US stocks are pulling back from all-time highs as we kick off a trading week.
Intel spiking over 20% last week as Nvidia bets big on a partnership with the company.
Nvidia taking a $5 billion stake in Intel at over $23 a share.
Now the deal could help Intel boost its competitiveness, especially by integrating Nvidia GPU technology with its chips.
Meanwhile, while Nvidia gains greater access to Intel's extensive business ecosystem.
And Cracker Barrel cracking under pressure, the classic American chain down 20% over the last month amid controversy from its rebrand efforts which the company has walked back.
Joining me to weigh in this morning is Evilio Silvera, co-founder of Wall Street Media.
Evillo, good morning.
Thanks so much for joining us.
So AI Darling Nvidia's 4% ownership stake of Intel.
What does it mean for both companies?
Well, good morning, Remy.
It's great to be with you.
I don't know if you can hear me, but if we're talking Nvidia this morning, then we've got Friday afternoon.
We saw the $5 billion investment.
Intel's Foundry struggles are creating opportunities for competitors while Nvidia's AI dominance is facing sustainability questions as this.
It matures and Intel's manufacturing missteps have handed market share to brands like TSMC and Samsung and Nvidia is trading at 35 times forward earnings despite slowing AI infrastructure and growth rates.
And the irony here is that Nvidia's strategic investment in Intel reveals that even the king of AI chips understands.
Importance of foundry diversification, and that's a hedge that's both shrewd and telling, and smart money is rotating towards these diversified chip plays, but Nvidia, that diversification with Intel, that's exciting, you know, when your biggest competitor starts buying your stock, it's either a vote of confidence or a calculated bet on your recovery.
Either way, Intel's obituary has been written prematurely by Wall Street undertakers.
Well, I do want to move on to Cracker Barrel, which is down double digits over the past month, led largely by its initial decision to move away from its old timer logo.
The company also posting mixed 4th quarter earnings and expecting restaurant traffic to fall.
So how long does the bleeding continue for this name?
Well, Remy, I'm unable to hear you, but I'm hopeful that we're talking a little bit about what's happening in the food sector with Cracker Barrel and Darden, and we'll, if we want to talk Cracker Barrel for just a moment, it's really where comfort food is starting to meet uncomfortable numbers.
You know, traditional casual dining is facing a structural headwind as consumer spending shifts are going towards experiences over sit down meals.
And today I'm in Fort Wayne, Indiana with our friends at One Resource Group, and what They're hearing from clients and customers is how these dollars are being spent in the greater market is coming to change.
Look, rising labor costs, declining traffic, there's a margin squeeze that's happening here.
Same store sales dropping 3.1%.
Labor inflation continues, a combination that would challenge even the most nostalgic of comfort food empires like our friends at Cracker Barrel.
But you know, restaurant chains without dating differentiated concepts really in today's market.
Strong digital presence.
They're fighting yesterday's war and tomorrow's market, and convenience is pumping ambiance and it's the same thing that we'll see with players like Darden, where you've got a good news from a bad stock.
Finally, Villiers Garden restaurants, home to Olive Garden, falling on a slight EPS miss.
Now the restaurant chain seeing near 6% same store sales growth from Olive Garden and also hiking its sales outlook.
So what do you make of the pullback?
We want to talk about Dardin, which we were setting up in the last comment.
Even with positive guidance, they just can't overcome investor concerns about this consumer discretionary spending, as certain economic uncertainties still persists if you kind of look beyond the initial layers.
So you've got a higher sales outlook that's meeting skeptical investors that are now learning that restaurant guided.
If we look at the last few quarters, always proves optimistic, you know, 6.1% same store sales growth, and the market is still questioning the sustainability with these economic headwinds gathering strains.
You know, sometimes if the market sees around the corner better than the company's management can, and Darden's caution about the consumer might prove wiser than their confidence in their execution.
OK, Vilio, thank you so much for joining us and as always, thank you so much for your perspective and your insight.
