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Halftime Report
Navigating the Bull Run in Semiconductors 4/23/26
00:43:26
Leslie Picker and the Investment Committee debate what's powering the run in semiconductor stocks and how you should trade the space. Plus, The Committee share their latest portfolio moves. And later, Josh Brown spotlights Trane Technologies in his "Best Stocks in the Market."
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- [00:00]
Jennifer Garner
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes, and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, Member SIPC not every sale
- [00:32]
AT&T Business Wireless Customer
happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
- [00:55]
Bill Baruch
AT&T business Wireless connecting changes everything. 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.
- [01:17]
Leslie Picker
Thank you, Sarah and Mike. Welcome to the Halftime Report, everybody. I'm Leslie Picker in for Scott Wapner. Today, front and center this hour, the market's next move. With stocks hitting fresh, all time high highs. The committee is making a bunch of notable trades in this record rally. Joining me for the hour, Josh Brown, Malcolm Etheridge, and Bill Baruch all here on set. Let's get a quick check on the market. You can see stocks somewhat muted today. The down of the dow down about 0.2%. The S& P essentially flat there. The Nasdaq down about 0.3%. The Russell also essentially flat. Guys, I want to talk to you about tech because there's an interesting stat out of UBS showing how since the start of the Iran conflict going back to February 27th, tech has accounted for all of the net increase in the S and P. Josh, how do you kind of think about that, especially moving forward? You know, we've talked ad nauseum over the last few years about just the narrow rallies that we have seen and the role that tech has played in the concentration in the indexes. And here, once again, that's back in focus.
- [02:23]
Josh Brown
Yeah, so I, I think it's, it's not as aberrant as it sounds on the surface, Leslie. This is the fountain of earnings growth. This sector in particular is going to contribute the most meaningful amount of earnings growth. Even if you added up all of the other ones, they're just not quite as important mathematically. I'm not saying they're not important for people following the markets to try to understand what's happening with the economy and corporate profits. But when you think about a cap weighted index the biggest companies are tech companies and as a result we pay the most attention to their earnings. And the good news is their earnings are spectacular. We have 10% of the S&P 500 in as of the start of this week. It's a little bit more by now but the blended. So take the actual results we've seen plus the rest of what we're expecting. Blended earnings rate year over year is 13.2%. This will be if it comes in as expected, the sixth straight quarter of double digit year over year earnings growth. Not just earnings growth double digit. This is the period of time that we live in and so the buoyancy of the market is not surprising at all. If you think earnings are important. I happen to think other than interest rates earnings are the most important thing that there is for for stock prices we're not getting in video till the end. They will be the single largest earnings contributor to not only the max 7 but to all of tech and the entire s and P500. When you look at the contribution from earnings for the MAG7 companies versus the other 493 stocks in the index, if you pulled out in video the s and P 493 would actually have more growth than the Max 7 year over year. Thing is we can't pull out Nvidia. But the reason I end with that point is I don't want to give people the impression just because tech earnings are the most important that that's all we're watching. The 493 are going to pull their weight this time around and the expectations for the 493 have actually been going up 15.9% is the expectation for that side of the market which is obviously extremely healthy.
- [04:34]
Leslie Picker
Well you mentioned Nvidia obviously. Semis have been a big contributor to the recent rally that we've seen. It's it had 16 straight positive days for the subsector. The longest winning streak ever. Malcolm, you have trimmed in video. Why? Why is that? Do you feel like it's run up too much?
- [04:54]
Malcolm Etheridge
So for context I started accumulating in this name ahead of Liberation Day last year. So somewhere around the hundred dollar mark is where I first started buying and kept buying on the way down. The stock has basically doubled since then. And so back in February I trimmed 25% literally this morning I just trimmed another 25% this is more about risk management than anything else. It's not necessarily me trying to call the top, but what I'm looking at is a market where the Google TPU is starting to be respected as a true competitor to the GP from Nvidia. We're also in a place where analysts are asking the question of can you reasonably be expected to sell through that backlog that you have? Obviously, Jensen Huang thinks they can, but the rest of the street has its questions. Also, there's the conversation about Blackwell being good enough and whether there's enough emphasis on moving to the Vera Rubin option later in the second half of this year. And maybe they do, maybe they don't. But what that means is there's enough questions around this name that it's a good time to be taking some profits and taking a little bit of risk off the table.
- [06:00]
Leslie Picker
Was that Google News yesterday, the impetus behind your recent sell?
- [06:04]
Malcolm Etheridge
Yeah, so, I mean, I was already looking for an opportunity to trim this name. This just gave me the, the momentum that I needed, the push that I needed to say this is a good time to call it. So I think now it's right sized, a little bit better. It got over its skis and was kind of jockeying to be my number one holding. And not intentionally at all, it was just the way that it had run up. And so again, it just, it looks like a great time to be taking some chips off the table. And as, as the guy who hosts the, the six o' Clock show on this network every single night loves to remind viewers, nobody ever went broke taking a profit.
- [06:38]
Leslie Picker
Right, Good point. Bill, you are an owner of Nvidia, so you're not as worried, I guess, about competition. The Google News yesterday that they're producing chips that are specialized for the needs of training and inference serving agents. Amazon also getting into that space, you still feel like they have a good enough moat to maintain that competitive advantage.
- [06:59]
Bill Baruch
Absolutely. I mean, Nvidia, it's our number one holding, but right behind you got Alphabet, Amazon and Micron. And you know, I think as this might be the, the moving out of the first innings of AI, because you're starting to see that expansion up and down the vertical here. You know, it's, you know, Nvidia is, I find it more in a value space right here. I mean where it is on a multiple below 20s. I mean there is some technical resistance that it's trading up to. There's about two or six is going to be a big level. But you know, of those names you just mentioned, Alphabet and Amazon, Nvidia, they're all really kind of lurking right below their record highs right now. So you know, I think there's tremendous momentum behind there. And then the. Speaking of Micron, they're going to account for about 50% of the s and P earnings growth this year alone. So there's, there is, it is a. You know, you don't have to just own Nvidia. There's a lot of names within the space to take a look at. It's how you, how you look to piece that together.
- [07:53]
Leslie Picker
And you bought some AAM as well.
- [07:55]
Bill Baruch
Yeah, I mean have you seen the CPU move just this week? Intel started to over two weeks ago. Intel's been up about 50% I think they reported after the bell amd then broke out. Now ARM broke out. Now ARM is known for powering smartphones. They cover about 99% of that market. And they did move into the CPU recently and that's, that's announced. They have a deal with the matter. There's a lot to remain to be seen there. But ARM is following the narrative and it is continuing to break out above $200 here today. So we got our toes in going to trust it here. And I think from a narrative standpoint you have to have CPUs in your portfolio. Kind of exactly what we were saying looking at Nvidia, Micron, Alphabet and Amazon is doing well, but look at some of these CPU names, eccentric names there and I think they are going to do really well in the coming months.
- [08:42]
Josh Brown
I think there's still opportunity in semis. But if somebody says is today the day that I add more to my semi exposure, I know that that's somebody that either didn't own enough the whole way up and missed this whole move or somebody that's got a very short memory over the last 16 days. The SMH, which is the semiconductor ETF is up 31%. That's in 16 days. And these were already up big. It's not like this is off of a low, this is off of a high. That is the best 16 day rolling performance for the semiconductors in the history of that etf, which goes back to the dot com days. So maybe like today is not the day, but I do agree with Bill. There is a need for compute that's probably not going away anytime soon. CPUs are obviously a very important part of the landscape. We talk a lot about lam research. This is a name that's been on my best stocks in the market list for a while. Company just reported earnings. I wish I could tell you there's a single negative in anything they had to say.
- [09:46]
Malcolm Etheridge
Here's the question though. Here's the question. You mentioned how important Nvidia itself is to the entire overall earnings period we're in, right? When Nvidia reports they, they're already at 80% gross margins. What better story can they tell us near term then we're at 80% gross margins. Like they have the best profitability of every single company inside the s and P500. How can it get any.
- [10:11]
Josh Brown
Don't you think that explains the fact that the stock has done nothing for
- [10:14]
Bill Baruch
nine months and all their customers report support before them? So we really have a great idea of what Nvidia has done. It as such a big stock within the, within the S and P and such a important stock within the S and P as well. You know, it's, it's. Everybody has to own it and no one is really looking to sell unless you're trimming. And we've trimmed from time to time, it's still about a 7% holding of ours. But you know, I think you got to look at where the puck could be going. And that's why I really like the CPU story right now. And I think the best way to think about it is the CPU is the brain and the GPU is the muscle of the data center.
- [10:45]
Leslie Picker
Well, there's also that question of how defensible those margins are, those 80% margins. Because Malcolm, I know you sold ASML as well. And there's this Wall Street Journal story about how shares yesterday falling, wiping out 17 billion in market value. And that was after Taiwan Semi said it has no plans to buy ASML's high end lithography machines because they, they are too expensive. So it does feel like price is becoming a bigger part of the chip story, especially when you have all the competition out there.
- [11:17]
Malcolm Etheridge
Yeah, that hurts. The reason that I wanted to own ASML in the first place, I bought this when I first recommended it on this show back in August of last year when it was selling below $700. And it was because it had basically been left for dead. Basically the, the word on the street was the growth opportunity. Opportunity is no longer in this name. It's reached the growth ceiling. And I think this could be the beginning of that sentiment creeping back in again. And so when I look at asml, Taiwan Semi is the most important name on their roster of customers. And that's an understatement, right? So for Taiwan Semi to be saying there really isn't enough need for us to upgrade to that next EUV machine that's going to cost us 400 million PER, when we've already got enough of them to last us probably through 2029 to maintain our profitability and keep our margins around 57%. That doesn't really sound great for a company whose only customer, our primary customer, is Taiwan Semi. And so before the cascade of downgrades come, I think it makes sense to look at asml, how far it's run in less than a year, and say, do I really, really believe in this one enough to continue to take that ride? Or like, I'm looking at it and saying, will I have the opportunity to buy this stock again in the near future at a cheaper price? And that's really what this one is about. So I expect to be back in the name at some point. But I also think that it's a good time to be taking that profit, freeing up that capital, because there's probably going to be a better. Better.
- [12:46]
Josh Brown
We're just. We're just in this moment where it's probably. It's probably smart to say, all right, I very much believe in this theme, very much understand the chip demand story, but it's just too hot. The stove is too hot. I want to show you an example. This stock popped up on my best stocks in the market list. And given my epic restraint, I said, as amazing as this looks, I can't. I can't even. I can't even go there. But I want to show it to people. GFS, there's a company called GlobalFoundries. Nobody's ever heard of it. They literally make chips in Vermont. I'm not making a joke. They're in Vermont and north upstate New York making chips. They make mature, fairly boring chips. This is a stock that just went from 40 to 60 in a week. This is the type of thing that we're seeing when we look at the semi sector, we look at the space. So I feel like we're getting to a place now where people are just saying, whatever, if it's chips, put me in it. And that's like, normally the time where you want to be more selective, not more generous with your capital.
- [13:47]
Leslie Picker
Well, Bill, in that camp, there's Integris, which I know you've bought more of. That Stock is up 77% this year, and they essentially are a supplier of materials for semi. So a bit more downstream on that supply chain. Do you feel like it is in that same camp that Josh is talking about, or do you think it's it's in a different category because of where it sits in the supply chain.
- [14:09]
Bill Baruch
I really like the narrative of looking down the vertical, looking down this supply chain of what's going to be driving, where's the demand going to come from. And some of these are really underpriced. You've seen some of the, the photonics and some of the other names really, they're up over 100%. So I think in the materials part of, and shipping of the, of the supply chain, like an integrous. They're, they're not, they're not up that much yet. So I think there's some room here to run. It's a, it's a very, very hard barrier to entry in this space. I think right here this name was, was very quiet to 2020. For a failed acquisition they had to spin off a couple of small, small units within the business. I think it's now leaner and I think the way that you're starting to see they're integral and the, in the supply chain, I mean they do a lot with the memory names. So I think right here we're also using technicals. So I'm not saying I do agree with Josh. Don't just, don't just, you know, throw spaghetti against the wall. You think everything's going, going to, going to work.
- [15:05]
Josh Brown
Is the risk management on something like this. Technical.
- [15:08]
Bill Baruch
That's what we are looking for. Technical in this as well as aam. We are seeing breakouts. I want to see those breakouts continue. We're sizing positions and where that if we're down 20% in it, we are ready to buy more and kind of see the theme through. But there are areas that we're looking at that okay, if it really starts breaking down or the, the theme starts to deteriorate, we're not just going to hold on to this for dear life. So we're looking through this and I they had a great report in February. I'm excited to see they think they report about two weeks from now what their report is and see that that momentum continues. But I think you have to start looking, starting with how we started the show. It's not just in video, it's not just Amazon and Alphabet looking out the supply chain. Where else is this going? Because we are starting to move into that second inning within the semi space.
- [15:51]
Leslie Picker
Well, this may or may not be part of the supply chain but software that seems like it's at an inflection point. Point. ServiceNow kicking off earnings season for some of the big Software players not off to a great start. You had that significant write down of Medallia in the private space. That's drawing some concerns just about, you know, the defensibility of their business model.
- [16:15]
Josh Brown
You know what right now, you know what's scary about ServiceNow? They actually had a good report.
- [16:18]
Bill Baruch
It was good.
- [16:19]
Josh Brown
That's. So if you're a bull and you're in, you're in other semi software. I own a couple of software stocks. I wish I didn't. I see a company like this come in and do 22% revenue growth and hit expectations and they looked for something to not like. So they didn't love the margins or they're worried about the pace of deals closing or whatever and they, they whack it out. 7, 17% on the day. And that's despite the fact that there's been insider buying here and that they are giving good guidance going forward. It's just, it's a merciless pit and it's, it's a very, very difficult place to be right now.
- [16:56]
Bill Baruch
I mean there's a lot of value in a name like now now. And we, we added to it for the first time right around $99. We added to it around 90, maybe just below 90 for the second time. It's still sized properly. Got to be patient. I agree with you. I think there's going to be insider buying.
- [17:10]
Josh Brown
We didn't like that. They blame the Middle east either. Middle east for the, for the conservative.
- [17:14]
Malcolm Etheridge
I actually.
- [17:15]
Josh Brown
I know, but don't do that.
- [17:16]
Malcolm Etheridge
No, no. I mean I understood why the street didn't like it. I thought that that muddied the waters a little bit on this one and didn't necessarily tell they doing a lot
- [17:24]
Josh Brown
of enterprise sales in the Strait of Hormuz. You know like that was the. That was like people like wait, what. What are they saying?
- [17:30]
Malcolm Etheridge
So if it is slowing down bookings. Right. I understand. But it doesn't help to tell a cohesive story at the time when you'll get whacked for just about anything that's not positive praise. So we've been saying for months that it's hard to disprove a negative when it comes to these software stocks. And the good news is the numbers will speak for themselves come earnings season. The good news is now we're in earnings season and the numbers get to speak for themselves. The bad news is even when they have positive stories to tell or at least they meet earnings expectations like ServiceNow, the Street doesn't care and rewards you
- [18:04]
Josh Brown
with the second went into, it went into the number in a 56% drawdown from its all time highs, down another 17% today. That's shocking. They also said they bought 20 million shares in the first quarter, which is double the amount of stock they bought back last year. So can you imagine the selling pressure if this is what the stock looks like even with that level of buyback support? It was really shocking.
- [18:29]
Bill Baruch
20% off the low. I mean, and you know, there was two or three Fridays ago that it felt like capitulation in the software space. It was just, they were just selling and it was heavy and then Monday they were all higher. So there was a, there was a gap and it looked, it looked pretty good. So this is some deterioration of that, of that positive technical landscape for the software space in general. But you know, I think it's part of a bottom, the bottom is a process, it's not a point. And you know, I think there's, this is really just tipping the iceberg of all these software names reporting. So hopefully we get some good reports and the market react positive. Them too.
- [19:00]
Leslie Picker
I mean, yeah, the IGV went up eight straight days in a row. So it had a nice streak. And then, you know, clearly sentiment has taken over. Speaking of earnings, let's talk Tesla, Bill. That's one you own. This of course is the first of the max 7 to report first quarter earnings this season. It was a beat revenue miss, but it, it's really that spending number that caught everyone a little bit, you know, by, by surprise perhaps. That stock's down only about 2% right
- [19:27]
Bill Baruch
now, but it's off the lows. I mean, I think it was down four, four and a half. You know, it's an AI arms race. All right. And at what point did everybody stop looking at this as a, as a car company? I mean for a while now it's an AI company, it's an optimist company, it's a power company. So their, their spending has to be in line with the expectations of, of that competing with the hyperscalers, competing with database, you know, entry, data center entry. It's, their spending is going to be there. So I think, I think that that is definitely hurt the price action here, but it's holding in fairly well. You know, it was up 3 at 3% or so after the earnings. The call may not have gone that well. I think there's just a lot of questions here in general. But this is, this is that handing off the baton. And maybe, maybe this quarter, maybe was last quarter, maybe, you know, but These next few months, I think they're really going to define what their future is. But because at the end of the day, it's never been a company of, what are you doing for me now? It's what are you going to do for me in the future? And I think we're really starting to define and round that out.
- [20:25]
Josh Brown
They didn't give the Bulls any reason to change their mind and sell, but they didn't. They didn't give people who are not in the stock any reason to buy. Basically, Elon's take was like, pump the brakes. I think the exact phrase he used was, I need to inject a little bit of realism here. The stuff that they're doing is really hard, like standing up manufacturing operations to start producing humanoid robots at scale. This is a thing no one has ever done before. So he was very, I thought, circumspect on the call. The problem is that's now people aren't looking for circumspect from Tesla. They're looking for literally visions of the future and they want it now. And, you know, I think he was like, very honest with the shareholder base. And if you're on the sidelines, you're not in the stock. You're definitely not like, oh, I can't
- [21:14]
Malcolm Etheridge
wait to buy the words out of my mouth. You don't come to an Elon Musk earnings call for sobering tone. You come for a wild optimism.
- [21:23]
Josh Brown
Right.
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Malcolm Etheridge
And so that speaks volumes in and
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Josh Brown
go to see your favorite band and they put a stool out on stage, we're in trouble. And then they come out, say, tonight's going to be an acoustic set, and half the audience walks out the door. I mean, that's, that's where they are. Look, they're doing in again. They're doing impossible things. I think the bulls who believe in Elon's vision, they're not going anywhere. Yeah, that's, I think what you get in terms of a Stock that pops 4% and then reverses negative 3% before the open the next day.
- [21:55]
Leslie Picker
Yeah, next. Next week we've got the rest of the Max seven. Wednesday we see Amazon, Alphabet, Meta. Bill, you own Meta, you own Alphabet, you own Microsoft. What's your expectation for the rest of the MAG7 for earnings season?
- [22:12]
Bill Baruch
Yeah, I think they've all traded fairly cheap. I mean, really cheap relative to where they've been. You know, Meta is two standard deviations below its, below its average multiple, traded below 15 times forward. Now, I think where, again, it's another where it's execution problems. I mean there is a lot of capex. Are they going to get that to work? Yeah, I'm looking forward to matter I think, I think Amazon is in Alphabet are two names that that they have a lot of momentum right now. I think they're going to be great earnings. My only fear in general speaking them about them as a group is is the expectations is that the earnings are going to be so great. So how much are we pricing in in this move? I mean the Nasdaq has broken out the all time highs and it's extended that gain where the S and P really really quite has it and it's been the Mag 7 and it's been the semis that have really kind of pushed that. So how much is being pulled forward this week and last week with those earnings expectations but again I think they're trading very cheap so there's not necessarily that you know they can't miss but, but there's nothing you said Ms. Use
- [23:13]
Josh Brown
of Claude is going to be explosive as all of these. Any company that has anything to do with that, any, any company that's got that anthropic connection and Amazon at a new high is not a coincidence. Amazon is becoming sort of a proxy for usage of Claude and US numbers I think should be great and that's really all that matters. You look at that report the deal
- [23:36]
Bill Baruch
earlier this week with with us and anthropic's promise of spending $100 billion over the next 10 years the 5 gigawatts of compute I mean there's something these companies are putting together that's what's being priced in on this move and I mean earnings of course matter and they're expected to be really well they can't go out there and miss but I don't think we're going to see duds. I don't think I don't think that at all.
- [23:55]
Malcolm Etheridge
That said though I would argue Microsoft probably has the most approved simply because expectations on that name have remained high even though it's sold off the way that it has in the last few months. I think that the Open Air story to your point about Anthropic that proxy for Open Air is still an open question and so I think Microsoft has more to prove going into it than
- [24:16]
Josh Brown
over under on analyst Q and a focus on on copilot like because I feel like that's the thorn in the, in the in the heel of this stock. That's the. There's just the questions about whether or not this is actually working and they've
- [24:32]
Malcolm Etheridge
already said they're revamping the way that they that Copilot functions. Right. Because it was a hodgepodge podge of different use cases of it. And that takes time. So I don't expect that in this particular earnings call we're going to hear that suddenly Copilot has struck gold and there's a waiting list of people looking to subscribe. So analysts asking that question are going to be disappointed.
- [24:51]
Bill Baruch
Copilot or tied to oracle? Tied to OpenAI. I mean, these all have been headwinds and they're going to, they're going to have to address them. We're underweight Microsoft and I mean, we've been buying it and buying more of it. I would like to find a reason here from this report next week to buy more.
- [25:05]
Leslie Picker
Yeah, a lot of circular deals to focus on next week. We have some news out of Washington. Let's get to our Megan Gazella.
- [25:12]
Megan Gazella
Leslie, the White House is firing a warning shot at China of over what it describes as industrial scale theft, essentially of American AI technology and research, at least taking advantage of American AI technology and research. So this is a new memo sent by Michael Kratzio as he's head of the Office of Science and Technology Policy at the White House, sent today to the heads of executive departments and agencies. And here's the money line within it, the United States government has information indicating that foreign entities principally based in China, are engaged in deliberate industrial scale campaigns to distill US Frontier AI systems. Now, distillation is this idea of training new AI models based on larger ones, essentially teaching the smaller model to mimic a larger one. What Gratios writes here is he says these coordinated campaigns and systematically extract capabilities from American AI models, exploiting American expertise and innovation. And he does outline some bullet points in here as to what the White House is doing about it, including sharing information with US AI companies concerning these attempts, the information that the government has on these foreign actors, sharing it with private companies, working with private industry to develop best practices and to build strong defenses against it. And he also says that the administration will be exposed to exploring a range of measures to hold foreign actors accountable for industrial scale distillation campaigns. So we don't know exactly what that will look like. But the fact that the White House is looking at ways of punishing foreign actors for doing this and that they're naming China specifically here really is a warning shot to Beijing. And remember, it comes just about three weeks ahead of that, that visit to Beijing by President Trump where he's set to Meet with President Xi. So another sort of friction point here between the US And China. This time specifically over AI. Leslie.
- [26:56]
Leslie Picker
Yeah, sounds like that could be more of a priority in those discussions at that time. Megan, thank you. Up next, we have a bunch of committee stocks on the move following earnings, including a 20% pop for one big industrial name. We'll reveal it and later, just Josh's best stocks in the market. Halftime is back in two minutes.
- [27:21]
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- [28:21]
AT&T Business Wireless Customer
Not every sale happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time. Sometimes.
- [28:46]
Bill Baruch
AT&T business Wireless connecting changes everything.
- [28:54]
Leslie Picker
Welcome back. Let's hit some committee. Stocks on the move today. United Rentals soaring after earnings bill. This one is yours. You own it 23% today.
- [29:03]
Bill Baruch
Yeah.
- [29:04]
Malcolm Etheridge
Big move.
- [29:04]
Bill Baruch
Yeah. What a move. I mean, it helps cancel out that service now drop off in the portfolio
- [29:09]
Leslie Picker
more than cancel it out. Right?
- [29:10]
Bill Baruch
But here's. This is a top 10 name of ours. Now it's breaking in the top 10 of this move. I mean, absolute phenomenal execution in the rental business. I mean this, this is now a breakout in the stock with a technical weakness. And there was, there was definitely. It has underperformed quite a bit. This, in the early part of this year, it was a negative name. Capex Guidance is below consensus. So that's, that's great to see. I mean, I think there's a lot of upside. This is a multi year compounder. If it's coming back to life here. There's definitely a lot of upside from this consolidation we've seen since the middle of last year.
- [29:40]
Leslie Picker
Thermo Fisher is another one having its worst day since 2005 after earnings bill, this is another one of yours down about 10%. Are we still canceled out?
- [29:50]
Bill Baruch
You know this is definitely a smaller position but I like I would had higher expectations for Thermo Fisher this year. It's been a really tough year in general. It's really an 1840 forward earning earning EPS growth expanded to about 10% stable grow or solid margins. I mean the beats there but the market just does it has not liked it.
- [30:09]
Leslie Picker
Is it just. Why is it having a hard time catching a bit here?
- [30:11]
Bill Baruch
You know interest rates holding up is I think having a good impact on, on some of the spending in this, in this space Diagnostics. So some of the smaller biotech names, maybe they're not spending. I'm you know trying to make sense of it all but it really has underperformed.
- [30:25]
Leslie Picker
Hmm. CBRE is also falling post earnings. Josh, this is one you own now
- [30:31]
Josh Brown
I haven't been in the stock for a long time but I do follow it and I, I don't really think that that what they reported was something that would make someone want to sell the stock. But it's been caught up, believe it or not in the SaaS apocalypse. They're not a software business but they are in the business of benefiting from an information asymmetry trade. In other words, they face buyers, they face sellers, they, they face tenants, they face all different players in the commercial real estate ecosystem and they have all of the information. They can capitalize on that. And in a world of Claude and OpenAI, that information asymmetry probably will shrink. And I think all of these types of stocks, any stock that is primarily benefiting from information information has seen the same sort of erosion of investor interest we see it in our industry. The shares of S and P Global is a similar example but in finance, not in real estate.
- [31:29]
Leslie Picker
American Express also lower today after sticking with their existing full year guidance. Malcolm, you own it.
- [31:37]
Malcolm Etheridge
Yeah. I'm a little bit surprised by today's response. I was encouraged on the earnings call. The CEO came out and basically said exactly what I thought three weeks ago I think when I first recommended the stock, which is basically that their customer is not phased by $4 a gallon gas at the pump. They're still shopping, they're still you know, dining out, they're still flying. And so making that bet on the top end of the K, the higher end consumer, if you want to play the consumer, is the safest place to be. So I understand that revenue growth is expected to top out at about 10%. And that doesn't necessarily speak volumes to anyone who is looking for, for a bang up guidance, but I really think there's an opportunity there. 15% growth in revenue year over year, I think that's a pretty positive number and actually their best one in I think three years based on their earnings yesterday. So I think there's still an opportunity here. I'll still continue to hold it, but I was definitely encouraged by, by what I heard.
- [32:35]
Leslie Picker
All right, let's get to Angelica Peoples with a CNBC news update. Hi, Angelica.
- [32:39]
Angelica Peoples
Hey, Leslie. President Trump is planning to nominate David Cummins, a senior vice president at a government services contractor for TSA administrator, CBS reported, citing a person familiar. The TSA has gone through a turbulent period as of late as Homeland Security funding was withheld for an extended period due to disagreements over ICE funding. Acting Attorney General Todd Blanche side In order today reclassifying state licensed medical marijuana to a Schedule 3 from a Schedule 1 drug that's a less dangerous classification. President Trump previously signed an executive order in December to initiate that process. And French authorities are investigating potential tampering with the country's weather sensors by bettors to gain an advantage on prediction platform Polymarket. The probe comes after a surge in polymarket activity and strained readings from some of those sensors. Temperatures briefly jumped as much as 5 degrees Celsius on April 6 and April 15. Bloomberg reports that those polymarket contracts received about $1.4 million in combined bets. Leslie, back over to you.
- [33:41]
Leslie Picker
All right, Angelica, thank you. Coming up, Josh Brown's ready with his best stocks in the market. He's got a new and so ready. He's so ready. So ready. We're ready. He's got a new industrial name on his list. We'll reveal it next.
- [33:58]
Malcolm Etheridge
When your company earns unlimited 2% cash back on all purchases with Capital One, that's serious business. So Stephen at Sandcloud got a serious business card, the Spark Cash plus card from Capital One. We used our 2% cash back to
- [34:13]
Bill Baruch
help build our retail presence.
- [34:15]
Malcolm Etheridge
Savvy, Steven.
- [34:16]
Bill Baruch
And we get big purchasing power so
- [34:18]
Malcolm Etheridge
our business can spend more and earn more.
- [34:20]
Josh Brown
The SparkCash plus card from Capital One. What's in your wallet?
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Bill Baruch
Terms and conditions apply. Find out more@capital1.com SparkCashPlus not every sale
- [34:29]
AT&T Business Wireless Customer
happens at the register. Before AT&T business Wireless checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence is takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time. Sometimes.
- [34:53]
Bill Baruch
AT&T business Wireless connecting changes everything.
- [34:58]
Julia Boorstin
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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Jennifer Garner
Trailblazing women, changing the game One of
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AT&T Business Wireless Customer
my favorite pieces of advice.
- [35:09]
Josh Brown
Think about what your boss's boss needs.
- [35:12]
Leslie Picker
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
- [35:21]
Jennifer Garner
Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts.
- [35:34]
Leslie Picker
Welcome back. He said he was ready. Josh Brown Best stocks in the market. Yeah, we've been anticipating this now for about three whole minutes.
- [35:44]
Josh Brown
I know it's a huge build up. I'm trying not to disappoint.
- [35:46]
Leslie Picker
Don't disappoint.
- [35:47]
Josh Brown
All right, we're going to talk about train, not drops of Jupiter. This is TRA&E. This is an H vac company. Probably a very boring stock for most of my career until recently. Guys, do me a favor, give me like a much, much, much longer term view. So what you see here is a very obvious breakout in progress. We wrote about it this morning. They have modular solutions to address the cooling intensity of AI related data center builds and they have answers to one of the toughest problems with building these data centers at the rate that they're getting built. The labor, the speed constraints, it's all very real. It's very, very heavily felt by the hyperscalers. And Trane has been called in on some of the biggest projects happening around the country. Around the world. Revenue is compounded at an 11% CAGR. Earnings per share has been compounding at 24%. That's going back to the year 2020. So this isn't just about data centers, although that is obviously the big driver now. And going forward I think the risk levels here are very strong. Simple for traders. You want to look at this zone between 445 which is 50 day moving average which has been rising and 450 which you can see very clearly on the chart is the last time it found major support bounced off that level like a trampoline below there would invalidate the breakout, the stock resets. Disciplined traders would then move to the sideline for investors. I would use the same level. I really think that so long as the stock is above 450 structurally. Have you.
- [37:24]
Leslie Picker
Yeah, I'm just.
- [37:25]
Josh Brown
You following along on the chart?
- [37:26]
Leslie Picker
I'm following along on the chart structurally. Looking at the PE ratio of 37.
- [37:30]
Josh Brown
Okay. Don't worry about PE ratios. This is best stocks in the market. We worry about that later. Stock is breaking out. Take a look at it. I am not personally in the trade just yet, but I might, I might become so if this thing continues.
- [37:43]
Leslie Picker
Yeah. Like I said, 37, not cheap stock.
- [37:46]
Josh Brown
How do you guys feel about it? Wanna high five me on this one?
- [37:48]
Bill Baruch
I can see myself in this chasing it air. High five.
- [37:51]
Leslie Picker
All right.
- [37:52]
Bill Baruch
I like to see the volume.
- [37:53]
Josh Brown
Hey, I could see myself chasing this down personally.
- [37:56]
Bill Baruch
Personally. But I like to see this finish the week with strong volume. With some weak volume. Maybe not loving it as much.
- [38:03]
Malcolm Etheridge
Sorry, I realized I left you hanging.
- [38:05]
Josh Brown
Give me that.
- [38:05]
Leslie Picker
All right. You must have delivered then.
- [38:08]
Josh Brown
And that's a best stocks in the market segment.
- [38:10]
Leslie Picker
All right.
- [38:10]
Josh Brown
We'll be right back.
- [38:11]
Leslie Picker
Love it. I'll do the tease.
- [38:14]
Josh Brown
Okay.
- [38:14]
Leslie Picker
Okay. Up next, more committee moves. Bill is throwing in the towel on a stock that Josh owns. Sounds like it's not this one, though. We'll debate the move. Halftime is back after this. Welcome back. New this morning, Warner Brothers shareholders approving the company's acquisition by Paramount. You can see Peace Guy shares on about 5% today. And take a look at Netflix, up roughly 10% since walking away from its own offer in February. But future M and A and other big moves are not off the table. Julia Boorstin joins us now with that story. Hi, Julia.
- [38:49]
Julia Boorstin
Hi, Leslie. Netflix today making its first big move in the wake of losing that Warner Brothers deal, announcing a new $25 billion share buyback program in addition to $6.8 billion remaining from a previous authorization with $2.8 billion in a breakup fee. Netflix isn't just using its cash to bolster its stock, but it also has said it's built its M and A muscle. Netflix saying the company will be disciplined and opportunistic about deals. But given the limited big assets up for grabs, its next deals are more likely to be smaller companies that accelerate its key priorities, including growing its ad supported streaming business and competing with YouTube for younger viewers. So now there are a couple types of deals to look out for. One is rights to sports events like the NFL's five game package that Netflix is Currently in talks for shows around YouTube creators like Netflix's Mark Rober show to help lure younger audiences. Ad tech companies to help with Netflix building its own ad stack. And more AI visual effects companies such as Inter Positive, which was Ben Affleck's AI company that Netflix is spot just last month. Leslie?
- [39:58]
Leslie Picker
Yeah, a lot going on there. Julia, thank you so much. Bill, you just sold Netflix.
- [40:04]
Bill Baruch
Did I had to, you know, pay for arm and integrates but an arm
- [40:08]
Leslie Picker
and a leg, yeah, as they say.
- [40:10]
Bill Baruch
So we cut Netflix. Here's the thing. I mean in the low 80s sub 80 it was, it was way too cheap. We didn't move on it then. I mean it had post deal, the big rally and you know what? It's the early support just kind of, of kind of as a reminder right back to where it was. Low momentum, free cash flow, growth slowing, weak guidance and you know, we, so we stepped out of it. I feel like it can't really do much here. I mean obviously we sold it today in there yesterday and then we get this buyback news. I was afraid it'd probably be up and it still came in rally on that. So I think it's at least another earnings report away before the market can get excited about this name. And my fear would be we find it back to 80 bucks and revisit that head of the ahead of their earnings.
- [40:48]
Leslie Picker
Josh owns it on Peaky Blinders movie.
- [40:49]
Josh Brown
Yeah, now it wasn't that good. Look, they are going up against a year like last year where they had just incredible content. Quarter after quarter they're going to start lapping the strangers thing finale. It got a little bit tougher. I think the $25 billion buyback is great, but there's a lot of flexibility in when they do that. So I don't think that's the kind of thing where they're going to say okay, we need a new buyback authorization because we bought back all that stock. They can go as slowly as they want. They don't even have to do it at all. It's not actually binding. It's an authorization. I do think it's a step in the right direction because the stock is too cheap. The problem that I, I don't disagree with you selling it. It looks like a dead horse right now. I have been buying it here 30% below its highs and I am a long term believer in the story. I just think the problem is all the those moves that we just saw up on screen, not one of those is going to move the needle. We have not Seen a lot of companies have success buying podcasts and putting them on their platform. Spotify tried that three years ago. It was a massive bust. It never got any credit from shareholders for doing it. Now we see shows from the ringer on Netflix. That's great. I don't think it's negative. I just don't think those are the types of deals that are to get things this thing going. What will is if they can accelerate the ad business, the perception that they are now in a mono a mano competition with YouTube. What better way to answer that than to say not only are we in this competition, but we're taking share, get the ad biz ramped and you will see shareholders come back with buy orders.
- [42:21]
Malcolm Etheridge
But I think that's where the competing with YouTube for younger subscribers comes into play with podcasts. Right, the video podcast.
- [42:31]
Josh Brown
What are you going to pay for these things though?
- [42:32]
Malcolm Etheridge
They're dirt cheap in comparison to big Hollywood.
- [42:36]
Josh Brown
Produced cheaper than Warner Brothers.
- [42:38]
Malcolm Etheridge
Yeah, they're a lot cheaper.
- [42:39]
Josh Brown
Smaller audiences than Batman though.
- [42:42]
Malcolm Etheridge
But the plus side for these guys is basically that YouTube's audience now is trained that when they watch a podcast online, they're going to get bombarded with 17 creatine ads in between 12 words in interview. And so there is a place for them to drop a ton of ads that they're not currently doing without cannibalizing the rest of the business where people like me come there for the ad free viewing. And so I think there is a world where this could work out for Netflix. But they are going to have to be very aggressive about acquiring smaller talents and being able to make sure that they get people's attention.
- [43:16]
Josh Brown
It's not another Mr. Beast out there anyway. So. You're right. You're right.
- [43:20]
Leslie Picker
All right, 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. We're all about re risking the last couple of days today maybe taking a
- [43:44]
Mike Santoli
bit of a break in a broad terms, yes, let's say I would agree in terms of the S&P 500. Really we've been kind of sideways since Friday's high if you look at the index itself, but still re risking if that's what you think. What's happening in semiconductors where, you know, coming out of the lows, the market rushed for two things. One is the areas with the clearest high fundamental conviction about, you know, long lasting demand in this capex plants, obviously that's a hardware, food chain. The other place it went to is high beta, get me back in a hurry, high risk, high reward stuff. And that is also semis in some respects. So I think that's why you have that overlap since the well month to date, not even just since the pure lows. Mag 7 up 13%. Microcap ETF up 13%. That's your barbell right now. So the question is, does that make it an unstable market? Is it kind of back in gear? Because we're still kind of rotating among themes. Now this is a capex over consumer story, has been for a while and I think that that's almost how The S&P 500 is built to be exposed to those things meaning capex and corporate spend as opposed to consumer get me
- [44:52]
Leslie Picker
back in a hurry. Do you feel like today is indicative of a rethink of that?
- [44:57]
Mike Santoli
Not specifically, no. I think it's much more about. Look, we're kind of digesting this strong move off the lows. There's been a lot of idiosyncratic, idiosyncratic elements of this comeback, which is yes, you saw a broad, very streaky comeback to the upside of the sort that you often see coming out of a deeper correction or a bear market. It's not common to see that angle of ascent and then get you to all time highs.
- [45:21]
Leslie Picker
Right.
- [45:22]
Mike Santoli
So that's the funny part right now. And I do think you've seen positioning stuff come up. Is probably still room for it to go higher just in aggregate. Slower moving money is not fully back in in terms of its exposures. And then valuations are not back to the highs either because earnings estimates keep going up. I don't think that means earnings season itself is a catalyst because you have great earnings seasons where there's just too much push, pull offsetting activity. But it does lay the groundwork for people being able to justify owning at these levels.
- [45:48]
Leslie Picker
Yeah, good point. Stay with us, guys. Final trades coming up on halftime. Foreign. We're back with vinyl trades.
- [46:00]
Josh Brown
Josh, calling attention to a name on the best stocks list is Starbucks making its, I'm gonna say, sixth attempt to break above 100, 101. That has been resistance. This could happen. They report earnings Next Tuesday on April 28th. So just putting this on your radar.
- [46:20]
Malcolm Etheridge
Malcolm DLR reports tonight after the bell. They've been on a tear this year looking for them to keep it going.
- [46:26]
Bill Baruch
And Bill, I bought my ticket for the train. This thing's breaking out. Looking to manage risk if it goes below 470.
- [46:32]
Josh Brown
All right, that does so influential, Leslie.
- [46:35]
Leslie Picker
So influential. Really? Clearly, that does it for halftime. The exchange starts right now.
- [46:42]
Bill Baruch
You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [46:54]
Jennifer Garner
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 halftime reportdisclaimer this is
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Malcolm Etheridge
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Josh Brown
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Malcolm Etheridge
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Bill Baruch
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