BNN - Thursday, May 23, 2024 - 01:00 p.m. (ET) - Segment #2

be thoughtful. These are people and they will act thoughtfully, so take a bit of time, but they will do it and they got the excess capital do it on other hand, there is an excess, a consent order and they can't buy anything in the united states. Remember, they got 25% excess capital and got a brand new ceo. He's got to get the stock up. He can't expand his U.S. business. Canadian business is going to be what it was going to do anyway. And he's got all excess capital, largely sitting in a company called charles schwab. He's going to sell shot trials. Bob trotz stock and buy back td stock. It's the simplest, easiest and smartest thing to do and that will force the stock up to 100 and change. So it sounds today you're getting any point, whatever percent dividend. That high-fiving that, you know, I apologizes thinking of another stock, but still pretty good perfectly it's, it's perfectly reasonable. Well, the other interest rates. >> And stock is cheap. And remember when you look at that, you're buying, if you. But if you look at the value of the stock today, the canadian bank and charles schwab. Equals the value of the stocks. You're getting U.S. bank, the 8th largest bank, united states and your pain, 0, 4, >> Okay, a there's a lot to unpack for, I guess the first main takeaways in your assessment, in worst case scenario, which is a big fine and you banned in the u.s., you still like the stock, you still like the option. I still like the we look at companies, we focus on companies, the value of companies and not the fickle stock numbers. And when you look at this company, as I said, value of the cane business value of charles schwab more is is more than it is a little bit more than the current price of the stock. You get a get the 8th largest bank in the united states for free. So it's a it's a late I want to bring up a downgrade on td and one of the key issues again, is related to am now. >> But that the expense growth as a result and they said it many times in the conference call their hiring. All these experts and now they're investing in their anti-money laundering practices. This means higher 2 years. And so the worry is that it's going to be even higher than what they're telling you. And so we get, it's just to run away. >> Focus on the 20, the 20% lake, excess capital don't waste your time worrying about 4 of the island for software engineers. Lt's put put the elephant and actually just look at the quarter and that that they deliver. And that's that's kind of what I here outside of that. Are they doing what they're supposed to medium? Baking was good b that the said it before make good U.S. bank is good. Well, it was good a capital markets, but that's only have. Is it fair to the problem? The biggest for us was was was not as bad as it could be. The U.S. very simple thing. They built the 8th largest bank in about in the united states in about 15 years. They have very strong deposit capabilities, low-cost liabilities. They have, however, do not have the assets. The asset side about balance sheet is is weak. Well, if the liability side and so that's their trick is what they have. That's what you're trying to do, always get get some assets on the door because they've already got chief liabilities. And that's the that's the focus on the on the U.S. side. And that think that, that that think that if they can do that, which is just just a few bargain. It is blocking packing into banking and maybe some acquisitions. Single be that the U.S. bank will be very profitable. What I think it's interesting to talk about this in the context of how all the other banks are doing royal moving towards all-time highs. Jp morgan towards all-time high. So that I feel like the penalty, of course for for td is. And the question is where does the growth come from, where is the growth from come from really asking that of jp morgan and wells just as long as they keep doing what they're doing. >> So why can't we say the same for td? Just keeps doing what it's doing my for sure. Can we own jp morgan? We've owned it since about $20 its end of the 200 bucks we 3 the jp morgan's a great company is run by probably the best single banker. Certainly generation probably forever and royals bit has been terrific. We also met you just exhausted are banking our ownership. Southern miss maul but but but td is, is a wonderful bank. It hit that no question about it. Did need a hurdle to and it's fighting its way through. It has been fighting its way through for a couple of years to say jump on the bandwagon. A negative at $75, okay. Instead of like if

you look at the charts of cheat, I charge much. But if you look at the chart of td and royal, they sort of went up the same. I think it's 2 years ago, they both pete right here and they both dropped 20%. Very td with 80 women with the whatever went to and the royals come back she forgot to go back up that actually gone down. Okay, why did it go down with them for the aml thing? Is that emily tell you find somebody who who can spell toronto dominion bank antell me that he's never heard of ammo. Okay, everybody knows that there is no information that this analyst who said that to sell now I don't know what the stock is going to do, but he's jumping on on, on, on a, a, on freight train that left the, the, the, the station so long ago, everybody seen it. The trick in the stock market is to see things that other people don't see what is not, what are people not seen today? The opportunity in td when this thing settles. Richard, thanks so much for your insight and your perspective. Important on a day like today, appreciated. >> That's richard fogler joining us with king west and company. We're going to take a quick break. When we come back. Nvidia pushing towards new record highs on the back. They pretty tremendous quarter. What next is there more to the party will talk about that when we come back. (Upbeat instumental music)Canadians are facing a newnormal with interest rat and investment options. The Capital Direct OneIncome Trust is in a growing asset class thatprovides stability and is income-generating forportfolios. Here from Capital Direct areEire Gorman and Aaron Narayan, great to see you again. Thank you for havingus back, Mark. Eire,how are interest rates impacting the Capital DirectOne Income Trust? It's really important tounderstand the timeline of the loans that make upthe income trust. These are fixed-term vehiclesthat don't have the volatilityof a variable product. That means we're less-vulnerable to interest rate changes for18-24 months. Aaron, what arethe pros and cons for the trust if interestrates go down? First off, we love stability. Looking forward, we believe interest rates willact in our favour. If rates go down then (Unclear)or now Cora drops which means the cost of capitalis actually cheaper. And what if interest ratesstay around these levels? Aaron: If interest ratescontinue to stay the same we continue to kick out similarreturns as we have been for our investors which makethem extremely happy. So the trust holdsresidential mortgages. Based on what you're seeinghow would you say Canadian homeowners are coping in thisnew interest rate environment? This is a good news story. Canadians arefinding ways to cope. Our mortgage investments andflexible lines of credit have allowed homeowners toconsolidate at a lower rate and continue todo the things they love while owning their own homes. As we said here, homeownershipis so important to Canadians and we've seen the choices thatthey have made to remain in this privileged category. And it's also important to notethat throughout this new normal we've kept our loaned valueat a very comfortable 52%. If advisors or investorsare interested how do they reach you? Yes, Portfolio Managers andFinancial Advisors can find us atincometrustone.com. And for direct investorsyou can call us anytime at 1-800-625-7747. Hello, you're watching draining down nn bloomberg. I'm amber kanwar. We are tracking shares of nvidia, one of our top trending trades at this hour. >> Hitting fresh all-time highs after its latest set of quarterly results blew the doors down. Sales growing way more than expected. The forecast for sales also increased more than expected. >> What happens next. What we've got. Dan morgan, senior portfolio manager at synovus trust is a shareholder. But perspective on the quarter. What was said on the conference call. Let's bring in ian king from bloomberg. There's always doubt. And can nvidia really deliver? And then pretty much every quarter recently, they have delivered. And then, you know, raise the bar even more. >> Yeah, I mean, track record at this point is pretty sensational. We've had, I think 2 quarters in the last 24. They've haven't actually beaten want their revenue estimate isn't recently. As you pointed out, we're not just beating expectations with them, raising the by even higher than already lofty expectations that wall street has when this company is now on a quarterly basis reporting revenue that is way above where it was on an annual basis. Just a couple of years ago and continues to to be talons and continues to raise the bar.

>> Now there were questions. I think people are looking anywhere, right? Where could we be wrong, where could they slip? There's questions about as they transition from selling they're hopper chip to their next generation blackwell about, you know, are we gong to see sales slip of hopper in anticipation of black, but what's the timing going to be? And they got a sense that on the call when he started to talk about the blackwell timing, that's when investors really took comfort that, you know, the big games of their latest chip could actually show up this year. >> You absolutely nailed it. I mean, one of the typical concerns in the semiconductor industry is when you've got a new product coming, you announce it and not kill fails of your existing stuff as people. So they get ready for the new thing. Jensen lying the ceo was asked is that the case? And he said absolutely not. Demand is still increasing for existing and guess what, we'll actually be getting revenue from the new stuff in the 4th quarter. So I asked and and of that you've gun to the heart of the matter. >> All right, thank you so much. That's ian king joining us from bloomberg. Let's get shareholder perspective with dan morgan, senior portfolio manager at synovus trust. I mean, the games take nvidia now year-to-date gains. The stock has already doubled. Is it possible, dan, that the party is just getting started >> Well, indication like ian was saying on this report pointed to continued growth. I mean, the things that really stood out to me were the growth in the data centre area, that was up 427% to 22.6 billion huge beat as a was mentioning the guidance going into the 2nd quarter. Consensus was a 26 and a half billion. So there doesn't really seem to be in. And right amber, think about nvidia has about 80% of the ai market. If you are a combined, let's aim microsoft, amazon and put them kind of all together with alphabet. They're expected to spend about 185 billion in capex this year alone. And most of that will be dedicated towards a iso. It seems like humans mentioning the bloc welcoming out, most likely in the 4th quarter. Have another ship product coming out added extra leg of growth. So really it's, it's like you said amber, this may be just kind of the beginning. I think that, you know, people look to okay, so it's going to be great. And 24. >> And people are looking to get comfortable around 2025 and 2026. We once all these chips are sold to the hyperscalers right? What happens next. Well, that's a good question, amber. They did bring that up in their press note. And on the conference call, where they are starting to see. >> You know, customer buying come from just not the big data centre companies right? Aws, azer gcp. You're starting to see it expand out into automotive and into other areas. So I think all a, I think starts to take off everyone now is kind of re-evaluating what they're doing in trying to see I can help them. Then that it only boys better for the likes of an nvidia because now they're selling chips, not just 2, you aws, an amazon, but they're selling chips to let's say tessler, some other company in another field that we didn't even think about would use ai in the past. So I see the customer base broadening as it as you mention, beyond just the hyper scales or data centre companies eventually you'll saturation point there. I I wonder about that point. He know that the demand will shift from the the hyperscalers to just everyday businesses. >> First, I mean, not everybody has the cash that amazon google facebook do to to buy and invest in the technology and what they just piggyback off of whatever amazon offers or whatever at google creates or microsoft. I mean, is the is the spending in the demand for enterprise going to be able to really pick up that both time from the tech companies. We bring up a good point. So just to for your viewers out there who think about how much these chips costs of. >> Hopper series the hopper. 100 is estimated to be about a $25,000 chip. When you're putting together these huge data servers, they can go up as high as 3 million dollars. The cost. The blackwell chip that's coming out. The grace blackwell 200, which is their highest and ship is expected to sell for around $70,000. So you bring up a good point, amber. And that is well, once you get beyond these huge capex intensive companies that have lots of money to throw at these ai products and build the saying out. Is there enough money with some of these other enterprise or even companies outside of technology that could afford this. And you're right, I

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