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Halftime Report
Brad Gerstner on the Market, Tech and the Flood of Mega IPOs 5/28/26
00:44:06
Scott Wapner and the Investment Committee are joined by Brad Gerstner, Founder and CEO of Altimeter Capital, joins CNBC's "Halftime Report” to talk everything from markets, tech and how to navigate the flood of mega IPOs releasing this year. Plus, Josh Brown spotlights Edwards Lifesciences in his "Best Stocks in the Market." And later, we hit the latest Call of the Day on Uber. Investment Committee Disclosures
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- [00:00]
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- [01:01]
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 hour, another parabolic tech move as Snowflake surges after its earnings report. We debate that space, whether too many names now are showing signs of fraud off. Joining me for the hour today, Josh Brown, Malcolm Methods, Jim Leventhal. We'll check the markets. That news that Axios had earlier of a potential deal between the US And Iran that needs the president's signing off on has moved the market not by leaps and bounds, but nonetheless. We're green across the board. But I do want to focus on this parabolic tech stock du jour. It's Snowflake. Okay? They beat, they got the Amazon deal and the stock is just off to the races. Nobody owns it here. Kudos to Stephanie Link for making the case repeatedly for it. By the way, Brad Gerstner, who owns a lot of it personally, no longer in his public fund, is going to join us in the next block to talk about this and some more stuff that you want to hear about too. But I don't care that nobody owns it here because it's indicative, Josh, of what happens in this market when you got a red hot name and you get a red hot beat.
- [02:27]
Malcolm Methods
Yeah, I think this is very good for beyond just Snowflake itself and Snowflake shareholders. I think this is good for sentiment because we've basically had a one way trade in a lot of technology stocks that were deemed to be, for some reason or other on the wrong side of the AI trend. And Snowflake kind of got lumped into that where they said it's too expensive and it's unclear what their exact position is going to be in this ecosystem. Everybody understands why it's a bull market for what Snowflake does, but there are questions around it because it's lumped in with all these software stocks. As a result, money comes out of the etf. This is one of the names that gets sold. People aren't thinking twice. They're shooting first, asking questions later, and then all of a sudden they come out and they say not only are we alive, we are doing better than ever. And we have this partnership with one of the top three names in AI and data centers, Amazon. And look, now it's time for you to actually think about the future for Snowflake and not lump us in with all of these other potential disruptees. I think stock by stock, you could see that happen with other names. And I think that's why it's such a healthy development for investors whether they own the stock or not.
- [03:43]
Scott Wapner
I mean, the market, Malcolm, is judging this one as a beneficiary of this AI boom, an enabler of these models rather than a disrupted buy these models, which, which obviously brings me to the fact that Salesforce is not trading like this one is. Stock was red after earnings. We'll just mention it. Kramer was bullish on it this morning, said he would buy it. I think it when it was like 170 something, 173, 174, 172. So stock did come off the lows. You could see the move too when, when Jim was talking about it on, on the show this morning. But Nonetheless, I mean, a 30 something percent move, was the market really that offsides on what Snowflake's got going on?
- [04:28]
Josh Brown
Yes, yes it was. And I say that for two reasons. One, I think Snowflake is validating to your point about Salesforce, the hypothesis that what the market was missing is that there's a difference between a consumption based model and a per user model when it comes to software. Snowflake is a data aggregator or a data warehouse that has done the smart thing of deciding to be Switzerland and sort of sit in between all the different model providers and not necessarily pick a favorite, which we're starting to see also has some benefits for the companies that chose to go that route. So in this case we're no longer worried about is software going to be completely disrupted by AI we're worried about which software names are going to be disrupted by AI. And I think what Snowflake is proving is that it doesn't really matter who the winner is. Whether it's anthropic OpenAI or someone else to be named later. They're going to have the opportunity because everyone's chasing compute wherever they can get it. What I mean by that is the different data storage platforms that exist out there, all the different NEO clouds that exist out there, companies are sending their data to wherever they can find Compute, which means then that it's kind of fragmented. And a company like a Snowflake that can bring all that together and give you access to it in one centralized place is proving that it's valid, it's going to survive the SaaS apocalypse. And I think that's why we're seeing recognition that, okay, we probably got offsides on this one, let's pile back in. But I'll say one more thing to that. Look out for databricks and the widely anticipated IPO that comes from that because they also play in the same sandbox.
- [06:03]
Scott Wapner
Yeah. And as Kramer was also saying this morning that they're coming for them as them being databricks. I'll turn to you, Farmer Jim, and move from software to chips. Speaking of parabolic moves in the market that need to be addressed. We now know the SSMH is up 64% since the March low. The Philadelphia Semiconductor Index, better known as the Sox, up 79% year to date. It is the best 100 day period to start a year ever. That rally pointed out by cnbc. Check out our website. Today becomes the most hated in history. Okay, how do they measure that? Oliver Renick authoring that piece for us as he watches the options market. So he sees the kind of buying that is is happening. Open interest in put contracts on the VanEck Semiconductor ETF, that's the SMH, have surged the past two months to just under 1.7 million. That's the most ever. Okay, going back to the Fund's launch in 2011, thus it's hated. People are worried. Although, remember I said yesterday on the show that somebody had told me, a well known investor, that they were watching this micron move with astonishment like everybody else and saying, yeah, but I'm still buying calls.
- [07:28]
Jim Leventhal
Well look, the put call ratio is traditionally a contraindicator. When it goes high, that usually means there's more gains to come. I do think that as much as we're all stock pickers right now, we probably have to be parabola pickers at this point in time, meaning you have to decide where a particular name is on its parabola. Now I get that Micron, just as an example, at 10 times forward earnings looks cheap. But I don't think this is the time that I would be picking a position in Micron. I think there are other semiconductor names that you can select. I've recently trimmed Qualcomm, but you know, Nvidia, if you, if you look at that, I don't even think that's a parabola anymore. It was several years ago. Now it's just a nicely appreciating bellwether leader in the space.
- [08:09]
Scott Wapner
There are some too, by the way, who will take issue with your statement of you can look at, you know, micron at 10 times and say, well, it looks cheap. Yeah, not historically how that's memory has, has traded.
- [08:19]
Jim Leventhal
That's my point is I'm sorry, I didn't make it clear that it's actually kind of expensive for something that has been this cyclical in video as it has a difference that it's more of a specialty manufacturer far more for it's not just GPUs, now it's CPUs. It's got the coding software on top of it. So this isn't as commoditized as something like Micron, which is highly commoditized. Enjoying the rally. Good for Micron. But longtime investors know that a cyclical stock like Micron will eventually give up some of these gains. Maybe there are more to come, but it's not for me. I do think that there are parabolas that you can buy and that there are parabolas that maybe are a little bit too mature at the.
- [08:56]
Scott Wapner
I don't know. I mean JP Morgan's retail radar is. Plays well off. The CNBC story by Oliver that yes, it may be hated by the volume of put buying, but there's still little evidence of profit taking in the memory trade at large. Price targets continue to go up. What have we had, you know, about 1500 bucks a couple times this week or thereabout. Ballpark DA Davidson, the latest to join that party. 1500 from 1000. Wow. Mizuho raises the price target for Micron. Sandisk arm on semi. They have micron at 1150. So we're in, you know, getting up there. Marvell was another one Josh on the list today, which has ownership from Joe Terranova and Stephanie Link. That stock was lower. They had a good guide. But you know, if your guide doesn't look like a space shuttle, you're going to not have a snowflake like move in the market, but it's still a good one for a stock that's ripped.
- [09:59]
Malcolm Methods
I think one of the most interesting aspects of the bull market this year is not how many stocks have gone up 100%. Of course there are many, but the surprise even amongst the experts. I had Dr. Angkor Crawford, who is a material scientist turned money manager at Alger where she manages growth portfolio frequently
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Scott Wapner
on closing bell, by the way.
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Malcolm Methods
Yeah.
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Scott Wapner
So Nebias shout out to her stock was up 10%.
- [10:26]
Malcolm Methods
I'm more friends with her than you are.
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Scott Wapner
Relaxed.
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Malcolm Methods
I'm just saying.
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Scott Wapner
I'm just calling her out for making a great call on Nebias. But I digress. Go ahead.
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Malcolm Methods
So Encore explained even is she available today?
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Scott Wapner
3 o'. Clock. By the way.
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Malcolm Methods
Kevin, let's check on that. Even the people that live in the semiconductor world and understand not only the investment rationale for these stocks, but the science. They all had memory, for example, or companies like Marvell. They had this list of stocks where they looked at this data center build out and they said surely there's going to be some massive surge of demand for these components. In some cases they bought bought the stocks and then nobody else showed up and they said I must be wrong. Maybe memory is not going to be that important to the stocks aren't moving. And then all of a sudden these things take off out of Nowhere, go up 3, 4, 500%. That's how difficult it is to be investing at the dawn of a new infrastructure cycle. Even the experts aren't 100% sure who's going to play where. And then by the time, by the time the market catches up, we have these supply imbalances and we have these shocks and you could put Snowflake right into the mix. This is not a stock up casually 10% after reporting a good quarter. It's up 40% because people were taken aback by how important what they do is to this proliferation of large language models.
- [11:53]
Josh Brown
Can I say though, you asked the question, you pointed out that there hasn't been any profit taking yet and we're getting this stuff stampede of upgrades, updates and price targets, maybe this is the place where we should be seeing some profit taking. Because when you look at a Micron up from 500 billion to $1 trillion in market cap in just 50 days or whatever it is.
- [12:13]
Scott Wapner
Yeah, 48.
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Josh Brown
That is absurd.
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Scott Wapner
I know. But look at what was the date that the DRAM ETF launched. Can we guys back in the control room can you somebody help me out
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Malcolm Methods
on February or March.
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Scott Wapner
Okay, so to some, yes, I bring it up because to some that was a moment that, okay, did that mark a local, as they say, peak in the stock? And some were suggesting, well, maybe that means that you should take some profits there, the stock from that day, I mean, Micron and the DRAM ETF is,
- [12:48]
Malcolm Methods
does the dog wag the tail though or does the tail wag the dog?
- [12:51]
Scott Wapner
That's why people are afraid, afraid to take profits too early in what is such a booming stock environment.
- [12:58]
Josh Brown
I'm not suggesting that it's time to head for the exits. It's time to ring the register completely and say I'm out of here. I'm talking about trimming the position to a point where you feel like as you took this ride on this parabolic move, you actually have something to show for it when it's all said and done. Because what we are also discounting, we get excited about the RPOs, we get excited about everything else. What we're missing out on the fact is it takes three, four, five years for these companies to actually build out the physical infrastructure necessary to roll out these solutions to catch up to the demand where it is. That's why chips historically are so cyclical. And so we're treating this as if all of a sudden these companies are going to be able to meet all of the demand that we're learning now exists overnight. And that just isn't the case. So I think realistically this is a good place to be taking some profits just to make sure that when it's all said and done, you got something to show for taking Josh.
- [13:52]
Scott Wapner
Josh makes a great point that nobody knows. It's a trigger happy market in certain things both up and down. No one truly knows what's being overbought, what's being over ordered, what's going to be completely disintermediated by AI, what is not. I go back to the fact that, you know, both Snow and CRM were, were sort of knocked, knocked on their backs for a while until the market's now trying to figure out, okay, maybe Snow is going to be just great. I look at cyber in sort of the same way and that a lot of the cyber stocks that day of the anthropic announcement, right, rolled over and now they've slowly started running again, right? There it is. They fall down and they think that
- [14:39]
Malcolm Methods
you can, think that you can count on is overreaction. So that's, I don't know how you, I don't know how you include that in the way that you're investing right now, but it should be in the back of your head. Not every 30% fall in a stock after reporting earnings is necessarily going to stick and vice versa. Not every parabolic move to the upside is necessarily the checkered flag. Like you're going to have to just remember how offsides people are being caught. Even in giant, well known companies. They're shocked.
- [15:12]
Scott Wapner
Love the segue. It's so perfect. Back to Malcolm Zscaler.
- [15:15]
Josh Brown
Yes, right.
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Scott Wapner
Worst day ever. Yesterday the stock was just obliterated. Yesterday you bought it. Tell me why.
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Josh Brown
Complete overreaction. This reminds me, I know it's not the same thing, but this reminds me of the outage event that CrowdStrike experienced when everyone decided to sell the stock all at once. Shares fell horribly and then we look and it slowly but surely chug back along to now being the category leader. And when I look at the fact that workloads have shifted from people to machines and in the era of agentic AI, it's only going to get even more so we really need the ability to have a grown up in the room supervising these agents 247 because they can and will go rogue if a little bit of sunlight is left there. A company like Zscaler with its Zero Trust platform is perfectly positioned to take advantage of that kind of an environment and that kind of a stance. And so I think it's a misalignment between understanding of what the opportunity actually is and what the threat is from Anthropic and Claude code. Realistically, Claude code is great at pointing to where the vulnerability is. It's not so great at least yet at telling you how to fix the vulnerability. That's where you still need human intervention from engineers at places like a Zscaler and elsewhere. And so in the world of agentic AI, that is where a Zscaler really has an opportunity to shine.
- [16:41]
Scott Wapner
Well, the stock likes your commentary and we'll follow that one because it's getting a move of about two and a third percent. So Malcolm buys more of it on that huge dip yesterday. Worst day ever for that name. Real quick then I got to listen.
- [16:55]
Jim Leventhal
I applaud you. It's not only a market in which you just buy high and sell higher. To quote our favorite Joe Terranova, you're buying something that's been knocked down. And folks, you can do that. There are plenty of names that are still recovering from the lows. You know, we're getting a nice bump today in Oracle as an example. I Think you sold that. But that's okay. You did a good thing with it.
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Josh Brown
Took you this long to get to Oracle?
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Jim Leventhal
No, I've been in it for three years. But the point that I'm driving at up 6% today is an absolute knock on effect from what's going on with Snowflake. Yes, I know the data business is not what people think about when they think about Oracle, but that's why it's up today and the hyperscaler business is yet to come in terms of the profits over the next two years. My point being is that you can buy stocks when they're down. You can.
- [17:34]
Brad Gerstner
Good job.
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Scott Wapner
All right, coming up next, our halftime headliners back Altimeter capitalist Brad Gerstner. The Invest America Trump accounts. The app goes live today. It's live now, so we'll get his take as well on Snowflake's best day ever. The coming big IPOs he's been an investor in, many of which are about to hit this market. We'll get his views next.
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- [19:41]
Scott Wapner
Right, welcome back. The Invest America Trump accounts app going live today, just about a month from the official launch of that program. Which means we wanted to hear from Brad Gerstner today. He's with us now as we do countdown to July 4th. So we're making these incremental milestone steps towards the big day. What does this mean?
- [20:02]
Brad Gerstner
Well, Scott, it's taken us four years to get here. Great to be here with you guys. But today, the Invest America Trump account app launches in both the Google and the Apple app stores. Remember, this is a Treasury account app, totally trustworthy, like Social Security. It's going to be here for a very long time. You need to make sure that every child, you know, if you have friends who have children, make sure that every child goes and family goes and downloads this app at either of the app stores. Okay? Every child under 2, remember, is going to get $1,000 automatically funded on July 4th. Most kids between the age of 2 and 10 will get at least $250. If they're in a state like Connecticut, they'll get $500. Or Indiana, they'll get $500. And kids between the age of 10 and 18 get a free lifetime 401k. Right. That they can compound in where employers are going to be adding money into those accounts, etc. There's no investment decision for the parents to make. All the money that goes into these accounts will be invested in the best 500 companies in America. They will be direct shareholders. A little bit of Nvidia, a little bit of Microsoft, a little bit of Wal Mart. All the companies that you talk about every day, we're going to get all the people who have felt left out and left behind what the President calls the the Main street agenda. Every kid on every rural block or every rural street and city block is now going to be a direct shareholder in the upside of America. You and I talked about it four years ago. Today is another huge milestone in making this a reality.
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Scott Wapner
You're still pounding the pavement, so to speak, too. I mean, you mentioned what's happening in Indiana, your home state. For those who don't know on the state level, this has a chance to be pretty significant. Significant too, for those that are going to contribute as well. This is not just a federal thing that we, we are going to talk about. Tell me more about that because I'm not sure people fully understand that.
- [22:00]
Brad Gerstner
So imagine this. It's a private investment account for every child in America any can contribute to. Moms and dads can add five or ten bucks. Employers can add money to, philanthropists can add money to. If you start with a thousand and just add $50 a month, that's $50,000 at 18, that's $175,000 at age 30. So I'll give you an example. I was in Durham, North Carolina on Friday. The mayor of Durham, Leo Williams wants to get all 40,000 kids in Durham signed up for these Trump accounts. So he's through a big event. I adopted the city, the school, my Murray Massenburg 700 elementary school kids and I'm putting an extra $250 into all of their accounts. I just talked to the principal, I said if you get them all signed up, you tell me the amount of money that I need to send you and you can deliver it via QR code directly into the accounts of each of those kids. Everybody in America can do this for their local school. You just raise a little bit of money, you give it to the principal and the principal transfers it into these individual accounts. So think of this as an open sourced way for every community in America to get their kids off to a great start.
- [23:14]
Scott Wapner
Yeah, amazing. You keep us up to date on all of that as we, as we run right up to the deadline. And they do have a countdown clock here on the floor of the New York Stock Exchange, which you probably saw when you were last with us on the Cerebras IPO day. Let's talk some stocks. Because when you were last on, we talked Snowflake Lake, we knew the earnings were coming. You had said you were still a huge holder of it personally, but no longer in your public fund. My goodness. What's your, what's your reaction to this? All you can do is chuckle when you, when you look at moves like this. What's going through your mind when you see that?
- [23:51]
Brad Gerstner
Well, first and foremost, when I was on your show, I think you remember that I said, Scott, I think it was about two weeks ago I said the data infrastructure companies like Snowflake Databricks and Clickhouse, they're all in the token flow. What do I mean by that? As more tokens are consumed, it accelerates their core data business. I suggested I thought they would have a great quarter and wow, they had a blockbuster quarter. Hats off to the team at Snowflake and to Sridhar for doing this. This is a very different story than software apps like for example Salesforce that more directly compete with the AI model companies. But if you peel back the covers on what they report, reported 33% growth, accelerating growth versus consensus of 27% growth. They took up their full year guide by more than their Q1 beat. And the massive beat really came from these two trends. AI is accelerating their core more tokens, more faster growth in their core. And number two, their products Like Snowflake Intelligence and Cortex Code hit a critical mass in Q1. So I expect this growth to continue. We're seeing it as well in other companies that we own like Databricks and Clickhouse. But Snowflake continues to be a very, very large personal holding for me. We moved out of it in the fund, Scott, because I'm in the business, I have to manage this stuff year to date. Snowflake is up 10% even, including today's moves. Compare that, what we move the money into like Micron, which is up 200% year to date, or AAM, which is up 200% year to date. So for our investors, for our shareholders, that was the right thing for us to do. Even though today is an absolute spectacular, well deserved blockbuster day for Snowflake.
- [25:31]
Scott Wapner
So a couple of things. So you're not taking any profits, for example, in a micro, in the Micron, given the crazy move that we've even seen since we last spoke, just as you said two weeks ago. Let me, let me deal with that first. And I have another question about snow and databricks.
- [25:47]
Brad Gerstner
Right, so, so yes, we are actively managing our portfolio, Scott. I can't give you every tick and trade, but I will say with these parabolic moves, we absolutely are making sure that we're taking down some of our exposure in names that exceed our price targets, rotating it into other names. But remember, you know, on the all in pod we have this, this phrase, let your winners run. So a key in this business is that you've got to let win the best companies continue to compound. You've heard me say it on this show before. A simple heuristic for the people watching at home. Think about a size. Think about manage your portfolio in three sizes, Small, medium and large. Okay? And when things are all washed out, when everybody's despondent like they were earlier this year over the start of the Iran war, maybe you take your portfolio to a large position. When everybody gets you, you may want to take your portfolio from that large position to a medium sized position. In my parlance, I call it 3, 6, 9, 30%, 60%, 90%. So of course when we see these types of moves, we take a little off the table that we can redeploy when we see volatility in the market. You know, that's our job.
- [27:01]
Scott Wapner
So back to Snowflake for a minute because you put it in the same category as databricks, which you're an investor in obviously. And we wait for that to go public too. To what degree is Snowflake to use the words that Kramer used this morning, coming after databricks, the competitive angle. Now, what does that mean?
- [27:24]
Brad Gerstner
Well, make no mistake about it, these companies have been competitive from day one. They are. They're run by incredibly competitive people. They do very similar things. Things. But at the same time, this is one of the largest tams the world has ever known. Intelligence. Every small, medium and large business in the world is going to consume more tokens in the future, more intelligence in the future. So there's plenty big TAM for both of them to grow very quickly for a long period of time, but they're going to battle it out. I don't think it means that one's going to win and one's going to lose. And don't count out Clickhouse, which may be the fastest growing of the bunch of which is also, you know, one of our shareholdings. We fundamentally believe that data is the oil that runs the air engine. And these are three of the most important companies in providing the data. So as more tokens are consumed, more data is consumed and these companies are benefiting from that. And you see it in the results.
- [28:20]
Malcolm Methods
Hey, Brad, it's Josh Brown. If, let's say, a hypothetical CNBC viewer wants to, with $100,000 in cash, for whatever reason, they want to put it into the market. They believe in the AI story. They believe it's secular and it's got years to go, but they're staring down the barrel of an $86 billion IPO raise in the near term, not to mention probably something close when you combine anthropic and open AI, maybe even more. Can the market survive, support that much supply of new tech stock hitting the market at the same time? What would you tell that viewer who's saying, yes, I want to invest. Yes, I understand I shouldn't time the market, but I feel like there are three asteroids headed for Earth and maybe I should wait till after. How would you, how would you think about that if you were that viewer?
- [29:14]
Brad Gerstner
Yeah, Josh, great question and I loved your earlier commentary on Snowflake. Let's just say this. Today is not the day that you shove all in on the market. You know, go back to the heuristic. I use 369. And let's say you have zero in the market today and you want to put $100,000 to work. Then I would put three. Right. I would put 30% of that to work because you have to start at some point and then you wait for your moments. Yes, we have incredible IPOs coming starting with Space X rumored on June 12th, hopefully I'll be back in the New York Stock Exchange with the you guys. It's going to be an incredible IPO. It's going to raise about 75. It's going to raise about $75 billion. Okay, so if Altimeter and we do want to buy the Space X ipo, I've got to raise that money from somewhere. So I've got to sell some other stocks in order to buy Space X. That's just the way it works. We don't have unlimited capital and when Anthropic comes public in the fall or open air comes public in the fall, I'm going to have to sell some something else to buy this. So your point is certainly correct. But the only thing I would say Josh, is remember the depth of our capital markets. I mean we're talking 100 trillion relative to $75 billion. So in the grand scheme of things, I think particularly because we're going to have early adoption, early inclusion in the index for Space X, I think there's going to be enough capital to do that. But the bigger risk right now is simply that we've come a long way quickly. Right. We could have a 10 to 20% consolidation in the SOX or these other technology in AI markets and that would be a run of the mill consolidation. So you want to make sure that if you're watching at home you have some cash on the sideline. So when the market comes in, the secular trend doesn't change. AI is where you want your money but you have some more dry powder to buy the those things.
- [31:05]
Jim Leventhal
I look at the one thing I'm thinking about with the inclusion of the indices and Brad, I'd like your opinion on this is the weighting in the indices because they're going to have a market cap Space X, you know, one and a half trillion. And yet the at least with the triple cues they're talking about something like three times the float. Do you see any discrepancy in that? Does that lead to more upside if the float becomes bigger and they can add more to the indices? Just curious about your thoughts on. On that.
- [31:30]
Brad Gerstner
Yeah, I mean honestly, I've seen a lot of analysis on this, Jim. It frankly is a little too complex. I think for most of the viewers at home and even for myself, I'm not going to try to game that. All I know is this. There's no human being on the planet that is better at turning electrons into tokens than Elon Musk. Right. Let me say that Again, because we focus a lot on the launch business. We focus a lot on the communications business. Right, which is Starlink, which we all benefit from. But Elon is building the biggest data centers on Earth and eventually in space, of anybody. And nobody is better at turning those electrons into tokens. That is an extraordinarily valuable place to sit. He just struck a huge deal with Anthropic. I think more deals are to come. And that, from my perspective, totally changed the game on the Space X ipo. I knew that the launch business was great. I knew that Starlink was great. But that alone would not justify the valuation. Him building the data centers which are going to power all of AI and him then using those to train up his own AI with incredible team that he acquired from Cursor, I think is a total game changer for the IPO and puts them in a really good position. Wow.
- [32:44]
Scott Wapner
Okay, you come sit with us mid June. We'll do what we did for Cerebras. That was fun. And I appreciate the visit today.
- [32:51]
Brad Gerstner
It's great to be here. Everybody go out, download your Trump account. Right? This is forever for your kids. Get them on the right path to compound and make them a shareholder in America. Thank you, Scott.
- [33:01]
Scott Wapner
All right, Brad Gerstner, we'll talk to you soon. Coming up, Josh Brown. Best stocks in the market. We're back in just two.
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Josh Brown
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Angelica Peebles
We're back on HALFTIME report. I'm Angelica Peebles with your CNBC news update. A federal judge declined to block President Trump's executive order that tightens rules on mail in voting. The judge wrote that the Democrats who sued brought the case too early because the government had not implemented any new rules or produced flawed citizenship rules list. The judge noting that Democrats could ask for an injunction after federal agencies take steps to implement the executive order. U.S. forces deployed to war zones have been targeted using commercially available location data. That's according to a letter from U.S. central Command viewed by Reuters. Democratic Senator Ron Wyden sent a letter to the Pentagon accusing it of failing to take basic steps to protect U.S. military personnel from counterintelligence threats. And the European Union has fined Temu 200 million euros after an investigation found the Chinese discount retailer failed to protect consumers from illegal products. Preliminary findings last year found that Temu sold high risk products on its site, including baby toys and small electronics that didn't comply with EU consumer safety rules. Scott, I'll send it back over to you, Angelica.
- [36:03]
Scott Wapner
Thanks very much. Angelica Peebles, Josh Brown's best stocks in the market. And before we get to today's name, you just launched a new strategy conveniently called Porterhouse.
- [36:13]
Malcolm Methods
Yes.
- [36:14]
Scott Wapner
Expect nothing less. Expect nothing less.
- [36:17]
Malcolm Methods
Sure.
- [36:18]
Scott Wapner
Tell me about that. What is it? What is it?
- [36:20]
Malcolm Methods
So Porterhouse is a separately managed account strategy that we employ for clients at Fidelity and at Schwab. It's not all of a client's equity exposure. It's a portion where we're trying to do what we talk about a lot here on the show, own the best stocks in the market. It is systematic. We've built this with Franklin Templeton, which is a $1.7 trillion asset manager working with their quants to try to take this idea of owning the strongest stocks in the market and turn it from a list into an actual portfolio strategy. It's more selective than the best stocks in the markets list. Right Now I have 100, 180 stocks on my list out of the Russell 1000. We're in a bull market that should not come as a surprise. The Porterhouse portfolio running for clients right now is only 58 names that will flex as the market trades well or poorly. But that's around the Sweet spot for a bull market. 40 names on the low end. It's got its own built in risk management so we don't turn winners into losers. And I think the most important thing I could share about Porterhouse is how difficult it is for stocks to make that list. You've got to have a lot of things. We're looking at the way stocks are behaving before and after they report earnings the three days before, the three days after. We're looking at not just the uptrend but the slope of it. We're looking at a lot of different relative metrics. When you talk about strength, well, how strong and how strong compared to other names. There's of a lot lot that goes into that to make sure that we only own the Porterhouse cut of the market. But it's been a lot of fun developing this and clients are really into it. And you know, I appreciate everyone that came out for the launch party. It's just the beginning but so far we're having fun.
- [38:06]
Jim Leventhal
Quick clarifying point because when you were talking the verbiage up there was talking about great cash flows, great earnings but I know you with best stocks in the market are a lot of it has to do with technicals. So is it both technicals and fundamentals?
- [38:18]
Malcolm Methods
So we want to. It's a great question. We don't want to buy.
- [38:21]
Jim Leventhal
I only socialize in great questions.
- [38:23]
Malcolm Methods
We don't want to buy the 52 week high list. We know oh that stocks up buy it. We don't want to be in Gamestop. We don't write. We don't want to buy stocks that are rallying for mechanical reasons like short squeezes. We really want to make sure we're not only buying stocks that are trending higher and have strong technicals but there's got to be a fundamental backdrop or else they can't get into the portfolio. It's been tried before. Obviously there's a lot of people running some sort of version of this. I think what separates ours is we're not a relative strategy in a market that's correcting. We're going to own less stocks as time goes on because we can't fill our slots with stocks that aren't going up. That's I think that's a really critical difference. It's not relative momentum to the rest of the market. Either these are the best stocks or they're not. We will rather, we would rather hold cash in those slots waiting for new leadership to emerge.
- [39:14]
Scott Wapner
So right. Just. And just because it's on Your best stocks in the market list doesn't mean it's going to be in vice versa. You do have one today that is in both.
- [39:23]
Malcolm Methods
Yes, yes. So I wanted to. I wanted to talk about a name that is both in the best stocks of the market list, but also good enough for inclusion in the Porterhouse strategy, and that is Edwards Life Sciences. EW Company's been public since 2000. They were spun out of Baxter, but they've been around since 1960. This is literally the first guy to do an artificial heart valve transplant. So Edwards is a huge player in that market. They've done these for millions of people. It's a med tech company that is now, now starting to break out. You see it here, about 87. Pull back the chart. I want to show people what I'm talking about when I say breakout. So you see, there's been a lot of congestion at this level going back to the end of October, early November 3rd. Time is the charm. I think we take that level out. What you can see here basically is a company with an RSI at 63. That's a healthy level of momentum without being overbought. The last earnings report was absolutely an inflection point. The fundamentals are confirming what the technicals are saying. I think we're breaking out here into new space. Once again, this is a name that we own in Porterhouse. It's also on the best stocks list. I don't see any reason why when we break this congestion, we can't see this thing roll back up to 100.
- [40:40]
Scott Wapner
Yeah, well, it's. It's on the move again in both Porterhouse and the best stocks in the market list approaching a 1% gain for Edwards Life Sciences. Thank you and congratulations.
- [40:51]
Malcolm Methods
Thank you very much. Appreciate that.
- [40:53]
Scott Wapner
All right, coming up, call of the day, we got one firm calling for a more than 40% rally in a stock that Josh owns. We discuss next. Let's talk about Uber, because BTIG today says the stock's going to 100 bucks. 40% upside to Uber plays off Porterhouse. Ubereats. It'll stake delivery.
- [41:24]
Malcolm Methods
Yeah, I hope they're right. I don't see it happening in the near term because Uber is suffering from the same malaise that's hanging over the enterprise software space. The market just absolutely believes that autonomous vehicles will be a winner take all business in the world. Winner will be way more. And there's almost nothing that you can say to the people who believe that that will change their mind. And you can't disprove a negative and so long as that's the cloud hanging over the stock, the only thing Dara and the Uber team can do is continue to execute, which they have been. They had another incredible earnings report, great guidance for the rest of the year, making all kinds of deals all over the world for autonomous fleets, working with OEMs, working with AI companies. They will, I think they will have more autonomous vehicles on the Uber app than, than Waymo has. By the year 2030, they might have more than every other player combined. At least that's what the roadmap looks like. The market doesn't agree with me, but
- [42:22]
Scott Wapner
you think you got to stick around till 2030 and you're going to stick the stock.
- [42:26]
Malcolm Methods
I've been in it for a long time and I was buying it when it was literally crushed in 2021, 22. So I'm not going anywhere and I've already seen it trade to 100. The other thing that I would remind people, Snowflake is as big a market cap company and it's up 40% today as a misconception was cleared up. That's not, that's not out of the ballpark for something to happen like that for Uber, if and when they can finally get, get it through to people. The value is not in the cars. The, the autonomous cars seem really fancy and special and technologically important. Today they're going to be toaster ovens. There are going to be fleets of millions of autonomous vehicles that are owned by private equity firms. No one's going to be excited about owning a fleet of autonomous cars. But it takes a long time between now and when we get there. The value is going to be in the app and the relationship with the users. And, and in my opinion, Uber is laying the groundwork to be one of the most, if not the most important players. I don't know how long it's going to take for people to figure that out.
- [43:31]
Josh Brown
So Uber is the bet on the super app then? The super app that everyone chasing, they
- [43:36]
Malcolm Methods
have the super app. They're now doing hotel stays.
- [43:39]
Josh Brown
Sure.
- [43:39]
Malcolm Methods
They're working with the airlines, they're doing shopping, they're doing grocery, they're doing delivery. They're literally doing everything. And if you're an Uber one user, not only are you not paying additional fees for all those different services, you're actually getting cash to do other things in the app. It's very Amazon esque. They have that and it's, you're not paying a market multiple. You have 17 times forward earnings with 30% plus growth in earnings this year. Maybe they don't hit it and I'm an idiot and the stock falls to 50.
- [44:14]
Josh Brown
It could happen. Those people you're talking about, who doesn't appreciate this story, 2030 sounds like a very long time. But in my opinion, Uber is more a transportation company than a tech company right now. They're in the business of moving people and things from point A to point B. I might as well own FedEx or UPS, and I don't like either of those businesses either.
- [44:31]
Scott Wapner
All right, Santoli's next. Senior markets commentator and overtime co anchor Michael Santoli, as you see right there is at post nine. We talked at the top of the program, the Parabolic Tech stock du jour.
- [44:48]
Michael Santoli
Yes.
- [44:48]
Scott Wapner
Snowflake. So how are you judging what you're seeing here?
- [44:51]
Michael Santoli
It's wild. I mean, first of all, you have semis up a little bit as well today. So it's not one of these either or type of days. But I do think it's about the market just getting very excited for any other way to play the prevailing trend, which everybody wants to do. So if you think that semis are in the process of getting a little bit wrung out in the near term in terms of the upside, it's pretty exploited already in terms of those trends. I think the idea of just sort of letting the pressure off of one of these names and being very selective in software. That's now the new line. Oh, these types of software. Durable. The other type. We don't want to hear it. That's why these trade at three to four times the price of sales multiples as the former bellwethers like Salesforce.
- [45:32]
Scott Wapner
I was going to go there. I'm glad. I'm glad you did. It feels like we're getting a little more insightful and smarter to certain way. We're discerning. Yes. Better word. Thank you. In the way that we're assessing these software companies.
- [45:43]
Michael Santoli
We are. And you know, once they prove it right. I mean, 24 hours ago nobody was willing to make the leap and say snowflakes. It's part of the club. But now they are because they managed to show it. And as I mentioned earlier to the market caps relative to every other stock we talk about all day are very much modest. It's $80 billion. It's. It's kind of like, oh, that's cute. You know, relative to Microsoft.
- [46:08]
Scott Wapner
Cute. A year 20 semi.
- [46:09]
Michael Santoli
But it was a bigger than that, you know. And so I think that's part of the equation here too. And then non Tech. The best thing about a potential opening of the straight is that it hasn't happened yet, but it might. And I think the market's going to treat it that way till we get the real one.
- [46:22]
Scott Wapner
Yeah, no doubt. All right, I'll see you a little bit later. On closing bell, it's Mike Santoli. We'll do finals after the break. Three o'. Clock. Liz Ann Saunders, Tom Lee, Brian Belsky, rich Clarida, Jeff DeGraff. It's going to be a good one. Don't miss it. We're at record highs again and we'll see what this market does and where the headlines take us.
- [46:40]
Jim Leventhal
Farmer Jim Wynn Resorts. This was a $130 stock before the war. Looks like we might be coming to a resolution. It's now at $100. There's your opportunity.
- [46:50]
Scott Wapner
And you did buy.
- [46:52]
Jim Leventhal
I did buy some more today, yes.
- [46:53]
Scott Wapner
Okay.
- [46:53]
Brad Gerstner
Thank you.
- [46:54]
Scott Wapner
Don't bury the lead, Jim.
- [46:55]
Jim Leventhal
It's like 12, 59 and 40 seconds.
- [46:58]
Scott Wapner
Well, I know, but I'm managing that.
- [47:00]
Josh Brown
Malcolm, I'm going to Octa reports tonight. I mentioned before that in the world of agentic AI, we need chaperones in the room. That's Octa, Josh.
- [47:08]
Malcolm Methods
Service titan reiterated Top pick at Morgan Stanley, 118 target. From your lips to God's ears, Morgan Stanley.
- [47:15]
Scott Wapner
See a three. You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:29]
Edward Jones Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its 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 opinion. Such opinions are based upon information the half time 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 Tired of the
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Scott Wapner
21.