Scott Wapner (4:13)

No, but I mean look there. There are as we showed you in the wall and we can put it back up for you again that the Deep SEQ Rise Journal headline exposes Nvidia's weakness. Nvidia in danger according to the Economist in their headline of losing its monopoly like margins. Rob, it feels like, and many are suggesting that the goal posts have in fact moved this week, that the narrative has at least changed somewhat. You own Nvidia. You feel like doing anything with your stock?

Rob Sechin (4:43)

If anything, I'm getting an echo here.

Jenny Harrington (4:46)

Scott. Sorry.

Rob Sechin (4:47)

Give him feedback. I hear myself. Can we come back to me?

Scott Wapner (4:51)

Yeah, sure.

Rob Sechin (4:53)

Sorry about that.

Scott Wapner (4:54)

It's not. Yeah, it's gone.

Rob Sechin (4:56)

It's gone. It left. I can come in. I apologize for that. I was hearing myself speak but anyway listen if you call him Jimmy Jitters you can call me Robby the opportunist in the new edge side of things because we expected this volatility from these type of extended price points and we've seen a lot of it. We did some trading around TSMC as well when we saw the sell off so we are underweight in video but we continue to look for opportunities to buy more of the stock longer term it would be imprudent as Jim says to ignore the risk of efficient computing power on their overall growth. However, the company continues to have dominant market share. They have a strong moat supported by a developer friendly ecosystem. We've been a disciplined buyer of this name. We're roughly 50% the weight of the index and the reality of it is if you buy at these levels when you have these recalibrations it provides a margin of safety in what is still a very cyclical business. There's no doubt that more efficient compute can be an issue but as Jim said none of the capex from the hyperscalers is looks like it's coming in meaningfully and we still think that Nvidia is going to be the strongest beneficiary of that. And remember we're up in the recent purchases we made sure you you said.

Scott Wapner (6:26)

You traded around Taiwan Semi a bit. I mean you bought more let's just make sure we're specific for our viewers. You bought more of that stock because a lot of the chip names were down a bunch this week. Teradyne down 10% Micron down 9 Broadcom down 8 Marvell down 7 Now Taiwan semi down less but that's the one that you decided to buy more of.

Rob Sechin (6:50)

On Monday we increased our weight and we're up I think about 10% since that Monday purchase and it shows you that the thesis of news created volatility is going to create opportunities. This was one you know we added last year on the show. We're up 30% since we've added it's still not meaningfully expensive trades at a 20 times forward P has ridiculous profitability characteristics. It's a company with incredible market share in this advanced chip manufacturing. It's a key beneficiary of AI CapEx. I think that's why we've seen some of the rally this week and this a company that's built such a market share on decades of innovation and it's an expertise that few, if any companies can match. So, you know, we want to take advantage of some of these ebbs and flows. In view, this Monday is a real opportunity to do that.

Scott Wapner (7:52)

Feels like, Steph, this is still a let the dust settle a little bit more moment because for your Broadcom, for example, which I said was down 8% on the week, I know Rob owns that too, but these are often situations where you come in and you tell our crew, hey, I bought more Broadcom because I think this is overdone. Now you may in fact end up doing that. I don't know. Only you do, but you haven't yet. And that to me is a sign in and of itself.

Stephanie Link (8:20)

No, it's not a sign, Scott, because the stock in the past year is up 92% percent even with the 8% correction this week. So it's had a really nice run. It has rerated on a multiple basis. I bought this thing three years ago at 14 times earnings. It's now trading at 34 times earnings. Now with that said, I think this company with AI, but also with their software business, which is 40% of revenues, I think they can actually do 11 to $12 a share by 2027. So you have to discount that back a bit. But you're talking about 20 multiple or 22 times if you believe those numbers. I do believe those numbers, but I just think it has had such a nice run. I want to get it a little bit cheaper if I can. But I was very encouraged this week to hear from Meta and from Microsoft that they're going to spend Meta is going to spend $85 billion in CapEx this year. Microsoft 60 billion, the big seven, 240 billion this year. And I don't think that's going to change. And yes, Jimmy, maybe next year the numbers come down, but for now they're not. And I have to tell you that the comments that Metta had to say about Broadcom was that they are interested in using more custom ASIC chips. And that is music to my ears. That's music to Broadcom's ears because that's what they do. So I'm just waiting for it to, yes, maybe settle, maybe come down a little bit, use some of the volatility. But it's definitely on my radar.

Scott Wapner (9:43)

I mean, if nothing else, this week Nvidia appears to have gone and reasonably quickly from unquestionably in the driver's seat. And they may still be in the driver's seat, but they're at least more on the defensive. They're Defensive driving if you will, because they were only playing offense and the street was giving it the benefit of the doubt by a long shot. There are other stocks that have gotten a halo lift off of this over the last year at least which are coming back to earth. As we said, your Terradyne is one of them. Down 10% on the week. It is the biggest decliner of the ones that I have in front of me.

Stephanie Link (10:21)

Right.

Steve Weiss (10:21)

And on Terradyne like we have no worries about that. In fact, the day, what was it? Tuesday, Right. The CEO of ASML came out and he's like actually, by the way, and that stock got hit too. This is good news for us. I haven't heard the Tearadyne CEO say exactly that, but it's kind of the same thing because however you cut this, however you cut it, the world needs more semi chips and Teradyne is in the testing space. So as long as more are being manufactured, Teradyne benefits. So we already have a full position. If we didn't, we absolutely would have been adding to it.

Scott Wapner (10:51)

Yeah, it's interesting. It's, you know, they're going to report earnings in a handful of a little less than a handful of weeks. Quiet period. What can they say? Not much. I mean this feels like one of those moments honestly, like in the past when Kramer would run onto the set back at HQ and sit with us and talk about because you know, talk about the situation. I don't know if he's grabbing lunch or whatnot. But if you're around, Jimmy, come on down. We'd love to have you. We even have an open seat today. But you know, Nvidia CEO Jensen Huang is going to be at the White House today. By the way, I think most of you know that by now at some point he's going to be there to meet with the President. Seema Modi is joining us now to tell us with what exactly to expect today with this now highly anticipated meeting. Seema.

Stephanie Link (11:42)

Yeah, very timely, Scott. Nvidia CEO Jensen Huang will be meeting with President Trump very soon at the White House. According to sources familiar. The meeting has been in the books for a while but of course timely given the deep sea revelations that have raised the question as to whether the US Needs to do more to limit China's advancement in artificial intelligence and restrict a wider range of chips that are sold to the country. According to analysts forecasts, Nvidia generates about 13% of total sales into China. Huang, I'm told will also bring up the so called diffusion rule which was unveiled by the Biden administration just days before President Biden left office. That would severely limit the shipments of chips not just to China, but a large list of countries that analysts say would no doubt challenge the semiconductor industry. Trump does have the power to reverse that ruling that is expected to go into effect this spring. However, evercore ISI says DeepSeq might add a new complication to those efforts. Scott, we will see if Wang can convince Trump otherwise. The other topic is the onshoring of chips production as the Commerce Department looks to revamp the chips act.

Scott Wapner (12:46)

Scott, we'll have a stakeout Cam, I'm sure outside the White House to try and get those pictures. We'll see what develops. Seema, thank you very much. Let's bring in Steve Weiss, who joins us now on the phone because he in fact has bought more Nvidia today. Tell me why today was the day to do that, given the headlines that we showed our viewers from that wall, the questions that are still out there, the fact that this stock has tried to bounce rather unsuccessfully.

Rob Sechin (13:15)

That's all correct and basically I agree with everything that Rob said, including by the way, his aversion to hearing him talk. But the reason I bought it is the is the headlines today in part. And it's been a pretty successful strategy with Taiwan semi with Netflix, with UnitedHealthcare on high quality permanent compounders to buy the dip. And so what we've seen this week is a lot of frightened holders who perhaps didn't know what they owned bought the momentum exiting the stock. So look, I don't know what happens with the meeting Jensen and and Trump, nobody does. But I can tell you anybody that's ever met with Trump recently has come out with Trump on their side and supportive of them. So you will come to a situation of course with deep seat where you at where tech lines up on two sides. You've got the matters of the world who really want to drive down costs yet they said that they're not revising their budget. Nobody shouldn't this so you're going to win from that within video. Now it's not news that Nvidia's margins are going to come out of come under pressure that in fact is Moore's law. The only news is is that may be happening sooner than later but they will continue to innovate. So right now I'm buying the panic selling in that I also bought the panic selling in Taiwan Semi. I also bought smaller because it wasn't really a big decline on Microsoft as well yesterday. So I just take Those opportunities for what I believe is still going to be a great AI capex cycle for technology. The difference being, at least for now, you have to be more selective. So each of those have an idiosyncratic, Idiosyncratic bull case to them versus the broader range that don't. So that's why I bought those and topped them up.

Scott Wapner (15:13)

Okay, great stuff, Vertiv.

Rob Sechin (15:16)

I also added to Vertiv again on the heels of the Meta's announcement. They're not slowing down.

Scott Wapner (15:22)

Okay. I appreciate you, Steve. Thank you for calling in and so clearly laying out exactly why now is the time to add to these positions. Well, we're lucky because Jim Cramer was listening and he did come down to join us on the set. I always listen and I'm glad we had a chair here for. Because I really feel like this is one of those conversations after one of these pivotal weeks that we need to hear from you. What do you make, first of all, of Steve's assessment that, look, a lot of these stocks were punished too much, that they still have an overwhelmingly large competitive advantage and now's the time. You might not time it perfectly, but why not today?

Jenny Harrington (15:57)

Look, I think the problem is you can never pretend that you know when you don't know. And it's always gutsy to come out and say, listen, I don't know. I mean, look, right now, Jensen Walsh with the President. I would like to hear what he has to say. We need, if you're along this stock, you need to hear that the President wants to undo what Biden did right at the end, which is to say, listen, we're only going to let them sell a lot to 18 friendly countries of which, by the way, they left off some major countries like Israel, which is supposed to be a friend, as far as I know. I listen to Alex Karp earlier, let me say definitely, but lots of other countries that are in the euro. So we need to hear that reversed. You need to hear that the President doesn't fear that chips are going to go to China of the lower level. Remember, they were giving lesser chips to China and that. And that Nvidia has been able to convince him that there is no backdoor from Singapore. There isn't because I think that they are able to account for all those. So let's go back to. And by the way, I know that he. That Jensen Meng hates Moore's Law and thinks it's dead, but I think the biggest issue is he got through the hurdle of Meta saying they need it. We know that Oracle needs it. Without a problem. We absolutely got that. We know that Apple wants anything it can get and they're a free rider, they'll be good. But we know that Microsoft needs more. But what we don't know is Amazon and next week Amazon, what happens if Amazon says it plays horrible and says, you know what, we don't need as many? Then you have this plummet and I am concerned about that. Otherwise, look, I think that Deepsea think Deepseek's playing checkers and these guys are playing grandmaster chess. Just so you know, you cannot use. By the way, the reliability of Deepseek is ridiculous. I don't know why anyone thinks it's any good. We were doing some stuff, putting in Winston 1984 and first it was talking about how he was told to disassemble in favor of the government and then it took that right away. But I will say, look, what can't, what can Deepsen not do? That Jensen knows that Nvidia can do multimodal memory, spatial intelligence, physical actuators, vision and touch. So you can't use it for robots and you can't use it for self driving. So what the hell good is it? So anyway, it's good and bad, but boy do I ever want to hear from Amazon. I want to hear from Google too, before I just say, hey, you know what, we're home free.

Scott Wapner (18:12)

So is it then overstating it to say that they have Nvidia being the. They have gone from in the driver's seat to on the defensive? I suppose both can be true. I mean they are still in the driver's seat. Look, we didn't mention Open Air. The fact that they're doing this huge raise at such an incredible valuation. Where are they going to go with the money to buy what they need? Probably in video, right?

Jenny Harrington (18:34)

Well, absolutely, you go to Nvidia. I think that I used to work very close with Stephanie and we would say, well, you know, when someone doesn't have anything to say, you can't necessarily attribute that it's good. And there are many things you can say and we've all had many different guests during quiet period and they didn't reveal the numbers, but they gave you a sense of what's going on. Alex Karp is quiet period. He's reporting on Monday and he just did this incredibly long interview with Sarah and you can say, well, if, if he can talk like that and talk about broader themes of Palantir, then Jensen should be able to talk about it in a situation where obviously, obviously his stock has had a material move.

Scott Wapner (19:10)

So you're saying the silence is deafening to his partner. Maybe. Jensen Huang uses the appearance at the White House today. As I said, I mean, obviously in these circumstances, there are cameras there. We're going to have a stakeout camera. And maybe he comes to the camera and he addresses some of the questions from our producer reporter who might be on site. We'll have to wait and see. But you own the Amazons of the world that Jim wants to hear from and you're going to hear next week. Week from that company.

Stephanie Link (19:37)

Yeah, I think they're going to spend more money. And by the way, Jim OpenAI the rumors they're actually going to use Broadcom's custom.

Jenny Harrington (19:43)

Well, that's the custom chips. But Broadcom is going up.

Stephanie Link (19:46)

They'll use both.

Jenny Harrington (19:46)

And we know by the way that Amazon likes custom because it's cheaper. That's right. I know that Meta does everything because Hock Tan's on the board of Metta and he's the CEO of spending. No, no, but I'm just saying maybe.

Stephanie Link (20:00)

A little less than. Than what they were going to, but I just, I can't imagine that they would. To keep. They have to keep up with the rest of the industry.

Jenny Harrington (20:08)

Oh, they have to spend. I'm just saying what happens if they're cage.

Stephanie Link (20:11)

Yeah.

Jenny Harrington (20:12)

Why don't they want to get the. Why don't they bargain to get the best price even though they need everyone? I think Nvidia is the best, one of the best companies in the world. That's not changed. But I do say that this is a thicket. I'd like to hear that even if Amazon walked away, you can. We don't know. Remember, the demand was insane and demand was crazy. I just want to hear that.

Scott Wapner (20:31)

That's right. And that's what Jensen said.

Jenny Harrington (20:33)

I want to hear it again. Is that too bad? Is that too much? Dan?

Scott Wapner (20:36)

I think that was at the Communicopia conference out in San Francisco.

Jenny Harrington (20:40)

He has this huge conference in March. But I just. Look, am I nervous? If you're not nervous and a stock has that kind of move, I don't know if you're a good manager.

Scott Wapner (20:47)

And what do you make of the move from Jim to trim some of his position? Because he's, I mean, admittedly a little nervous about where we are.

Jenny Harrington (20:56)

That's what we do.

Jim Lebenthal (20:57)

But bear in mind, it's, you know, you take in video. I don't have to tell you this. It's up three, three fold. In 15 months, I'd be a Fool not to. I think I actually. Give me a second.

Jenny Harrington (21:07)

No, no, I'm saying this is why you're a manager.

Scott Wapner (21:09)

Exactly.

Jim Lebenthal (21:10)

It's risk management. But can I just point something out that I think is important in video? Microsoft, they don't exist in a vacuum. You started, Scott. Your first question was, does the market have jitters? And I said, only a sector does. Look, Microsoft, and I want your opinion on this. Microsoft and Nvidia are down on the year. The market S&P 500 is up. Is it possible, Jimmy, that maybe the market broadening can happen without a disaster? Right, because everybody says that concentration of the top 10 names, it usually comes down with the market having a wipeout. I had it possible that maybe we get the broadening without an overall disaster.

Jenny Harrington (21:43)

I had an existential, existential crisis week. I said to my wife, I believe I missed a 10 bagger in Brinker, which is Chili's, because I've been so concerned about Nvidia and that makes me a manager who sucks. And she goes, I think that's a little too strong.

Jim Lebenthal (21:58)

I think that's strong too.

Jenny Harrington (21:59)

I think I said it was existential. But you know, you can't do it. You can't just say, I'm going to focus on Nvidia and I'm going to miss a 10 bagger because I'm a good manager. No, you're not. So that's what's at stake.

Jim Lebenthal (22:13)

Give me just a little more Runway on. This is. The market's up. You know, financials killing it. They have been for a while. Industrials killing it. They have been a while. But here's where I want to go. To health care, right? Left for dead at the end of last year and it's coming back eventually. The flows follow the price which begets more price movement. Am I wrong?

Jenny Harrington (22:31)

I mean, look, I mean, Abbey comes out tonight. God damn videos. What do you mean? Well, I missed it, Abby. I could have had abvi, Merc and Pfizer next week. Well, no, I mean go home. It's like in video and video, it's not right.

Stephanie Link (22:44)

But Jim, to your point, actually, value is outperforming growth year to date. If you look at the, you know, the Russell 1000 value, it's up 4% and the Russell 1000 growth is up 2%. So it's a broadening out to exactly what you're talking about.

Jenny Harrington (22:58)

It's positive.

Steve Weiss (23:00)

Here's. Can I say something? This is like bigger picture in trading. But what really struck me on Monday was how was. Who is Selling in video and what was happening because what I would have expected as someone who's more value focused, who's dividend focused, we have a big international strategy, right? What I would have expected to happen on a day like Monday was I would have expected the market to be down one one and a half. I would have expected our portfolios to also be down and instead we had international stocks up like half a percent. We had dividend stocks up flat or flat. Right. The Dow was flat. And what really, really struck me on Monday was that there was this willingness almost this desire out there to rotate and I didn't expect that. I really was thought to myself who, who sold Nvidia down 17%?

Jenny Harrington (23:46)

It wasn't you, it was a zero day option clowns. It was those triple ETF Nvidia Eagles chiefs.

Steve Weiss (23:55)

But that's exactly right. So, so who's out there affecting it? Is this fringe where there excessive risk taking, excessive concentration, you know they're mucking it up. Sure it's going to give you, it's going to give wise going to give you, it's going to give people little, little pops to get in. But I think what struck me was really how willing like ConAgra in my portfolio was up 4% on Monday.

Scott Wapner (24:18)

Right.

Stephanie Link (24:18)

Well it was rotation, it was massive.

Jenny Harrington (24:21)

But Taiwan sent me a bigot. Taiwan semi and Nvidia have traded together forever. But the people who are trading Nvidia are not people who we can trust. No, I'm saying they gotta go to DraftKings. They gotta take the two just and move on. And I say that because they're clowns. They don't belong trading.

Rob Sechin (24:38)

It is a they shouldn't be trading.

Jenny Harrington (24:39)

They don't know what they're doing.

Steve Weiss (24:41)

You know what, in my quarterly letter I referred to them as players. Of course my husband edited that out.

Jenny Harrington (24:45)

Players.

Steve Weiss (24:46)

But I couldn't say traders. I couldn't say imperial investors.

Steve Kovach (24:49)

I had to say finance.

Jenny Harrington (24:50)

You couldn't say fools.

Steve Weiss (24:51)

No, he didn't let me say that. He like writes a proper letter.

Jenny Harrington (24:54)

Before I let you go, before I.

Scott Wapner (24:56)

Let you go and before you tell me what you got tonight, just. Is there any reason to believe that either Amazon or Alphabet are going to deliver anything other than good results?

Jenny Harrington (25:06)

I don't know about Alphabet because they have this Gemini problem and I don't use search nearly as much as I used to. And I don't think I'm an outlier. Amazon, the world's an oyster right now but the stock has moved up a great deal and Andy Jassy is not Brian. Neither one of those guys are. They don't pump the stock. So you could have people say, oh, it's really bad. They won't have that deceleration that Amy Hood had to talk about on the Microsoft.

Stephanie Link (25:30)

No.

Jenny Harrington (25:30)

Let's hear what Jensen says when he gets, if he gets out. Says, listen, this was a great meeting and I'm allowed to sell everywhere because, you know, they didn't Biden, they didn't speak to him. They. They limited the number of chips he could sell on a Saturday. I mean, I saw him the next day, you know, so two days later, I said, wow, that was a bad conversation with the White House. There was no conversation with the White House. None. None. Well, what does he sell?

Scott Wapner (25:52)

Fossil fuels. We'll see. I mean, it's a big deal, this event. Quickly, what do you have tonight you want to do?

Jenny Harrington (26:00)

Because Otis is China. Everyone has to know China, right? I mean, what is going on with China? They have a massive wave of deflation and all that ever happens is people come on air and they say, I was talking to Tepper years. I love Tepper. I mean, you know, not that team. The team is like just second rate. But Ian still loves China. He loves China. Maybe Baidu teams up with Apple and we find out who's short apple and comes on and says the long apple today, right? Steph, who are those? There's so many people who are. I mean, it's like it's Mo currently and Larry, these guys, and maybe even Shemp, maybe even even champions it. I mean, like these people, they came.

Scott Wapner (26:36)

Out of the woodwork this week.

Jenny Harrington (26:37)

Now they all on Apple. They all. I loved Apple the whole way.

Scott Wapner (26:40)

You're the best. Thank you for coming down here, enjoying this conversation. I felt like I had to hear from you today.

Jenny Harrington (26:45)

I shouldn't have been so definitive.

Scott Wapner (26:47)

Mad Money again.

Jenny Harrington (26:48)

Alex Clark made me look like I'm Carrie Grant. Meatside bond.

Scott Wapner (26:51)

Mad money, 6:00 tonight. Do not miss that with Jim. We didn't even talk about Apple. We'll do it after the break. We do have more committee moves as well to document today. Stephanie just added to a stock. It's under some pressure today on earnings to tell you exactly what it is and what she did. What's at stake when administrations change from the first 100 days and beyond. EY brings insights on the issues that matter.

Rob Sechin (27:22)

Executive orders, regulation of AI, the fate.

Scott Wapner (27:24)

Of billions in tax credit, global trade and workforce stability. No matter the policy shifts, EY helps business and government leaders remain resilient and seize dynamic growth. Ey navigate the geopolitical and economic landscape with confidence. For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with.

Stephanie Link (27:47)

Local communities and expanding access to care.

Scott Wapner (27:51)

Together we're building a healthier future.

Jim Lebenthal (27:53)

Learn more@mycare.org Are you still quoting 30 year old movies?

Scott Wapner (27:59)

Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your.

Jim Lebenthal (28:14)

Card, you automatically earn cash back.

Scott Wapner (28:16)

Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report. Let's talk about Apple in the aftermath of its earnings. Obviously iPhone sales myth, Ms. Excuse me, China bad. But their outlook was better than expected. So the stock is up. Steve Kovach joins us now who obviously covers this story for us. Not a great move today by the way, in terms of follow through. Why was the stock initially up? And tell us what the most important takeaway for our investing audience is today.

Steve Kovach (29:08)

Yeah, the move up, Scott, is because of the guidance after this kind of crumb of report where we saw iPhone sales down, we saw China sales down 11%. Guidance came in on the call saying they're still expecting top line revenue growth. They're still expecting that double digit percentage services growth. And that's all despite some foreign exchange headwinds. So that that explains the stock move we're seeing now. It's come off its highs. It's not even up a percent though. But look, the big takeaway from yesterday, Scott, it's China. China was down 11% to 8 and a half billion dollars. We've been seeing this play out for several quarters in a row. We saw it a year ago when I was here that business was down 13%. And Tim Cook gave like several answers for why he thinks this is happening. One, he was blaming it on Apple Intelligence, which is not in the country yet. They need that regulatory approval from the government in order to launch it there. They don't have it yet. On top of that, he mentioned inventory issues through their channel partners. Those are those wireless carriers and other third party retailers that sell iPhones. That kind of he blamed for the miss and mismanagement of the inventory there. And then he talked a little bit about this government stimulus program that's basically giving rebates back on smartphone devices. Apple wasn't part of that last year, but it looks like they're going to be part of it this year, which could help China a little bit. But at the same time, the stuff that Apple isn't saying about its China business is just as interesting as those excuses I just rattled off for you from Apple. And it's, it's, it's Huawei, it's these Chinese homegrown brands that are eating into Apple's market share. If you look at these third party data from idc, from so many other research firms that are looking at this, Apple is the only major brand in China that lost market share last year. It's losing market share to Huawei, it's losing market share to Shami, it's losing it to Vivo and so many other of these homegrown brands. And that's really what they need to pull off and show that they can compete with those Chinese brands. Eunice Yun, our colleague over there in China, she did a great piece today, Scott, talking about how there is this gravitation towards these Chinese brands. The Chinese consumer tends not to see a big difference anymore between what Apple's doing and what show me. And while we are doing so, that is becoming a challenge as well. We'll see how this subsidy thing plays out. That could be an interesting wrinkle in this China story as we talk about the March quarter. Scott. Tim Cook actually kind of teased ahead to that, saying maybe they see a benefit from these subsidies that now it sounds like the iPhone is, is capable of getting.

Scott Wapner (31:44)

All right, good insight, Steve. Thank you for.

Steve Kovach (31:46)

Thanks.

Scott Wapner (31:47)

It's Steve Kovac. Rob, your takeaway as the shareholder?

Rob Sechin (31:52)

Yeah, I think, I think what I'm shocked by is how strong Apple share price has performed in light of what has been pretty pedestrian numbers as you cite on iPhone sales on China, we are neutral. The stock, we find it tough to go underweight mainly because it's a very long term holding for us that has done well. But on the positive side, service revenues were up 14% year on year and it points to the strength in their ecosystem and it's one reason that we believe it's very difficult to be underweight. This company, along with Incredible Brand Power, 140 billion in cash and you kind of saw in the second half of last year, despite pedestrian metrics and performance that they were, the share price was able to perform. I think you have to be careful at 30 times earnings though, Scott.

Scott Wapner (32:43)

Yeah, I mean you still have a little bit, I suppose of a tariff question over this company because of China. But we'll speaking of the news broke, I guess about an hour ago at this point that tariffs are coming 25% on Canada and Mexico over the weekend. Barclays has a note out today that says the tariffs against Canada, Mexico and China could amount to a 2.8% drag on the S&P 500's profit if enacted fully. Materials and discretionary, most at risk. Here you talk about, you know, talking about Mexico, there's Whirlpool that bank of America had specifically mentioned today. It's a stock that you own. It is down 18% week to date. That would be its worst week, in fact, since October of 2023.

Steve Weiss (33:29)

Lucky me. Actually, I bought it in 2023 when it was down so much. The reality on the tariffs and Whirlpool is that's really not the bulk of the problem. The bulk of the problem here is just that the housing market hasn't recovered. And I think this is indicative of people conflating tariffs into everything. One of the first things we did when Trump was elected was go through our portfolio and say how, you know, how are each of these companies actually impacted? And again, I mentioned before, for example, we have this international strategy. So I have clients all the time who are like, hey, with Trump in the White House and with these tariffs coming, aren't all these companies going to get hurt? And the answer is no. It's much more nuanced. So Whirlpool does take, does import some product over the border from Mexico. Who knows what or what will not be left in. But that's not why their earnings were down. Their earnings were down because the housing market hasn't recovered. Their partners destocked. You know, once the housing market does recover, I think at that point they can return to growth. But it's easy to put a tariff headline on this when it's not really the bulk of the problem.

Scott Wapner (34:27)

All right, let's get the headlines now with Courtney Reagan. Hey, Courtney.

Steve Weiss (34:30)

Hi, Scott. Well, the FAA has restricted helicopter flights in the Reagan National Airport in indefinitely in the wake of Wednesday night's fatal crash. Officials tell Reuters only police and medical helicopters will be only allowed between the airport and bridges nearby. North Korean troops have reportedly pulled back from the front lines in the Kursk region in Russia. Ukrainian officials tell CNN North Korean troops haven't been seen for about three weeks and it's most likely they've retreated after suffering heavy losses. Ukrainian officials and Western intelligence estimate around 4,000 of about 20 12,000 North Korean soldiers sent to Russia have been injured or killed. And the National Park Service, which maintains The Carter Historical sites in Plains, Georgia, released today the first official photos of the grave sites of the president and first lady Rosalynn Carter overlooking the pond the former president built at his home. While not yet open to the public, the Park Service says it should be soon.

Rob Sechin (35:21)

Scott, back over to you.

Scott Wapner (35:22)

All right, Court, appreciate that. Thank you. Courtney Reagan straight ahead, Stephanie Link buying the dip in one of her stocks today. We'll give you a trade update next. What's at stake when administrations change from the first 100 days and beyond, EY.

Rob Sechin (35:40)

Brings insights on the issues that matter. Executive orders, regulation of AI, the fate.

Scott Wapner (35:46)

Of billions in tax credit, global trade and workforce stability. No matter the policy shifts, EY helps business and government leaders remain resilient and seize dynamic growth. EY navigate the geopolitical and economic landscape with confidence. And now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn more at @ they are lower. They did beat. Revenues did miss however. And Stephanie Link, we sort of alluded to the fact already you bought more Eaton. Well, you bought more already this week, didn't you? So this is the second buy more of the week.

Stephanie Link (37:03)

Yeah, so I bought it on Monday because It was down 18% at one point. I bought a little bit because I always around the quarter the stock always trades a little strange, a little more volatile than usual. And actually the quarter was fine, was pretty much in line. But what I care about is the Electrical Americas division, that's the Data center trailing. Twelve month orders were up 16% backlog at 11.8 billion but the margins expanded 300 basis points and the company guided higher organic growth between now 2025, about 7 to 9% organic versus 6 to 8% prior. So I thought everything they had to say was good. They are executing very, very well. They're seeing no slowdown in data centers they have set. There's $1.7 trillion mega projects around the world and only 15% have started. There were $454 billion of new product projects in the fourth quarter. So the momentum is there. He was sounded very, very bullish. And so I just Want to round out the position, make it even bigger.

Scott Wapner (38:06)

Talk about deckers for a minute too. Thank you for that, Steph. It's our chart of the day because it is down quite substantially too. There it is down about 16% on the guide here. Rob, you own the stock here. Talk to us. UBS does raise the price target to 284 from 267 and it did hit a 52 week high yesterday. But what about this one?

Rob Sechin (38:30)

So it's a name we added on the show. It's up 37% since it's given back a little year to date. It trades at 29 forward. This is a great quarter from a fundamental standpoint. Revenues rose 17%, earnings rose 19%. They exceeded expectations in nearly every category. The reaction today is more a reflection, we think of lofty expectations after the stock ran 80% in 2024. This continues to be an industry leading retailer posting double digit growth and profitability and they have an incredibly loyal profit base. It's not surprising to see a little bit of a reset after that. We did see some hints of weakness in the HOKA segment during the holiday quarter. But you know, running shoes aren't necessarily standard stocking stuffers. So it's not something that's bothering us too much.

Scott Wapner (39:28)

Scott, we mentioned already. Thanks, Rob. Vertex and Abbvie, you know, in the context of, of talking about health care with Jim. But tell me about Visa because Visa beat and the stock is on the move to a record intraday high today. There it is on your screen and Jimmy, you own it.

Jim Lebenthal (39:44)

Yeah, I think this is very simple. The consumer is quite healthy actually across the globe because this is not just a US story, but they indicated the consumer is healthy. This is about volumes picking up. We got a pretty good indication that this was going to be a good report from MasterCard yesterday and there was a good bump in, in Visa as well yesterday. Now I have to say Visa is kind of pricey at this level. So I'm not adding to it here, but I'm not selling it either. Let's just let this go until we get some fears that the consumer is faltering. There are none of those fears right now.

Scott Wapner (40:12)

You know, I'll just ask you quickly about Exxon. You own the stock, your overweight energy. It is the worst performer of the year thus far. When you're talking about oil prices coming down because the president wants drill, drill, drill. Why are these stocks going to do well in 2025?

Jim Lebenthal (40:31)

When we talk about oil coming down, we've got to remember that oil has been in this range of $70 to $80 on West Texas Intermediate when all where all of these companies make a lot of money. And I think it's going to stay there. It's not just so easy to say drill baby, drill. It takes time, it takes money to get more out of the ground. So I think we're going to stay in this range. But more to the point, if you're going to, unless you're not going to own energy, you really should own ExxonMobil. It should be the first stock you buy in the energy space from a valuation yield and size point of view. And size really matters in a commodity business.

Steve Weiss (41:00)

One comment into that, just real quick.

Scott Wapner (41:02)

Because we got to go.

Steve Weiss (41:02)

Let's say you're wrong and it's not 70 to 80. Let's say it's 60 to 70. The US companies are still wildly profitable there and so they make up for for loss of, you know, revenue. Whether they make it up on volumes is the bottom line if we get it to set.

Rob Sechin (41:16)

The trade here is infrastructure. The trade here is infrastructure, full stop. If you're playing the Trump export of liquid natural gas, this is a midstream trade in energy this year for sure.

Steve Weiss (41:31)

But Rob, those stocks were all up like 60% last year. So they did move ahead of that to some degree. So you need to be careful.

Scott Wapner (41:38)

We're going to go Mike Santoli's next with his midday word.

Rob Sechin (41:43)

Foreign.

Scott Wapner (41:48)

We're back with our senior markets commentator Mike Santoli here at the desk. I always love on Friday to ask you your big takeaways for the week. And this was another interesting one with a Fed meeting deep seek everything else.

Jim Lebenthal (41:58)

Uncommonly interesting also just in terms of the way the market metabolized everything, almost record levels of just divergence among stocks within the market, especially relative to the index prices themselves. So you've had this very active kind of rotation, a willingness to kind of, you know, move money around as opposed to exit at the same time. An incredibly active retail dip buying reflex that has been evident for a while, but I think is really almost become more noticeable. It's this little bit of a separation between retail tenacity and institutions I think are a little more on the wait and see. If you look at the positioning numbers, they're not chasing so much. So I think what it's allowed is the the index is to stay supported at near at or near record levels, 10 year kind of holding in there. The economy seems good enough obviously in terms of both growth rates and inflation and then It's a matter of just how high the bar is for earnings because it actually, the big beats are not getting across the board rewarded, but we're hanging in. And so all that, you know, built together. I don't know if it's creating a fragility down the road. If you have some slippage in that rotation. If retail buys one too many dips.

Jenny Harrington (43:12)

And it doesn't work.

Jim Lebenthal (43:13)

Maybe like going on with Nvidia. Yeah, that's a question.

Scott Wapner (43:15)

Let's wait for, you know, Nvidia earn Nvidia's earnings. Now you want to talk about the ante being up on this. Wow. I mean, but you still got to wait. You still got to wait for it. Not next week. It's a few weeks and we'll get more mega caps. Mike, I'll see you on closing bell. Thank you. Mike's in. Totally. The setup is next. All right, let's do the setup for you now. Got some big earnings coming up. Pfizer is on Tuesday morning before the bell. Jenny, you own it. Talk to me.

Steve Weiss (43:58)

So that shouldn't be too exciting. They held a guidance call in December. They talked about everything. What they're going to need to show is product pipeline and debt pay down. They really need to show that product pipeline. They have got to give investors some growth to believe in.

Scott Wapner (44:12)

What about Regeneron? Regenerative more exciting there. That's Tuesday morning as well.

Steve Weiss (44:17)

Yeah. No. So they're going to need to talk about depiction growth and also their pipeline. That stock had been a huge, huge, huge grower for several years. Is down actually almost 30% over the last year. So this, this too. They're just going to need to show clients or sorry, investors how they're going to return to growth with the pipeline. It's tough.

Scott Wapner (44:32)

Chipotle is Tuesday afternoon staff, that's yours.

Stephanie Link (44:35)

Yeah, I think 5.7%. Same store sales, 4% traffic growth and operating margin expansion of 70 basis points. That should be enough if it's below. If the comp is below 5.7, obviously it'll disappoint. But I would be a buyer. This is. These guys have the best trends in the industry.

Scott Wapner (44:51)

H and R block. Tuesday afternoon. Rob Scott.

Rob Sechin (44:55)

It's hard to get a ton of takeaways from this quarter. Nearly all their revenues come from the March quarter. But I would be looking for any commentary around their views on the IRS tax press software. I could be a headwind for their do it yourself model. Still a cheap stock though. And we love the business.

Scott Wapner (45:13)

Stanley, Black and Deckers Wednesday morning.

Steve Weiss (45:15)

Jenny, that'll be really interesting. When we were talking about tariffs before, here's a company that actually has pressure from tariffs. So you saw that come down from like 108 before the election to around 90 where it is now. And they import from China. So unlike other companies that just get labeled like they actually could have a problem and they're going to need to flesh that out. Although I'll say to a huge degree it's already incorporated in the share price. But it'll be interesting. That'll be macro interest.

Scott Wapner (45:40)

Yeah, got a lot of interesting ones next week for certain finals. We'll do those next. All right. Closing bell, 3:00 Eastern. Today, Jeremy Siegel, the Wharton School need to talk to him about this market. Eric Woodring to his first reaction, the Morgan Stanley Apple analyst on those earnings. That will be a critical conversation as well. Rob Seach, in your final trades, what.

Rob Sechin (46:04)

It'S got to be Amazon earnings momentum fueled by US and operational efficiencies and dominance in E commerce and cloud computing.

Scott Wapner (46:13)

Thank you very much. Farmer Jim Small caps.

Jim Lebenthal (46:16)

Let's keep playing for the broadening of the rally.

Steve Weiss (46:19)

Jenny for dividend investors only ups 5.7% yield and still decent earnings growth ahead.

Stephanie Link (46:25)

Deckers. I'm not there yet, but I like it.

Scott Wapner (46:27)

All right, you let us know what you do. I'll see you on 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 12 Eastern only on CNBC.

Stephanie Link (46:43)

All opinions expressed by the Halftime Report participants are solely their opinions and do.

Scott Wapner (46:47)

Not reflect the opinions of CNBC, NBCUniversal.

Rob Sechin (46:50)

Their parent company or affiliates and may.

Scott Wapner (46:52)

Have been previously disseminated by them on.

Rob Sechin (46:54)

Television, radio, Internet or another medium.

Stephanie Link (46:56)

You should not treat any opinion expressed on this podcast as a specific inducement.

Rob Sechin (47:00)

To make a particular investment or follow a particular strategy, but only as an expression of an opinion.

Stephanie Link (47:06)

Such opinions are based upon information the Halftime Report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer Learn how to.

Scott Wapner (47:23)

Use AI to be more successful with CNBC Make it's new online course.

Stephanie Link (47:28)

We'll give you examples that can help.

Scott Wapner (47:30)

You master AI tools. Go to CNBCmakeit. Com AI and register now.