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Halftime Report
Buy the AI Sell-Off? 2/13/26
00:44:08
Scott Wapner and the Investment Committee debate how to trade the AI Sell-off and whether now is a good buying opportunity. Plus, the Committee share their latest portfolio moves. And later, the desk debate when it's a good time to get into a stock. Investment Committee Disclosures
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- [00:00]
A
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes, and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, Member sipc Thy ticket lady Jennifer of Coolidge.
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B
Well, many thanks, good sir.
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A
Here is my Discover card. They accept Discover at Renaissance Fairs?
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C
Yeah, they do here. Discover is accepted at the places I love to shop. Getith with the times.
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A
With the times. You're playing the lute.
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C
Yeah, and it sounds pretty good, right?
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B
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report. 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, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, air ripple effects, more sectors suffering from disruption fears. This week, our committee is buy some of those dips. That is the headline for you today. I got some buyers up here. I'll tell you where. Joining me for the hour, Shannon Sokosha, Jim Leventhal, Amy Raskin, and Stephen Weiss. So we will check the markets. As Carl and Court were just telling you, we've had a nice little turnaround here. You can thank Goldman Sachs, which was down pretty heavily earlier. It's come back. J.P. morgan, same story. Microsoft, Meta, Amazon, same story. That shows the Goldman move. We're going to get to all of, of that. The cpi, as you know, was cooler, but the biggest story out there remains how AI is just rippling through this market sector by sector, day by day. We have a good wall to show you that sort of takes you through that in what Barclays determines to be a sell first, ask later market. No mercy for almost anything. There it is. Software. You know about that? Well, gaming, okay. Legal tech, insurance brokers, wealth managers, property managers and freight off of that transports takedown yesterday, which was downright ugly. Weiss, take the first shot at this market, which, you know, maybe some people have looked at some of these areas that that wall shows. You have gotten banged up and said this is like, okay, a little crazy, a little ridiculous. Shoot first, ask later. But maybe you need to think about, think about this before you.
- [02:54]
D
Yeah, I don't even, you know, they used to say, don't shoot silly. The whites of their eyes, well, they're not even waiting to see the whites of their ey so they're shooting in advance of shooting first. So look to me, I made this observation last week that when markets go down, people say, wow, that's really healthy. But when they rise up with the same force and same vigor, like NASDAQ up 400 and the Dow up a thousand, nobody blinks an eye, says is great. Let me add to it. Well, to me that's the inverse. That's troubling and that's what we've seen, will continue to see now what happens now when you see these go down. I do think you have to buy. However, I will tell you that I'm looking to sell some things. I won't sell them down here. And the only ones I'm really looking to buy are the ones where I can really justify the valuation and I don't need to deal with is AI going to put them out of business, damage their business? And that question isn't going to be answered. I had a call with somebody who's like in a I and disrupting a major industry and I look at the companies he's disrupting and those are the Accentures and others similar. So. So I don't think you take this opportunity to buy those. I think you got to be confident where the fate of these companies is going.
- [04:12]
B
I just don't think, Shan, that, you know, people don't yet have the ability to accurately assess what really is going to be disrupted to the degree that the stock declines would suggest. It is a very much sell first because I'm worried and we'll figure it out later and then maybe I'll buy back the declines.
- [04:34]
A
Well, I think investors are looking at not they don't want to look stupid in this environment. We keep hearing how much will be disrupted and potentially disintermediated by AI and as an investor, you're looking at those businesses and now you're looking at that second level, that third level of the business and trying to determine if I just move out of this now, this way in two, three, four years, I won't be surprised. On the flip side, the other thing to think about though is a lot of these businesses have built their, their software silo or excuse me, their services sil based on a multifaceted business. And so if you think about logistics, if you think about wealth management, a number of the companies that have been disrupted over the last two weeks Those services businesses are deeply intertwined with other products that they're providing that are not necessarily going to be disintermediated by AI. And so again, this, this, the narrative has switched overnight from companies that can grow their productivity, that can grow their margin, that can grow their earnings, that can grow their businesses creatively, to being disintermediated by AI. And I think that's just really inaccurate because again, a lot of these services businesses are based on core competencies elsewhere that are tied to businesses that are very unlikely to be disintermediated.
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B
Let's, let's work in, guys. I'll get you in a minute, but let's just get right to it because I really think that's the differentiator for some of the people who are up here. Here from all of the decline and the doom and gloom and all of that. Bring in Josh Brown, because I want to start with commercial real estate. CBRE had one of its biggest drops since COVID SL Green, Cushman, Wakefield, Jones, Lang, LaSalle, Hudson Pacific. All huge declines. Brokers and fears are overplayed, says Morgan Stanley. And I bring in Josh, who's on the phone for us today, because he obviously agrees. So you bought cbre. That is one of our big headlines today. Tell us more.
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E
Yeah, so this was a name that went from being one of the best stocks in the market for almost a full year to all of a sudden getting raided by algorithms that decided, okay, today's the day we're gonna spook everybody about real estate and see how many people we can get to sell. And it worked. These stocks have just been absolutely crowbarred. But if you know literally anything about commercial real estate, you understand that nothing that's playing on your screen is based on reality. My commercial real estate broker is Barry Finkelman. He is simultaneously negotiating deals for my firm in Boca Raton and Charlotte. Right now. We'll be doing a New York city headquarters in 2028. I guarantee you. Watching him wheeling and dealing in action with the landlords, the building owners, the vendors, the trades, Literally none of this is disruptible. So much of this is based on how people speak, how they communicate. The math is the math. We are all going to use AI to have more information, to have efficient communication, and to make calculations very rapidly that we couldn't even imagine just a year ago. That's terrific. But in the end, people have to have responsibility for the transactions they're undertaking. Especially when you're talking about Fortune 500 level transactions that Jones, Lang, LaSalle and CBRE are conducting all over the world for corporate clients. So I looked at this and left. I hit the buy button this morning. I'm not telling you it's a forever hold. I think it's an easy trade.
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B
Interesting. I mean, but you do have to be concerned, I would guess. I think some of this sell off is due to the. The AI replacement idea that you're just placing. I don't know. You're going to have cbre, you know, brokering fewer spaces now, selling fewer square footage. Because if you. We're going to lose all of these jobs that we're filling those buildings, that's going to be a hit to the business of them and these others. That's obviously part of the fear.
- [08:37]
E
I mean, we're five years removed from that escaped mental patient James Altucher, telling us New York City is dead forever because of COVID If you didn't learn your lesson from that, I don't know what to tell you. This idea that we're going to have empty skyscrapers all over the world because for some reason we're going to decide, why would anyone want to walk out of their house and see each other when we could just tap buttons on our keyboards? It just flies. In the face of 100,000 years of human evolution. We're social animals. We're going to find reasons to be with each other, and that includes during the day, working hours. I just think that's such an insane narrative. I don't believe it. And I think we're all going to have a good laugh five years from now when it doesn't materialize.
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B
Stay with me as we kick this around because I want to pivot to something else in a moment, but I want to hear from the group.
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F
Jimmy, I like this. And you know, I was listening to you, Josh, and I was thinking to myself, okay, this is a tactical play, and there are tactical plays out there. You know, I'm thinking about software stocks that some of which are literally now trading at the same multiple as airline stocks. And I know you've made a very good case of Halo, and maybe airline stocks fall into that category. But at the same time, from a tactical point of view, these balance sheets are remarkably, I mean, just diametrically different. A software company versus a capital intensive, highly indebted airline. And that's a tactical opportunity. And I know you've done that with. With, what is it? The Titan Company. There are also opportunities out there. And I think you've been doing this, and I'm doing it, too, of looking at Great companies for the long term that you're just looking at these multiples and saying it's not very often you get great companies at great prices. I mean, one that I'm buying today and maybe we'll talk about it later. I hope I'm not front running is Disney. There's no catalyst here. There's no catalyst, but there's no catalyst.
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B
Thanks for front running a nice segment that we were going to do, but that's okay. Continue.
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F
Okay.
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B
Stuff. Go ahead.
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F
Yeah, well, here's the thing. Disney's not down on. On AI and people think that, you know, it's a Small World ride is going to be replaced by AI but it is down with the market overall. So what I'm saying here is there are two opportunities. There are the tactical, which I see Josh doing with, with CBRE right now, and there's the opportunity to get great brands, great companies at great prices. Doesn't happen very often.
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B
Okay, you go, go ride in the teacups for a little bit. Let me give you one little point. Another one. Are you going to front run something else?
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F
No, I'm going to back run something.
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B
Go ahead.
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F
You have to have capital with which to do this. I entered this year, Scott, you'll remember I trimmed Citigroup and Google at the time. I didn't have anything to do with it. I was waiting for this moment. These are great opportunities.
- [11:12]
B
All right, well, Josh, I'll come back to you in a moment, but I want to hear from Amy because it plays right into what she's doing as well. Where you look at the declines that we've seen in software, you know, year to date, flat out ugly. Right? Some of the biggest declines we've seen for a sector like this in 30 years. You bought more Cadence, you bought more Snowflake, you bought more cognacs. Tell me more.
- [11:34]
C
We did all of that a couple about a week ago when it was like the height of the selling frenzy. We're still underweight tech, so I was just using some of this opportunity to reduce our underweight a little bit. You know, these stocks ran a lot coming into this quarter, so. But get it. Getting cadence at a 35 p. E, I think that sounds. That's attractive. I like it for the long term. I'm not, as Josh was saying, I'm not really worried about I just placing them anytime soon. So we use the. We use the indiscriminate selling to add to some of our core positions.
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B
Snowflake's had a nice week. It's about 7%. It's been in many ways out of the crosshairs of. Of a lot of the selling. It's gotten in also some cases caught up in it. It has like some of the cyber names.
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C
Last week was a disaster for Snowflake. This week was better. So we got in what seems to be a good price for five days. So we'll wait. You know, the jury's still out. We own CrowdStrike as well. I didn't add to that, but again, Snowflake and CrowdStrike are AI enablers. You need them to actually make AI work well. So again, I think with the indiscriminate selling, we thought it was a good opportunity to add and I would put actually Cognac Vision and software in that. In that, you know, obviously had a great day yesterday. It was up about 40% on earnings. But, you know, for. They make the vision systems, you're going to need that if you want AI in the real world.
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B
So CrowdStrike, by the way, got upgraded today to a buy UBS 446. The target remains. So again, the stocks have gotten caught up a lot in that. Josh, before I let you go, you know, Toast is up a lot today, too. There's some of your stocks as. As Jimmy was referring to at Service Titan. I know he was. Was talking about that one. Here's toast, up about 5%. You want to comment on that before I let you run?
- [13:24]
E
Yeah. I said yesterday on the show, like they're going to report earnings. I'm pretty sure the earnings are going to be great. They have been every other quarter. But I can't speak to the reaction. Maybe it finally got carried away enough to the downside where there was no place to go but up. Last night they reported another incredible quarter. The stock responded by being negative 13% after the close. By the time this morning rolled around, it was plus 1%. You tell me what changed. Nothing. At a certain point, the algorithms were out of ammunition and you get a break. Revenue was 1.63 billion, up 22%. They beat on earnings, they beat on cash flow, they beat on number of customers added. They have 50% of their customers with more than $1 million in revenue on the platform using the AI product Toast IQ that they themselves pioneered. Everything a shareholder could want out of the call you got, plus good guidance. The stock is green. Does it last past today? I don't know, because people are still going to be insane tomorrow. But it's an example of a stock where there's no one left to sell At a certain point.
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G
Yeah.
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B
Well, it's bumping up as we see it live on our screen. Thanks for calling in you. You've helped us a lot. Appreciate you. Have a good weekend. We'll see you on the other side. That's, that's Josh Brown. Of course we need to talk about the mega caps too. Amazon has been in a bear market. Okay. Microsoft been in a bear market. I said we're getting a little bit of a reversal in some of those names. Amazon's barely positive as you see. It could be the ninth straight down day. That would be the longest streak since 06 for that name. Microsoft Weiss has had problems. You own Amazon, you own Microsoft. We spent a lot of time talking about the ripple effect of what Anthropic is doing and what they're building and Claude for work and the impact on Office. It's undeniably had an impact in this stock. Amazon says they're going to spend $200 billion. Freaks out the market out. The stock hasn't been the same since.
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D
Yep.
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B
Despite the fact that a week ago today we sat with Jensen Huang out in California ahead of the super bowl and he said this is undoubtedly justified and it's going to lead to bigger cash flows down the line. Market's gotten this part wrong. Apple's coming off its worst day since April so there's a lot to chew on over here.
- [15:52]
D
Yeah. So you know Amazon, Microsoft, I do own Microsoft's a larger position in Amazon and candidly I'm looking for the exit now coming into the year and throughout last year I've been saying that Microsoft to be the number one beneficiary of AI spending. I doubt that now as a matter of fact, the last conference call, they really didn't call out their cloud business Asia for you know, for a major upgrade in terms of revenue out, you know, forecast or things like that from all the air spending. And I do think their software product is primed for disruption and squarely in disruption. So. So I have issues with it. I don't think I'm selling down here now you can look at and say well forecast 24 times earnings. What is that ever been that cheap? But I don't know what the is going to be anymore and I don't know know what the cap spending is going to be anymore. Seems to go on for Amazon where my. So I'm not selling it here but I am looking for an exit. I may turn around, sell here in a week because it underperformed all last year.
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B
I was down 17% in six weeks.
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D
Yeah.
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H
Right.
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B
Year to date on that disruption. You know, Amazon can't get out of its own way.
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A
Well, so to the point about expectations, Scott, if you looked at Amazon at, at the beginning of the year 1 126, they expected $40 million of free cash flow. We're six weeks out and they now expect negative free cash flow for this year. So the challenge here is this rerating in what were potentially some vulnerable valuations and now there's actually evidence that we are going to have to re rate these stocks based on kind of continued expectations of pressure on that free cash flow, which again, in both the equity and credit markets made these so strong. Strong over the last couple of years.
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D
Yeah. And I see Amazon as again their cloud business possibly being beneficiary, but the spending you have to keep going through to get there sort of puts the ROI out further into the future.
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A
US was up 24% which was a great number.
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B
They still have such great belief that it's going to pay off. Matt Gartman, who runs, was on the network in the last couple of days with, with John Ford.
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F
Yeah.
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B
Justifying what they're spending and how great the payoff is going to be.
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D
Right.
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B
It's, you know, the obvious corporate speak that you're going to get, but nonetheless you have to take these folks, I think at, at face value until they're proven otherwise.
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D
Exactly. I think you do. But I don't like buying companies when they're in a major cap cycle. I like buying them when they're coming out of it. And I don't think see where the light at the end of the tunnel is there.
- [18:33]
C
By definition, return on capital is dependent on how much capital you're putting in. So we're putting in a lot more capital. What worries me most honestly about the last couple of weeks is that we got capital raises, capital raises across the board. And the semis didn't respond well.
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B
They have been at record highs.
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C
Memory responded but you didn't get it. You didn't get an impact on Nvidia, you didn't get an impact on Broadcom and those Capex raises. If they were so big that they surprised investors that they took the hyperscalers down. You didn't get that. That they were so big that they lifted the, you know, theoretically the beneficiaries and that that's a big disconnect. That hasn't gotten a lot of attention. But it's worth thinking about.
- [19:15]
B
I thought the, the note from JP Morgan today regarding the sell off in the transports and logistics names applies to across the board where they say I'm tying it back to this mega cap conversation. We don't expect this overhang will dissipate quickly given the hair trigger response to any hint of a disintermediation risk. Now you could say the same thing about mega cap spending. We don't expect this overhang is going to dissipate quickly. Any time somebody mentions a large number the market's going to have to come to grips with it. And to this point point it hasn't done that well, it just hasn't.
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F
Let me frame my response to this by noting that we enter 2026 quite worried many people about the valuation of mega cap tech. Well we're not so worried about that anymore. Now these valuations have come down Microsoft, Apple, Amazon to the low 20s as we're talking about. Frankly I think that is cheap enough to buy. If you're wondering why I'm not buying them today is because they continually go down as we're all talking talking about on the show right now. But that will change and I think you just have to be patient here and wait for these stocks to bottom out. But Amazon as an example of what we're talking about is likely to be a buy pretty soon. Steve, I don't take issue with what you said. I think it's very wise that you don't like to buy stocks when they're heavy in the capex. I get that. But there is a point in time where you have to say do you believe that Capex will be monetizable? That there will be a return on investment?
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D
Investment?
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F
I am thinking about that Jensen Huang interview and the Brad Gerstner interview that you did last Friday in which they say particularly in these cloud services from Amazon and Microsoft and the like that there are positive returns on investment right now. So I put this all together and I say they are buys right now except for the fact that the charts are so ugly and you just have to wait for these stocks to bottom.
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B
Let's talk about a stock and a chart that is not ugly and let's take a look at Applied Material Materials because their sales forecast crushed estimates there it is up near 9%. We don't have any direct ownership but the semi equipment names have have fared very well. The semi design companies are interesting to look at in light of Amy buying more in pinch.
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C
Yes.
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B
So if you're on the right side of this semi business, by the way, the SMH as I said earlier this week, hit another Record high. So the chips have done well, you could say. Well, Nvidia has really done that much.
- [21:41]
C
Right. And memory has been sort of driving all of that. So no. And that's partially why we also bought Cadence, which is semiconductor chip design. But impinge had a rough quarter. It's down. It was down on the quarter. We bought more after the quarter. We believe in this long term they do ultra high frequency RFID, which is really key to automation and logistics management. It's a small cap stock, about 3 billion. But we like it. We think it has a long term upside, even if it's in a little bit of an air pocket.
- [22:10]
B
The other air related play, utilities worth looking at to up 9% to start the year. That's the best start to a year in 25 years. We'll keep an eye on impinge. Obviously it's up five and a half percent. And again Amy Raskin buying more of that nature. So I think you get the point, you know, from, from Josh to others on this desk who have looked at some of these declines across the wall of sectors that we showed you at the very top and said in some cases enough is enough. Utilities have done well, industrials have done quite well. You bought more Leidos, Mr. Weiss.
- [22:47]
D
Yeah, so the SAIC response reported and they always have sort of mixed quarters, 1/4 up and quarters down on that quarter. And because of the nervousness in the market, you saw the stock trade down from about 190 to roughly 170, 172 on percentage basis. Not monstrous, given the move in the stock. But you know, I reached out to the company and we were both careful because they're in the quiet period and going to report earnings. So I don't want anything know anything about that. I just want to know the market intelligence. And that's what they came up with as well. So management has been excellent. The new management's been there for about two years. They've executed and over delivered on everything. I love defense. I want to be in more defense stocks. And so that's why it's Leidos, which is already one of my larger holdings.
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B
All right, well, you guys are popping a bunch of names which have been, you know, we've been hearing a lot about a lot of selling. So we're trying to get away from that and focus on what, what's happening here, which tends to be, at least today, a bunch of buys. What about industrials still?
- [23:54]
A
Like, yeah, I mean, you know, if you look at just the kind of the cyclical economic rebound that we're seeing globally. That's why you're seeing 7 out of 11s and P500 sectors are actually outperforming. If you, if you think about that, there's a lot of room to maneuver underneath technology. You look at emerging markets, you look at Japan and Europe, those are areas where you can pick up that cyclical exposure and sort of stay out of the fray of this, of this disintermediation theme.
- [24:20]
C
Ames, we are very overweight industrials. We're actually very overweight ex us which has worked out really well. And as I said, we're still underweight tech, even though we're adding to some here. I mean, I think you're having a global boom right now. You're having. I think somebody said to me yesterday, 91% of central banks are easing. You're getting fiscal stimulus almost everywhere. Valuations are more attractive. Expectations are lower. We just think that's a much easier place to be. We've talked about banks. Japanese banks have been on fire this year. European banks are still doing well. So we think there are a lot of areas to just sort of benefit from this cyclical upswing.
- [24:57]
D
You know, I'm sorry, No, I have a problem with cat. I was looking at a Goldman report from July of last year and they had a price target of 435. And I look at the stock today. This is Caterpillar, you know, so this isn't open AI now, part of it is that they are part of the tool belt for AI and that's great. But I feel uncomfortable with the valuation here. But I felt uncomfortable with it at 680 maybe like three weeks ago.
- [25:28]
C
Right. We just trimmed ABB. We just trimmed Sandbake. A lot of these names have moved very fast. You have to manage your position size always. Yeah.
- [25:36]
F
I think it's quite possible that the earnings beat expectations to a degree that the valuations were worried about cure themselves. And I feel it too. Okay. Like I'm looking at Westinghouse Air Brake Wabco, it's been on a tear. And I look at the multiple and I think really a railroad equipment manufacturer in the low 20s. I have a feeling their earnings are going to really wildly beat expectations. And we may be looking at something that right now is in the high teens.
- [26:00]
C
Right.
- [26:00]
D
Go ahead.
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C
What cyclicals you tend to buy when they're more expensive, you know, just in the earnings.
- [26:04]
D
Exactly.
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C
Go into the earnings.
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D
Yeah. My issue is that I think they'll beat earnings, but I still don't think whatever number they print is going to be support of the valuation. It's going to be supportive of momentum in the stock. Right. So if they miss earnings, the stock could be down 20%, you know, before you have a chance to hit a button.
- [26:23]
B
All right, so we'll, we'll squeeze in a break. Stock's green across the board in terms of the major averages. All but one of the S and P sectors are green. So we've had a nice little turn here and we do have more moves to get to, which we will do in the commodity space. Jim has another one to tell you about as well. That's all. When we come back.
- [26:46]
A
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- [27:20]
C
And the best part, they accept Discover.
- [27:22]
A
Except Discover in a little place like this? I don't think so, Jennifer.
- [27:26]
B
Oh yeah, huh?
- [27:27]
C
Discover's accepted where I like to shop. Come on, baby, get with the times.
- [27:32]
A
Right. So we shouldn't get the parachute pants.
- [27:35]
C
These are making a comeback, I think.
- [27:39]
B
Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen.
- [27:47]
A
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C
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A
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- [28:30]
B
All right, welcome back. Let's take a look at gold. Very much on investor minds of late. And there it Is, back above 5,000 yet again.
- [28:40]
C
I trimmed a little. Yes. Which is very.
- [28:43]
B
I mean it is because the price targets on the street continue to go higher and higher.
- [28:48]
C
Right.
- [28:49]
B
6,000, 6,500.
- [28:51]
C
And we still own it. And I think it will continue to work. It just sort of is a straight line up at this point. And we used it to buy some of the software names that we talked about a little bit earlier again, I've spoken about Franco Nevada on this, on the show lot of times. I think it's been a great stock. I think that continues to work. The miners are still kind of where I would like to be right now because the embedded gold price into those valuations are about half of where we are right now. So you have a lot of room that it could come down. So we still like it. We still, you know, all the reasons that we bought in the first place are still valid. It's just the prices moved up so much.
- [29:26]
B
Weiss, you still own the gld. It's interesting for, you know, for those who have. Haven't watched the show for the last almost 15 years that we've been doing it together, your general take on gold is like, I don't want to own it because I can't value it.
- [29:40]
D
Yeah.
- [29:41]
B
And this. Is this just purely a momentum run for you like you had at times within Bitcoin?
- [29:48]
D
No, it's a little more than that. And I couldn't value it. And I was skeptical because some people say, you know, it's an inflation hedge, other people say it's an asset. You know, so it was basically what's the definition of. Fits the reason I hold it. But at this point, what it is, it is a safe harbor. And when you see the U.S. treasury, the treasuries being sold by foreign countries, which is a whole different issue. And when you see all the trouble spots in the world, including in the US if you want a safe harbor, it's going to be gold. Not necessarily. I still think the Treasuries are a safe harbor. Sure, should be. But others are going. And pause. You're seeing. I believe, and I have no real proof to show this, but I believe a lot of people that were in Bitcoin are now in gold, you know, and I'd say that with, with very little fear of being proven wrong. So those are all reasons I like gold and why it's not a trade.
- [30:47]
A
We've been overweight commodities for the last year. And I would say now, if you look at kind of the end where we're talking about this disintermediation closer to the consumer, close, close to the end of the supply chain, the front of that supply chain on the backdrop of global growth, I think that we're seeing increasing interest in real assets broadly and in industrial metals in particular.
- [31:06]
F
The.
- [31:07]
B
The sector that's the best performing year to date. I transition there because we have another move from Amy is energy. Yeah. SLB is up 32% year to date, much needed and you bought more of it. So you're a believer in this trend?
- [31:22]
C
I guess I am. We're overweight energy and we have spoken about SLB as well. I like the name. I think the under investment in the energy complex as a whole has been massive for a very long period of time. So I think this is a long trade. We still like, you know, they had good earnings. We still like the name from a long term perspective. I think more people are coming around to this, this thought now. So if it gets overdone we will trim or sell. But right now we still like it.
- [31:50]
B
What about Williams which got upgraded today to outperform at scotiabank target to 84. You own that name too. And that target also goes to 78.
- [31:58]
C
At Steeple and that had a great quarter yesterday if you want to put it up. I mean it was again a little bit of a straight line up. So we like to Williams again it's the natural gas play. You do need the LNG exports to sort of kick in to continue to support it. But you know, basically a fixed cost business with a commodity overlay. So we like it from a long term perspective. Although it is getting more expensive up here.
- [32:22]
B
All right, let's get the headlines now. It's Seema Modi. I seem to.
- [32:26]
C
Hey Scott. The Justice Department suing Harvard today alleging Ivy League University illegally withheld its admissions data. Now the DOJ claims the data will help assess whether Harvard is complying with a 2023 Supreme Court decision determining the race based affirmative action in college admissions is unconstitutional. In other news, the US Is reportedly sending the world's largest aircraft carrier to the Middle east in a major escalation as the US Conducts nuclear talks with Iran. According to Reuters, the USS Gerald R. Ford will join the Abraham Lincoln carrier in the region along with several guided missile destroyers and fighter jets. The Ford has been operating in the Caribbean and will take at least a week to reach the Middle East. And the New England Patriots wide receiver Stephan Diggs pleaded not guilty today to felony strangulation and other criminal charges. According to court records, his personal chef told police Diggs smacked her and tried to choke her during a dispute about money he owed her for work. Diggs has denied the allegations. Scott, Senate back to you.
- [33:25]
B
All right, Seema, thanks for that. That's Seema Modi. Up next, the big money on the hardwood. CNBC just dropping its exclusive NBA valuations list. Find out which teams took the very top spot. We're talking some very very big numbers at the rim when we come back. Looking to get out there and feel.
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Foreign.
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Welcome back CNBC out today with our official 2026 official NBA valuations. The numbers they're staggering. The average NBA franchise now worth more than five and a half billion dollars that is up 18% from only one year ago. Three franchises, the Golden State Warriors, New York Knicks, L.A. lA Lakers have officially crossed the $10 billion mark. Rounding out the top five, the L A Clippers and Chicago Bulls. For more on what is driving these record breaking valuations, let's bring in CNBC Senior Sports reporter and our valuation guru, Michael Ozaney. It's good to see you.
- [36:37]
H
Great to be here, Scott.
- [36:38]
B
Should. Should any of this be a surprise to us?
- [36:43]
H
No, I don't think so, Scott, because we've discussed often the new TV deal that the NBA has that began this season, which is 2.6 times greater than the previous deal. And in addition, we've seen the multiples of revenue that buyers are paying for nbt. NBA teams continue to go up. And on top of everything else, we've had the influx of private equity money, which was a big part of the Celtics sale, and we've also had new arenas. So you had the Clippers move up several notches on this year's list because last season was their first one in their new arena where they're getting all the money from where. When they're playing in crypto.com arena, they were sort of the third tenant behind the L A Kings and the L A Lakers.
- [37:30]
B
Golden State being number one to me is remarkable. To your point. Yes. They have the. The Chase center, the house that Steph Curry built. Which leads me to my next point that if you would have told me, okay, L A New York, I completely get that. Your two largest media markets and, you know, Chicago, obviously another one, but the. The impact that their success and Steph Curry has had on that team from a business standpoint and its valuation strikes me as maybe the greatest that we've ever seen from. You could make the argument if not one, but a very small group of players.
- [38:12]
H
I think you hit the nail on the head, Scott, because you have to look at the timing as you're alluding to when they moved into the arena and the team was just ascending with Steph and winning titles. So if you look at it in terms of general ticket revenue, the warriors are the only NBA team that crosses the $300 million mark in general admission ticket revenue.
- [38:34]
B
Wow.
- [38:34]
H
You know, they're about 60 million ahead of the Knicks, who are number two. Their EBITDA from that arena and their NBA revenue is second only to the Dallas Cowboys in all of sports. So it's not just huge revenue, it's also immensely profitable.
- [38:53]
B
Well, that's. That's amazing to hear. And lastly, you know, as you mentioned, the. The NBA in many respects has opened its pool of potential capital in ways that the other leagues have not. Private equity. Of course, the NFL now allows, as does the NBA, but the NBA, I believe, also allows sovereign wealth money. So as you continue to increase the pools of potential capital, it's not a surprise to me either that now you start getting franchises, even, you know, not only the premier ones at these incredibly escalated numbers.
- [39:29]
H
Yeah, it's going to trickle down because the new national TV deal, that money is split evenly among all the teams. You know, I saw your great segment a few days ago with Mark Ganis on the potential sale of the Seahawks and he alluded to the fact that now the NFL, looking at the success that the NBA has had in bringing in outside money, foreign money, sovereign wealth funds to their teams, may consider the same thing with the sale of the Seahawks, which could set that team to a record NFL sale price. So this is going to impact all leagues to varying degrees. But certainly I don't believe we're in a so called bubble with valuations and we're going to consist of continue to see team values go up and following in the footsteps of the Clippers, not too many years from now is going to be the 76ers because they're going to be moving into a new arena.
- [40:23]
B
Wow, great stuff. Really interesting to think about, Mike. Thank you. Mike Ozanian. To see the full list, go to cnbc.com/sport Coming up next. Even more committee moves, Jim. Adding to one name, it's down 5% this week alone. It is popping today. We tell you which one next.
- [40:58]
E
Welcome back.
- [40:58]
B
Let's take a look at shares of Wynn. They had a mixed quarter. The stock's getting a nice bump today of some 5%. Jimmy, you bought more.
- [41:08]
F
Yeah, I actually didn't wake up this morning, Scott, thinking I would buy more because I thought the stock was going to be down.
- [41:12]
B
So what happened, Jimmy, what happened?
- [41:15]
F
Sometimes the price action.
- [41:17]
B
He saw me.
- [41:18]
F
Sometimes the price action commands action. And I really thought it would be down on the mixed quarter that you mentioned. And what was the mixed quarter? You know, Macau, they didn't have a great hold. Big deal. This is a long term story and you're looking, looking at Al Marjan, which is their resort coming up in the United Arab Emirates. It's already topped out on the 70th floor. They're going to open it up in about a year. And that is the long term play here is geographical diversification. New lines of revenue coming in to win. And I think the price action today is telling you that the street is paying far more attention to that than whether they had a good, a good quarter at the gaming tables in Macau.
- [41:54]
B
All right, so help me out for a moment. I'd love to. You roll out of bed, you put on the velvet slippers, you go to the Desk and you're like, if the stock was down, you weren't gonna buy more.
- [42:07]
F
Yeah, I actually was, but it was up.
- [42:09]
B
So you did.
- [42:10]
D
I'm in the same place, Scott. I don't know what's going on here.
- [42:12]
F
You guys are just funning me now. You know exactly what I'm doing.
- [42:16]
D
I'm.
- [42:17]
B
That is a completely legitimate thought that I have. You like the company so much, you like the stock so much, why wouldn't you buy it if it dipped?
- [42:25]
F
Because a lot of times in this stock people look in the short term they do. People look at gaming stocks as a trading vehicle and they would have looked at this and said, oh, they missed the quarter, whatever. And now I'm going to sell the stock. And if it had gone down, $100 becomes a kind of line in the sand that I wasn't sure it would hold. But as I just said, you know, this is a long term player. This isn't about whether Vegas is having a good quarter or not or Macau. This is about the United Arab Emirates. They are the first person, first company to open a resort there. Disney's going to follow them. But this is a wide open, unplowed territory, unplowed field for them. And they have the first mover advantage. And I think the Street's paying attention.
- [43:04]
D
So what? I don't like it if I can ask a follow up question. If you've got such a long term view and I know that's what you do, why would you take, take any opportunity of weakness in the stock? Because it's only momentary. According to you. Rather than buying it on a plus tick, you have the opportunity to buy it. Downtick.
- [43:21]
F
I love your question.
- [43:22]
B
Let me also, before you answer it, suggest that, you know, Goldman Sachs reiterates the stock is a buy today and they say the pullback creates a compelling risk reward.
- [43:32]
F
So and the pullback that I think.
- [43:34]
B
They are referring to the one we've already had.
- [43:36]
F
Question. Yeah, right, exactly. Remember I cut this in half a few months ago at 126.
- [43:41]
B
They lower their price target at the same time by the way to 135.
- [43:43]
F
Okay, well 135 from 1,400.
- [43:45]
B
Okay, you take that.
- [43:46]
F
But remember Scott, I trimmed this at 126. It wasn't that long ago. And you know, you can have a core position and trade around it. So I maintained the core position. I was looking to get back in. And if it had gone down today to both of your questions, I would have had to wait and I would have been terrified of that 100 look level and taking it out and then the Alos come in and pound it down below that. But it held. So I'm in today with, with what I took out a couple of months ago.
- [44:11]
B
Okay. All right. That's a good explanation. Thank you.
- [44:14]
F
I thank you your honor.
- [44:15]
B
You're welcome. Santoli's next. Senior markets commentator overtime co anchor Mike Santoli joins us with his midday word. I had your early word right next to you this morning in the, in the nine o' clock hour. We've made a nice move since.
- [44:47]
G
Yeah, we have market trying to kind of get back in gear and you know, definitely still having to absorb some weakness among the big guys. We've had three notable pullbacks this year so far, Scott. And the S&P 500. Every one of them stopped at the same place which is just under 6,800. Every one of them basically stopped before it got to a 3% pullback. So I guess right now that's the rule at least you make an attempt to buy a 3% pullback hits the 100 day average. So that's one kind of trading mechanics part of this. And then I guess coming into the week there was a chance that the jobs number, the CPI could together go the wrong direction and start to kind of paint a stagflationary picture. Both of them probably upside surprises or pleasant surprises in the sense of not being as bad as feared and holding together along that Goldilocks line. So all that you know, put together I think helps. We'll see. It's still got plenty to prove here. I still think it's market's been kind of lucky to avert more danger but, but so far it's doing so.
- [45:49]
B
So we've gotten through the meat of the economic data that we were waiting for. Right. The jobs report delayed and now we have CPI and we've gotten through the heart of earnings the most important companies by and large have reported except for one.
- [46:06]
G
Yeah.
- [46:06]
B
Which drives me to waiting for Nvidia as the next big catalyst for what has been a tricky trade lead in AI.
- [46:15]
G
It'll definitely be the focal point. You go back a few quarters. It hasn't necessarily been a market wide inflection point but it's at an interesting spot. I mean Nvidia is exactly where it traded six months ago right now. Somehow the rest of semis have managed to keep things moving forward. It's obviously seen as, you know, shifting fortunes within that. So that's, that's part of it. And obviously memory is taking up the the mantle. What I'm also watching though is the stuff that was first hit on some of these fears and in the pullback in January and February. If they will continue to respond to these oversold conditions and rally beyond today, beyond just a little bit of a reflex short covering bounce.
- [46:55]
B
Yeah. Well, we've had buyers of several of the names in those baskets so we shall see at least certainly on our show. Michael, I'll see you later. Thank you. Mike Santoli. Finals are next. We'll see how that last hour is today. On the closing bell, Dan Ives on the software sell off, Microsoft's decline, etc. Again, that stock in a. In a bear market. Anastasia Amoroso, Stephanie Link, Kevin Simpson will do final trades twice.
- [47:21]
D
QXO. They announced an acquisition earlier this week. Over 2 billion. That's going to be the story. The stocks could keep going higher.
- [47:29]
B
Okay.
- [47:29]
C
Amy Thermo Fisher.
- [47:31]
A
It's.
- [47:31]
C
It's gotten impacted by the AI trade. Our amazing health care analyst likes it a lot.
- [47:37]
B
All right. How many waters you crush to just two. All right.
- [47:41]
H
Your average Apollo Global.
- [47:43]
F
It'll snap back.
- [47:44]
B
All right. Chan.
- [47:44]
A
Consumer discretionary. There are a number of levels of stimulus this year.
- [47:48]
B
We need to order more. We got enough. We're good. Okay. We got a lot.
- [47:51]
D
All right.
- [47:52]
F
Nespresso.
- [47:52]
B
I'll see you on the closing bell. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [48:07]
A
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 it's tax season.
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