CNBC Halftime Report – "Navigating High AI Anxiety" (February 24, 2026)

Host: Scott Wapner
Guests/Panelists: Joe Terranova (“Joe”), Jim Lebenthal (“Jimmy”), Josh Brown, Mike Santoli

Episode Overview

This episode centers on the growing anxiety in the stock market stemming from AI disruption fears, market volatility, and shifting sector sentiments. Host Scott Wapner and the investment committee discuss the recent wild moves, notably in tech stocks, and examine the so-called “halo stocks” (industrials, energy, staples, and more) thought to be relatively immune to AI disruption. Notable earnings, sector rotations, and institutional reactions to both news cycles and hypothetical research pieces also shape the discussion.

Key Discussion Points and Insights

1. AI Anxiety and Market Volatility

• Recent catalysts:

  • Massive selloff in IBM (its worst day in 25 years) and wild market moves tied to AI-related headlines—e.g., the Citrini paper speculating on AI’s effect on jobs and business models.
  • “The Citrini fuss is further evidence that we are in an expensive market that is looking for an excuse to fall for reasons that are probably wider than just AI.” (FTSE, 01:40)

• Panel perspectives:

  • Joe: Emphasizes the market’s unpredictability, with every bout of anxiety being bought rather than sparking prolonged sell-offs (03:24).
  • Jimmy: Challenges the narrative that the whole market is overheated and notes strong performance in small caps, energy, and international stocks, despite tech’s struggles (04:19).
  • Josh: Calls much of the AI fear “hypersensitive,” likening it to past cycles of overblown market pessimism. “If you take [the Citrini piece] to 'I need to change my whole portfolio around'—you’re not a good investor.” (07:38)

2. The “Halo Stocks” Phenomenon

• Definition & Rationale:

  • “Halo” stocks are those with Heavy Assets and Low Obsolescence (HALO), considered resistant to AI disruption.
  • These include oil, physical infrastructure, manufacturing, real estate, consumer staples, and utilities.

• Panel Picks:

  • Josh’s List: Texas Pacific Land, Corning, Southern Copper, Baker Hughes, Deere, Schlumberger, Iron Mountain, FedEx, Hershey, Colgate-Palmolive, Apple, among others (09:55).
  • Joe’s List: Baker Hughes, Merck, Vulcan Materials, Bunge, Generac, FedEx, Welltower, Corning (12:51).
  • Jimmy’s List: CRH (aggregates), ExxonMobil, Transocean, Wynn Resorts, Disneyland—emphasizing travel and experiences as irreplaceable by AI (13:20).

• Nuanced Analysis:

  • “It’s not tech vs. non-tech, it’s more nuanced than that.” (12:17)
  • Apple called out as a “halo” tech stock due to its ecosystem and hardware dominance (11:51).

3. Sector Rotation and Asset Allocation

• Key theme:

  • Investors shifting out of “asset-light,” software-centric companies into “halo” sectors seen as safer from AI and broader disruption.
  • Significant recent outperformance in energy and industrials, driven by a search for stability and real-world assets (17:01).

• Cyclical or secular?

  • Ongoing debate: Is this a short-term trade or a long-term paradigm shift in market leadership away from big tech?
  • Josh: “We have been rebalancing systematically for years so that we have the representation in other industry groups outside of tech and in other markets outside of the S&P 500.” (17:01)

4. Tech and Software Under the Microscope

• Nervous anticipation:

  • Upcoming earnings from Workday, Salesforce, and Snowflake seen as crucial tests for the AI-hit software segment (19:47).
  • “We want to see if degradation in earnings from AI cannibalization finally shows up.” (20:42)
  • Despite fears, so far software earnings have not collapsed, but the sector remains hypersensitive to bad news.

• AI-related news effects:

  • Even announcements from relatively unknown sources can spark huge moves, revealing the market’s skittishness regarding AI risks (14:26).

5. Semiconductor and AI Hardware Trends

• Nvidia:

  • Seen as a continued bellwether for AI infrastructure, with much attention on its imminent earnings report.
  • Questions over whether hyperscaler spending cutbacks would actually help defuse some market anxiety (23:44).
  • “We believe a delay or cut to capital spending would be a very positive, positive catalyst.” (23:51)

• AMD:

  • Receives a major boost on news Meta will buy $100 billion in AI compute; stock jumps 9% (25:44).

• Wider context:

  • Analysts freely debate possible overbuilding and future risks, but see no signs of it for now; current environment is supply-constrained in AI compute (24:44).

6. Discretionary vs. Staples Divergence (29:09)

• Staples Outperforming:

  • Consumer staples (Walmart, Costco) up 15% YTD vs. discretionary down 2.5%.
  • Investors favor companies with stable, tangible revenues amid AI-induced disruption threats.

• Discretionary:

  • Jimmy: Many discretionary stocks may just be resting after running too far ahead, not in deep trouble (29:44).
  • Joe: Cites worsening momentum for many discretionary names; shift to defensiveness (30:54).

• Consumer behavior:

  • Travel and experiential names seen as more resistant to disruption—“You cannot replace getting on an airplane and going to a Wynn Resort or Disneyland.” (13:20)

7. Best Stocks in the Market: Utilities Gain Steam

• Defensive Rotation:

  • Josh spotlights NextEra Energy, Duke, FirstEnergy—utility stocks gaining as investors look for safety and reliable yields (36:29).
  • “NextEra... half of this business is a regulated utility, Florida Power and Light. The other half is one of the most exciting renewable energy businesses in the country.” (36:29)

• Panel reaction:

  • Jimmy: “I think you have to respect, as Josh is saying, when a sector like this does well, you need to make sure you have some exposure.” (38:10)

8. Commentary on Market Psychology and Positioning

• General sentiment:
  • Market is vulnerable, with “little storm cells roving around” (44:32); structural shorts in software show persistent bearishness in that space.
  • Positive spin: Current volatility and repositioning could be setting up a healthier market landscape going forward (44:32).

Notable Quotes & Memorable Moments

• Perpetual Market Anxieties:
  “There are always fears, Scott. ...Ten months ago, store shelves were going to be bare. Four years ago we were on the precipice, theoretically, of nuclear war...Creative destruction happens all the time.”
  —Jim Lebenthal (05:50)

• AI Disruption Overreaction:
  “It’s very hypersensitive people who are easily triggered by Substack and they, you know, read a science fiction post...If you take [the Citrini piece] to 'I need to change my whole portfolio around'—you’re not a good investor.”
  —Josh Brown (07:02–07:38)

• On Halo Stocks:
  “These are the stocks that people are running to every time Anthropic announces something that terrifies them...They’re the beneficiaries of that [AI anxiety].”
  —Josh Brown (09:55–11:51)

• Paradigm Shift in Investing:
  “We have been rebalancing systematically for years so that we have the representation in other industry groups outside of tech and in other markets outside of the S&P 500.”
  —Josh Brown (17:01)

• On Discretionary vs. Staples:
  “Staples vs. discretionary is almost typically a referendum on how confident people are about the leisure activities and retail shopping of the consumer. And right now, not great.”
  —Josh Brown (32:09)

Timestamps for Key Segments

• AI Anxiety & Market Volatility: 00:55–04:19
• Halo Stocks Explained & Lists: 09:13–13:20
• Is this a Secular Shift? 16:04–17:01
• Earnings Watch: Workday, Salesforce, Snowflake: 19:47–22:02
• Nvidia & AMD Developments: 22:58–27:09
• Discretionary vs. Staples, Consumer Behavior: 29:09–33:08
• Best Utilities Stocks: 36:29–39:58
• Market Psychology with Mike Santoli: 44:23–46:32

Panel’s Final Trades and Wrap-up

• Josh Brown: Martin Marietta as a “best stock” (46:58)
• Jim Lebenthal: Bought more Microsoft (47:08)
• Joe Terranova: KLA Corp—“You still need semis.” (47:12)

Episode Takeaway

Navigating High AI Anxiety explores how headline-driven market jitters are manifesting most intensely in tech and software sectors, prompting a shift toward “halo” sectors perceived as safer from AI’s disruptive force. While panelists debate whether this represents a lasting investing paradigm or short-term trade, the consensus is that diversification and sober risk assessment trump reactionary portfolio overhaul. The episode’s tone balances skepticism of alarmist narratives with practical strategies for weathering a market beset by technological and psychological crosscurrents.