Scott Wapner (2:58)

You know what's bananas br the intraday low on the Nasdaq from the so called Liberation day whatever was 14,784. Let's just show the NASDAQ now. I mean you just have to see the numbers to fully process it. We're all, we'll call it 23,000 in six months from the low of 147 to 23.

Steve Weiss (3:27)

Yeah, I mean I think it tells investors one thing is, is you don't want to interrupt as Charlie Munger said so brilliantly, you don't want to interrupt the power of compounding if you don't have to. And I think that people that got shaken out of the market once again have that tough decision of when do I get back in. And I think to Joe's point the semis are definitely leading but there's just been this huge thrush higher money markets haven't come off the sidelines. I don't think they ever do and I don't think it really matters that that continues to build. And so I think this is going to be a really important Q3, Q3 earnings for the tech sector because I think that the one company they're all going to be talking about is the one private company OpenAI which doesn't have to report earnings. And so I just am so excited to hear about are they going to have their Oracle moment and just massively increase capex or is there going to be some sanity with the big hyperscalers and cloud service providers of still just like focusing on spending, free cash flow, still having strong margins. Are we going to see this start to melt up in terms of more CapEx spending?

Scott Wapner (4:38)

Yeah, I mean probably that. Probably the latter I think is a good bet. The Dow from 36 to 46k in 6 months over that period of time it says more about maybe where we, where we were than that where we've come to because you know, the market got so rattled by the extreme nature I think it's fair to say of, of the tariff rollout that day. And here we are, we fought our way back and now we're finding almost every Day where the news cycles dominated by these AI deals.

Jim Lebenthal (5:13)

Yeah. And there are some under, you know that, that are working but just don't get the headlines. Take a look at Cat today up over 4%, hitting another new all time high at 507. Take a look at where it was during the temperature, the, the tantrum it was about, it was under 300. So we're seeing these type of moves and you could argue while I has been very news linked and momentum linked that what story with Cat. So Cat to me is playing off lower interest rates, playing against increased onshoring, things like that so you can find ways to make money. But look, I said coming into this year, I probably said going into last year as well that I still want to be in big cap tech. And what you're seeing with AI is just a massive, massive adoption that is unrivaled by any of the point in history. So to me one of the best ways to play this because you're outpacing fundamental valuation. Fundamental valuation. Jyoti strategy is perfectly geared for this kind of environment, momentum strategy. So you got it, you got to pay attention to momentum for sure.

Scott Wapner (6:24)

We'll talk later about a number of names within the Jyoti that have just reached I think new highs. We'll give you all those names later. What's interesting is that investors have so much have their eyes on the prize, so to speak. That's AI spend the pot of gold at the end of the rainbow, lower rates, all of the benefits of that. I wonder if there's a level of complacency at all of the rise in gold which seems unabated up again today. We can show gold it's firmly above 4,000. Right. Yesterday, first time ever. 4,066 where it is. Ken Griffin talking about that. What the statement in that is, if you will, whether it's a conclusion that the US is less reliable. Dollar down, gold up, Bitcoin up. I mean that's out there. Market doesn't seem to care. Investors don't seem to care about much because the market continues to go up.

Bryn Talkington (7:19)

So to answer where you started, is there some complacency? Probably. However, Scott, I think we're going to go further and Joe touched on this when he said there's probably a melt up into the year end. We know and I think Joe, you said this, we know a lot of people did raise cash immediately after the Liberation Day announcement and they're probably, probably regretting it now. And if you're a professional money manager, you have to Catch up. And the only way to do that in a market like this is to put money to work. Now, regarding gold, which is on the, you know, on the minds of a lot of people. In fact, we were discussing it at Saturday Partners this morning. If you're not in it right now, I don't think you have to chase it because of what Joe and Steve and Bryn and I are saying right here. There are so many ways to make money in this market. Technology stocks are making a lot. In fact, if you look at an Oracle or an Nvidia or whatever, they're making at least as much if not more than gold. So it's not just gold, it's not just bitcoin. It is an everything rally. And if that reflects that inflation is coming on the back of lower interest rates, maybe interest rates that shouldn't be lowered as much as as they are going to be, so be it, assets are inflating. It's not just gold, it's not just bitcoin. It's stocks. It's a lot of things.

Jim Lebenthal (8:25)

And that's the critical point is that. And that's where the canary sitting firmly in the coal mine. Long, long distance from from where the mine opens, which is inflation. So inflation has sort of like reached a bottom because of, you know, still 1% above where the Fed wants it to be. And all signs are that it's going to accelerate. And I say all signs are because you hear companies talking more and more about it and that they can only take so many, so much in costs out and then suffer so much of the price issues rather than passing on to consumer because that's not sustainable. So I think you will see prices go up until the tariff wars are settled. And right now it doesn't look like there's an end. So inflation in my view is going to accelerate meaningfully.

Bryn Talkington (9:17)

But right now it's party on and we'll see. Steve, maybe it does, maybe it doesn't, I don't know. But I also think there are some esoteric reasons that need to be discussed. Discussed in terms of gold's rise. I happen to agree with you. I think you agree with me that gold is reflecting an inflationary environment, but it also could reflect some geopolitical things such as the fact that we did freeze Russian assets after Ukraine and there are countries out there that have moved their reserves from the US dollar to gold. We know that. I don't think the dollar is going to lose its reserve currency status simply because there's no replacement. But there are other as I said esoteric reasons. And this also applies to crypto as well, which some people look as a potential 21st century hedge. Just remember there are these wallets that are big wallets, whales that can any point in time liquidate. So you just have to be aware of that if you're going to use it as a hedge. It has to be a very long term.

Scott Wapner (10:04)

So the week has been dominated really, as we said, at the very top by in some respects, I mean, obviously AI deals, but in other respects, AI fears Ken Griffin Sugar high Dalio feels frothy to me, Even Paul Tudor Jones, who says the market's going a lot higher. This blow off top before you have an issue feels exactly like 99 Nvidia CEO Jensen Huang, he weighed in on that topic on Squawk this morning. Listen, what's going on in the world.

Joe Terranova (10:32)

Versus what happened in 2000 is just dramatically different. You know, back then, as you recall, there were pets.com, hospitals.com and all of the Internet companies combined was what, 34, $40 billion in size. If you look at the hyperscalers now, that's where the first tranche of AI infrastructure is building. If you look at the Hyperscalers at about 2 and a half trillion dollars of business that's already operating today.

Scott Wapner (11:03)

I mean, Bryn, that is a valid point. You do have the difference obviously that this time around in terms of the spending, it's the biggest companies in the world with the deepest and best and biggest balance sheets that are, that are doing the spending.

Steve Weiss (11:18)

Right. And today they are doing the spending off their free cash flow. And the free cash flow is very, very high with the exception of, as I said earlier, Oracle, which has gone negative free cash flow in their spending. But I think it feels very, there's elements to me more of 2021 where you see not the big hyperscalers, not the large cap, which multiples you can still justify. But it's like with Quantum stocks, which obviously have a small position in Ion Q or some of the drone stocks or even like a Robinhood and Palantir, which go up, you know, 5 to 5% a week. And so to me, you have to separate the two where there's a lot of froth in some of these extreme companies, like we'll say quantum or drone, etc. That the multiples really don't make sense versus the larger tech companies where the multiple multiples do make sense. And I think where you are going to see, you know, more cloud margin growth with a Google or a Microsoft and So I think you have to separate the two. I think what Paul Tudor Jones said, which I'd forgotten about, is In October of 99 to March of 2000 the NASDAQ doubled double, so doubled in six months. Okay, that's a different scenario than we have today. And I just think the market construct is different. But I think investors do need to be really careful with, with those, you know, smaller names that have no E, have no potential of an E and are trading at just these like nosebleed levels. Those could get cut in half so easily for a bazillion different reasons.

Scott Wapner (12:44)

Goldman's Peter Oppenheimer, he weighs in. He dismisses bubble talk. Valuations of tech are becoming stretched, he says, but not yet at levels consistent with historical bubbles. This is less about a bubble in tech and more about the general conditions of low interest rates, high global saving and an extended economic cycle. Michael Dell was on overtime, the 4 o' clock program yesterday where he weighed in. I'm sure at some point there will be too many data centers built but we don't see any sign of that. They raised their long term revenue and profit growth forecast. Brin, you own the stock which is up 125% in some six months and was up big yesterday on the announcement.

Steve Weiss (13:24)

Yeah, well, so you know this is a good sign of the time. They were projecting what 3 to 4% revenue growth and now 7 to 9% revenue growth. So not even double digits by the way. You know, Dell has this infrastructure services group where all the growth is coming from and they compete against Supermicro and I think they're doing a very good job of being really in pole position. And so once again Dell is a wonderful company. Michael Dells like a Larry Ellison and he's, he's made it through both sides from 2000. But when a company goes from growing 2 to 3% revenue to 7 to 9. We're not talking about high growth here, we're just talking about incrementally higher.

Scott Wapner (14:07)

On the data center idea, the power behind them, utilities fresh high. That's after a record close yesterday. Constellation got upgraded today to a buy from neutral Seaport is the firm that did it for $407 is the price target. That's your name.

Joe Terranova (14:21)

And they are going to be critically important in the solution for power generation. We've talked about that all year. Scott, I think it was remarkably comforting to hear from Jensen Huang about what he is doing in the boardroom, what he is seeing in the AI factories themselves. To me that's way more Powerful than with all due respect, Ken Griffin, Ray Dalio and Paul, who are speculators and investors like each of the three of us are talking based on history and their intuition. That's distinctly different. And I think that's where you have to listen to Jensen Huang more than anyone else. I think you also have to understand that the administration is right alongside the tech industry in not so much allowing but supporting supporting the build out of this innovation. Let's remember 15% potentially of chip sales in video AMD going back to the government, the stake that they've taken in Intel. So that almost is a clear path. Does it become troubling at some point in 2026? It probably does and that leads to a long awaited correction in the market. But it doesn't signal a bubble.

Scott Wapner (15:33)

Okay, Jim's listening to Jensen, Jensen Wong because remember there was that report about 24 hours ago right as we were coming on the air yesterday about these weak margins for Oracle. It was an information report for renting out Nvidia chips. The stock was down about 2 1/2% yesterday. It's rebounding a bit now. Jensen Huang also was a guest yesterday with Jim Cramer for his investing club meeting and he defended that name. Listen to what he had to say. Actually we don't have that sound. So he said when you first ramp up a new technology there's every possibility that you might not make money in the beginning but over the life of the system they'll be wonderfully profitable. So Jim believes that because Jim bought more Oracle.

Bryn Talkington (16:17)

I do, I did. And my thought process here is it has been in a little multi week downtrend since that incredible meteoric rise after the last earnings report. So as it's been coming down, look, I believe in the name and I've been looking for the place at which to add it. Yesterday Scott, as you referred to, the stock was down over 5% but rallied back to be down only 2%. Now I'm going to make a very inexact comparison but if you go back to May, the Eddy Q comments about Alphabet and declining search that turned out not to be the case, at least as far as Alphabet's then subsequent quarter report said. And all I'm thinking about this is not everybody knows. I'm certainly not impugning Eddie Q. But but we don't know what this unsubstantiated rumor is, where it came from, if it's substantiated or not. And I think that the rumor, you're talking about, yesterday's rumor that the Margins on rent wasn't a rumor.

Scott Wapner (17:11)

What do you mean a rumor? It was a report.

Bryn Talkington (17:13)

Who did it come from?

Scott Wapner (17:14)

The information.

Bryn Talkington (17:15)

Who did it come from? Okay. It came from a news report that supposedly, supposedly they saw an internal document. It was not a release by Oracle.

Scott Wapner (17:23)

Well, that's not far different than a rumor.

Bryn Talkington (17:27)

It's not far different. It's not far different from a rumor. I mean it is not far different from a rumor.

Scott Wapner (17:32)

Seeing an internal document is not that far different from a rumor.

Bryn Talkington (17:36)

Look, here, here is what. Show me, show me the internal document. Show me a report from Oracle. Not you in particular, but one in general. It is unsubstantiated. I mean it's just an unsubstantiated report. It is not the same thing. And you know what, Look, I'm going to go back to what Eddie Cute said. He said something. The stock in this case Alphabet moved wildly down. It turned out just not to be the case. Now may, maybe Eddy Q will be turned out to be right later on, but all I'm saying is there is a lot of information coming out.

Scott Wapner (18:05)

What Eddie Q said was a factual statement too. The market made its own inference from that for what it might mean down the road. It's not like what he said wasn't true. He said for the first time ever they saw it. Okay, he didn't make it up.

Bryn Talkington (18:20)

I'm not saying about, well, exactly what I'm talking about. And I said I'm not impugning him, but what I'm saying is, to use your words, yes, there was an inference that Alphabets searched, volume was declining. That turned out not to be the case. And we saw that in the second quarter earnings report. What I'm saying is, and the reason I added to Oracle is there are going to be unsubstantiated reports like yesterday's. I like the way the stock clawed back and I see this as an.

Jim Lebenthal (18:46)

Opportunity to talking about, you know, basically a repayment on an investment taking a few years as if it's revolutionary. That's a primary principle of investing. Maybe not in stocks because we've gotten used to instant gratification, but when you make an investment in a piece of capital equipment, you always calculate what your payback period and it's true. Whether you're buying a linear generator that's looking to save you energy costs or whether you're putting solar on top of your house. What's the payback period? So that should not be alarming to Oracle investors that there's a payback period. As just someone says, okay, well, I.

Scott Wapner (19:29)

Mean we'll see, we'll see. Jim buys the stock again on a little bit of that weakness.

Jim Lebenthal (19:33)

Doesn't mean it's cheap though. I think it's very expensive for very flat line essentially flatline growth, you know, for the next couple.

Bryn Talkington (19:40)

It's expensive on current earnings if the earnings show the way they next year's earnings. Yeah, no, you're right, Steve. If you go two years out, it's 26 times. That's what your basis it on. You either believe that or you don't.

Scott Wapner (19:51)

Okay, then there's Xi. As David Faber first reported more than two weeks ago, denied at the time X doing another capital raise. It's $20 billion. After Nvidia and others boosted the round. The big takeaway, rather than talking about that specifically, it's is that Nvidia is chassam being looked at as the new first national bank of AI. Christina Parts and Evolos is taking a look at that. She joins us now. That was your, I think, insightful way of looking at this today.

Steve Weiss (20:26)

Yeah, that's how I called it. And I say that because Nvidia CEO like you said, Jensen really isn't backing down from his company's aggressive financing strategies in AI. So just this morning he defended Nvidia's role as both investor and supplier, even as he called out competitor AMD for trying somewhat similar tactics. AMD this week, as a reminder, offered OpenAI warrants for up to 10% of the company in exchange for chip purchases. Jensen Huang said, quote, I'm surprised they would give away 10% of the company before they even built it. It's clever, I guess. The comment really comes as Nvidia faces scrutiny over circular financing. CNBC has confirmed. Like you talked about, Scott, Nvidia is investing in elon Musk's X AI, which is raising $20 billion. Of that, 12 and a half billion will be debt used to buy Nvidia chips. Nvidia has also committed up to 100 billion to OpenAI. And when asked how OpenAI will fund it, Jensen Huang said bluntly, they don't have the money yet. So Nvidia is essentially becoming the preferred lender within the AI world, the AI bank. Nvidia has invested in over 100 AI companies. They do have a ventures branch while remaining their primary chip supplier. The strategy definitely helped Nvidia reach a $4.5 trillion market cap, making it the world's most valuable company. But now these questions remain about whether the company is starting to finance real Demand or create it.

Scott Wapner (21:45)

Christina. Thank you. Christina. Parts and Nobles. The other idea, and you mentioned this yesterday, is the amount of debt that is being used to finance a lot of this. The amount of debt tied to artificial intelligence has ballooned to 1.2 trillion, making it the largest segment in the investment grade market. According to JP Morgan, AI companies now make up 14% of the high grade market, surpassing US banks. And the analysts identified 75 companies across tech, utilities and cap goods that are closely tied to AI.

Joe Terranova (22:17)

So we had a conversation about this yesterday in the office because there's been really strong demand for this paper. You had a debt offering from Oracle last week of $15 billion. Got quickly gobbled up. So what is it about this that is distinctly different and not troubling to 1999? And I'm open to the other side of this argument, but one could make the argument that what's going on here with the circular financing right now is they're delivering tangible products, they're delivering actual chip chips, they're delivering actual customers. Were there tangible products in the circular financing of 1999? Not so much. So it was uniquely different type of circular financing environment. That doesn't mean there could be some trouble spots and stumbles along the way as we move through 2026 index. But again, I don't think it's applicable to make the comparison to 99 itself. Keeping in mind that there's no way, there's no way that Open Air achieves the profitability that they're expected to achieve by the end of the decade without utilizing debt. There's just not enough capital out there to fund that.

Scott Wapner (23:21)

Okay. In chip other chip news, AMD, Micron, Broadcom, nice gains today. Lam research target to 160 from 150 15. That's a reiteration of a buy at Goldman Sachs. You own that name to.

Joe Terranova (23:32)

I do. Lam Research, KLA Corp. And now finally, Jimmy, your Applied Materials is joining the party. We've got the green light on the momentum there. We don't own it in the etf, but it's had a very strong recovery recently. Kudos to you staying with it.

Jim Lebenthal (23:45)

Can you take a look at Taiwan Semi? Taiwan Semi just. I mean that stock continues to be explosive. They don't rest at all these stocks, they just keep going. Goldman and that's got to be troubling. Markets come down, they correct on excesses. So going back to the conversation we started with, you have to determine if there's nexus as there was with portfolio insurance. If we go back into 97 as we go into Internet in 2000, as we go into debt, housing debt, and you can keep going and going. So you have to calculate, are we at an excess right now? The movement in stocks seem to tell you that we are. But then you hear others like Jensen Huang, who I don't believe is just talking his own book, saying, we're not. So you got to ride. Well, you can still ride, but be aware that this could happen. But own the permanent compounders. They'll correct, but at least you won't have to worry about damaging the business models.

Joe Terranova (24:38)

You get out, you're out of applied material.

Bryn Talkington (24:40)

Did I smile?

Joe Terranova (24:44)

My goodness.

Bryn Talkington (24:45)

Okay, but one salient comment on that.

Jim Lebenthal (24:47)

I don't.

Bryn Talkington (24:47)

One salient comment, though. I mean, Oracle raising debt or anybody raising debt. These credit spreads are extraordinarily tight.

Jim Lebenthal (24:53)

Yeah.

Bryn Talkington (24:54)

If you're going to raise financing by debt, this is the time to do it. And frankly, if you're building physical plants like data centers, you want to, you want to use debt. It's a lower cost of capital than equity. You use equity in things like software because you don't have the cash flows relevant to pay it back.

Scott Wapner (25:10)

Let's hit Cyber CrowdStrike Palo up nicely. A record high today for Palo Alto brand. You own the bug Cyber etf. We focus on these names a lot. We haven't talked too much about them of late, but they are worthy of a mention today given the moves that you're seeing in the stocks.

Steve Weiss (25:26)

Yeah, it's nice to see another part of tech because clearly software is not going higher. Another part of tech outside of AI really participating in this rally. And I think we've all talked about, these are secular, secular winners, but cyclically. Cyclically they can be kind of tricky. And so it's nice to see this upward trend that, you know, over the last three to six months, not only bug, but the individual names, Palo CrowdStrike have started to participate in the market. Because what I don't like to see is like this very narrow market of just semis and I moving higher. I want to see other sectors within tech also participating because these companies have the margins and the revenue and the growth where. Where they should be participating in this market rally.

Scott Wapner (26:10)

Okay. All right, we'll take a quick break. When we come back, we're doing our calls of the day, including a big call on a struggling private equity name. We'll discuss next.

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Steve Weiss (27:32)

What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, Changing the Game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.

Scott Wapner (28:18)

All right, let's discuss KKR. Because the target today was raised to 170 from 167. They reiterate their outperform rating on the stock. It's a defense of it, if you will at Wolf Research, Bryn, you own it and I want you to opine on it. But they say that they continue to prefer private equity over credit while we still favor the PE geared alts. They mentioned kkr, TPG and Carlyle. Over credit, they discuss the concerns that are out there around credit quality with some of the bankruptcies that have been out there. They say while we're not comfortable painting all private credit with the same broad brush, we acknowledge that credit concerns are likely to persist over the near term. Against that backdrop, we're comfortable leaning into private equity geared names like the ones that I mentioned. What do you think is this group is certainly getting picked over a bit and obviously the bankruptcies and private credit are being discussed.

Steve Weiss (29:20)

Well, hold on. So we're talking about. Let's separate these two a minute. Just a second. On private credit, when you look at Tricolor, which I in First Brands, which I feel are being arrows pointing to private credit. Actually the banks, the publicly traded banks had the majority of the exposure to Tricolor and First Brands was more of a clo, which was actually in a lot of public publicly traded funds that invest in close the market as a whole. I think with private equity, the publicly traded stocks, because there have not been distributions. There's also concerns about job growth which these companies, the publicly traded private equity firms I think are really tied to the cyclicality of the economy. And so when there's concerns about that plus the lack of distributions, these names come down. I would argue that this is the time to be adding to these because KKR and I own also Apollo are growing fee related earnings in the double digits. They're still raising a ton of assets, I think about 18% growth rate. And so these are just like fee earning machines, whether it's 2 and 20 or what have you. So I would say buy the private equity publicly traded stocks versus buying private equity itself. And so I think it's a great time to be adding to these names on weakness as I did in May of this year when once again people got concerned about the economy. These names will sell off and long term, mid term I think they continue to do really well because of their strong AUM and fee related earnings growth.

Scott Wapner (30:49)

Joe, you have Apollo as well and.

Joe Terranova (30:51)

It'S not trading well. Apollo is not trading well. KKR is not trading well. Blackstone is not trading well. You can make an argument that maybe car, Carlyle and Evercore look the best of the five that I just mentioned. But you try and discover what is the challenge right now for them. And I do think to a certain extent in 2023, a lot of these names attracted a lot of inflows on the perception that private credit was a liquidity replacement for public credit at that point. And that truly was the case. In addition, Steve, you know this better than I. Private equity in that environment was attracting capital, private equity in the, in the spring while public markets were gathering inflows. On the private equity side, you saw capital actually going away. So there's, there's an inherent challenge right now. I think you pulled back the lens over the last five years, say okay, they look pretty good, but the near term there's some form of a cyclical challenge in front of them.

Scott Wapner (31:47)

What's up with this space in your mind?

Jim Lebenthal (31:50)

I think a few things. It's difficult to raise capital in this environment for private equity and has been for a long time. That's number one, number two, while the banks have talked about Goldman and Morgan have been willing to look forward to increasing deal flow, you still don't necessarily have that same look forward as they look to exit positions. So what has happened over the past five years so is they had continuation funds and what that means is I can't sell to the public markets, I can't sell to another buyer. So I'm going to ask investors to re up post my term, you know, when I'm supposed to give back capital in this. So you've got those legacy positions are still haunting them. I personally think they'll work through it over the next year or two. But right now or if the market gets way more optimistic and we see that deal flow, but right now I think it's kind of a tough landscape for them.

Scott Wapner (32:42)

Okay, coming up, chart of the day, big drop for one of Josh Brown's names. He's going to join us next with his playbook on that when we come back. It's Cybersecurity awareness month and LifeLock is here with tips to help protect your identity. Use strong passwords, set up multi factor authentication and report phishing scams. And for comprehensive identity protection, LifeLock is your best choice. LifeLock alerts you to suspicious uses of your personal information and also fixes identity theft, guaranteed or your money back. Stay smart, stay safe and stay protected.

Joe Terranova (33:19)

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Steve Weiss (33:25)

What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players, new episodes every Tuesday. Wherever you get your podcasts, we're back on Halftime report. I'm Julia Boorstin with your CNBC news update. British counterterrorism officials say the man who attacked a synagogue in Manchester, England, that led to the deaths of two Jewish worshipers last week claimed allegiance to the Islamic State in a phone call. Officials said the man made the call after he drove a car into pedestrians and attacked worshippers with a knife in the synagogue before being shot by police. Pope Leo told US bishops at a Vatican meeting today that they should address the president's immigration policies. According to Reuters. The bishop said the pope was, quote, very personally concerned about the matter. The pope has recently been ramping up his criticism of the policy policies in recent weeks. The Vatican has yet to respond to requests for comment. And the Senate confirmed former NFL star Herschel Walker is the U.S. ambassador to the Bahamas yesterday. He'll be the first ambassador to the Bahamas in nearly 15 years. Walker unsuccessfully ran for the Senate in 2022 as a Republican, losing to Democratic senator Raphael Warnock. Back over to you.

Scott Wapner (35:16)

Okay, Julia, thank you very much. That's Julia Boorstin. Shares of Joby sinking after the company said it's offering shares with an aggregate price of $500 million. Our chart of the day. Josh Brown owns it. He joins us now on the phone. I mean, this is a key stock and a key theme, I think you call it the low altitude economy. Right?

Jim Lebenthal (35:33)

Yeah.

Josh Brown (35:33)

So I'm an investor in Joby and Archer. Joby's down less than 8% on the day, which is fairly tame. The stock is actually higher than where they placed this offer and that's $16.85. So this reminds me of Tesla. The bears used to say, oh, Elon's running out of money. There's going to be a secondary. They're going to dilute you. They're going to dilute you. And then they would do a massive secondary and the stock would go up 20%. And the bears would be like, wait, I don't understand what just happened. What you have to understand with these companies that are re revenue in developmental stage of their business is that the fact that they can do a secondary is the bullish part. Look how fast that stock was taken down. It's $500 million worth of stock at a 9% discount to last night's close. They snapped it up like it was in a moose bush. And that's the bullish aspect. Look at the demand that's there to be invested in the low altitude economy. So I actually think it's great news. This is not selling insiders. This is money that's going to be used to build out the vertiport parts now that they've acquired the blade business and to continue to build the S4 EVTOL, which is going to be what this business is all about. You need a lot of money in order to do that. And that's where this capital raise is coming from. So I love it. And if the stock gets materially cheaper, as you know, I will continue to add.

Scott Wapner (37:00)

What, what's the other way you're playing this? Beyond, beyond this stock? There's another one, isn't there?

Josh Brown (37:05)

I look at this one as like the Uber of disguise. They want to be in the, in the taxi business along with military and emergency service applications. Archer I think of more like a Boeing. They actually want to make the Midnight Craft and sell it to other companies. I'm not sure which is going to be the winning strategy but they're the 1 and 2 numbers. 1 and 2 players. 1 of the things I want the viewers to understand and a little bit of inside baseball, there is a, there's an IPO coming a company called Beta which is going to be a very well capitalized, very respected player in this field. I think it was smart of Joby to get out ahead of that and raise money before that that news source of supply came on new shares for a new company in the space. So if you're a long term shareholder that's what you want to see. You want to see these companies take advantage of prevailing liquidity, go out there and raise the money that they need to complete the build out for full commercialization.

Scott Wapner (38:10)

You have something to say?

Joe Terranova (38:11)

Spoke to Josh about this when he mentioned these names, the fact that there potentially could be a equity raise. He discussed it. He didn't believe it was an impediment to investing. And and you have to look at what has happened now as a form of a clearing event. If you priced and position sized accordingly. You expected this and you're fine on the other side. Just ride out volatility of down 8% one day.

Scott Wapner (38:33)

Yeah Josh, thanks man. Appreciate you coming on calling in and discussing this drop in shares and what you think about the big picture. Josh Brown, we do have another committee move coming up. We will discuss next. Sam. Okay, welcome back. So the other day like two days ago.

Jim Lebenthal (39:15)

Yes.

Scott Wapner (39:16)

You said you're going to buy the xpi which yesterday updated our viewers and said that you did.

Joe Terranova (39:21)

Yes.

Scott Wapner (39:21)

Followed through on that. Now you're buying more.

Joe Terranova (39:23)

Yes.

Scott Wapner (39:24)

Already.

Joe Terranova (39:24)

Yes.

Scott Wapner (39:25)

Why?

Joe Terranova (39:25)

Because you buy high and you sell higher. In particular when you get a breakout, a multi year breakout, the November of 2024 high, we talked about that yesterday. The potential for the XPI to exceed that price level. In fact that's what is it has done this morning. So you add to the position, you don't step away from it. That's further validation that there's a lot of room to the upside that could take you back to the trading ranges of 2021.

Scott Wapner (39:49)

I'm not saying there's not but you can make that determination in 24 hours.

Joe Terranova (39:53)

When you get that type of a breakout. Yeah. You have that long standing 52 week high sitting there and the market takes it out. That's an automatic buy signal. And I think if you look at the price action today in the xpi, I think, you know, it would clearly represent that that's what a lot of people responded to that by doing Weiss today.

Scott Wapner (40:12)

Bank of America double upgrades health care to overweight. They were on an underweight call on that stock for two years. Jonathan Krinski, I think it was yesterday or the day before, said the turn in that space looks legit, looks different this time. What do we think here?

Jim Lebenthal (40:27)

I think it's purely based momentum, not fundamental fundamentals. I mean, there's going to be massive impact from so many different factors. And we were just discussing this internally as well where I think you are on the precipice of changes similar to what we saw in 99 with the Internet that will make current business models ineffective as it did with old tech. So I think you got to be very careful. Not that there aren't places to play here. There are. If the FDA ever gets Iraq regarding AI, you could really compress the time for bringing drugs to market. So that's one place. But as far as service companies, I think it's very difficult. Despite the move that we're seeing in UnitedHealth again today, a huge move. And you know, that's really, you know, the, the price target upgrade is really in response to what the stock's done, not what the fundamentals are because they've been in the quiet period now. I'll bet on Hemsley and I am Steve Hemsley, who's come back, who stepped away from CEO role, was chairman, now has come back to both roles. He's a ninja. He's going to get it right. But it doesn't mean that the stock is attractively priced here.

Joe Terranova (41:34)

Remember at the end of September I did buy Merck on that perceived breakout. That's been disappointing. I'll acknowledge that. That has not followed through. I've got to manage that. On the downside, probably would do. So the stock right now about 86.81, probably below 82 are probably going to have to admit a loss.

Scott Wapner (41:50)

All right, we bounce for a couple. We come back Santoli with his midday word. That's next. Mike Santoli at the desk, our senior markets commentator. I mean, this remains an AI deal powered market. Yeah, right. Isn't that how you're thinking about things today?

Joe Terranova (42:23)

Again, it's the thing that penalizes caution the most. That's one way I would put it. I mean, yesterday was the weakest of dips that we got right. We were watching all day. It looked a little fragile. Were they going to be able to pull it out? It ended up being less than a 4/10 of 1% decline in the S and P. And then. And yes, you just have this. The sheer brute force of the capital flowing in that direction. I think the one thing that is pretty impressive and notable is AMD's persistent follow through to the upside. Even yesterday when all the other chips had a little bit of a gut check, you know it's just I think that the promised revenue is so great relative to their current sales base that it's going to keep going.

Scott Wapner (43:00)

Well look at that.

Joe Terranova (43:01)

Yeah, yeah. Beyond that, you know, I guess I would say the consumer leverage stuff still is look great. You have to keep it on a shorter leash. Macro where you have a little bit of a vacuum but people are kind of geared up for for something like a stutter step in growth doesn't seem to matter terribly much right now. So you know, we'll see. I guess we're going to have to wait for almost maximum bullish positioning when you have a trend this strong to really get to that moment where you say okay, everybody's got to take a break.

Scott Wapner (43:32)

What's your take on gold? And those who are weighing in on.

Joe Terranova (43:36)

Just feels to me like the world decided that that's our preferred diversifier. People don't trust bonds to do what bonds always did. There's too much government debt in the world and now it's just feeding on itself. Now it feels momentum on a two year basis. Gold and the Mag 7 ETF are right neck and neck with each other. So it's almost like oh guess what those are macro immune massive pools of assets that we can just use as a diversifier against things we otherwise are exposed to in terms of macro risk.

Scott Wapner (44:07)

All right Mike, thanks. I'll see you on closing bell a little bit. Mike sent only coming up the committee's all time high club. We reveal the names next. All right. One of your investors, Stephen Weiss.

Joe Terranova (44:35)

Yes.

Scott Wapner (44:36)

Said this is a great time for the Jyoti at that time. I said there are a number of names hitting record highs that we'd get to later. Later's now. Doordash record high yesterday yesterday. Garmin record high yesterday. Ulta 52 week high yesterday. Cincinnati financial record high yesterday. Qantas Services and United Rentals.

Joe Terranova (44:56)

Two industrial names one financial three consumer discretionary. You could add upon that consumer staple Monster Beverage 52 week high today. WR Berkeley Financial 52E kind of day. So where my friend and longtime Jyoti investor began the show talking about there are other places talking about money. He's exactly right. Yes, the MAG7 and technology has been the dominant force in 2025, but there are other areas of the market and that's why it's a more healthy environment.

Scott Wapner (45:27)

He gives you a lot of headaches, but he. He showed you some love.

Joe Terranova (45:30)

Steve, Always sorry for him.

Jim Lebenthal (45:33)

Listen, you have no idea. First of all, you have no idea.

Scott Wapner (45:35)

I do. I do. So viewers, they know you well by now.

Jim Lebenthal (45:38)

Yeah, I mean, I just wouldn't look at as the beginning of a.

Scott Wapner (45:42)

Believe me, we don't. We don't. We'll do finals next. All right, three o' clock Eastern. Closing bell. Dan Greenhouse, Jonathan Krinski, Anastasia Amoroso. We got the open Loop Health CEO. It's an AI Clay in the heartland because they're based in Des Moines, Iowa. It's a really cool story and I hope you'll join us. So it's AI in ia. You get it? You see, I did that. Like that.

Joe Terranova (46:12)

That was really, really good.

Scott Wapner (46:14)

That was on the fly. I was on the fly, too. Proud of myself. Brin, your final trade is what?

Steve Weiss (46:20)

Mike? Microsoft. Everyone's focused on Oracle and OpenAI. But make no mistake, Azure is OpenAI's corporate poor cloud computing partner. I think they're going to crush earnings. And Amy Hood and Satya are the adults in the room in this AI race.

Scott Wapner (46:34)

All right, thank you very much, Farmer Jim on Holdings.

Bryn Talkington (46:38)

I think we all know the running shoes. I just recently reinitiated it right. At about this price. It's got some nice momentum here and the valuation is attractive.

Scott Wapner (46:45)

Man, we went the whole show without talking about cliffs up 9%. I'm sorry. I'm sorry, Steve. Netflix.

Jim Lebenthal (46:54)

Look, I think it's finally bottomed after the musk tweed after some concerns about Paramount acquisition streaming. So I think it's a good time.

Joe Terranova (47:02)

To buy Arista Networks.

Scott Wapner (47:03)

All right, good stuff. I'll see you on the belt. The exchange starts now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

Steve Weiss (47:19)

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of cnbc, NBC Univers, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy. But only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer It's Cybersecurity Awareness.

Scott Wapner (48:00)

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