Scott Wapner (3:03)

So are you concerned at all about a bubble based on all of the CapEx that's going on and some of the conversation that's out there? The Solomons people are excited, they're out on the risk curve. Bezos people can't distinguish between the good ideas and the bad ideas. You just throw money towards everything and hope everything works. But inevitably nothing all works.

Rob Sechan (3:24)

When we talk about bubbles, we tend to lean towards valuation. We all pay attention, attention to valuation on this show. But it's when the earnings trajectory is going to show when and when you're going to see that change is when capex starts to slow. We're seeing really no signs of capex slowing. And so until you see that pivot point, I think it's going to be more of the same, as we've said before on the show, but at some point you're going to have to switch from the cyclicals, the semis, the mag sevens to the application of this. I think there's a lot of hope that, you know, you're going to see a broadening out in this market too, which we have not seen. The cap weighted indices are doing really well. The others aren't. And so I think we're more of the same at least through year end. And I think that's probably what propels us to, you know, 7,000 on the S and P. I mean, stuff you.

Scott Wapner (4:17)

Could be just years before you get into any kind of bubble trouble. As we learned in 2000, Greenspan made his thing four years before the irrational exuberance thing, four years before the whole bubble burst. So I guess these conversations are useful to try and take stock, if you will, on where we are. If history is repeating itself, if it's at the very least rhyming to Rob's point about capex. Wow. Bank of America is so bullish on capex. We expect annual investments to nearly triple between calendar year 25 and 30 to over $1.2 trillion plus constrained only by the ability to scale buildings and power. So this isn't stopping anytime soon. Whether it inflates a gigantic bubble, one won't know until probably it's too late.

Stephanie Link (5:03)

Yeah, I mean I think we're in very early innings. Capex is not just coming from the technology companies, it's coming from several different industries. The industrials, utilities, the pipelines, the power companies, etc. So it's not just AI, it's data center, its grid and its power. And Tom Fanning who is the ex CEO of Southern company was on CNBC last week talking about how we're going to need 24, 7 capacity and energy and we just don't have it. So I just think that this is very early innings. I think that you can play it a number of different ways. It's not just mag 7, we talk about the industrial companies all the time building out data centers and building out the grid. It's the IPP companies. Companies, it's the utility companies. So that's why I don't think it's a bubble.

Scott Wapner (5:50)

Because some say those are in a bubble.

Stephanie Link (5:52)

I don't think so. I don't think so. Because you, you have this massive investment across every different industry.

Scott Wapner (5:57)

Yeah, but that's why I don't think it's a bubble. Hoping that it all pays off and on.

Stephanie Link (6:01)

Cost, the costs, actually the financial services companies are talking about the cost coming down from using AI like by 30 to 40% and a lot of that is going to lead to job losses eventually, of course, course. But they're saying that it is very beneficial to use. I think we all would say that. But it's the real numbers that prove that it is such a strong trend. And also it's the ROI Companies are seeing ROI's monetization. Ask Metta.

Scott Wapner (6:30)

Okay, so on the notion of what inning are we in, Josh Morgan Stanley's Lisa Charlotte takes a crack at that this week, earlier in the week and so said, quote, given the Jenny Capex story centrality to both markets and the economy, the most important question for investors in the next year is what inning are we in? When it comes to market discounting scenarios, we believe we are closer to the seventh than the first and we're starting to see cracks all based on this idea that Capex is going to carry this market until it doesn't. What do you think?

Josh Brown (7:04)

I'm not smart enough to be able to pinpoint what inning or, or even tell you whether it's the earlier or the later innings, what I can tell you and I think I am qualified to Say this, there's going to be a correction even if we're only in the first inning. As the technologists would tell you. There's just absolutely no way you can have stock prices, all hundreds of companies all revolving around this theme spread out from industrials to utilities to communications to semis software. You cannot have this level of activity and bullishness and Empire State Building esque vertical charts in perpetuity. It just, it's never happened before and it won't happen this time. There is absolutely going to be a reckoning that's not a reason to not invest because as we've seen over the last 15 years, corrections happen really fast. People don't even get a chance to panic if and when they happen. So I don't think that that should keep you out of these stocks or being in the market. I just think people need to calm down. Maybe the right focus is position, size, whether that rather than some sort of binary in out decision. And now I'm going to say something that's going to sound ridiculous on its surface but give it a few hours, think about it. Later you'll recognize how profound it actually is. The only thing that we don't keep this rally this. Just hear me out and you'll understand. The only thing that will keep this rally going is if the rally keeps going. And I know that's a tautology but the entire premise of the bullishness around this theme is emanating from the performance of the stock prices. When did Mark Zuckerberg stop spending money on the Metaverse? When his stock price fell by 70% and people were on TV demanding an apology from him. If and when we start to see stock prices stop reacting positively to continued CapEx spending expansion, that's when this will end. Only down stock prices can put an end to the rally. I don't think we're there yet because every time one of these companies says hey, remember we said we were going to spend X turns out it's Y, the stock price goes up 10, 15%. In that environment, why would a CFO and a CEO look at each other and say let's slow down, they're being rewarded for speeding up.

Rob Sechan (9:40)

I hate to inflate a very big head already, okay, But I think he's spot on here. The stock market is what's driving confidence. You're seeing come in through some of the consumer data. It's all the high end consumer and is as far as this goes the minute you see a crack, which is why capex is so, so Important, it's when confidence is going to wane. And I think if you get out of the market now, let's all recognize that if you're early, you're wrong. That's it, that's the market has punished you for that. And so everybody keeps going on the same path.

Scott Wapner (10:17)

So Amy Blackrock is said to be near a $40 billion data center deal. There was a Market watch story that I thought was interesting. It quotes an analyst at the a firm called Macro Strategy Partners says the AI bubble is 17 times the size of the dot com frenzy and four times the size of, of what we saw in subprime. Michael Hartnett of Bank of America weighing in today as part of the fourth flow show note which we always like to quote. He says price action, valuation, concentration and speculation are all frothy and lead to indicators of inflation inflecting higher. But every bubble in history popped by central bank tightening and no central bank in the world has hiked rates in the past two months. Nobody expects any central banks in the world to be tightening policy any time within the next 2, 4, 6, 8, 10 or 12 months unless there's a major surprise on inflation that people are gathering. How do you want to weigh in to this central question in the markets.

Amy Raskin (11:12)

Today about whether we're in a bubble? Yeah, I, look, I think well, you.

Scott Wapner (11:16)

Should just continue to buy these stocks even if we're, if we're in a bubble, like, like we said it could be the earliest stages. Like it wasn't so helpful. Yes, I understand, you know, Greenspan's thing that we look back on. But was his statement of irrational exuberance, was it helpful to investors then?

Amy Raskin (11:34)

Obviously not. Now? Obviously not, but I think. But then we were in a bubble and it corrected 70%. So you could be, you could have gone out early and still four years earlier. Now four years earlier. But if you started selling in 1999 and missed the last 20% up and then missed 70% swoosh, you were doing okay. I think the central question around AI is whether it's a natural monopoly, like how many people are going to win in this. This will certainly happen. I will improve productivity. But there are lots of big capex infrastructure things that improve productivity that don't make a lot of money. And so that to me is the big central question here. Search is a natural monopoly. You've seen Google at trillion dollar market caps. Social is a natural monopoly. You've seen Metta. The question is are we going to have six AI players that all compete with each other and then drive down prices like airlines, like wi fi, like lots of other infrastructure projects. In that case, the people, the equipment makers, the videos will do fine. But you're not going to end up with the trillion dollar. You know, Chachi Beat might not end up being a trillion dollar company.

Scott Wapner (12:41)

I know that way there. You wait till the, you wait till Open Air goes public and then we're going to have these kind of conversations all over again. But on steroids.

Amy Raskin (12:49)

Right. And it might start out that way and then you have to see what the profitability and the return on all this capex eventually is. And we're still a ways away.

Scott Wapner (12:57)

Yeah, they're the great big bets. By the way, as part of that flow show note staff, you had the biggest ever weekly tech inflow, $9.3 billion. It's the biggest on record. So just follow the money. Investors obviously aren't worried yet.

Stephanie Link (13:12)

I was just going to mention I talked to a lot of chief technology officers, I'm sure you as well. And they're spending on two things. Double digit growth, growth from now until the end of the decade. One is a I, because they don't even know what it means for their business and they're learning it every single day. And the second place that they're spending is cybersecurity. You've heard me say cybersecurity is going to be bigger than AI because AI is not safe. But these are the two areas that they are spending double digits. They're going to spend maybe single digit, low single digits elsewhere too. But this is something that is absolutely safe, significant.

Scott Wapner (13:47)

Well, speaking of cybersecurity, you just bought more crowdstrike.

Amy Raskin (13:50)

Yeah, we did. I agree with you. I think crowdstrike, you know, if we went to the user conference a couple of weeks ago, AI is not going to have. Nobody is going to. No enterprise is going to put in AI until they know it's agentic, until they know it's secure. So they raise numbers huge at that conference too. Right.

Stephanie Link (14:07)

Versus 11% expectations.

Amy Raskin (14:09)

Amazing. You know.

Scott Wapner (14:11)

Well, it's one of the reasons why RBC today says we believe the bear case for software and the narrative there is overdone. The point being you just better be in the right software stocks.

Josh Brown (14:19)

Right, right.

Scott Wapner (14:20)

It's not. You can no longer make a big broad bet on software because some will be just going to have a disruptive thing either on fundamentals or, you know, revenue flows and things like that. You wanted to weigh in on some.

Rob Sechan (14:32)

Yeah, I mean I would say, you know, the record tech inflows the chase is on in the year end only 30% of the active managers are beating the indices. Positioning net is 55% across AGA. Yes, CTA are long but when you look across the whole body at 55% that's not overly extended. It's frankly a little light. And you're going to see managers chasing the year end. So I think that's why you're seeing this record tech inflow.

Scott Wapner (15:00)

Josh Nvidia 7th day of gains in a row. The longest streak since November of 23. Amazon gets a target bump to 275 from 240 by Goldman Sachs. You own both of those?

Josh Brown (15:14)

Yeah. You know, look, one of the things holding people back from the Nvidia story is they thought they missed it. When a stock spends a few months consolidating and then finally breaks to a new high. All of those people who were like I'll buy the summer swoon, sweet. September is the coolest month. October is pro. So we go through these months and these, and these, these big bad events don't happen. You don't get in video at 160, then it's sitting there at 185 and it's like you know what, whatever, just pull the trigger. We'll buy it here. I know nobody will admit that professionally but I talk to people in bars and taverns and I know that's exactly how it works. Why I like new highs. So I wouldn't be surprised. See this thing with a two handle in short order doesn't mean I would personally go chasing it here. I'm also not a seller. This is just the environment that we're in. People have to get used to it.

Scott Wapner (16:05)

Best week since June by the way for the semis. Micron record high up 21 1/2% this week. Lam research Rob, that's you up 15% record high today. Teradyne Stephanie link up 52 week high. It's up 9% on the week. What do we make Robbie and then Steph on this trade this week?

Rob Sechan (16:24)

So listen, we have exposure across the entire semi ecosystem.

Scott Wapner (16:28)

Taiwan, semi Applied Materials, Nvidia obviously KLA and asml.

Rob Sechan (16:33)

All of it. All of it. You know it's been a great place to be the last six months. They continue to benefit from the capex. The cycle is looking bigger and longer than I think most of us could have expected. Yet they're a little extended here in the short term. You know I would love to see a little bit of pause and. But the fundamentals are still really really healthy and their, their PS are really relatively low in the mix that you talked about.

Stephanie Link (17:04)

I mean tearadyne for me is new because I picked it because it has lagged the group and I think the stock, the valuation makes a lot of sense at 21 times EBITDA is not strong, super cheap but the long term average is 29 times. They are it's twofold story semiconductor testing company and they benefit from the next generation chips which is what we're all talking about and then robotics which really hasn't even taken off just yet. I have a big bit of a big fan of robotics in general. I own Rockwell Automation and I think that robotics is really is only 14% of Teradyne's business. And so they've got a big customer, Amazon and I think that's going to, they're going to grow very nicely with Amazon as Amazon builds out their robotics. So I think that there are places to pick and choose. You know I own Broadcom. I would not be adding to Broadcom here but I'm trying to find some names that maybe are little, little gems, hidden gems.

Scott Wapner (17:54)

How about this? Apple downgrade today. Guys underperform at Jefferies. They had it at hold. 205 is a price target that's about 20% or so downside from here. Charts look pretty good obviously since you know, you take it back a little bit. It's had a nice run. It's still year to date, just plus 3%. It points to the underperformance that it really started the year as quote, solid demand for iPhone 17 quote has led to excessive expectations on 18 fold. That's that new foldable phone that we expect from Apple and the replacement cycle there. We do not doubt Apple will make the most beautiful foldable phone in the market. But the question is the tam the total addressable market of a $2,000 phone?

Rob Sechan (18:34)

Amy?

Amy Raskin (18:34)

Oh gosh, a $2,000 phone. It's an expensive phone. Look, we own Apple. We've owned it forever. I'm not buying it here. I think it is expensive for the growth rate but that way. But I also don't see it going away. I don't see anyone chipping away at Apple's stronghold on the high end consumer. And so you know, there, there's worries about tariffs, there's worries about supply chains, lots of things but I think this is one that you hold but we're not adding to it right now.

Scott Wapner (19:03)

Josh, want your take on another big talker and that is possible cracks in private credit. You've had a Couple of high profile bankruptcies. Some are wondering whether they were canaries in the private credit coal mine that people have been trying to weigh in on. Including the famed short seller Jim Chanos. He spoke to the FTSE in which he compared this $2 trillion market to the packaging of subprime quote. With the advent of private credit institutions, institutions are putting money into this magical machine that gives you equity rates of return for senior debt exposure. Should be the first red flag. Mark Lasry of Avenue was with me on closing bell yesterday. Weighed in too. Let's listen and we can react. On the other side, what ended up.

Mark Lasry (19:40)

Happening is you were able to borrow money very easily so you borrowed more than you needed and you did it on aggressive assumptions. So if anything ended up happening, happening that was bad, you were going to have a problem. And that's what's happened with these two companies. So if you look at what's happening in the market, what's happening is the economy is slowing down. So because of that you're going to have less growth, you're going to have less earnings, so you're going to have more issues. So this could be the beginning.

Scott Wapner (20:11)

I'm wondering what you think about Josh, especially when you take into context what private equity stocks have done. Probably this year's biggest disappointment. Disappointment considering where expectations were coming in of big deals going to happen. You're finally going to have exits after a big freeze up in the last few years. Week to date, Apollo's down seven and a half year to date, down 23%. KKR on the week, down five on the year, down 14. What do you think?

Josh Brown (20:39)

So on the private credit side, in past cycles people would obsessively follow credit spreads and they look specifically at junk bonds over Treasuries or junk bonds over investment grade. It's tougher to do that now. The issuers that make up things like the H, Y G or the JNK have never been higher quality. They're actually not even really junk issuers. If you were to compare them to the types of junk bonds that we had in the market in prior cycles, they just, they have tons of cash flow coverage for their, for their interest payments and they all were able to term out maturities and, and issue debt at significantly lower than normal interest rates. So that's not where the action is taking place. I think the smart money is watching the BDCs. These are publicly traded equity like vehicles that do things like direct lending. They have leverage, of course, it's part of the business model. They are lending to Companies that also have leverage. There is all sorts of questions about whether or not all of these loans were good loans. Of course we won't know until after the fact but those stocks have a great degree of volatility now relative to let's say three months ago. And I think those stocks are where people are watching the action in order to determine judge whether or not it is going to be a canary in the coal mine. I think Obviously not all BDCs are created equal. Some of these are better actors than others. But if you ask me what to keep an eye on, that's where I would be focused at the moment.

Scott Wapner (22:14)

Rob weakening economy certainly, you know, making some people a little nervous about what could potentially happen if it, if it gets weaker as Las re was pointing out. Well, the saving grace could very well be the Fed's cutting interest rates, so. So that's a helper too. Goldman Sachs, by the way, on the alt managers they say the recent sell off is a compelling entry point. BMO is bullish on the alternative asset managers including your Blackstone, Josh Jones, Carlyle, but other names are certainly in that area as well. They go 190 on Blackstone. What do you think about this issue?

Rob Sechan (22:45)

So this issue is one that can can go from bad to worse but I don't think it's going to. When we lived through this in 2018, 2008, it was back leverage that was the problem 2008, 2009, what happened is when the loans repriced really aggressively, they got called out of the black back leverage and there was for selling a little bit of that had to do with Lehman Brothers problems back then too. But the reality of it is is as long as you have strong underlying credits, as Josh said, as long as you have plenty of liquidity chasing this market, refinancing happens. And so we should be able to get through this especially if there's an economic breather given to us by the Fed.

Scott Wapner (23:26)

One of these companies that recently filed had a very strong credit rating which takes you right back to 08 when the credit rating agencies, many of them were asleep at the wheel as a lot of this stuff was going on. And only then after it blew up did people say oh yeah, you know what, we should have been more concerned with the leverage that XYZ business had. As somebody put it yesterday, the whole area around private credit has been both opportunistic obviously and opaque, which is the problem. The whole shadow banking system which people have been talking about literally since 0809 and we haven't seen a big problem related to the shadow banking system. That's why some people are nervous.

Amy Raskin (24:05)

Yeah. Yes. I mean the amount of money that went into the space in such a short period of time, you have to think that probably some things got done that shouldn't have gotten done. I mean even private equity has, is now over $10 trillion asset base. So that's a lot of money to put to work. You just saw the EA deal for $55 billion coming at a premium to public market valuation. So what you've seen in private equity is that the discounts that they used to be able to get businesses at, they're not getting them at those discounts anymore because they just have so much money to put to work. So naturally the returns are going to go down. And you're seeing some of that in the private credit space as well.

Scott Wapner (24:43)

Not to mention the judge.

Josh Brown (24:45)

Yeah, yeah, sorry. Very important point to bring out here. Not everything in financial services reacts well to falling interest rates. I think for the viewer who doesn't understand this, a lot of the loans that we're talking about are being made as floating rate loans. Which means as the Fed reprices overnight rates and everything in the fixed income ecosystem then follows suit and reprices accordingly, all of this activity becomes less profitable to the lender. It's a, it's a floating. It's as simple as goes down the.

Rob Sechan (25:20)

It improves the credit, helps, helps the company.

Josh Brown (25:23)

Helps the company, sure. But it's a double edged sword. And now if we start hearing about non accruals. Non accruals is a euphemism for deadbeat borrower. So if we start hearing about more non accruals and we look at some of these BDCs as sort of like a, like an avatar for the whole space. Yeah, they're all making year to date lows right now. Many of them now trade below April. I would again that's where it gets concerning.

Scott Wapner (25:55)

I want to get one more point in before we have to take a break. And it's the fact that why is this so relevant not just at a, at a very high level, not the 30,000 foot level, but the fact that regular investors have had access to these types of products for the first time ever and we've tried to make them more available to more investors across the space. The individual investor who now has access to, through platforms of alternatives to get into private equity. We're having a national conversation about should 401ks have access to private equity and things like that at the very moment where you're wondering whether cracks are forming in certain parts. And you're not going to see it until afterwards, in the 11th hour when the regular investor finally gets their opportunity to play on something they've been told is so great.

Stephanie Link (26:44)

100%, because the asset allocation are changing from 60, 40 to like 60, 20, 20. I mean, when you have companies saying that they own 30 or 40% of their liquidity in private markets, that's a scary sign. I don't think individuals are anywhere close to that. But that's, you're hearing that more and more.

Amy Raskin (27:05)

That's why you're seeing the secondary market, because institutional investors are trying to get out. And if you look at private equity fundraising, there's a reason for that too. The last three years, institutions are not putting as much money to work there. So they're opening it up to the private market or to the investors public, you know, and so that's where you're.

Scott Wapner (27:22)

Getting the issue quick because we're, we're over time.

Rob Sechan (27:24)

So the reason institutions are getting out is because money hasn't been returned as quickly. That's one of the benefits of private equity. If they're able to sustain across a difficult, difficult funding period with interest rates going up, that is a difficult time for investors who are experiencing, exposed to floating rates. They're never going to sell their businesses at the EBITDA that they have at that point in time because they know when rates come down, it's going to explode up. That's what's going to happen in the private credit space. When you look at the big firms, they've done an incredible job at providing transparency into the assets they own. Private equity, no, you can't get that same visibility. But in the private credit market you really get visibility if you're willing to do the work. You just have to have analysts to go in there and do that work. They're not. Blackstone is not scared to share what they own in their private credit funds. They're not scared to show what terms they are. I can tell you Apollo is the same. Maybe there's some fly by night private credit funds that are doing things a little untoward, but that's not. These players.

Scott Wapner (28:24)

I'm not even talking, we're not talking about doing things that are untoward. We're just simply talking about the fact that individual investors have had access to these types of assets.

Rob Sechan (28:34)

And that's great. That's a great thing.

Scott Wapner (28:36)

Yes, but it does, it also comes with risk.

Stephanie Link (28:40)

Right.

Scott Wapner (28:40)

That investors need to know about because of the illiquidity that many of these investments have you brushing that off.

Rob Sechan (28:47)

Am I brushing off the illiquidity? No. You better be good at explaining that, you know, semi liquid investments are not really semi liquid would when everybody wants to get out the door. At the same time, if somebody's done a good job explaining that, there should be no problem with that. You got to go in eyes wide open. That said, having that as a different return profile within a portfolio where stocks are historically expensive, bonds are not producing a lot of yield despite the fact that they're up from the bottoms. Having these alternative assets makes a ton of sense. Whether it be uncorrelated private credit, you know, private equity, venture debt. There's so many things to do right now that are producing above average forward returns, which is that investors should take advantage products. Exactly. So it's actually de. Risking the environment by not just being in stocks and bonds. Pay attention to it. I think it's going to be great for individual investors.

Scott Wapner (29:43)

The diversification of your assets is one thing. It's. It's making these investments and then if something does go wrong, understanding fully that many of them are wholly illiquid.

Rob Sechan (29:55)

Well, they will, they will, they will go to, they will go to 1.

Amy Raskin (29:58)

And valuation private markets arguably have gone up more than public markets. Even with that.

Scott Wapner (30:04)

There's a difference between making a sales pitch like you are about the group and about alts. I don't think anybody would disagree with you that it's a, it's a way of obviously diversifying your, your holdings. But that doesn't mean that it doesn't come with risk. At a time where more people are talking about private credit, more individual investors have access to private credit. And for one of the very first times, we may be tested, we may.

Rob Sechan (30:31)

Be tested, no question about that. But we can't just call it alternatives. We can't just call it private credit credit. It's like comparing every single stock in the market and saying they're all the same. None of us thinks that every one of these funds is different. Every one of them comes with their own risk profile. Every one of them comes with their own liquidity profile. If you do the work like we all do in the public markets all the time in the private markets, you're going to see what funds do an exceptional job at underwriting. Let's just stay with private credit. Private credit, it's exceptional. If they do a great job, they can continue to weather some of these storms. You don't want to see Covenant Light. You don't want to see pay in kind. You know what to look for if you're used to looking at it. And I think individual investors should be working with firms like ours to try to identify.

Scott Wapner (31:21)

Individual investors are relying on their investment advisors who are pushing them to take a look at these products because of the returns that you can, can generate in a maybe lower return environment going forward. That's the whole point.

Rob Sechan (31:34)

Yeah. And I think that's, that's a very responsible thing. As long as those advisors are taking the time to do the work or the firms that they're part of are taking the time to do the work.

Scott Wapner (31:43)

We'Ve gone way overboard. I think it was worth it. So I'm glad we had the conversation. Up next, Netflix is having its worst week since April. We will discuss there's a new call on the name today. We'll do it next.

Multicare Narrator (32:00)

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Mackenzie Segalos (32:31)

Taylor Swift just came.

Amy Raskin (32:32)

Off her record breaking eras tour.

Josh Brown (32:35)

What can she do to top it?

Scott Wapner (32:36)

The pop superstar announcing a brand new album.

Mackenzie Segalos (32:39)

Literally everything she touches.

Josh Brown (32:40)

People won't know about the Swift effect. Cnbc premieres Saturday, October 4, 10 Eastern Foreign.

Scott Wapner (32:58)

Let'S talk about Netflix, people. Worst week since April. So Elon Musk posted earlier in the week to cancel Netflix. Cancel Netflix account. The activist Robbie Starbuck reposted that. So just a lot of noise around Netflix. Oppie is out defending it today. They reiterate their outperform. 14 $25 dollars is the price target. Josh, you want to talk about this stock and what's been going on around it?

Josh Brown (33:26)

Yeah. Look, this is like every, every publicly traded media company's worst nightmare when, when the mob turns its attention to something that they're doing and we've actually seen real world effects not just on stock prices, but on companies and how they conduct themselves. So I wouldn't completely dismiss out of hand Netflix having a rough couple of weeks. But I don't my personal opinion, nothing to do with the programming or the controversy itself. I don't think it'll produce a lasting effect on the stock price. And I don't think Netflix management is going to come out and do anything to make it worse, which we have seen at other firms over the Last few years. So if I were looking at the stock as a new entry, I would look at this more of an opportunity as opposed to a reason to sell. Personally I own the stock right now. Not selling.

Scott Wapner (34:18)

Okay, let's talk about Bitcoin for a minute because it's been surging lately. We can look at the chart. Coinbase by the way having it. There's, there's bitcoin. Look at that ramp up. End of the day 123, just pushing 124,000. Coinbase having its best week since June. It's up 20% year to date. Upgraded data to a buy from neutral target to 417 from 325. And that's at Redburn. Stephanie Link, you own Coinbase and you bought it not that long ago.

Stephanie Link (34:44)

Last week.

Scott Wapner (34:44)

Wow. Okay.

Stephanie Link (34:46)

I bought it last week. I want to have crypto exposure. I have no idea and no edge on what bitcoin the price is going to do or any of the crypto currencies. But I like the exchanges because they all you need is a buyer and a seller and that's what this company does. And they have 100 million users and it's just very diversified. They have 240 different kinds of cryptocurrencies. So really like the management team and I just wanted to have exposure risk on way of playing lower rates.

Scott Wapner (35:13)

Okay. Rob likes to drive fast cars. He likes to own fast car stocks. Ferrari initiated by 570 is the target. At Berenberg they're looking for only modest volume growth. They do believe though investors in the name can achieve attractive long term results. Results. What do you think? Rob upgraded at HSBC yesterday and it was up like 3% yesterday. What do you think?

Rob Sechan (35:35)

I think this goes back to Josh's comments. As long as the stock market's rocking and rolling, I think people are going to be buying these cars and it gets back to feeling good. You're seeing an incredible bifurcation between the high end consumer and the low end consumer. And the high end consumer continues to spend. This is not a company that's immune to into tariffs though it's going to impact them reasonably hard I think over time. They're not passing all that through on to customers. So what that means is they're bearing some of that responsibility. But this a company that has software like margins. If you were to compare Ferrari to Porsche, both cars that wealthy people buy. Right. You're going to see the performance of Ferrari stock has been incredible relative, relative to the performance of Porsche.

Scott Wapner (36:21)

All right, we're breaking. We're coming back. Josh's best stocks in the market is still to come. He says go long on this healthcare name. He calls it the sales force of drug discovery. We will reveal it straight ahead.

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Amy Raskin (37:05)

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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Trailblazing women, changing the game.

Amy Raskin (37:14)

One of my favorite pieces of advice.

Stephanie Link (37:16)

Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.

Amy Raskin (37:24)

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Stephanie Link (37:25)

Think big to accomplish big things.

Narrator/Announcer (37:27)

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday.

Mackenzie Segalos (37:33)

Wherever you get your podcasts, we're back on Halftime Report. I'm Mackenzie Segalos with your CNBC news update. The Trump administration will reportedly restore $187 million in counterterrorism funding cuts to New York, according to the New York Times. The White House said Homeland Security made the decision without the approval of President Trump earlier this week. Governor Kathy Hochul called the defunding utterly shocking. The cuts constituted the most significant, significant federal reduction in funding for police operations in New York in decades. And California Governor Gavin Newsom threatening to pool billions in state aid to any California university that signs on to The Trump administration's 10 point plan for universities that went preferential, that want preferential access to federal funds. Newsom says his state will not, quote, bankroll schools that sell out their students, professors, researchers and surrender academic freedom. The University of Southern California was among the nine schools receiving letters from the White House. And fast fashion online retailer Sheehan is moving to brick and mortar. The company just announced plans to open physical locations. According to Reuters, the first stores will be in France this November and will open inside department stores across the country. Halftime Report is back right after this.

Scott Wapner (38:48)

All right, best stocks in the market from Josh Brown. The spotlight today is on Viva V on the list since May 29th of 2025.

Josh Brown (38:57)

Tell me why this might be like the only time this stock has ever been mentioned on the network. Nobody, nobody talks about it but it.

Scott Wapner (39:06)

Could be the last time.

Josh Brown (39:10)

It's this incredible company, Scott, and it literally is demanding that we pay attention to it based on its performance. So the stock broke out in May. It has since been consolidating just below those 52 week highs. It's got an all time high that somewhat, somewhat higher from 2021. But this is a much better company now than it was back then. Basically this. Every time you hear a pharmaceutical or a biotech CEO extolling the virtues of what AI is going to do for their business, they're probably excited because they're working with Viva Systems. VIVA is effectively becoming the industry standard CRM platform form for drug discovery. And they've signed some of the biggest companies in health care, Bristol Myers recently and they've got a product called Vault CRM. What's changed with this company over the last couple of years and the reason why it's rallying so hard. They used to have a system that was built on top of Salesforce itself and they've spent a ton of money in capex to build their own, their own system, their own. So they're off that OEM system. It's called Vault CRM. And I want you to hear the fundamentals here because this is not just a chart. Net income this year up 36% to 714 million. That's up from 525 million in the same in fiscal year 2024. Operating margins look great now that they've built the, the platform back up to 25.2%. This year is going to be the company's most profitable year in absolute dollar terms back to 2020. So they've made this huge investment, they built out their own product, they're signing large deals with some of the biggest companies in pharma and biotech. And again it's a stock that not a lot of people know about while they increase market share.

Scott Wapner (41:09)

So.

Josh Brown (41:09)

So it's not a cheap stock, nor should it be. It's operating at a very high level and I think the $300 level has been resistance going back to May. If the stock can get above and stay there, I think we're in a new leg of the bull market and I would want to be long the stop loss here very simply 260 to 265. That was support. Excuse me, that was prior resistance. I think that comes support. So that's your risk reward.

Scott Wapner (41:37)

All right, we'll Watch. Thank you very much, Josh Brown. Final trades coming up. A big congrats to our own Amy Raskin. Her firm, Chevy Chase Trust just landed on this year's CNBC FA100 list. Congratulations.

Amy Raskin (42:09)

Thank you.

Scott Wapner (42:10)

Give me an idea about what your strategy is as a firm, what you hope to do for your clients.

Amy Raskin (42:16)

Sure. We're thematic investors. So we have five to seven themes in our portfolio at any one time and they provide some balance and hopefully upside. And we've been very proud of our long term track record. More years than not, we, we beat the market and we have a wonderful client base with a lot of people in Bethesda, Maryland, northern Virginia, working very hard on our clients behalf every day.

Scott Wapner (42:42)

You accept clients in all 50 states. We do 5,200 accounts, almost 13 billion under management. And you are number 91 on the list which was just revealed. You can see the full list, by the way. Congratulations again.

Amy Raskin (42:55)

Thank you.

Scott Wapner (42:55)

You can scan the QR code on your screen or virtual visit cnbc.com fa100. We'll do finals after this break. Let's talk about one more call. Today. It's Chipotle. Stephanie Link reiterated by 63 bucks the target at Loop they have increased confidence that the comps have recovered after declining during the first half of the year. The loyalty program they suggest has ample room for membership expansion. Stocks down 28% in three months.

Stephanie Link (43:30)

Horrible stock year to date. Absolutely horrible. But it has been always a second half of the year story in terms of new products, store openings, restaurant margins improving. What I thought was interesting is yesterday credit card data came out for Shake Shack showed that their first quarter numbers sales up 13%. That implies that the consumer is going back into these places. And I think you're probably a low bar. If they do 2 or 3% in terms of same store sales, I think the stock can really go. And also they're buying back stock the most since their E. Coli breakout. And that's pretty for me, that's a confidence builder.

Scott Wapner (44:05)

I mean, what if they're just liking Shake Shack like Josh does, but he's not going into Chipotle like others.

Stephanie Link (44:13)

Every, every gender Z is going into Chipotle.

Scott Wapner (44:16)

Well, if they were, then you wouldn't have the problem with comps in the stock.

Stephanie Link (44:19)

Well, you've had a problem for the industry actually in terms of traffic. I mean Shake Shack hasn't done all that well this year either. So I think you've got those are.

Rob Sechan (44:28)

Fighting words with him.

Stephanie Link (44:30)

It's true. It's been a, it's been a very tough segment within the consumer services business and segment and I think that it's poised to do better recover in the second half of the year including including Shake Shack.

Scott Wapner (44:42)

Well, there's a rocky looking chart.

Stephanie Link (44:45)

What is that?

Scott Wapner (44:46)

Josh give me a final trade.

Josh Brown (44:50)

Archer Aviation was just named conviction long for Q4 at Deutsch. These stocks Joby Planet Labs, we talked about them Tuesday. All of them are having an unbelievable week.

Scott Wapner (45:02)

Threw Josh off his game for a minute.

Stephanie Link (45:04)

I thought he was going to pick I thought he was going to pick Shaq Slumber now.

Rob Sechan (45:10)

Rob JP Morgan like the setup headed into earnings two weeks out. Think financials can lead into the fourth quarter.

Amy Raskin (45:17)

Amy Shell a well positioned company in an unloved part of the market right now.

Stephanie Link (45:21)

Stephanie link capital1 I like the Discover Financial deal.

Scott Wapner (45:24)

I'll see you in a couple hours time on the closing bell. The exchange begins right now. You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 2012 Eastern only on CNBC.

Narrator/Announcer (45:41)

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 Julia Boorstin sits down with Thrive Global founder and CEO Arianna Huffington.

Amy Raskin (46:26)

What advice would you give to young people now trying to navigate this crazy world? My advice is to pick a time at the end of the day that you declare as the end of your working day. Because let's face it, there is no end to our working day.

Narrator/Announcer (46:44)

Julia Boorstin Hosts CNBC Changemakers and Power Players Listen now wherever you get your podcasts.