposite directions.

After the close.

Cisco consensus sits at $15.56 billion in revenue and $1.04 in EPS. The number to watch is AI infrastructure orders, which hit $2.1 billion last quarter with management guiding above $5 billion for the full fiscal year. The stock is up 28% year to date, and options are pricing roughly a 10% move.

If those orders accelerate, it confirms that enterprise AI spending is broadening beyond the hyperscaler buildout. That would be the next leg of the AI infrastructure trade.

Alibaba consensus is near $36.3 billion in revenue and $0.90 in EPS. Adjusted EBITA in China commerce contracted 43% year over year last quarter, with AI spending and delivery subsidies compressing margins. Wall Street carries fourteen buy ratings with a mean target implying roughly 31% upside, but the earnings trajectory needs to inflect for that number to hold.

Cerebras is guiding its IPO above the $150-$160 range with 20x oversubscription and prices tomorrow at a valuation near $49 billion. SoftBank reports full-year results today, with investors watching for impairment risk on its cumulative OpenAI position. Applied Materials (AMAT) reports Thursday as the semiconductor equipment bellwether.

The S&P 500 closed Tuesday at 7,400.96, the Nasdaq at 26,088.20, and the Dow at 49,760.56. WTI is near $101 this morning. Gold is steady around $4,700.

See you tomorrow morning.