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Halftime Report
Gauging Market Momentum into June 6/1/26
00:44:18
Leslie Picker and the Investment Committee discuss the market momentum of the last two months and whether stocks can continue their trajectory higher. Plus CNBC's David Fabers is joined by Clay Magouyrk, CEO of Oracle, to discuss everything from Data center buildouts, the future of AI and what it means for Americans and the market. And later, the Committee debates what to do with some of their stocks that are on the move today. Investment Committee Disclosures
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Edward Jones Financial Advisor
At Edward Jones, we believe rich isn't about having life all figured out. It's opening yourself to all the possibilities. That's why your dedicated financial advisor provides long term planning built around you, meeting you where you are and helping you get closer to where you want to be. So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts. Let's find your rich Edward Jones member sipc.
- [00:31]
Venture Global Representative
Never bet against American Grit or American Energy through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
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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.
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Leslie Picker
Thank you Carl and Sarah. Welcome to the Halftime Report. I'm Leslie Picker in for Scott Wachner front and center this hour, your June set up with the market coming off one of the strongest two month rallies on record. The investment committee is standing by with their playbooks. Joining me for the hour, Joe Terranova, Amy Raskin and Jason Snipe. Let's get a check on the markets which the S and P and Nasdaq have turned positive in the last hour or so. The Dow still negative about 0.2% lower. The S and P nearing the flat line up about 0.1% right now. In the NASDAQ up 0.3%. What an amazing two months we've had. We should note that the major indexes all posting second straight monthly gains. The S and P just posted one of the strongest two month rallies on matching only four other instances since 1950. Joe, what do you think is the biggest risk to what we've seen so far?
- [02:12]
Joe Terranova
Well, the biggest risk I think is that the momentum factor were to roll over bond yields were to rally or some of the anticipated appetite. The strong demand for the IPOs is not ultimately there and that would kind of offset what has been the catalyst which has been the earnings growth and the earnings growth has delivered, it's delivered in technology. I think what we witnessed last week as it related to some of the software names, it's extending into what we're seeing today. Look, today is not a broad based rally. Values down 50 bips while growth is higher. We only have two of the 11s and P sectors that are higher technology and energy. But this is about rebuilding positioning in the software industry. That sounds like something that we were insane just six weeks ago, but there are a multitude of names in the software industry that you could be taking a look at right now which are having a really strong recovery. Salesforce up another 10% today. We added Datadog at the end of April in the rebalance. That stock is up over 100% since we added it. That's a software name focused on cloud infrastructure. And the last name I mentioned that's having a really strong rally. If we could show a one year chart is Twilio. Twilio Seeing the benefit of from agentic AI being utilized with their messaging and their voice. That's a name that I've owned personally in the past and I'll probably take a position even with what looks like a staircase rally over the last three months. I'll probably take a personal position there as well. So it's about rebuilding the software positioning, but Leslie, it's all about earnings.
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Leslie Picker
So you think now is the time to get into software? Not when these names were more beaten down a couple of months ago.
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Joe Terranova
There's still a lot of room for a recovery in the software names. I mean look at name like palantir, that's at 160. I think the high was slightly above 200. Oracle, which we'll talk a little bit about today. Your, your high there was about 300. I'm not saying they're making a return to those all time highs, but I think the, the SAS apocalypse that we all feared was ultimately kind of come into play. We're kind of reversing some of that overwhelming negative sentiment, if you would, and moderating that view. And I think that's a little bit of the rebuilding positioning we're seeing.
- [04:32]
Leslie Picker
Yeah. David Fab sitting down with the CEO of Oracle momentarily. Jason, you're nodding your head over here. I'm just curious. So if you are looking to get in on, on software, for example, I mean it really does feel like, at least according to several analysts notes this morning, that it's idiosyncratic opportunity from here. So how do you distinguish whether it's software or other places names that are poised to least rise through the summer?
- [04:56]
Jason Snipe
Yeah, no less. I think, I think, you know, software is a very interesting play. I mean they're up 40% off the March lows. Right. The IGV. And if you turn back the clock to what we saw with Snowflake last week was a Tremendous, tremendous earnings release. The stock obviously post print was up 38%. We obviously talked a lot about that. You know, earnings were up 178%, product revenue was up 34%. You know, so. And I also turn to another name that we own as well, which is ServiceNow. You know, ServiceNow is obviously had a, has a really great run, but still negative on the year. So I think there's an opportunity for this kind of harmonious play with AI and agentic tools playing along with software. Again, the LLMs train off of the Internet and it's this proprietary software plays that need there. There needs to be a gateway into these, these businesses, into enterprise. And I think software is the route to do that. So I do think there's a good opportunity in the software.
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Leslie Picker
Speaking of AI, we've actually got some breaking news on Anthropic. Let's get to Kate Rooney.
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Kate Rooney
Leslie. So Anthropic just announcing that they have filed their paperwork to go public. They filed confidentially with the sec, making them officially in line to go public in this parade of tech companies that we're seeing line up to list at some point this year, saying in a, in a press release, in a blog post here, the company saying that they have officially joined the IPO queue, pretty much they take the next step here towards an ipo, say that they have confidentially submitted the draft paperwork and it gives them the option to go public. They say doesn't guarantee that they will go public, but this helps them prepare and be ready. They talk about market conditions and sort of leaving the door open for them to also not list. But of course, the backdrop here is their rival. Open AI, we have reported, has also been in the same position, has been looking to file confidentially. That is sort of in limbo. But we had the latest we had heard was that they were looking to file, file and in the same way confidentially. So we don't see any of the numbers quite yet, but they have been seen as first that OpenAI was the one to go first. It seems like Anthropic is sprinting here to either get out ahead or at least be on par with where OpenAI is. It also comes as we see Space X listing. Finally, last note on Anthropic. We reported just last week that they closed a massive financing. It was $65 billion, $965 billion valuation, almost $1 trillion. And there were questions over is this it? Before they go public, will they tap private markets, public markets? Here is the answer. They're looking to go Public, I think sooner than a lot of people thought. Leslie.
- [07:30]
Leslie Picker
Yeah, that is remarkable, especially against that context of the recent round that they just raised. Do we know anything about those investors and the lockup or, you know, their appetite to sell into an IPO from that, what was it, Series H round?
- [07:46]
Kate Rooney
We're getting quite high up the Alphabet. These companies do stay private longer. But one thing that did stand out with a lot of the investors that you saw on the cap table, some of them were previous investors, but they were sort of the crossover funds you had. The leaders in this were Altimeter, you had Dragonier, you had Sequoia, and those are seen as sort of the long only funds that might get in at the last stage. Sequoia is a little bit different and sort of a hybrid. But you had T Rowe, you had Fidelity, you had a lot of the names that could strategically get in pre ipo. Really, the growth investors that would say, be seen as sort of the strong hands as well. But the ones that aren't going to flip, then they're not going to sell in a knee jerk reaction. And that sort of set the stage for, okay, this company appears to be getting ready to go public. I had heard from investors that, yes, they were doing the paperwork, they were talking to lawyers, but they were still leaving the door open for, hey, maybe they don't need to list. I think a lot of this is going to depend on market conditions. But Leslie, you and I talked about Uber and Lyft. This is very much a rivalry. These companies have been public about how much they really just don't get along. They are now competing fiercely in enterprise. All you have to do is look at the photo of Sam Altman, Daria Amade on stage, not holding hands. That is iconic. And it really, it just encapsulates the competition between these two which has spilled out into the open. You remember the super bowl commercial. We are going to get a fiercely competitive IPO season.
- [09:06]
Leslie Picker
Yeah. And it matters because it doesn't feel like there's a finite amount of capital in the world, but there is a finite amount of capital in the world. And so you benefit by going first because presumably you want to make sure you get the highest quality book. Highest quality is the term they usually use for those long only investors or crossover investors that you were mentioning that will be more likely to hold on to it and not just flip if there is a pop. Kate Rooney, thank you so much, Amy. I turn to you on this because there has been a lot and it's kind of a controversial idea. You know, I've heard from people on one hand who say, don't worry about the IPOs that are. There three big IPOs that are coming. And if we look at what happened in the, you know, 2020, 2021 era or the dot com, it's nothing bigger than the market's been able to handle at one period of time. If you kind of adjust for inflation and so forth. On the other hand, people say, you know, there are so many different elements to the piping of the markets, whether it's changing indexing rules, rules or the SPV and people rushing kind of before these IPOs to get exposure. How are you thinking about it?
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Amy Raskin
I think there's a lot going on here. I don't love the NASDAQ changing the rules from 100 days to 15 days that the stocks would be in with before lockups expire. I don't understand that, actually. Why would you do that to new investors in an ipo? So I actually do think it's a little worrisome. It's $3 trillion or more of market cap that's expected to go public in these names. The whole market is 78 trillion. So it's not nothing. As you said, it's not necessarily going to move the needle. But I do think there is some froth. These companies don't have earnings. They're going to have very high valuations. So to me, that's a little reminiscent of 1999, 2000. And you also have all these small AI companies that are billion dollar companies that have an idea and don't have earnings. And that is reminiscent of 1999. And I lived through 1999. So I think that's true. What the other side, though, what Joe is saying about earnings is, is how important earnings are. And semiconductor earnings have doubled in two years. That's not normal. That's not typically how things work. Broadcom's earnings have quadrupled in three years. Media's earnings have quadrupled in three, three years. So the question is, do we have sort of elements of the 1999 bubble on sort of the side and potentially one of these guys ending up like Netscape? And then on the other side, you kind of have an earnings potential bubble which is much more reminiscent of the global financial crisis and homebuilders and banks. And those stocks actually had earnings and they never got particularly expensive. They were always in the 10 times earnings range. And everybody kept pointing to them and saying they're fine earnings. But it was very cyclical and that's Sort of more what's going on in the semiconductor space. So I think it's very important to sort of know what you're looking at and not complete the two and not say, well, semiconductors are still cheap, so therefore we're not in a bubble because that might be more on the earnings side. And then, you know, when people talk about the AI space, they're like, well, look, it's, you know, it's not like 99, these companies have such great cash flow and earnings, but now they're talking about the semiconductor side. And in my mind I try to keep them distinct. There are two distinct things that are happening right now.
- [12:24]
Joe Terranova
Yes, look, I think I share the sentiment of concern that Amy is expressing as it relates to where the demand comes. And I think that's a question that's been raised throughout the financial services industry over the last six months. Let's keep in mind a couple of things. Sovereign wealth funds have been the marginal buyer for the Mag 7 over the last 18 months. Do they shift their intentions now towards the IPOs? I don't think universally you can make a declaration that it's binary. They will or they won't. I think they'll find things, certain names appealing better than others. I think very clearly over the last 12 months, from a sentiment perspective, there's a much warmer feeling. There's, there's the similar feeling that we have about the New York nix.
- [13:08]
David Faber
Right.
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Joe Terranova
As it relates to Anthropic relative to open AI, it seems as though anthropic has surged ahead of OpenAI. I could tell you as a user of Claude, I think that's justified. So look for who has the relationships with Anthropic that you're in. Video, that's your Amazon, that's your Alphabet, is a trillion dollar company. So you're not going to really see reflected in their share price what the potential demand could be. But let's pull up an intraday on Zoom Communications because I've been talking about this stock for the entirety of 2026, this company makes a $53 million investment in 2023 in Anthropic. That stake is arguably worth 6 or $7 billion right now. And you could see the spike intraday. Zoom communications is up 9% today and it's up why? Because there's a better feeling for software. But there's also that relationship, that investment in Anthropic and they've been benefiting from it as investors are getting ahead of
- [14:10]
Amy Raskin
this IPO that's actually also helped the earnings of the hyperscalers there. They have remarked their anthropic and open air investments and you're seeing that in the earnings estimates. So as much as everybody's getting so excited about the earnings estimates, some of them are not as real as we'd like them to potentially.
- [14:27]
Leslie Picker
And there's kind of like a second derivative. Yeah. Play there. If you're kind of worried about getting allocation to the ipo, maybe you do something like a zoom or an Alphabet to get exposure. Just mark to market basis. Straight ahead, the race to build America's AI infrastructure. Our David Faber is standing by with Oracle CEO live from the Stargate Data center in Michigan. That exclusive interview is coming up next. Halftime is back in two.
- [14:55]
Edward Jones Financial Advisor
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- [15:25]
Venture Global Representative
Never bet against American Grit or American Energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
- [15:55]
Joe Terranova
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- [16:38]
Leslie Picker
We're back on Halftime. America's infrastructure buildout is playing out across the country at sites like the $16 billion data center being developed in Michigan for Oracle as part of its Stargate partnership with OpenAI. David Faber joins us live from the site for an exclusive interview with Oracle's CEO dav
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David Faber
Leslie, thank you. That's right. I am joined by Clay McGurk, Co CEO of Oracle. Nice to have you.
- [17:04]
Scott Wapner
Nice to be here.
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Amy Raskin
Thank you.
- [17:05]
David Faber
Yeah, you know, I just had a tour. At least something of a tour. I mean you can't really even on tv, you can't really have people fully understand the size and scope of these projects. It's just so big.
- [17:17]
Scott Wapner
Well, I think it's, it's big in all the ways. Right. It's both big in terms of the construction, it's big in terms of the amount of people that are working on it. It's big in terms of the impact of the. It's happened in the world. It is, it's hard to understand. And I feel like as someone who spends my time on it, you, you go away for a minute, you come back and it hits you every time. It's always big.
- [17:35]
David Faber
Yeah. You know, it's funny talking to Jeff Blau, of course, the developer here, $16 billion is the number I keep using in terms of the cost, but that is only the cost of putting all of this up. What is the ultimate cost for Oracle, for example, in terms of everything you've got to put in there to make this an actual data center?
- [17:54]
Scott Wapner
Yeah. So the way to think about it is that roughly, you know, if a site like this, you said $16 billion, it's going to be an additional 30 to 40 billion to put everything inside of it in terms of, you know, the networking, the GPUs, all that kind of stuff. So. And then that stuff obviously gets replaced over time. So thankfully we're able to design the buildings for a long life, but the actual infrastructure inside ends up being much more expensive and then goes through a shorter lifespan.
- [18:22]
David Faber
Yeah. As we enter what we're calling the inference age. Not that training is going to stop. Does it change what goes inside the building?
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Scott Wapner
It does and it doesn't. So the good thing is that the same capacity that you can use for training can be used for inferencing. But there are a lot of very specialized inferencing technologies that are coming out, so they're much more cost optimized or higher performance, lower latency. And obviously, you know, you're familiar with Nvidia and amd, but there's a lot of new interesting startups that are putting out products and a lot of the big model providers actually have their own inferencing dedicated chips that they're creating themselves.
- [18:57]
David Faber
Yeah, there's that question about latency in terms of the geographic location of many of these data centers, they're typically in places that are not near an urban center, in part because there's abundant power and land.
- [19:08]
Scott Wapner
Right.
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David Faber
Does that become more of an issue is inference takes control, so to speak?
- [19:12]
Scott Wapner
No, I don't think so yet. So the good thing is that the speed of light is relatively Fast in comparison to how long it takes us to kind of do the computation. So when we think about like latency, we're not talking about the microsecond level, like high frequency trading like some of your customers do, or let's put it seven feet closer and we'll win. This is more about how do I make it take only one second instead of 10 seconds. And so location matters less rather than the overall architectural design of the hardware itself.
- [19:42]
David Faber
All right, so you obviously, we talked about the compute that will go inside what will eventually be here. And we're going to come back for the opening when I guess it's only a year and a half away.
- [19:50]
Scott Wapner
Yeah, it's in 20, 27.
- [19:51]
David Faber
How many, by the way? How many? I mean, so what do you have up and running? Stargate was announced with great fanfare. The numbers were hard to imagine. You're actually delivering on that now. Abilene is certainly. But how much do you have up and running and terms of the data centers that you're delivering under the Stargate banner?
- [20:07]
Scott Wapner
Well, it's a. Stargate is a all encompassing kind of concept. What I can tell you about Oracle itself, you know, last quarter we delivered on the order of 400 megawatts. You know, we're on, on pace this quarter to deliver more than that. And then you'll continue to see acceleration from us. Abilene, we started with our first couple of buildings that delivered kind of late last year. And then we are very rapidly, you know, it's eight buildings in the original Abilene site and we've delivered another couple of those right now. So that's moving very fast. But across Stargate as a whole, we've got multiple sites around the country. We've got what we're doing here in Michigan, we have a wonderful site in Wisconsin, a site in New Mexico and another site in Texas. All of which combined with the original Abilene site, are really dedicated to, to pushing forward the next generation of AI.
- [20:57]
David Faber
Are you on the right track then to meet your goals in terms of what you're going to spend and what you're going to be able to deliver in terms of power? Well, it's measured that way, but in terms of compute.
- [21:07]
Scott Wapner
Look, anyone who sits here and tells you they're doing five of the largest construction projects ever invented, what does it mean to be on track? What I can say is that based on all of our expectations, both in terms of, you know, the construction process, the permitting process, power generation, GPU delivery, all of it's actually going you know, on schedule or ahead of where we expected it to. And you see that from in terms of what we're delivering to our customers and also the commitments that we're making to our investors and our partners.
- [21:36]
David Faber
Yeah. You know, speaking of being on delivery schedule, we do think of it often as a race. You're in a race against some of your competitors, and then we as a country are said to be in a race with China. Do you view it that way?
- [21:53]
Scott Wapner
You know, I tend to be much more internally motivated, so I think of it as the best way to get somewhere quickly is to focus on yourself and not so much on the competition. And by that, I mean is what I know is that our customers rely on us to deliver things as absolutely as quickly as possible. There is more demand today than we can deliver, and we are out there, there constantly trying to figure out how do we deliver it as quickly as we can, because we see the huge benefits that AI brings, and we think it's really important that we get there and deliver that to our customers and all their customers.
- [22:25]
David Faber
Yeah. But I do wonder, Clay, though, you know, it is being described, our ability to build data centers like this is a national security concern, the development of AI. Of course, we are in a race again with China. Do you not agree with that?
- [22:38]
Scott Wapner
If you're asking if. If the. You know, do I think that AI is critically important for the success of the country? Absolutely. Do I think that we have. This is like a transformational technology, and the quicker that we can actually build and scale it, I think it's going to be better for all Americans. What I'm saying is, is that, you know, are we in a race with this person or this person, that country or that country? What I know is that if we actually go out and we build things like what we're building here in Saline, I'm very confident that the American life will get better for all Americans.
- [23:06]
David Faber
You are confident, by the way, because, as you know, there's a great deal of backlash, not just against data centers, but against AI in general. We all saw some of the commencement speeches, for example, where notable speakers were booed by graduates. You know, we're not making this up at this point, that there are a lot of people very concerned.
- [23:24]
Scott Wapner
Yeah. I think that anytime you have a transformational technology, I think people are worried. I think in times of great change, it's very easy to be. Be fearful. And I don't have all the answers. But what I do know is, look, I spent my entire life, my entire career as a Technologist focused on with a firm belief, and I've seen it play out time and time again, that we build great new technologies and then we use them responsibly, and it's a huge benefit to our people. I don't see any reason that this technology is indifferent.
- [23:51]
David Faber
By the way, your Stock's up another 8 1/2% today, was up 10% on Friday. It's all your great leadership, I guess.
- [23:58]
Scott Wapner
Right. You know something that I was given wise advice by Safra one time was never take responsibility for good news unless you're willing to take responsibility for the, for the downside. What I can say is I think that Oracle is doing incredibly well, and I think that this space is doing incredibly well.
- [24:13]
David Faber
Yeah, you know, I do wonder because, well, it was up in part because of that incredible quarter we got from Dell and just sort of all of the fervor around that and obviously, obviously the insatiable demand part that we're talking about. But there are some questions about COMPUTE and how much of it is being used by corporate America and how much of it is being used for a productive end? I mean, what are you seeing from your client base? Given suddenly people are saying, wait, what's my COMPUTE bill this month? How did it get to that number? And who's using all of this for what?
- [24:41]
Scott Wapner
Sure. Well, I could even talk. I have insights into our customers. But even just Oracle ourselves, we're a big customer. I think that with the advancements that have been made in coding applications, in terms of the models and how they can help accelerate software creation, it's unlike anything I've ever experienced. Right. I started programming really before the Internet. I got to go through how the Internet and open source changed technology. I got to go live through kind of the cloud transition. Nothing has changed the way we write software, the way that AI models are doing it, and it's incredibly addictive. It's empowering. Yes, it has a cost, but I think that we're learning, all of us, this new technology, we weren't doing this this way a year ago. And the demand is really, really high. And we see that ourselves at Oracle, across our application portfolio as well as the way we use software, these agents to kind of write all of our software, but we see it for our customers, customers as well. Is it embedded into things like our health care applications, our fusion applications? The demand is, I would say, still continues to outplace, outpace supply.
- [25:50]
David Faber
And do you think your customer base understands the efficiencies, the productivity that they are getting from it do they have a good read on all of that or is that kind of yet to come from some new layer that needs to be added?
- [26:00]
Scott Wapner
Yeah, well, I think it's actually, it's less, you know, inventive than that. So if, take for example, software development. If you take the actual process of writing the code and you shrink it down even to zero, you don't suddenly have infinite productivity because you have a lot of processes. How do you test the code, how do you do release management, how do you deploy it? So part of what's actually happening across all of these enterprises is you're having to re engineer your entire processes to take advantage of this much faster way of doing things. And so right now I think we're in a phase where we've taken one portion of the puzzle and made it really efficient. And what we're all having to realize is that we have to actually re engineer how we work as a whole. That's going to take time because that involves people understanding processes and learning and changing. But I'm very confident that with this new technology we're going to be able to see massive productivity gains.
- [26:52]
David Faber
All right, so that will take me a year and a half out. When we're here celebrating the opening of the, this, this facility, doing inference and training workloads. I mean, things are moving so quickly. What am I, what are we going to be talking about in a year and a half in terms of what this is going to be processing for the enterprise?
- [27:13]
Scott Wapner
You know, if I, if I knew exactly that answer, I probably we'd be doing, we could go do a startup and we do that instead.
- [27:18]
David Faber
Sure, I'm ready.
- [27:20]
Scott Wapner
Look, I think that we've clearly seen product market fit with coding abilities. I think that we're going to see more and more specialized models that actually create more and more use cases. We spend a lot of time at Oracle focused on healthcare. I think there's a lot that's going to come out as we get this flywheel going that really transforms multiple different industries. I look within my organizations, it's not just my programmers that are using this technology. The way in which we do finance, the way we do accounting, hr, it's all changing. I wish I could tell you. I know like what we're going to be discussing 18 months from now, what I do know is it's going to be moving very fast. It's going to be quite different.
- [28:00]
David Faber
Yeah, I mean, finally, Oracle is known still, I mean, in many ways as an enterprise software company. Obviously you're also this. Yes, and there has been thought that there's been a risk to your overall business as a result of being part of sort of that SAS apocalypse, so to speak, from your vantage point running the infrastructure, is there a real risk? Do you see it at Oracle in terms of at least the next generation of enterprise software kind of getting built on an entirely different stack, for example?
- [28:25]
Scott Wapner
I think there's a risk if you're not using the technology to make your products better.
- [28:29]
Jason Snipe
Right.
- [28:29]
Scott Wapner
The good thing is that at Oracle, our customer base and our existing technology are not a liability, they're an asset. Right. So we have customer relationships, we actually understand their needs and we actually have huge install base in terms of technology. The fact that we can use AI and then go in, revolutionize how we're delivering those applications and then deliver it to those customers very quickly, that's actually an advantage, not a disadvantage. If someone said, hey, would you rather be starting a new SaaS business from scratch or would you rather be starting with one of the world's most comprehensive SaaS portfolios, to me it's a very simple answer. Yes, I'd rather start with the customers and the relationships and the huge technology advantage. But you cannot wait. Right. The reality is, is that you can't keep doing what you were doing before. You have to be developing applications in a new way.
- [29:19]
David Faber
Yeah. All right, we'll be waiting on this for the next, I guess. How much your time do you spend on. On these. On this, you know, not this, but on the projects of course, that you've committed.
- [29:29]
Scott Wapner
It's a hugely, hugely important part of my job. And it's. You should not underestimate the difficulty of building multiple of these sites around the country from supply chain through the actual design and build processing, working with our partners. It's a lot of my time, but honestly, it's what's, what could be more fun than doing this?
- [29:51]
David Faber
We're at the forefront, that's for sure.
- [29:53]
Scott Wapner
Okay.
- [29:53]
David Faber
All right, Clay, thank you.
- [29:54]
Scott Wapner
Thank you.
- [29:55]
David Faber
I appreciate you taking time. Clay McGar, Course Co CEO of Oracle Right here from Saline Township, Michigan. Back to you.
- [30:03]
Leslie Picker
Amazing. David, great interview. And it was his first one on one that we have seen on cnbc. Appreciate it, David. So what I heard from that conversation was there is an insatiable amount of demand. They're moving quickly, but, you know, nothing is quick enough to kind of meet that demand. They're making productivity gains, but, you know, there's just this kind of unique environment in the. They sit at the epicenter of it. Joe, how do you think about you own Oracle, it's up 8% today. How do you think about those comments and just the way Oracle is currently positioned?
- [30:39]
Joe Terranova
Well, they'll be reporting earnings on June 11th, I believe they reported in the second week of March. It was a good earnings report. A lot of what we heard today was something that we heard back in, in March. I think the story will be a good one again in June. I think it's a different environment though today than it was in March because after Oracle reported earnings in March, the stock kind of slowly eroded. Some of the gains from earnings sentiment has clearly improved and I think one of the reasons that sentiment has improved for the software industry and look, keep in mind, Oracle at 700 billion billion as a market cap is going to benefit arguably the most if the sentiment improves in the software industry. But the approval to move higher and appreciate really came from the bond market. There was a significant amount of a debt offering and maybe surprisingly, the demand was remarkably strong. And the demand was not specifically centered to the US we saw really strong demand overseas for a lot of that debt paper. So the offerings went remarkably well in particular for investment grade paper. And I think Oracle has benefited from that fixed income positive sentiment now being pushed and reflected into the equity itself.
- [32:02]
Leslie Picker
Yeah, that debt overhang was certainly a big one for the stock for a very long time. Jason, what do you think make in terms of those, those comments about just international competition and how he's thinking about China. That stood out to me as he was like, you know, we're internally focused, we've got a big job to do. Essentially we don't really focus much on the competition. And David pushed him on this being seen as kind of a national security issue. How are you positioned here?
- [32:26]
Jason Snipe
100%. I think that's a big deal. One other piece I wanted to add to what Joe just said on the debt raise, you know, since the debt raise since they have done $29 billion in contracts since then. And I think part of that story is this new platform strategy, bring your own hardware upfront payments, which I think has risen the stock. I think the other story, and to Joe's point, I think this sentiment has completely shifted on the software, the entire software space. You know, this RPO number, right, this staggering $550 billion number and can they execute? I think that story has quieted down. I think the capacity and ability to do that. I think as the market has warmed up to that. And I think one other point I'd also pull out, you know, in terms of partnerships, we talk a lot about the partnerships in this space. But their partnership with Bloom Energy I think was extremely strategic, you know, and being able to increase their capacity, 2.8 gigawatts of energy capacity, I think will be accretive for the stock in the long run. So I think there's a lot of good things that are happening there. And I think from a security perspective, which I think that's going to be important as well as they kind of move forward and we'll see what they do, what they produce in their earnings release in mid June.
- [33:37]
Leslie Picker
Yeah. And of course, the visuals of seeing it in person, too, is amazing. We do have another big exclusive interview coming up at 2 Eastern. David Faber will be speaking with Open Air CEO Sam Altman. That is one you are not going to want to miss, especially in light of the news we saw earlier this hour about Anthropic confidentially filing its S1 as that race continues. Coming up, Berkshire Hathaway's new deal that's pushing homebuilders higher. Plus, our top calls of the day. Halftime we'll be right back
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- [35:09]
Leslie Picker
What made you confident that you could do something that hadn't been done before? I have no fear of failure.
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One of my favorite pieces of advice,
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think about what your boss's boss needs.
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Amy Raskin
Leadership can look in many, many different forms.
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Leslie Picker
It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
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- [35:45]
Leslie Picker
Foreign.
- [35:54]
Julia Boorstin
We're back on Halftime Report. I'm Pippa Stevens with Your CNBC news Update. Florida sued OpenAI and CEO Sam Altman alleging the company knowingly released an unsafe product and ignored warnings that it could harm users. The lawsuit says OpenAI allowed ChatGPT to aid and abetted mass shooters encourage people to take their own lives and degrade users critical thinking skills. Sam Altman will join David Faber at 2:15 Eastern Time on Power Lunch. Five people were killed after an explosion and fire on a South Korean rocket propellant production line. Officials said the blast appeared to occur while water was being used to clean explosive material from tools making the propellant. The deceased were always workers at the plant. And a United Airlines plane bound for Spain from Newark's Liberty International Airport turned around mid flight on Saturday night due to a possible security threat. According to air traffic control audio, authorities came to inspect the aircraft after someone named their Bluetooth device a quote, certain four letter word sources. Tell the New York Post the word was bomb. Passengers were re screened by TSA in Newark and the plane landed in Spain more than nine hours late. Leslie, back to you.
- [37:09]
Leslie Picker
Oh my gosh, what a nightmare there. Pippa, thank you. Let's hit some committee. Stocks on the move today. Berkshire Hathaway buying homebuilder Taylor Morrison for $6.8 billion. You know, the question is kind of what the follow on means for homebuilders broadly. Wells Fargo saying they expect this, some to view this as a sign of a bottom, but they believe that builders still have some wood to chop before potential recovery. Joe, you own Pulte Group.
- [37:38]
Joe Terranova
Well, the biggest challenge in front of the homebuilding industry is where mortgage rates are. Mortgage rates are at the highest level since last August. Now look, the administration is behind some unconventional approaches using Fannie and Freddie to try and stimulate demand. That, that's great for the American homeowner, for the American home building industry, but you still need rates to come down to move lower. I think for, for Berkshire, this is a excellent message that's being sent by Greg Abel. I'm here, I'm ready to we have 300 and what is it, $97 billion worth of cash. We did in January as Warren Buffett was exiting, we did the Petro, Petrochemical, the Oxy deal for about 9 billion. And here we go. We do this deal. It adds to what exists currently with Clayton Homes, which is affordable housing for low and middle income homeowners. And this is more on the upper end. So I like the completion story there as it relates to home builders. And look, they have patience and they will ride out what right now is a difficult home building environment. But on the other side of the it, they'll benefit from it, I believe, because that's what they do well, they have patience in their investments.
- [38:52]
Leslie Picker
Jason, you own Dr. Horton. You think that kind of the scale play is the answer here, given all of the big challenges in the homebuilders right now.
- [39:00]
Jason Snipe
I think this is an important deal. Obviously Dr. Horton, I mean many of the homebuilders obviously haven't done well. Drone only up point and a half so far this year. I think to Joe's point, I mean the 30 year mortgage is six and a half percent. I mean that is a hard wall to, to climb.
- [39:15]
Leslie Picker
No pun intended.
- [39:16]
Jason Snipe
Yeah, right. You know, but housing supply is starting to improve. I think that, I think that's an incremental positive. I think, you know, yields have obviously been on the rise. That's kind of the inflation expectation story. The 10 year is a proxy for mortgage rates which is at four and a half right now. So we're going to need yields to come down. I think if we get some frame of a solution in the straight, you know, I think we could see that come down meaningfully and maybe there'll be some more opportunity here.
- [39:42]
Leslie Picker
And Amy, you own Berkshire Hathaway. Is this the type of deal you'd like them to see do more of?
- [39:47]
Amy Raskin
Absolutely. I mean the housing cycle almost cannot be worse. So getting in at this time is, is I think strategic. Excuse me. And the stock, the stock needs sort of a kick to sort of start working. But I don't think that really happens until the momentum in the market sort of turns and then Berkshire is really well positioned with their cash balance and as Joe said, their patience. But the stock is unloved. Most analysts don't like it, are not recommending it. Earnings expectations for 2027 are less than 2024. So there's not a lot baked in in terms of growth. It's have gone nowhere for the last few years. And Sue Decker, chairman of the board, who is my boss at DLJ a million years ago can't be better. And so I think, I think, I think they're in good hands with Greg the Buffett premium sort of coming out and it will work when, when sort of when you need it to work.
- [40:39]
Leslie Picker
Well, it sounds like this deal came together pretty quickly. So we'll see if there are more, more in store for them. Up next, your ETF edge. There are now close to a thousand more ETFs than stocks floating around the marketplace. So what does that say about the state of play. RC Mamodi is following the money for us. Half time will be right back.
- [41:04]
Seema Modi
We are back on the Halftime Report. I'm Seema Modi with today's ETF Edge. It has been recently noted that there are now a thousand more ETFs than stocks. Where is the innovation going? I'm joined by we have Gavin Fillmore, CEO of Title. And Gavin, you've been talking about thematics. They faded in popularity. Now they they're back. Is that due to Space X?
- [41:23]
Gavin Fillmore
Space X is a continuation of that trend. So things definitely slowed down in the early 2000s after a robust decade of thematics, but they are back and I think it really started with I actually well ahead of Space X.
- [41:37]
David Faber
Right.
- [41:38]
Gavin Fillmore
So the AI trend caught fire maybe two and a half years ago with the release of chat CBT. And ever since, you just have more thematic ETFs coming to market and they're increasing increasingly niche all around that ecosystem of AI.
- [41:50]
Seema Modi
I mean, even beyond space X. A flurry of IPOs. You've anthropic filing confidentially in the last hour. How does that influence the ETF market?
- [41:57]
Gavin Fillmore
It just gives people more and more to talk about and more niche exposures to drive interest in products. So you talked about space.
- [42:05]
Tyler Redick
Right.
- [42:05]
Gavin Fillmore
We're involved in a space ETF ticker, NASA that also has private exposure to SpaceX. So obviously leading up to that IPO, there's just a fury of interest in that arena. Now you have Anthropic and there's more to come. So we've never seen more activity than today.
- [42:21]
Seema Modi
Interesting to see how investors are placing their bets. Gavin Fillmore, thank you. And we're going to continue the conversation over at ETF edge.cnbc.com Gavin will be joined alongside Tim Urban, chief investment strategist at innovator Goldman Sachs Asset Management. Leslie, I'll send it back to you.
- [42:37]
Leslie Picker
Looking forward to that conversation, Seema. Thank you. Up next, Mike Santoli joins us with his midday Word. We are back on Halftime. Senior markets commentator and overtime co anchor Mike Santoli joins us with his midday Word. Mike, would love to get your thoughts on just the deluge of IPOs. You've got space X looking to kick off its roadshow as soon as this week. We just got the anthropic S1 to kind of add fuel to that fire. What should the market be thinking about as it pertains?
- [43:10]
Mike Santoli
I feel like everyone is kind of standing on the beach, the waves pretty far away. It's getting closer. You don't know exactly how big it's going to be or where it's going to break. So part of me has been dealing with this idea that I almost feel like it's almost building its own wall of worry.
- [43:23]
Leslie Picker
Yeah.
- [43:23]
Mike Santoli
Everyone's talking about it. Everyone think it's going to be destabilizing. I don't think it's a matter of is there going to be enough money to absorb of the supply. Literally much more focused on what it's going to do to the complexion and the character of the market and the indexes once they're all in there. Because there's no way you can't increase the, you know, the volatility and I guess kind of the fundamental sort of disruption leverage within the indexes once they're
- [43:50]
Amy Raskin
all public and mathematically the peak.
- [43:52]
Mike Santoli
Yeah, well, exactly right.
- [43:53]
Amy Raskin
So all of a sudden the market's going to go from like a 22pe to potentially a much higher P. E because there's not a lot of earnings
- [44:00]
Mike Santoli
and it's cranking the market in the direction it's already very skewed. And so I think all those things matter a lot. The machinations around, should they get into the indexes sooner? Should they not? I think it's just it would be strange to have multitrillion dollar companies sitting sidelined not in the indexes that are meant to represent what the market is. But does that mean you want to own the indexes after that? That's a separate question.
- [44:23]
Leslie Picker
Do you think there needs to be selling in more liquid names in order to fund that? Because you said there won't be an issue of, you know, the amount of capital that can kind of fund these IPOs. But does that preclude selling more liquid places in order to free up that?
- [44:39]
Mike Santoli
I would say not dollar for dollar. No. And I keep pointing out that open air has raised $100 billion in one bite. At some point point privately, the money exists somewhere. Right. And I do think that that that kind of thing can maybe be reassuring. I suppose people have to reallocate. Nobody knows what sectors, you know, space X is going to be in. Is that going to matter? So to me it's more about also the hype cycle kind of revving up into these deals.
- [45:06]
Leslie Picker
Yeah.
- [45:07]
Mike Santoli
Is going to be pretty extreme. Maybe that's what we're already seeing.
- [45:09]
Joe Terranova
Feels like it takes a narrow market and makes it even more. More narrower.
- [45:13]
Mike Santoli
I guess so, yeah. The narrow piece gets broader, but. But in aggregate it does. It does seem to kind of, you know, up the ante in that one direction.
- [45:23]
David Faber
Yeah.
- [45:23]
Leslie Picker
So I guess in the meantime you'll be surfing the big waves as they come to the shore.
- [45:27]
Mike Santoli
Let's get ready.
- [45:27]
Leslie Picker
We'll look out for that. Mike Santoli. Up next, the setup on two big cyber stocks on deck with earnings. We're back after this. Welcome back. Let's hit the cyber setup. Jason, you own Palo Alto, reporting tomorrow after the Bell. We talked a lot about software this hour, but how does this one stand out to you?
- [45:58]
Jason Snipe
Yeah, this one's interesting. Obviously Palo Alto is up a lot so far this year. It's up 60%. So I think there's a little bit of pressure going into earnings. I think the RR number we got to see over 5.1 billion. I'm very interested to see they acquired Cyber Arc a couple of quarters ago and what those cross sell opportunities look like going forward. So those would be the couple of things I'll be watching on Palo Alto's release.
- [46:21]
Leslie Picker
And Amy, you own CrowdStrike, which reports Wednesday after the bell.
- [46:25]
Amy Raskin
Yeah, this stock was $400 a few weeks ago. 700 over 770 now. So a lot of good news is already baked in. But we like it long term. We think they're really well positioned in an AI world. And at $170 billion market cap, it's almost quaint compared to everything else.
- [46:43]
Leslie Picker
Less than 200 billion. What a steal. Up about 5% today. Final trades coming up on halftime. We're back. Make sure to tune in to halftime tomorrow at noon. I'll be speaking with Goldman Sachs CEO David Solomon at the Economic Club of New York. We'll bring you all the highlights right here on halftime. Now, time for final trades.
- [47:08]
Jason Snipe
Jason, Google, the cloud story continues to accelerate here.
- [47:12]
Amy Raskin
Amy, Major drilling, mineral exploration and drilling services.
- [47:16]
Leslie Picker
And Joe.
- [47:18]
Joe Terranova
Yeah, oil appears to bounce here. Diamondback Energy ticker symbol Fang is a name you could own.
- [47:24]
Leslie Picker
Yeah. Currently up about 3.9. That does it for Halftime. The exchange starts right now.
- [47:31]
Scott Wapner
You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.
- [47:43]
Edward Jones Financial Advisor
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 Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer Snoring Gasping during sleep?
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Tyler Redick
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