← Halftime Report
Halftime Report
Alphabet's Climb to a $4 Trillion Market Cap 11/25/25
00:47:20
Scott Wapner and the Investment Committee discuss the resurgence in tech and Alphabet's climb to a $4 Trillion market cap. Plus, the Committee shares their latest portfolio moves. And later, we hit the latest Calls of the Day and how to trade them. Investment Committee Disclosures
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Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. All right, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner, front and center. This is our surging Alphabet. The stock nearing 4 trillion in March market cap. It is a stunning turn of events over the past six months. We'll discuss and debate the whole AI trade with the investment committee. As always, joining me for the hour today, Joe Terranova, Stephanie Link, Brian Belsky and Josh Brown. We will check the markets. It is a Dow and small cap kind of day. NASDAQ is basically flat. But I'm telling you, the biggest story continues to be this move in Alphabet, which is why we're leading with it again today. Got to $3.98 trillion in market cap pre market. It needs today to get to 330, $31.48 to hit 4 trillion in market cap. Joe, I just asked our executive producer Kevin. This Stock has added $2 trillion in market cap since the Eddy Q sell off six months ago. Now I know Nvidia has had some unbelievable moves. $2 trillion in market cap added to this name in six months. That's unbelie.
- [02:29]
Joe Terranova
It's staggering. And if you think of what I keep talking towards, which is the return on investment related to AI, this was probably the one Mag7 name where you had the least confidence coming into 2025 that they actually would do what they're doing now, which is potentially have that strongest ROI on the on the air spend. So that dramatic reversal in sentiment is, is remarkable. It's a credit to Sundar Chai's strategy of a full stack approach. And now we're hearing about these tensor processing units which have really been in place for the better part of the last 12 years. Google has been developing them for quite a long time. But what does that allow them to do? Okay. You don't have standing in front of you the regulatory concerns that we had. At the beginning of the year. They introduced Gemini 3, which is being widely applauded. And there you go. Okay. Were able to defend against open AI. And now the unthinkable. They're actually have the ability to challenge in videos, GPU chips.
- [03:34]
Scott Wapner
Oh, I thought, I thought you're going to say the, the unthinkable that Berkshire added.
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Joe Terranova
Added 4.9 billion. Yeah.
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Josh Brown
By the way.
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Scott Wapner
But it's up 16%. Okay. Since that was revealed on November 17th. So you got the equivalent of the Good Housekeeping seal of approval from Berkshire Hathaway on Alphabet. And this stock has just been a freight train ever since. Brian, you own it as well. I just don't know that we've seen anything quite like this.
- [04:04]
Brian Belsky
No, I was trying to go through the math too. And you were talking to Kevin in terms of the $2 trillion ad. You know, we were very fortunate in April during the depths to double our position in Google just because we did not believe in the demise of Google due to ChatGPT and OpenAI. And you got to take a big picture. Think about this as well now with what's going on in terms of its potential business with Meta. Remember earlier in the year they talked about joint ventures and more and more work with Apple. These are really, really big strategic decisions that were brought on by some of their founders that came back into the business and helped them really derive where they're going in the next several years. And by far, it's our largest overweight in the Mag 7, number one, by far, it's our largest overweight in communication services. And then back to Berkshire. If you take a look at the cash positions alone and how Google is not only managing those, but investing that. And then per Joe's point, in terms of return on invested capital, those two things are major, major, major things that Berkshire has always looked at.
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Scott Wapner
I'm old enough to remember when Stephen sold Google, right, and bought Meta. Remember? Yes, remember.
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Stephanie Link
Yes, yes, yes.
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Scott Wapner
Now I'm wondering if we're gonna have a reversal. You're gonna sell Meta and buy Google.
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Stephanie Link
Are you nuts?
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Scott Wapner
Are you absolutely nuts? I mean, look at the direction of these stocks. Put up Meta. Yeah, take a look. Put up Meta versus Alphabet. Actually, over the last six months. Let's Just look at that for the sake of the conversation because I'm just bringing it up of course, because you know, Meta, everybody's all bulled up on Meta after their worst year ever. Then they had their best year ever. And now I think we have a much more idiosyncratic picture as it relates to the hyperscalers who is perceived to be well ahead of the pack, who has more questions about it and where. 6 months ago Alphabet seemed to have all the questions about it. We are asking those questions of Meta now.
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Stephanie Link
So we're supposed to buy low and sell high. So those guys that actually bought more Google, Alphabet, congratulations to both of you. I think Josh also owns it, so congratulations, that's great. But I think that there's tremendous value in Metta, especially after the 21% correction, especially since the earnings estimates actually went higher despite the concerns about higher expenses. So it's now trading at 17 times forward estimates. You know, I've been adding to it on the decline because they are seeing the ROI just like you just mentioned.
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Brian Belsky
Yep.
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Stephanie Link
In a different way they're seeing better double digit impression growth 14% because of AI. They're seeing time spent increase 5% because of a I. And they get, they're getting pricing power and oh by the way, they have a $31 billion buyback program which I'm sure they're in there down here at least I'm hopeful. And I do like that they are using Broadcom's custom chips. They might use Speculation, they might use Google's custom chips. They're setting themselves up to be in the game and no one's given them credit because they don't have a cloud business. That to me is crazy speak. And so I think we're going to make a lot of money in Metta over time. Just have to be patient because I don't see a near term catalyst. But the stock is awfully cheap for the growth that you're getting. What by the way, 20% earnings growth, 26% revenue growth. That's pretty impressive.
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Scott Wapner
That's the problem, I guess Josh, is what Steph just said. At least it relates to Metta. I don't see a near term catalyst because all of these other names seem to have near term catalysts and they're capitalizing on them like Google Alphabet, which according to the information now Meta is considering spending billions of dollars on Google's TPUs. They currently rely on Nvidia's GPUs. So this is another near term catalyst for this name. That name being Alphabet, which you don't own by the way.
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Josh Brown
Yeah, well, the whole world owns Alphabet. It's like the fourth largest company in every major index. So the question is, are you overweight, Alphabet, or not? And I screwed up with this name. I sold it closer to 200 and I did believe that chat, CBT usage and Claude and a lot of enterprise AI products would be a threat to search and I think they still might be that. That doesn't matter because what Google has done beautifully is respond to the challenge around its core business with new product. And that new product is working. And it's not just Gemini 3. Yesterday I was on the show, we talked about Nano Banana, which is their answer to Sora. Like they're going to have best in class products in every major category of AI. And we weren't sure that that would be the case as recently as six to nine months ago. So for the people who made the bet that they would, those people are getting paid right now. I think the lesson though for me and for everybody else is how easily a narrative can form based on share price action, whether it's up or down, and then how quickly that narrative could not just fade away, but completely reverse. Think about the storylines that we've seen this year around AI that have come gone and then completely went the other direction. In the early going, Metal was the most aggressive in AI. They were hiring engineers and paying people billion dollar salaries vis a vis acquisitions of startups. It really looked like they were off to a running start and everyone else was still sleeping. Now Met is in this bucket where nobody's really sure about whether or not their AI strategy beyond monetizing reels will be good. Same with Apple. They're not spending enough. Why aren't they doing anything? Why don't they buy Perplexity?
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Stephanie Link
Wow.
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Josh Brown
Now the narrative is, look, they didn't spend too much, they didn't get themselves into off balance sheet debt deals with Blue Owl, they didn't do any of that stuff. New all time high. So I don't know what the narrative will be on matter six months from now. It could be the polar opposite. People could look at them and say thank God they don't have a cloud business where they're spending all this money to facilitate other people's AI. Thank God they could just focus on their own business. So I don't think that we want to just look at the last month of Alphabet and Metta and Microsoft and draw these like hard and fast conclusions about what might happen in 26, because you could just Flip the deck of cards in the air and pick up the cards in a different order and things could look very different.
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Scott Wapner
Sure, that's fair. But this looks like a gross miscalculation from the depths of that day in May when I'll give him props again, when Lebenthal came out on the show and said, I think this is way, way, way overdone. Lord knows I've given that man enough grief about some of his positions in certain stocks. So I'll, I will cite him and that call as many times as it takes to get, you know, back into his good graces.
- [11:13]
Brian Belsky
We're not talking about a steel stalker cat.
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Scott Wapner
We'll get him with something else, though, and get invited back to his ranch to help him clear some of that brush. You know, the other big story today is Broadcom. It's overtaken Meta's market cap. That's a story in and of itself because if you had listened to stuff and when in video was going nuts and everybody was having its, you know, this party over what Nvidia was doing, Broadcom was quietly keeping pace, not to the same degree and market cap and not necessarily to the same degree in monthly or annual appreciation or anything like that. But this is a statement move that Broadcom is now has a higher market cap than. Than Metta.
- [11:58]
Stephanie Link
Yeah, I mean, the leadership is amazing. Hock Tan is now there at the company until 2030. That's a good, good sign because he has designed this company with a diverse portfolio of revenues. Right. So they have software and that is a recurring revenue business. High margins, and that's 40% of their revenues. They have AI, that's 30% of their revenues, but growing at a rapid pace. And that's driven by their custom ASIC chips where they have four customers and they have two potential new customers for next year. Could be $100 billion revenue opportunity for them between now and 2027. And they have the networking business. So they're connecting all this stuff in the data center. And so I think you add it all up, they've had better than expected growth, better than expected earnings surprises and guides higher than in video. And so it has done better in the past year, year, much better than Nvidia. I don't, I think it's a little more owned now, Scott, But I don't think it's nearly as much as in video.
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Scott Wapner
So I think, I'm sure that's fair.
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Stephanie Link
You know, and so that's how I, that's how I invest. Right. I don't want to be on one side of the boat. I don't necessarily need to be on the boat by myself, but I want to be somewhere in the middle with great leadership, great free cash flow, industry high margins. And so I still like the story, but I've told you this, I wouldn't be buying it here because it's had such a nice run and it has rerated. But I do like it very much for the long term.
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Scott Wapner
You've never, you've never been the shiniest toy investor.
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Stephanie Link
No.
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Scott Wapner
Out there.
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Stephanie Link
No.
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Scott Wapner
Part of that that's, that's sort of in your, in your DNA.
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Stephanie Link
Yes.
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Scott Wapner
You want to make sure the toy is good and popular, but it doesn't have to be the shiniest one on the shelf.
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Stephanie Link
Good bones mismanaged, maybe new management coming in that can actually correct the company. And operating leverage, of course, is the big one.
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Joe Terranova
There's a lot of derivatives off of the news that we're speaking towards this morning and one of them is Broadcom. The relationship that they have with Alphabet and the TPU chips is remarkably important. And it's one of the reasons why you saw yesterday on, on the news that Broadcom rallied so much to the 11% customer.
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Steve Liesman
Right.
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Joe Terranova
So, you know, conversely, you have the challenges that are in front of AMD because of their relationship with Nvidia.
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Scott Wapner
AMD is down today. And part of like why, you know, Nvidia is down on the, on the news of the Alphabet TPU thing with, with matter rather than the GPUs from.
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Joe Terranova
Radio, because matter, the reliance for better is on the AMD chips and the Nvidia chip. So AMD is going to be down on that. So I think there's, there's a whole universe you have to be careful for here from a second derivative.
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Scott Wapner
We haven't like Microsoft was the first sort of out of the barn, right. And then, you know, it seems to have fallen, fallen to the wayside a bit. Bernstein's defending it today, making the case of why you want to own it. That's what their note is titled. Positioned to be one of the major winners in Jenny and yet the stock has been down significantly recently, even after a positive resolution to the open air negotiations and a solid quarter after having spent time with the company. We believe the concerns are either overstated or simply wrong.
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Brian Belsky
Brian I think that's right because what you've seen in Microsoft, in Apple in particular, Scott, this year is that they've kind of traded places in terms of what's your defensive pick, what's your defensive pick with within the Mag 7. So we've seen so much more momentum and now Broadcom and then the Nvidia stuff. And so I think we're going to see flows back into Microsoft, especially into next year and Apple, just because I do think the market's going to become more defensive over the next six months. And it makes a lot of sense.
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Joe Terranova
Both Microsoft and OpenAI have very strong relation. Microsoft and SoftBank have strong relationships with OpenAI. If you pull back the lens here over the last month, you'll see that Microsoft's down 12%. If you look at SoftBank over the last month, it's down 43%. Why is that? Because right now the valuation of Open Air in the private market is being questioned and now in the public markets, we're looking towards which companies have the strongest relationship. It's Microsoft and it is SoftBank. And you're seeing them used as a proxy to figure that valuation might be the case.
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Stephanie Link
But commercial bookings up 111% and RPO is up 51% in the past quarter and the stock is down 13% from that numbers.
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Joe Terranova
I understand that.
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Stephanie Link
To me, I understand you call it.
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Joe Terranova
You call it silly season and I don't disagree with you but sometimes the fundamentals disconnect from the reality of what's going on in the market for sure.
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Stephanie Link
But that's your opportunity. That's, that's where I started buying it and I, we own it.
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Joe Terranova
I don't disagree.
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Scott Wapner
You know what the bottom line of this conversation is before we move to something else is like Tony Pascarello is talking about today. Josh from, from Goldman. The dispersion among these, these names. This is no longer a monolith story. Just forget that because not going to do that anymore. These companies are out for blood on each. They may have relationships with one another. It's like, yeah, a lot of the UFC fighters know one another out of the octagon, but when they're in the octagon, they want to kick the you know what out of the other guy. So this is a, it's a battle. It's an arms race. It's a fight. Whether it's a fight to the finish or what have you, these companies are not going to trade the same way anymore.
- [17:06]
Josh Brown
I'm so glad you said that, Scott, because I think that is the capstone point to this discussion. In the early going of a growth business, let's say like cloud or now like Generative AI, the success of your competitors actually helps you because it validates the category. In other words, you could say to your investors, look, we're spending a lot of money but so are they and so are they. And look at all these contracts they just got. And that's like a good, it's a positive thing. And everybody's kind of on team industry growth. And then as things mature it's like oh wait a minute, we're losing customers to those guys. What do we have to do to out innovate them or price better or whatever to take share back? We're there now. A lot of businesses, it takes decades to get there where they are today. And a win for one of these companies is now being interpreted by stock traders as a loss for the other. And it's as plain as day when you just look at the divergence of the rising fortunes at Alphabet and the falling share price at Microsoft, which is hitch swagging for the most part to open AI, one is seen to be pulling ahead and one is seemed to be lagging. Now again, it's a horse race. It could switch again but this is just the current state of things. And I think Pascarello nails it with that point. And I think we all need to start thinking about the trade quote unquote going into next year as not all one big theme that you just throw money at the 20 biggest market caps. Now we got ourselves a ballgame.
- [18:37]
Scott Wapner
Yeah, yeah we do. And I'll tell you what, if we just continue with that, the name that's been gotten a lot of pitches up and in is Oracle. In this ball game, shares are down again almost 3%. Down more than 17% in three months. Down 25% month to date. The stock got downgraded today to a hold at CFRA. The target got dumped to 200 from 300 at DA Davidson. Today it's CDS is up again. If we can show you the CDS, it's going to show you again that's where the green has been in the credit default swaps. And that is the story in and of itself. And by the way, a credit investor at a major bank telling our own Seema Modi who's been on top of this story from the beginning, that they're starting to get a lot of inbound calls, calls from equity investors who are trying to understand the structure of Oracle's debt. Joe owns it in the T. He can't do anything. He said as much doesn't he's not happy about it. You don't have any rules around your position in Oracle. So what are you thinking about these days?
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Brian Belsky
Well, we'll use the baseball analogy, they have to take some pitches here. You talked about high, high and tight or high inside. They need to take a few pitches here and see how this balance sheet situation follows through. But I think it's a whole notion of needing to go out in the public market or wanting to go out in the public market. I still that they've gone out in the public market and we're taking a look at it. We still own it across the board in terms of our tactical portfolios that we oversee. And it's becoming even more of a value call for us and we've had it for a while. So I'm not concerned at this point, Scott. I still think from an operational perspective it's still the best in class software name.
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Scott Wapner
So you're doing nothing for now.
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Brian Belsky
We're doing nothing for now.
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Scott Wapner
What would cause you to do something?
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Brian Belsky
Well, let's see if we'll see a further drop or if we see some sort of a reversal here and the stock spikes up here a little bit. I might lessen my position just because we've gone back and talked about for the last year we've entering this high dispersion market, Scott, and you want to be more of a stock picker. You don't want to be too concentrated in certain names. So I think that will give us an opportunity. If we see a spike spike here, we would lessen the position.
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Scott Wapner
All right. Steph's trying to be a stock picker in retail which the retail ETF, the XRT on pace for its best day since May 12. Retail sales for September, forget the data's way, way backward looking now because the shutdown September retail was the worst print since May. Confidence was weak. One of the names, Dick's Sporting Goods was on the ledger today. They beat on the top of the bottom line. Shares were down though because the company is closing some foot locker stores to protect profits. The stock has come back. It's up 2%. Silence that. Thank you. As Stephanie Link buys this name.
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Stephanie Link
Yeah. First time ever, by the way.
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Scott Wapner
Yeah. What was the big draw?
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Stephanie Link
Could I just go back on retail sales? I mean, I know that September data, but it was up 5.7% year over year. So it's still quite healthy. That's up from 3.5% the prior month. But this is really old data. The other data I'm looking at for the consumer, JP Morgan comes out with their Chase Card data every month and card spend last month, this month rather November, 4.5% versus last month. 3.3 Johnson Redbook they come out with data monthly as well. Retail sales at Johnson red book, up 6%. I do not think the consumer is in dire straits by any means. The confidence numbers will have you believe that, but I don't. On Dick's, it's down 11% year to date. It was down 7% this morning. This is a very strong franchise with a phenomenal management team. Best in class. Their core business was great, 5.7% comps. That was much better. And that was against a 6.4% comp last year. So they're comping the comp. It is Foot Locker that's the problem child. You know, Scott, I like those kinds of stories where there's a little bit of a turn that's going to happen. And I think that their kitchen sinking footlocker right now was very poorly run, which is a surprise, to be honest with you. But I think they're going to fix it, and I think they're going to continue to gain market share.
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Scott Wapner
Okay, Macy's, Gap, Walmart, Lowe's, Nike, take a look at all of those. Dollar General, five below. That's where the action is today. There's gap up near 10%. You sold that last month. Maybe early, maybe not. The jury's going to be out on that. There's dg, which is having a nice move. Estee Lauder is notable today. We can throw that up. It was cut to a sell at Rothschild. Don't see it that often. Stock's not doing too much, but nonetheless, on a green day for retail, that one is not. Best Buy raises its annual forecast. And then how about restaurants Getting a bump. Brinker's ripping today. Citi goes to 176. Notable there, Chipotle, Texas Roadhouse is a biggie today. There's Brinker. You bought more. Starbucks. That's now your largest discretionary position out of this group. Why buy More now?
- [23:31]
Stephanie Link
It's really done nothing since May, when the new CEO was announced, Brian Nicoll. And so I want to take advantage of that because he is best management in the whole industry, in all of probably the s and P500. He's one of the very best. And they are making progress on the turnaround star. But turnarounds, you know, take time, Scott. But they said that they were ahead of a plan last quarter. They had the first positive comp in two years last quarter. And they are fixing the store experience and the menu changes and mobile payments and that sort of thing. So I think that there's a lot that can happen that could go right for this company, it's not priced that way and so I added to it and I'm going to continue to add to it on any negative days.
- [24:09]
Scott Wapner
Shock is up near 3% today. Josh, again, almost everything in this space is having a good one.
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Josh Brown
Yeah, look, I think these stocks basically sat out most of the rally this year. It just was not about the scoop. Consumer discretionary. We do have this K shaped phenomenon where the higher priced luxury brands have held up better and then the middle class stuff has not done as well and then at the low end you've had companies find success. So we kind of have this hollowed out consumer. I don't think it changes anytime soon. Shocks really unique because it's a growth story within the space and I think investors are paying for this stock because they expect it to grow faster than its competitors Years. That's been the history of the last few years. I don't think that'll change either.
- [24:53]
Scott Wapner
Let's make one more move here, at least one more discussion point before we take a break. Bitcoin, it's a block story I think still until it isn't. It's down again. Okay. Bitcoin is Coinbase got downgraded today at Argus. So you know, there's a belief that the market overall is not really going to be able to fully stabilize until bitcoin does. You own Coinbase in the, in the etf. So what's your view on that?
- [25:24]
Joe Terranova
I think I said yesterday, I've said last week and I'll say it again today. I think it's going lower. I think the entire crypto space, Coinbase is going lower, it's going low because of what's going on with crypto. It looks to me like the, the crypto asset class peaked on October 6th. We're in the mix of a liquidity driven sell off. You could cite whatever reason for it, but in terms of observing momentum on a very near term basis, there's no signal that I see in front of me that suggests a turn.
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Scott Wapner
Did you, did you believe, do you believe what others do? That until bitcoin firms up the stabilizes somewhat that the market itself is going to feel a little more volatile.
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Joe Terranova
I think sideways trade in Bitcoin is the gives the free pass for equities to move higher. I think we break down below 80,000 once again. I think that will have a liquidity effect on equities.
- [26:15]
Steve Liesman
All right.
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Joe Terranova
Short term in its nature.
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Scott Wapner
All right, let's do that break. Coming up next, a big earnings spot for a name that both Josh and Joe own. Plus a price target hike from one of Steph's names reporting earnings next week. We got a lot to debate. We'll do it. Coming up.
- [26:36]
Steve Liesman
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- [26:46]
Scott Wapner
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Brian Belsky
Twas the night before Christmas when all.
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Commercial Voiceover
Through the barn, Harry and David's Royal Riviera pears were wrapped. Heading out from the farm, the children.
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Stephanie Link
Were nestled snug in their beds while towels of moose munch popcorn danced in their heads.
- [27:33]
Brian Belsky
When what on our doorstep should magically appear.
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Commercial Voiceover
Harry and David delivering holiday cheer.
- [27:38]
Joe Terranova
Harry and David exclaimed as they drove out of sight.
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Commercial Voiceover
Happy holidays to all and to all a good bite. Find magical gifts for everyone on your list@harryanddavid.com stocks on the move as well as some calls.
- [27:53]
Scott Wapner
We're going to start with Zoom. We talked about it yesterday. Josh, with you heading into the print, they did post a stronger than expected earnings. They beat upbeat guide as well. Take a look at that. You made a nice, you made a nice call on that yesterday. They also increased the buyback. What do you think now?
- [28:12]
Josh Brown
I mean, you can't sell it. They just delivered everything that people have been waiting for four years to see this company deliver this entire post pandemic period. So I think you have to, you have to ride it. The risk reward going into the number as I talked about was asymmetric. There was almost nothing priced in. They did way better than nothing. Third quarter total revenue was up four and a half percent year over year. GAAP operating margins 25%. Pretty good. Non GAAP 41%. Things are trending in the right direction. Cash flows were up 30% year over year. And they have traction with the $100,000 plus enterprise customer that's up 9%. So like what else would you really want to see? I got price target raises all over the street. I'm going to stay long.
- [28:58]
Scott Wapner
All right, next one. Applied Materials Got up at UBS. Target goes to 285 from 250. Jyoti.
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Joe Terranova
There's a surge in memory dram. Demand continues to increase. Pricing continues to increase for this company. Look, it's been KLA Corp. It's been Lam Research, it's been Applied Materials. I would say you've seen more strength in KLA Corp. And Lam Research than you have Applied Materials. Applied Materials is now seeing a little bit of a mean reversion, positive performance. And that's on the fact that wafer fab equipment in 2026, you're expected to see a 20% surge in demand there. And that's really where Applied Materials business is most centered.
- [29:40]
Scott Wapner
All right, Snowflake target to 280 from 270. Loop Capital makes the move on encouraging channel checks. Steph.
- [29:47]
Stephanie Link
Yeah. So on the 27th of October they preannounced the quarter. So I don't expect any fireworks next week. But I do expect good product revenue growth of 25% plus operating margins probably beat. They expected about 9. The whisper is 11. Gross margin 72.2%. I think that's going to be flattish. So I think it's going to be a good quarter. But I think a lot of good news is priced in. It's up 60% on the year.
- [30:09]
Scott Wapner
All right. Live Nation by 164 is the price target at UBS. Josh, that to you.
- [30:16]
Josh Brown
Yeah, look, this is one of the most valuable assets in the entire entertainment space. It truly is one of a kind. If you want to bet on live shows and our continued enthusiasm for them, this is the only ticker that you can really buy. Here's what's announced for 26. Lady Gaga back on the road. Guns N Roses, BTS, Metallica is going back out. Linkin Park, Ed Sheeran, Lynyrd Skynyrd is going back out like next spring and summer, another blockbuster concert season. This is the company that's going to benefit most. So I remain long. I think it's a crown jewel asset.
- [30:52]
Scott Wapner
Within the space Monster reiterated by @ARGUS today. They think Monster is able to grow both its name, domestic and international revenue. Jyoti.
- [31:01]
Joe Terranova
So think about a consumer staple company that's able to deliver double digit revenue growth. It's up 41% year to date. Coke, by the way, is performing well also but really Monster Beverage provides you the opportunity to ascertain in a sector that normally doesn't deliver very strong growth. And this company can execute and they've executed, executed in terms of diversifying the product mix remarkably well and now expanding it internationally.
- [31:30]
Scott Wapner
Belsky FT says Spotify is going to raise prices in the US in the first quarter of next year. You own that name.
- [31:37]
Brian Belsky
Yeah. Well, they've done an amazing job with their content. They continue to add more and more podcasts. They are, I've said this before, they're the Kleenex of streaming in terms of music. And they actually do a better job than Apple. I never thought I'd say that. But so Spotify we've owned for years, we love that company. In fact, it's our largest, absolute and relative overweight in the communication services sector.
- [32:00]
Scott Wapner
All right, we'll take a break. Coming up, we have a small cap playbook. Small cap. The Russell's ripping today up 11 3/4%. Now Jefferies is out with a list of the names you should take a look at. Tell you what they are next.
- [32:18]
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- [33:37]
Contessa Brewer
Hello there. We're back on halftime. I'm Contessa Brewer with your CNBC NEWS UPDATE Israel says it has received human remains handed over by Hamas to the Red Cross. Prime Minister Benjamin Netanyahu's office says the remains will be taken for forensics testing and identification to determine if they belong to one of three deceased hostages remaining in the Gaza Strip. Today's handover is the latest since last month's ceasefire began. West Virginia Republican senator and former Governor Jim justice, along with his wife, are being sued by the U.S. government for more than $5 million in unpaid taxes, penalties and interest dating back to 2009. A motion filed with the court just hours after the suit was docketed indicates the couple agreed to pay the amount requested. It did not indicate when or if they can pay the money. The senator's office has yet to comment. And Tokyo is no longer the world's most populous city. A new United nations report Fort finds Indonesia's capital city, Jakarta now has that title with an estimated population of nearly 42 million people. It soared from 33rd place in 2018. That is tremendous growth.
- [34:51]
Scott Wapner
SCOTT all right, Contessa, thank you very much. Want to hit a story now which has seems to have moved the market in multiple places, a report that Kevin Hassett is the frontrunner to be the next chair of the Federal Reserve. Bring in our Steve Liesman now to discuss this because the movement in markets is notable on this reporting. Steve the 10 year is below 4% for the first time since October 29th. Stocks have pretty much hit the highs of the day. The Russell 2000 has added to its gains on the idea of lower rates. The dollar is down and I don't think this would be much of a surprise to those who would say that the President wants to put somebody in that role who is going to do what the President says he wants him to do or her to do.
- [35:43]
Steve Liesman
Yeah, and just to be clear, Scott, we don't have confirmation of this story. We're running our usual traps to see if we can do so, but we have not if it's it's not that big a surprise. I think as you suggest, Hassett is a frontrunner, has been thought to be a frontrunner for a while. The two Kevins is the phrase that maybe people have used. WARSHIN Hassett we did hear and I was able to report several weeks ago that they also liked Rick Reeder the over at at blackrock. So that's a possibility out there as well. I think the story here is that the market, as you suggest, does see looser Fed policy coming from a Kevin Hassett run Fed and that would be for two reasons. One is principally he is one who is seen doing more of the President's bidding than perhaps some of the other candidates. And that would be a reason why he would be a frontrunner. The other reason though is not just doing the bidding, but more believing in the longer term effects of the President's policies. One of the things that the Treasury Secretary and other administration officials have complained about is we're doing all these things that we think are going to bring down inflation in the future, increase growth and allow you to run with a lower funds rate. The current leadership of the Fed is like that's great, we'll react to that when it happens. But we're not going to do that preemptively. Whereas the thinking perhaps is that a hasset run Fed would be more likely to say hey, you're doing all these things on the investment side and there's this boom in productivity. We had Besson actually say that this morning, that he wants Powell to take the attitude towards productivity and technology investment that GreenSpan took in 96 where quite famously he went against a bunch of the hawks in his committee and did not raise rates because he believed in the productivity that was coming from technology. Bessant wants him to do that now that Hassett more likely to do that than perhaps some of the other candidates.
- [37:46]
Scott Wapner
Yeah. And I mean Bessant obviously saying on squawk today too that they could actually name this person before Christmas. You know, also on the idea of the type of person that the President would want, all you need to do is look at the way that the Fed governor role was formed. Not to take anything away by any stretch from the bona fides of Myron, but he was put in that role presumably to do what the President wanted him to do. And that's argue and if he had to vote for interest rates to be lower, I mean can we agree on that without being controversial? I don't think it's controversial. I don't think it's controversial.
- [38:37]
Steve Liesman
We disagree. No, it's not. It's also not controversial to point out that he is on leave from the administration. And that has never happened before as far as I can tell historically. So, and that's been a point of controversy about Myron and he is in there doing what the President wants and as you say and suggest he has given some intellectual and, and backing in the data for his points of view that that the funds rate ought to be lowered down, he does say towards neutral. So he's not embracing all of what the President says Hassett, you could imagine, and I think we've had him on saying the same thing, believes rates ought to be lower. And then, you know, the question becomes, okay, two things. One is you're going to bring rates down, you know, if there's inflation, are you ready to go back the other way? And then the second thing is, are you the kind of person that would give the same leeway to a Democratic run administration as you would a Republican one, or are you being in playing politics with it? That would be a matter of concern. But hey, the market doesn't care about that. The market says, hey, we're going to put Hassett in. That means lower rates. Buying.
- [39:43]
Scott Wapner
No, that's, that's right. I mean, that's the way that we're not going to, we're not going to judge our opinion. Anybody's opinion who does this is irrelevant. On good, bad, indifferent, whatever the market votes, we report what the market votes. The market likes. The idea of somebody in that role who is going to advocate for lower interest rates, who is more aligned with what the President's view is, and that is a man who wants interest rates to be lower. All, all you need to do is look at all of the asset classes that are moving on this conversation that we are having based on the report that was put out, and it would tell you exactly that story. Small caps, they like low rates tech. The Nasdaq was flat 41.5 minutes ago. It's now up 1/2 of 1%. The cyclical stocks that would play a role into the Dow, for example, up 1.2% is the Dow. The discretionary sector is up near 2%. Follow the money.
- [40:51]
Steve Liesman
Yeah. I would make a point, Scott, of something that I learned during the pandemic and I'd be interested if you have a chance to see what your traders think about this. But one of the, one of the things that I thought was most remarkable about the pandemic, and they all may have known this already, is companies make plenty of money during inflation and that the stock market itself is not concerned about inflation. The bond market ought to be, but it isn't. Individual Americans are concerned about inflation and that creates a political dynamic. But when prices go up, input prices go up. Companies were perfectly able to raise prices and keep their profitability high throughout the inflation, inflation run we had from the pandemic. So if you're worrying about, if you're concerned mostly about the stock market and the level of stocks, I don't put inflation up there as a real high concern other than down the road if the Fed has to come and force a recession in order to get control of inflation. But in the near term I was very surprised and I learned a lot about how companies operate inflationary environment, of course. Jeremy Stock Siegel, who I talked to about this in the middle of pandemic, he was not surprised.
- [42:03]
Scott Wapner
Steve, thanks. Appreciate your insight into what has been a market moving report. No doubt that Steve Liesman joining us there. You guys have, I do have a thought on that.
- [42:13]
Joe Terranova
A few weeks ago I bought the gold. That was my entry into owning gold. I will probably buy more of the gold and the reason being is we are going to see certainly a Federal Reserve Board that wants to adopt easier monetary policy in 26 gold is the way I think you play that and.
- [42:31]
Stephanie Link
You don't fight the Fed, which is why the market likes this maybe announced.
- [42:35]
Scott Wapner
That's my, that's my point of course.
- [42:37]
Stephanie Link
But I would also say like the market doesn't care so much or get so alarmed about inflation if growth is better than expected. And I've said that a lot, a lot. We're growing at 3 and a half, 4% GDP, inflation is sticky at 2 and a half, 3% but earnings are growing at 12% much better than expected because of what Steve said in terms of the pricing power. And then companies also being really good about restructuring, reorganizing, maybe they lay off some people and being more productive.
- [43:03]
Brian Belsky
We've reared an entire generation of investors that believe he buy stocks if interest rates go down. And so yes, and that's a key, key thing to remember. And I think the other thing too that you got to throw in this dual mandate stuff and I think as long as growth remains very strong, it makes sense that, that we could continue to see more, more cuts.
- [43:23]
Scott Wapner
Josh, quick thought before, before I go, I just think it's, it's so clear as to how the market views. What's not an announcement, it's nothing official, of course, it's just a report. But it's a report that the market would like because of the trajectory of rates that one would glean would come from it.
- [43:41]
Josh Brown
I guess I would just say be careful what you wish for. We just saw this morning the biggest drop in consumer confidence since 2021. What was happening in 2021? Prices started to get out of control. What are people angry about now? Definitely not their wages, definitely not the stock market, definitely not the rate of employment. They're mad about prices. If you really think this is the answer to whatever is going on economically in this country, I Wish you luck. I wish you luck.
- [44:11]
Scott Wapner
Great luck. All right, we will take a break. We're at the highs of the day or the lows of the day depending on which asset class you're talking about because it's all relevant. We did mention the Russell continues to elevate which is why next is the perfect time to give you some small cap picks. We'll do it.
- [44:33]
Mike Santoli
Foreign.
- [44:47]
Scott Wapner
It is a Russell kind of day. We were just talking about that and how perfect that Jeffries is out today with A list of 17 buy rated names that should see earnings and sales acceleration in 2026. Valero Arrow is one of them. Josh, that's on the best stocks list, isn't it?
- [45:05]
Josh Brown
Yeah. So these companies are benefiting from the fact that the feedstock, the price of oil remains low but demand for gasoline and other distillates remains high. So that's called the crack spread. And that spread is opened wide. It's remained wide and that's enabled a lot of Wall street firms to come in and raise their earnings expectations for next quarter next year. That's why these stocks are leading the market. That's why they're on my list.
- [45:30]
Scott Wapner
Cohr Coherent, Brian Belsky.
- [45:33]
Brian Belsky
So yeah list we've owned it in our SMID portfolio for about three years is one of our core positions in terms of technology. It's an electronic components name. It's got very steady earnings. It's more cyclical than maybe some large cap names that we've owned it for a while. We really like it.
- [45:46]
Scott Wapner
Textron, txt, Same thing.
- [45:47]
Brian Belsky
A bigger, a bigger, a bigger mid cap company in the industrial sector space. We've said a long time that we're going to see more Capex industrials. This engine company is one of the best run and a pretty good dividend as well.
- [45:58]
Scott Wapner
Joey, what about Edwards Life Sciences?
- [46:00]
Joe Terranova
That's been list really good producer in terms of performance for us. One of the rare names in health care. I think Josh talked about Life Sciences Yesterday looking into 2026. A lot of these names are building positive momentum, seeing a lot of capital being invested in the research and it's being reflected in really strong earnings and revenue growth.
- [46:20]
Scott Wapner
You know, dollar general points too. Sorry Josh, go ahead. My bad.
- [46:26]
Josh Brown
Agilent reported stock looked like it was going to open down 5%. Huge reversal just prior to the open. Take a look at this chart. Take a look at the stock breaking out above its old highs. These Life Sciences sort of annuitized the businesses. The recurring revenue. Some of the best stocks in the market.
- [46:47]
Scott Wapner
I was Mentioning Dollar General being on the list. I only bring it up, Steph, because don't you have a history in this.
- [46:51]
Stephanie Link
Name long, long time ago? I mean, I think I probably sold one of them for Target, which was another disaster. You know, I just, I'm not as crazy about the low end consumer. I mean, the low end consumer certainly is struggling and that's not a surprise. And that's not nothing new, unfortunately. Unfortunately, the low end always tends to feel the pain from inflation, from higher gas prices, whatever it may be. So to me it's more of a struggle.
- [47:16]
Scott Wapner
But when that play into stories like this, that's the whole thing. If, if, I mean, the Stock is up 39% year to date. We've probably talked a lot year to date about the lower end consumer struggling and yet this Stock is up 39%.
- [47:32]
Stephanie Link
Well, I think the stock has been kind of a weak player in the last couple of years. I mean, if you look at the chart, it's just been this year that's actually done a little better. I think they've done better than feared and they've done a better job in terms of cutting costs. But in terms of same store sales, that really remains muted for Dollar Tree, Dollar General, the whole cohort.
- [47:50]
Scott Wapner
Okay, Santoli is next with his midday work. All right, welcome back. There's the Russell Intraday, about 2%. Mike Santoli is here for his midday word. This is all part of the, the asset bump that the market got on that, that reporting that he is apparently the front runner.
- [48:13]
Steve Liesman
Sure.
- [48:14]
Mike Santoli
Look, I think that was an extra push in the direction the market was leaning for sure. In a mode right here where it's like, okay, a 7% opening drop in Nvidia. Can't break this tape. The rotational rhythms are back. We're starting to run toward last week's high. Let me not let it get away. And so yes, Beta was killed in the downturn that's coming back. That somewhat represents Russell. Also within the Russell, I always point out the biggest holdings in the Russell. A lot of them are kind of super low quality mean mesh type stocks. Those are not the ones driving the Russell Bloom Energy Ion Q. They're in the top five of the Russell 2000. They're actually down on the day. So it is a little more robust. It's following what's happening with banks. Regional banks are very strong today. So, so it all fits together. And it also comes on a day when in other circumstances you could have gotten a little bit stressed over the consumer confidence stuff and maybe some of the mixed retail data. So I think it's, it's what the market needs. I don't think there was ever any mystery that if it came down to it, stocks like potentially irresponsibly easy feds, if that's what we're going to get and you can see some proof of that.
- [49:15]
Joe Terranova
Yeah.
- [49:16]
Scott Wapner
And we'll see if that carries through for the rest of the day. I'll see at three. Yeah, that's Mike Santoli. Finals are next. All right, three o' clock Eastern time. Closing bell. This market's going to be really interesting right into the finish. Adam Parker Bryn talking to Ed Yardeni. Warren Pies. We just added Richard Fisher to the former Dallas Fed president to react to the reporting that is moving the market today. I will see you then. Final trades Josh Brown.
- [49:41]
Josh Brown
Uber stocks in an 11% drawdown. I like it right here.
- [49:44]
Brian Belsky
Belsky Humana Sticking with the mid cap theme.
- [49:47]
Scott Wapner
Hum the linkster.
- [49:49]
Stephanie Link
Zoetis 18 times stock down 21% industry leader buying opportunity Jyoti Zoom.
- [49:55]
Joe Terranova
Technical breakouts going towards 100.
- [49:56]
Scott Wapner
Look at that move on the back of earnings. Thanks for joining. I'll see you at three the exchanges 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.
- [50:13]
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- [50:52]
Your commute, your train, your car, maybe your walk. Even if you don't realize it, crypto and blockchain innovations are all around you on your way into the office. So why not learn about them on the way? From institutional custody solutions to 247 cross border payments with nearly real time settlements, crypto and blockchain are shaping flexibility and innovation for institutions all over the globe and your city. Join Ripple and host David Schwartz for crypto and blockchain conversations on Blockstars, the podcast. It's happening with Ripple.