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Halftime Report
Fresh AI Jitters Shake the Market 12/12/25
00:43:53
Scott Wapner and the Investment Committee debate the headline that Oracle is delaying data centers to 2028 from 2027 and what it means to the AI trade and the market. CNBC's Seema Mody joins us with the latest out of Oracle. Plus, the Committee shares there many portfolio moves. And later, we hit the latest Calls of the Day. Investment Committee Disclosures
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Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Carl, thank you very much. Welcome to THE Halftime Report. I'm Scott Wapner. Front and center this hour, the broadening trade and why some say it's only getting started, especially with some fresh air trade jitters, AI trade jitters. Today we'll discuss and debate with the investment committee. Joining me for the hour today, Steve Weiss, Jim Laventhal, Brenda Vincelo and Kevin Simpson. We will check the markets. We did have an extension of the record high for the Dow off the open today, but as you can see now, it's a, it's a wholly different picture. There's the intraday look and we just showed you the other major averages which have all gone decidedly red, especially the nasdaq. Let's show that because that's where the pain really is. That headline that Oracle is delaying some of its data centers for open air to 2028 from 2027. The delays are said to be Weiss, largely due to labor and materials. But a delay is a delay and frankly, anything that calls into question the pace of the build out or the return on the investment is going to make this market skittish. And there it is front and center in your face today of what that looks like.
- [02:23]
Steve Weiss
Yeah, and I agree with that. And particularly when multiples are at levels that are assuming that you're going to get a quicker reb turn. Look, the reality is, you know, we just sold electrical contract that works primarily in data centers for four times what we paid for it just two years ago. Now there's some M and A that drove that and that's because of the scarcity for skilled labor. So that is factual. It is also factual that this delays the return, the investment. So you're absolutely right. So companies like Oracle should be down. Companies like what we're seeing, you know, across the board, the energy companies, so GE, Vernova, etc. However, if people sold Meta because of their Cap X, this should be, this should be attractive to them because they're delaying the spending and by that time you'll be able to see if there will be a return on the investment. So I would use this buying opportunity, I did use it for trade and it's going to be a quick trade buying the Qs here. Just, just sell off on this sell off, because I think it's wildly overdone, really speaks to the nervousness in the market. The nervousness about AI, which we saw in Broadcom, which I thought was a really good quarter and I don't own it. So it's more emotional than factual at this point.
- [03:40]
Scott Wapner
I mean, there's just so many questions if you're, if you're delaying something, Brenda, until you know, 2028, you know, is the demand still going to be there in 2028? Is, are we going to have overbuilt already by 2028? You're just unable to answer any of these questions. Not you, but us. Right. You just don't know. But there's enough skittishness in this market about the trade in general that an announcement like this or a like this is going to show up pretty dramatically in the market.
- [04:12]
Brenda Vincelo
Absolutely. And I think you're exactly right. Nobody knows the answer to those questions. And we talk to a lot of managers who invest in our private credit managers, for example, that are leery of doing any lending as it relates to data centers. Because there's just a big question about what the long term outlook is for those facilities and whether all of the capacity we think we're going to need now is really going to be needed in the future. So I think having a moment like this and taking a little bit of the wind out of the sails of some of the air trade is a healthy development. Because I think we don't want to get ahead of ourselves. But there's no doubt that this is a huge wave of technological innovation that's going to change a lot of things. But when we think about all of the Capex in the infrastructure layer. I don't think we want to do a repeat of the telecom buildout that happened in the late 90s that then took years to absorb that capacity.
- [05:06]
Scott Wapner
You just don't know whether you're going to repeat that or not until you do. That's the problem with a sea change like this. And when you do a build out like this, you just don't know what's what until perhaps it is too late. I'll come back to the table in a minute, but I want to bring in Seema Modi. He's been following this Oracle story from the get go. It is a equity story, it is a debt story and it is this new development. But also what you flagged earlier today, this filing in the 10Q yesterday. Can you just put the whole puzzle together for us today?
- [05:41]
Seema Modi
Let's start with that headline. The market certainly sniffing this open air Oracle datacenter delay story as a financing issue. Because remember, the street has been laser focused on Oracle's $300 billion deal. Scott, with open air. So any signs of delays, the market is going to be sensitive to. And yes, it does follow a new 10Q that was filed by or that shows a significant increase in datacenter leases, which as a credit investor told me does raise the likelihood of Oracle going to the debt market sooner than expected. The street was sort of anticipating early to mid-2026. Now the expectation is this needs to happen in early 2026. And then the question is will it be a jumbo bond sale or a term loan involving banks which does increase the likelihood of those banks using Oracle's credit default swaps as a hedge. That's one of the reasons we've been seeing CDS surging in recent weeks. Scott.
- [06:37]
Scott Wapner
Yeah, I mean this week look at it, I mean 20% near for the CDS week to date seemed. Thank you very much. You know Kev, you sold Oracle over the past week. Are you out because of the issues like we're seeing in the markets and now like a report like we get today brings to mind just what's happening here.
- [07:00]
Kevin Simpson
Yeah, I wish I could take credit for that. But more candidly, it had a lot to do with just the poor price action. So as the stock has been breaking down over the past three weeks, we use a relative exit strategy. So we sold a third at $280 and obviously wish we would have sold it all there. Sold another tranche at 240 and then just within the past week we sold the last tranche at 200. Not really expecting Any more bad news because so much had already been piled on the shoulders of Oracle which is why when you have something that you need, perfection, any little problem there is going to be amplified and that's what we're seeing today.
- [07:34]
Scott Wapner
Jim, you still have it.
- [07:36]
Jim Laventhal
I'm still hanging onto it. It has now become the more speculative position in my portfolio and it's a reason why we don't just own one stock, why you blend it with other stocks that are more stable. But I do think that if the open air money comes through, which Scott, as you were pointing out, we're not going to know frankly for years but if that money comes through, this is a stock that's going to be meaningfully higher from where it is now. And I'm willing to take the risk that open air money doesn't come through basically at the end of the day because this is Larry Ellison's company with decades of a track record of being successful. He has frankly, to be quite honest risk the company many times before. There's nothing that guarantees he'll be successful again. But he does have a long track record of success.
- [08:20]
Scott Wapner
Yeah, retort to that or yeah, here's that. Or what do we want to do with that?
- [08:26]
Steve Weiss
Well I'm not going to do anything with Oracle because Oracle is a different company now than it was and Oracle is always going to have until they pay down the debt and until more importantly OpenAI is able to generate enough revenue to fulfill their part is clearly.
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Scott Wapner
In Sam and Larry we trust.
- [08:47]
Steve Weiss
Yeah, well, right.
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Scott Wapner
Altman and Ellison.
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Steve Weiss
Yeah and I'm not willing to do that. Larry Ellison's got a long track record of performing and Oracle's a great company but this is just again a different world and what they've mortgaged and they have mortgage part of the company.
- [09:02]
Scott Wapner
Man, look at that chart is that, that is something over the last three months the CDS blowing out and the equity getting blown out.
- [09:14]
Steve Weiss
Yeah and I don't mind debt in a company that can, that can afford, that can carry, carry the interest payments and they can do that in spades. I don't mind that. I think that's actually good financial management. However you got to look at what the end market is found in market is OpenAI which hasn't been able to generate and you difficult for you to forecast that they will generate enough revenue to live up their part of the bargain. And as we've seen over the last couple of weeks with Google coming in and taking two steps ahead of OpenAI I just don't think you would Put all your eggs in one basket. And while that's an exaggeration of what they're doing, there are so many other ways to make money in the market. Playing the trade and trying to pick a falling knife in a sector where investors typically don't do that.
- [10:00]
Jim Laventhal
Yeah, so for me, it's not a falling knife because I've been in this for three years, so I've had a triple in it already. And what I'm willing to say here is that if this goes right, which is a question, there are real risks here. I used the word speculative a minute ago. I'm going to use it again. This is now a speculative stock, but if it comes through, and by it, I mean Larry Ellison. I do mean Sam Altman. I mean open AI. This is a stock that 180 right now will be over $300 kind of in the blink of an eye. And by the time the market figures that out, it's already going to be much higher.
- [10:32]
Steve Weiss
What do you have to see or what does the market have to see to get this stock to move up that percentage?
- [10:38]
Jim Laventhal
It's going to take some time. And by time, I mean another quarter or two. Because as SEMA was just talking about, it's in the next quarter or two that this funding needs to come through. And that's an overhang. Right now we know that that is.
- [10:50]
Scott Wapner
Part of what you really think of next quarter. Quarter or two.
- [10:53]
Jim Laventhal
That seems completely unreasonable because what's really vexing me right now are the credit default swaps. And as Seema just pointed out, that may well be the bank's hedging in advance of financing that's going to come in over the next quarter or two. But if you get that financing done and the pressure comes off of the credit default swaps, I think people are going to look at a decline in the credit default swaps. If it occurs, it's a credit default.
- [11:19]
Kevin Simpson
They're a proxy, not just for Oracle, but they're a proxy in a way to hedge the trade.
- [11:24]
Steve Weiss
Exactly.
- [11:24]
Kevin Simpson
So there's an inflated number there. That's not just to back Steve up on this. This isn't just an Oracle story. It's the only place you can go where you're going to see this debt, where you can go and be hedged across the trade.
- [11:35]
Scott Wapner
No, of course, this whole thing is a proxy for the AI. Yeah, everything almost. It's like a hopes, AI dreams, AI jitters, AI doesn't work out. I mean, this stock and CDS are sort of reflecting everything.
- [11:51]
Steve Weiss
And I don't think this works, by the way, until you start to see real revenue from OpenAI open AI, it's not going to be a quarter or two. It's a market is assuming that they're going to get the one they're going to get.
- [12:02]
Jim Laventhal
It's worth pointing out that while Open Air is a huge part more than 50% of the remaining performance obligation at Oracle, it's not all of the RPO, it's about 55%. There's a lot from the other AI players that frankly if just that comes through, this is a cheap stock.
- [12:18]
Scott Wapner
How about this? So if you look at where the pain is being felt today, of course you look at the power players, take a look at some of these names. Let's cycle through as many as we can show. GE Vernova is coming off a monster day in a huge week for that stock. Let's show the week right, because the they had their investor day and they blew everybody away and the stock was great. And then obviously look at that. That's the week now. It's down 4% today. Constellation, Eaton, Nextera, Quanta, Vertiv. Brenda, you got Eaton and Quanta too. These are the places that you look if you're worried about this trade and the durability of it. Whether some of these stocks have simply just been bid up too far on where the expectations expectations are expected to be. Thus the valuations have expanded as well.
- [13:10]
Brenda Vincelo
I think there's still room for grid investments and a need for more electrification. It's not just a data center play, but I hear you a lot of these stocks have really had a tremendous year and and that's reflected in the valuation. But I do think the fundamental story there is still good. So on a day like today we would be more a buyer or adding to positions rather than selling because I don't think over the next few years that this trend is going to change. We can look out to 2028 and that's still a ways away. And I think the fundamental story is still going to be positive especially for these companies that are really directly tied to grid investments or electrification, which is an on shoring story and other things that are playing into the that strength. It's not just data centers and to.
- [14:00]
Scott Wapner
The point when you have for Nova.
- [14:01]
Steve Weiss
And I do, I do Vertiv is a bigger position. That's exactly your point that you're making. So if you're building fewer data centers, you're putting fewer cooling racks in them. However, that the assumption is that the data center announcements have been so fast and furious that it's already reflected invertive stock and I don't believe it is. If you look at the stock well.
- [14:21]
Scott Wapner
You might not be building fewer. These stocks are trading well. You delay as if you're building in perpetuity and we're not going to know the answer to that question. I don't know 28, 27. The fact that we're even having a conversation, a headline about some of Oracle's data centers being pushed to 28. We're at the end of 25.
- [14:45]
Steve Weiss
I don't and I don't care about timing differences frankly I take a much longer long term view and I bought some I added subversive for a trading position at between 1 650-and-161 this morning when the news broke down the stock was already down stand about 10 or 12 bucks earlier. So when it traded down 18 I just said this is just an overreaction, knee jerk, emotional reaction. You can scalp some quick dollars on a trade. I think that's true of all of them by the way.
- [15:13]
Scott Wapner
Well Broadcom, let's look at that one because it's dropping on questions about its sales forecasts, its backlog and future margins. The Stock's down near 11%. We talked to you Brent on the way in. Let's talk to you on the way out. What do you think?
- [15:26]
Brenda Vincelo
I think this is all about guidance. Q1 guidance was really for 100% growth in the, you know, in the air chips but that then they didn't raise overall guidance for the year. And so I think investors took that to mean that there was maybe some sign that things weren't going to grow as fast for the remainder of the year. But I don't think that's the case. I think the fundamental story here continues to be strong. I think this is an expensive stock. We had an amazing run year to date and so again some of the wind being taken out of the sails. I think it's a healthy trend with this trade because again there was so much concern about a bubble and you know, I think we're all getting ahead of ourselves a little bit to your point Scott and talking about what's going to happen in 2028 but I do think the evolution of companies now taking on debt to finance a lot of this capex is a newer development that I think is causing some concern. But I do think with the company I do think this trend is going to continue and so I think there's still strength out there. I do think that Broadcom is still very well positioned. So I would view, again, a move like today as being more of an opportunity to add to existing positions or get in if you have missed it.
- [16:40]
Scott Wapner
There's. There's no nervousness on the street after these results. It doesn't appear. Stacey Raskin goes to 475. Bank of America goes to 500. Barclays and KeyBanc do the exact same. There are target hikes all across the street today. Judging that earnings report as being really good, not the representation that you're witnessing here from a chart standpoint.
- [17:07]
Podcast Disclaimer Narrator
Kev.
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Kevin Simpson
Well, there's other things taking place also with this tape that we've got to keep in mind in December from a seasonality standpoint. Window dressing. People do things for tax purposes. I thought the report was fantastic. I didn't listen to the whole conference call. I know it was after the conference call that we really saw the stock sell off. But I agree with Brenda. If you don't own this name, you can take a position here. Absolutely.
- [17:26]
Scott Wapner
I mean, you're taking some positions. I mean, the chips in general are weak today, obviously. You bought Micron. The target goes to 300 at Stifel. Stocks down a bunch today, down 5%. You bought Applied Materials to give me something on that.
- [17:38]
Kevin Simpson
Yeah, we bought Micron earlier in the week at 243, so we're still up two hours. But today's pullback gives you a chance to get in and follow us into this trade. I think that there's a lot of opportunity here. I haven't owned this stock since the 90s. I mean, literally, that's how long it's been since we've owned Micron. So we're excited about the memory story. This is an advance of earnings, so they've got earnings next week, which I think will be really positive. Applied Materials, we have owned this off and on in the past. It's a starter position for us, but it should play Best of Breed. And one of the names that hasn't been the top tier, so it's. Its performance has lagged a little bit. So we're seeing if we can sneak in here and catch a few points.
- [18:14]
Scott Wapner
You know, what a time to show you this next picture. I'm not sure if you all have seen it or not, but Time magazine's Person of the Year. It's many persons, the architects of AI. Let's show you the COVID because it's so interesting on a number of different levels. As you've got Zuckerberg and Lisa Su and Elon and Jensen and Sam and some others too. Is there a double entendre here? I thought that as I looked at this. Yes. These are the architects of AI sitting way up on this, on this piece of steel. I couldn't help but think, look out below also.
- [18:52]
Steve Weiss
Yeah.
- [18:52]
Scott Wapner
You know that one slip up from maybe not any one of these, but most becomes a problem. If there's one crack, so to speak in any of the foundation of this building that is being built, you got a problem.
- [19:08]
Steve Weiss
Yeah. I mean is that what, why it looks like they're suspended over. They are suspended over everything.
- [19:12]
Scott Wapner
Well that's, that's a steep drop down picture. Gosh. I don't know when the original one was. Was from the 30s maybe.
- [19:20]
Steve Weiss
Yeah.
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Scott Wapner
But it is interesting to look at it from both perspectives. This is who we are relying on for a great part of what's happening in this stock market.
- [19:31]
Steve Weiss
Yeah.
- [19:32]
Scott Wapner
Slip ups allowed.
- [19:33]
Steve Weiss
Yeah. I mean look, it's, it's extremely bright people. The only one I know people personally is faithfully who I serve on a board with of a company that's fully automated, the warehouse with robotics. And I can tell you that you talk to them, the future is so bright and, and in terms of AI and it's only what most people know from what they read. But beyond what they read, whether you talk to them or you talk to, to Joe Lonsdale, it's just going to revolutionize everything. It's going to make health care. I'd recommend people read Joe's substack piece last week on, on AI that was written by Sebastian who runs health care for him at hbc. And it opens up your eyes to what it can do, for example make health care, health care more accessible, cheaper, etc. So I'm all in on a high and I recognize can be significant volatility, significant drawdowns. That's how it always is.
- [20:27]
Scott Wapner
Kind of all in and reliant on the people you saw in that photo. By the way, the FTSE person of the year is Jensen Huang. I don't think that would, would surprise many now besides what's happened this week with Oracle, there's that and Broadcom. The story of the week really has been what's happened in the Russell, what's happened with the Dow, what's happened with the equal weight S and P and how tech has continued to lag. Wolf research today says is the broadening finally happening? I think we're all kind of wondering that if you look at the sector winners after the Fed decision mature, it's just like cyclicals all over the place. Materials up 4%, financials up 3 industrials up to health care's done well I thought Michael Hartnett, bank of America Today had a really interesting note where he talks about the K shaped economy being all the rage in 2025. Now it's, it's the market sort of sniffing out the run it hot economy in 26 and that's why you're getting the rotation Main street over Wall Street. You've got mid caps Bren, you got a lot of these got you in mid caps. It's the small caps, it's the micro caps things that are going to work if the administration wants to run this economy hot especially into the midterms.
- [21:40]
Brenda Vincelo
Yeah and I think if you look at that mid cap exposure for example, it's a lot more financial. A lot of regional banks in there, a lot of REITs, a lot of areas that actually have not performed very well this year. And mid cap in general it's been a laggard relative to other areas but I do think as rates are coming down at the margin and a strong domestic economy should really provide a nice tailwind to those areas. And they have been laggards not only in price but also in earnings growth. So if we start to see earnings actually start to come through in those parts of the market I do think we could see some nice outperformance there as things broaden out.
- [22:16]
Scott Wapner
This trade speaks right to you, right? The run it hot trade.
- [22:20]
Jim Laventhal
It does. I mean so many things that are non tech in my portfolio speak to this, whether it's financials, industrials, transportations. But Brenda just said it. For this to work in a sustainable way earnings growth from what I'm going to call the other 493 stocks has to pick up now. Right now it's projected that by the second quarter of next year earnings growth and the other 493 will be equal to the earnings growth from MAG7 and increasing beyond that from there. That sounds great. Here's the problem and I think we all know it is that we've been saying that's going to happen for the last year, year and a half. So we've been pushing this out. It has to come through for this trade to sustain itself.
- [22:58]
Scott Wapner
How about, how about your city today? Let's take a look at shares of Citi raised to overweight from neutral JP Morgan target goes to 124 from 107. Think about that one.
- [23:09]
Jim Laventhal
Well it's now, I mean it's become very Interesting. This was a stock Scott, as you well know, I was talking about as being cheap for what seemed like forever. It's no longer cheap. We're now at least at a slight premium to tangible book value. Tangible book value is roughly $100 a share I would say at 120, 125. We've got to start to think about trimming this, this a little bit now for everybody who's listening, I want to point out that I had this when it was literally 50% of tangible book value. So it has grown to a very.
- [23:35]
Scott Wapner
Large size in my portfolio again today. This has been a great stock and.
- [23:39]
Jim Laventhal
It may well and frankly should have more room to grow beyond 120, 125% of tangible book value. But portfolio management, risk management says at some point you have to trim this. So another 10$10 from here I might consider trimming it.
- [23:52]
Scott Wapner
Well, you trim gold. Goldman Sachs, that stock hit a record high yesterday. Why did you do that?
- [23:56]
Kevin Simpson
Yeah, I mean I'll take the baton right from Jim. I mean that's portfolio management. This is a stock that we've owned for over a decade, probably 15 years. We've never sold the core position but we keep a maximum target of about 5% to a ticker. So this grew to be a 7% weighting all time highs. We trim it back to 5 or freeing up 2% cash dry powder. It gave money for us to purchase other things that we talked about talked about earlier and it's always nice to have a little cash on the sidelines to put to work. So Goldman Sachs, best of breed love the stock will own it long term. But to Jim's point, excellent sound portfolio.
- [24:30]
Steve Weiss
Yeah, I'm not tempted to trim any. I'm not restricted by by those position sizes. I run bigger position sizes and will on occasion use margin. I'm just going to let it run. There's nothing and I think you would too.
- [24:45]
Kevin Simpson
You weren't no debate.
- [24:46]
Steve Weiss
Yeah. The fundamentals haven't changed and that's what drives me to cut back sometimes if it's a ridiculous move higher on what I think is unwarranted or just emotional higher than I'll trim. But right now not take a look.
- [24:57]
Scott Wapner
At shares of these also. These have been talked about a bunch this week added to the tactical outperform list. Let's show the week too because I think it's had a pretty interesting week added to the tactical outperform list at Evercore the target goes to 380 from 375 right there was a, there was a positive mention about this name if, if not an upgrade a day or so ago. Brandy, you have this right?
- [25:22]
Brenda Vincelo
I do. And you know this is high quality company but tied to consumption obviously. And if we have an ongoing strength of the economy and if we really do have a broadening out of consumer spending trends next year, that should certainly benefit fit Visa. But also if you look at just globally, the payments, electronic payments still have a lot of room to go. And if you look at Visa in particular, they've really been benefiting from a lot of the value added services which last quarter contributed about half of the revenue growth that they saw. So really seeing a few levers there for them to pull, to continue to grow, to grow earnings and be relevant. I know there's been some questions about that within the payment services area, but I think Visa is going to continue to be a strong player.
- [26:06]
Scott Wapner
There we are. We'll take a quick break. Kevin's got a move that we still have to get to from the top sector of this quarter. So we'll do that along with some of our calls of the day next.
- [26:23]
Podcast Disclaimer Narrator
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- [26:55]
Fidelity Trader Plus Announcer
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- [27:23]
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- [27:54]
Scott Wapner
All right, you know, healthcare is the best performing sector of the quarter. So you bought Intuitive Surgical. Is that the one?
- [28:00]
Kevin Simpson
Yes, Scott. This was a name that we were stopped out of a few months ago. I wish we had been in it because it's been an unbelievable performer, but an absolute leader in robotic surgery. And what I like about the name, besides all the numbers, because they're fantastic, is if you look at their prospect list, like if you're thinking about their clientele, all of us are aging. Not you, Brenda, but a lot of us are. And so many baby boomers are going to opt for minimally invasive surgery. And it's just phenomenal technology. I think AI and health care combining and really, really like the stock. I love seeing all the upgrades as well. We need to need to see more.
- [28:34]
Scott Wapner
All right, let's talk about some calls. Speaking of upgrades, Citi today has initiated on aerospace and defense. Leidos by 218 Weiss, that's you.
- [28:42]
Steve Weiss
Yeah. Look, I love this sector. It's a difficult sector to invest in because it's obviously dependent on government contracts. Sometimes companies are well positioned. Don't get it. Leidos I like in particular because they really have multiple legs to the stool. It's been a great stock for me and I have no interest in selling any of it. Management's phenomenal here.
- [29:02]
Scott Wapner
Do you know that the ITA, the Aerospace and Defense ETF, is having its second best year ever? I didn't know that. Boeing buy 265.
- [29:10]
Kevin Simpson
Yeah, 100%. This is not a turnaround story anymore. I mean, this company is doing everything right. New management is on track. I could go through all the orders, but they're not pushing through product. They're making sure the quality and safety is there. And I think that's what was missing for a long time. So the run on this stock is not over.
- [29:27]
Scott Wapner
Okay? Lockheed neutral 505 neutral is better than sell.
- [29:32]
Jim Laventhal
It's been a bad year for Lockheed, up about 2%. A lot of things went wrong this year. They lost the F47 contract to Boeing. Elon Musk punked them around this time. Twelve months ago, they had a big classified charge. Those things are all in the rearview mirror. And in the meantime, while the F47 is being built, the F35, which is Lockheed's baby, is the best jet fighter in the world and every Air Force wants it. Their missile systems is going great as well. It's an attractive valuation. I think 2026 is the year for Lockheed Martin.
- [30:02]
Scott Wapner
QXO buy 31 bucks Luke twice.
- [30:06]
Steve Weiss
Yeah. And the stock, you know, it's look, it's been waiting for another acquisition by Brad Jacobs and that hasn't happened. But at their earnings and at their recent investor investor day, he laid out the story and it's a very compelling story this. He is a permanent compounder, not just qxo, not just, you know, the other companies like you are. Right. So I continue to like it. Did you have a good position there.
- [30:32]
Scott Wapner
On holding top pick 2026 at Stifel? 60 bucks is the target. Jim?
- [30:38]
Jim Laventhal
Yeah, I mean the stock, the company is just doing great. The product is doing great. People want the shoes. The management guidance from the, from the earnings call a few weeks ago was stellar. And I see the stock going higher just with the momentum from that Spotify.
- [30:54]
Scott Wapner
Best idea for 26 at JPM805 is the price target.
- [30:59]
Kevin Simpson
Kevin Sims it seems hard to believe, but if we compare this to Netflix 805 is a reality. This is a company that's now introducing ad pricing. They're improving their margins. If you look back at the chart over the past year, they had some fits and starts, but I really think that they've dialed it in and I'm excited about this name for next year.
- [31:16]
Scott Wapner
All right, Chevron Target goes to 206. Just a couple of bucks. But we talked a lot about these kinds of stocks this week. I think it was Josh Brown who had bought Exxon. Chevron, I said, is the one we're talking about now. Brenda, why don't you take this. This is a 36% upside from current levels.
- [31:32]
Brenda Vincelo
Right. And the company is talking about growing revenue, 2 to 3% in excess of overall oil demand. And also, you know, this company for years was kind of viewed as being the most capital disciplined player in the space. And then they kind of veered away from that. But I think they've come back around now and reined that in a little bit, which is a positive in our view.
- [31:51]
Scott Wapner
Let's get the headlines now with sema. Hi, Seema, Scott.
- [31:54]
Seema Modi
The Justice Department expanded its lawsuits against four more states refusing to hand over their voter rolls. The DOJ is now going after Colorado, Hawaii, Massachusetts and Nevada for failing to share the information, bringing the total to nearly 20 states. Justice Department officials claim the government has the legal rights to ensure states have proper and effective voter registration and voter list maintenance programs. Meanwhile, the National Trust sued President Trump today to stop his White House ballroom project. The Brazil demanding an architecture review and congressional approval for the massive project. It comes after the President approved the demolition of the White House's east wing to make room for the roughly $300 million ballroom, which he says will be paid for by private donors, which include our current parent company, Comcast and Zootopia 2. Topping $1 billion in global sales 17 days after its release, this is the fastest PG film to ever hit the box office milestone. The Disney sequel is only the third film to hit 1 billion this year. Scott.
- [32:54]
Scott Wapner
All right, Teama, thank you for that. Coming up, we have more portfolio moves from the investment committee. Kevin Simpson with a pair of new trades to tell you about. He's a busy man. Detail it. Next, the heaviest metal credit card of all time, rumored to be one of.
- [33:12]
Steve Weiss
Only 18 in existence, plated with the.
- [33:15]
Scott Wapner
Very same tungsten that forged the International.
- [33:18]
Steve Weiss
Space Station and wielded at business dinners.
- [33:23]
Scott Wapner
Like a samurai sword. It's a classic corporate power move. But the real power move, having end to end visibility on your most critical shipments.
- [33:35]
Steve Weiss
FedEx.
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Scott Wapner
The new power move.
- [33:39]
Jim Laventhal
Before the trophy.
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- [34:38]
Steve Weiss
All right, more.
- [34:39]
Scott Wapner
Moves from Kevin Simpson. You wrote a covered call on Netflix. Just take me through this thinking here.
- [34:44]
Kevin Simpson
We talked a lot last week about Netflix, especially with everything that's happening. We don't need to replay all of it. But knowing that the stock, I think Josh used the term it could be in a box. This. This stock could be in a box.
- [34:54]
Scott Wapner
Yeah, he sold 85% of it. As a result of that. And the box could go 18 months at 18 month long box.
- [35:01]
Kevin Simpson
Yeah. And it's possible. I don't think so. I think it's going to work out really well for Netflix. Even by default. If this deal breaks up. I think they get $2.8 billion just for doing basically nothing. But let's pretend that doesn't happen for me. I don't have to exit the position. I talked about writing a covered call on it, so I sold a January 105 call. I brought in three bucks. It doesn't sound like a lot, but the stock's off $5 since last Friday. So we hedged it out. That option is trading at about a buck right now. So I can keep clipping coupons on it. But I really like the name. I looked at Polymark this morning just because. Why wouldn't I?
- [35:33]
Scott Wapner
Right.
- [35:33]
Kevin Simpson
And it's got 49% that Netflix does not get the deal. And I thought that was pretty fascinating. And I'm surprised the stock's not up more on that.
- [35:42]
Scott Wapner
You think you win either way?
- [35:43]
Kevin Simpson
I think I went either way. Long term, I think it's a great deal for Netflix. I really like the IP as a customer, as a consumer and an investor. I think it would be a phenomenal marriage. Very accretive over time. Short term, the best thing that could happen is that Netflix gets kicked out of the deal and we see the stock pop.
- [36:00]
Scott Wapner
Yeah. What you think too?
- [36:03]
Steve Weiss
I think they win either way. Absolutely. And I think it's a coin toss. And I thought of selling Netflix because I do believe it's going to be dead money for a period of time. But I have no other place to put the money. And I stole some cash. Do you want.
- [36:16]
Scott Wapner
Do you want the deal to happen?
- [36:18]
Steve Weiss
I. Yes, I do, because I think it's absorbed in the market. Now. That's going to happen. And I actually think that either way, whether it happens or doesn't happen, and it's. It's a true thing. Coin toss. Because of Ellison's relationship with the White House. So that's really where the issue is. So either way, stock pops. So I'd like to see it happen from a long term standpoint. Okay.
- [36:42]
Scott Wapner
The other move you have is you sold Lind.
- [36:44]
Kevin Simpson
Yeah. I mean, this is kind of boring compared to Netflix. But this is an industrial gas company. We bought it in July in the low 400s. It's down about 10%. We basically got stopped out of it. So it's portfolio match management. But if you think back to the earlier Conversations with Oracle. This is the same rule that took us out of Oracle, it took us out of Linde and we took the money, basically bought Intuitive, Surgical, Applied Materials and Micron. So we'll see what happens.
- [37:09]
Scott Wapner
I mean Citi says It's going to 520.
- [37:11]
Kevin Simpson
It could. I like the stock.
- [37:13]
Scott Wapner
It's. They name it as one of their, their top picks.
- [37:16]
Kevin Simpson
I run a rules based strategy. When it pulls back, I'm out. I think it's better to take a small loss and move the money elsewhere than to try to have the hubris that I picked this stock and I'm right, I love it, that's why I bought it. But we're sellers because of technical reasons.
- [37:29]
Jim Laventhal
This is an interesting stock and the chart still up there. Keep it up for a second because this was actually in a lot of growth equity managers portfolios. It's Linde, it's an industrial gas company. Why was it in growth portfolios? Simply because of this belief in new energy, renewable energy that we'd need things like hydrogen and Lindy would play in that. We've seen the decline as it goes back to being a value stock. It's no longer a growth stock. That Citi call for 520. I think that's hanging on to the hope that renewal energy, renewable energy regains its legs.
- [37:58]
Scott Wapner
Yeah, they, they think that the recent price weaknesses is overdone. The stock is having its worst quarter since Q1 of 2020.
- [38:06]
Jim Laventhal
Yes. And a lot of that has to do. They were investing in things like hydrogen hubs.
- [38:12]
AT&T Business Announcer
Hubs.
- [38:13]
Jim Laventhal
These major centers that were going to promote things like fuel cells and clean energy. And it's basically with the change of politics that's just not happening. So it's become a value stock again. I mean, does it go higher from here? Maybe, But I think 520 is a bit of a pipe dream.
- [38:28]
Scott Wapner
Would you. You sound like you know a lot about this name.
- [38:30]
Jim Laventhal
I mean it's a classic value name. I mean, come on, you know me. Industrial gas, why don't you own it? Look at that chart. Bring it back up again.
- [38:40]
Scott Wapner
Don't make me make a joke.
- [38:43]
Jim Laventhal
You're restraining yourself. Believe me.
- [38:45]
Steve Weiss
I don't even know.
- [38:47]
Jim Laventhal
As the words came out of my mouth, I regretted them.
- [38:49]
Scott Wapner
You don't even need to say anything. Santoli. He'll say a lot. Next, Senior markets commentator Mike Santoli joins us now. This midday Word. It doesn't take much for a jittery AI related trade to get upset, right?
- [39:14]
Mike Santoli
Well, for sure, because the trade is so big when you do have people heading for the exits in a way like they are today. The rest of the market can't absorb it. So we still do have the rotations that you know pro cyclical movement of money going on today it's just more about outperformance, not outright gains. Right. So it is still value over growth. It's quality over beta. It's equal weight S and P over market cap weighted S and P. It's just that everything is, is kind of not enough to, to actually keep the indexes positive. I do think that reflects that we got back to the highs obviously we still have you know some elevated valuations. Everyone's confident about the market's message in terms of the macro for next year but yeah just too much much in the way of a rethink of also next week. It's very unusual, you know is supposed to be kind of getting toward the final wind down of the year and we're going to get pretty fresh employment and inflation data. It's probably can change some minds on a divided Fed. So I think that's also in the mix as yields migrate higher on the long end.
- [40:14]
Scott Wapner
Are you a believer in you know the, the what Hartnett put forth of bank of America the idea of the market front running the so called called run it hot trade.
- [40:22]
Mike Santoli
No doubt about it, it's been absolutely what's been happening. It's the Fed cutting into a reacceleration and that got manifest now. We did it last year too. We really did. I was growth friendly policies. Nobody thought it was going to be tariffs and immigration at the same time before deregulation and tax cuts but that's what we got. So this time it looks like a cleaner picture and the market's more confident in it. But it's unclear how much of it we've priced. You know industrials in the square and beer at 24 times forward. It's not like the rest of the market is dirt cheap at this point.
- [40:51]
Scott Wapner
Oh you make a really good point that the expectations were sort of reversed but thankful to the trade for blunting the negative impacts of what you just talked about to help this market still from an S and P standpoint go up 16% now if you're looking at a much more positive backdrop, who knows.
- [41:12]
Mike Santoli
Yeah but then you still have, have you know 65% of the S&P 500 trying to perform when 35% maybe has already, you know kind of reached a point where it's got to digest a little bit on the AI side. That's what the Magic 7 is worth within the S and P. All right.
- [41:27]
Scott Wapner
I'll see you a little bit later, Mike. Thank you. Coming up, under the radar rallies. We have a number of committee stocks today that are staging stealth breakouts. We'll give the names, we'll give the trades, we'll do it. Next. Let's talk about several committee names hitting new highs quarter to date. Okay. Caterpillar hits a record high today. Steve Weiss up 31% quarter to date. Yeah, talk about a lot of stocks. And we have talked about, about this one, but probably not as much as we should have.
- [42:10]
Steve Weiss
Yeah, I agree with that. You know, considering the performance. And you know, Kevin, Kevin owns it as well. And it's, it's for both of us. It's up close to 80% X today. Look, they're the picks and shovels. And to me, I love playing the picks and shovels rather than picking, at least in the private markets, the next AI technology that's going to come out and they'll continue to do up, particularly as rates come down. You'll get the, the build again. But it's not just data centers for them. So. So I love the stock, you know, not to sell any yet, but, you know, if it gets up to about 650, I made trim.
- [42:46]
Scott Wapner
Delta is up 24% in the quarter. It also hit a record high today.
- [42:50]
Jim Laventhal
Yeah, all time high. And it makes sense to me. I just want you to consider that the estimates for next year started this year at around $8. And the 30 cents after Liberation Day, they went below $7. They're now just above $7 now, which means they haven't even come close to regaining what was lost in terms of next year's estimates after the Liberation Day. And I will tell you that we all think, or at least I think the economy is going to be much stronger in 2026 than we thought at the beginning of this year. There is still much room to catch up in.
- [43:20]
Scott Wapner
Delta Airlines Unity Software is up 23% quarter to date, a 50, 52 week high today. Kev?
- [43:26]
Kevin Simpson
Yeah, we, we caught this at the right time, but I still think it's a high risk trade. There's a big turnaround play here that has to be, you know, seen to believe, so to speak. But we're on the right track. The 3D gaming, the industrial simulation. There's a lot here to like, but just be careful. Stock's done really, really well. And I think it's a little more risky to jump in.
- [43:46]
Podcast Disclaimer Narrator
Okay.
- [43:47]
Scott Wapner
Brenda Parker, Hannifin up 18.5% quarter to date. Also hitting a record high today.
- [43:52]
Brenda Vincelo
Yeah, this one's really been a sleeper for the year, up about 40% for the year. But this is a great way to play aerospace trend. That's really what's been driving strength in their business. Also they've been focusing on cost control, so that's been helpful too. But think this is a, you know, a trend that's likely to continue. So it's been a great performer this year.
- [44:09]
Scott Wapner
But I think the outlook still looks, let's hit hasbro. It's up 10 and a half percent in the quarter. That's a 52 week high. Kevin, yesterday I think a lot of.
- [44:17]
Kevin Simpson
People thought that tariffs were going to hurt this company more than they did.
- [44:20]
Scott Wapner
I was, I was thinking that as I was looking to see what stock I wanted to do next and it's the first thing I thought of.
- [44:25]
Kevin Simpson
Well, they did a lot of cost cutting in advance of that. That worked out. They helped their margins. They've got fantastic brands and let's face it, we're heading into the holiday season.
- [44:33]
Scott Wapner
All right, still ahead, rocketing higher. Two of Kevin Simpson space plays are on a massive run so far this month. Find out if he's staying long. Those names next. All right, welcome back, Space Place from Kevin Simpson higher over the past couple of weeks. So Rocket Lab month to date's up 43%. AST spacemobile up 34% month to date. Josh's Planet Labs up 35% yesterday, up 50% month to date. What's happening here?
- [45:08]
Kevin Simpson
I mean, it's hard to believe. I think that it's exceeded any expectations that we humbly had for these names. But Rocket Lab in particular, it's quietly becoming a massive competitor to SpaceX. We're going to be talking about SpaceX throughout 2026. So bringing space into the conversation now probably makes a lot of sense. But small satellites, top to bottom, start to finish, it's an amazing company. Ast's interest interesting because it brings satellite right to your cell phone. So they're carrier agnostic. You don't need any special equipment. Just a really cool story and it seems to be working and it's getting more and more buy ins from the big carriers.
- [45:44]
Scott Wapner
I'll say. I mean, rocket's up 133% in six months. ASTs also a double PL, up 226%. Take that.
- [45:56]
Kevin Simpson
Yeah, well, you know, that's why our growth port portfolio is a lot of fun.
- [45:59]
Steve Weiss
Yeah, I sold Rocket Lab so early because, and this is your fault because Kevin. Kevin didn't keep me in give me a dog like cat in rocket lab, you know. 30% a month.
- [46:09]
Mike Santoli
Yeah.
- [46:10]
Scott Wapner
All right, we'll do finals next. Got a big one. Three o' clock today. The professor, Jeremy Siegel, he'll be with me. Alex Cancerowitz. We're going to talk a lot about this AI trade. Avery Shepard field Warren Pies. I swat the motor in all valuations. And Malcolm Etrus, I hope you'll join me at 3 o' clock Eastern Time as we close out this week.
- [46:35]
Brenda Vincelo
Brenda Final trade Palo Alto Networks it's been a laggard this year. Still think there's a lot of room for growth for wallet share within that security ecosystem to go to that company.
- [46:45]
Kevin Simpson
Kevin Simpson, Micron Technology ahead of earnings if you like valuations, take a look at that forward P E. All right.
- [46:51]
Jim Laventhal
The Farmer Adobe. I do think the momentum has turned positive twice.
- [46:56]
Steve Weiss
Vertava, I think you should buy it here. It's going to bounce.
- [46:58]
Scott Wapner
Yeah, big day for that one.
- [47:00]
Steve Weiss
Wow.
- [47:00]
Scott Wapner
Down almost eight. All right, I'll see you on the belt. The Exchanges now you've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:15]
Podcast Disclaimer Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime reportdisclaimer with savings over $390 this shopping season, VRBO helps you swap gift wrap time for quality time with those you love most. From snow on the roof to sand between your toes, we have all the vacation rental options covered. Go to VRBO now and book a last minute week long stay. Save over $390 this holiday season and book your next vacation rental home on VRBO. Average savings $396. Select homes only.