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Halftime Report
Positioning Plays at All-Time Highs 7/17/25
00:44:11
Frank Holland and the Investment Committee debate whether its time to trim exposure in some of the high-flying stocks like Nvidia. Plus, the desk share their latest portfolio moves. And later, Josh Brown highlights another name in his “Best Stocks in the Market.” Investment Committee Disclosures
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- [00:00]
Edward Jones
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- [00:32]
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- [01:03]
Scott Wapner
I'm Scott Wapner, and you're.
- [01:04]
Carl Quintanilla
Listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day.
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Scott Wapner
We record this live weekdays at 12 Eastern. Listen in.
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Frank Holland
Thank you, Carl and Sarah. Welcome to the Halftime Report. I'm Frank Holland in for Scott Wapner, front and center at this hour. Positioning plays at all time highs. The investment committee making a bunch of new portfolio moves. We're going to find out if they're leaning into this rally or if they're taking some chips off the table. Joining me for the hour, we have Josh Brown, Joe Terranova and Bill Baruch. But first, quick check of the markets. Right now you can see in the green across the board, the down, the S and P up close to a half a percent. The NASDAQ the best performer up about three quarters of 1%. Great place to start after yesterday's scare about possibly Jay Powell being fired, the market's pretty strong today on the back of tech earnings. Taiwan sent me one of the factors there. So, Josh, at this place we're at right now, is this the time to take some chips off the table or just ride this rally going into earnings?
- [02:03]
Carl Quintanilla
I think for every individual person watching this and for every portfolio manager, unfortunately, I don't have advice that would cover the gamut of what everyone's trying to do. But one of the things that I think is very obvious is now is not the time to be getting more bullish than you were a month ago or six weeks ago. Now is the time to maybe say, okay, I've had a good run. A bunch of stocks that are up double digits in a very short period of time and do I still want to have as much exposure as I did when valuations were lower and there was less enthusiasm priced into these names? And for some of you, you'll say, you know what, Actually, I haven't thought about that in a while, but maybe I don't want to have a 5% position that just went to 8%. And it's not. It's not the same as saying, oh, we're about to have a correction, and I predict that it starts in 27 hours. It's just a recognition that this has been an amazing market to be involved with. And a lot of stocks have probably outgrown the original size that you put them on in your portfolio. And you might want to make some decisions right now about if today were the starting point, how do I want to be allocated going forward?
- [03:13]
Frank Holland
Joe, coming over to you. So far, very early goings, burning season actually going better than expected. The estimate was 5.7, so six and a half according to Health Stag. Right now, do you want to just continue to ride your winners into earnings, or is it time to take a few bucks off the table and reposition a bit?
- [03:28]
Josh Brown
Well, I got to reiterate what Josh said. It's a little bit difficult to give a very succinct answer to that, but I'll do my best in an attempt. I think if you believe this is some form of an inflection point, something similar that we've seen on a secular basis, maybe in 2000, 2007, then for sure, it's definitely a moment where you want to take action in the portfolio. If this is nothing more in the upcoming quarter than a quarter in which maybe the S and P is flat to slightly down because we have a September 17th Federal Reserve meeting. You have a lot of issuance coming. The long end of the curve is backing up.
- [04:04]
Carl Quintanilla
Okay?
- [04:04]
Josh Brown
You just kind of set an expectation for yourself and you say this quarter is not going to look like the previous quarter. And if I want to do some minor selling, trimming some positions, I have no problem with that. But I'm going to stay anchored with the positions that I have. I think the risk in believing that this is some form of an inflection point, number one, is that you are going to get that rate cut in the fall. The earnings, as you mentioned, Frank, are very strong. And then just lastly, I do a lot of pattern matching. If you go back, you have to remember we had the precipitous decline already this year. We had it in the spring. Go back and pattern match the period from spring of 2018 through the end of 2019. And you'll see that precipitous decline in the fall of 2018. On the other side of that, you had a very steady staircase. Move higher and this pattern match to that time period is very high. That's potentially what we're setting up for right now. So I think you stay anchored and just set the expectation that maybe Q3 doesn't look as good as the prior quarter.
- [05:09]
Frank Holland
I just put this all in context. If we're going from the April lows, Nasdaq's up more than 35%. The S&P is up more than 25%. The Dow is up just about 18%. Want to come over to Bill Baruch? I don't have to ask you, Bill. I know what you're doing. You're actually taking some money off the table. Why don't we start off with you trimming the triple cues. What's the rationale behind that?
- [05:25]
Scott Wapner
Listen, I think earnings are going to be good, but remember how, how you felt in what the market was going through in early April. And you know, this is why you take risks like we did in April is being in. You monetize it right here. We were trimming things, bringing back to balance, taking, creating a little bit of cash gives us a little flexibility as we go through earnings season. And you know, I think there's just going to be some churn here. We're gearing for maybe a record high close in the S and P today, but I think this could be some churn as the market kind of just digests things. I don't think, as Joe said, it's going to accelerate. But I do remain overall bullish. I'm not sitting here bearish, but this is just tactically raising some cash.
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Frank Holland
Goldman actually out with a note talking about some of the moves that you're making or at least referencing a possible move similar to the ones you're making. I'm going to read part of it. The average tech stock in the S and P is implying an earnings day move of under 5%, the lowest in two decades, suggesting completion set up and lower probability of relief rallies. They're recommending hedging tech exposure with XLK puts or buying puts on stocks with high earnings revision risk agreeing with this strategy.
- [06:30]
Scott Wapner
Well, here's the thing. If you're buying puts, you're spending money now you could really protect your downside. And there's times to hedge. In 2022, we hedged our downside to use puts. The Fed said They're going to drive the market lower. I don't see this really being the instance here. We could get a nice little flush down. I don't think it could last very long. But if the market pulls back, I want to be able to get cash to work. I do agree with Joe. There's really some great pattern match. I've been going back a couple of months ago in May saying this party like it's 2019 and we're going to see a tremendous bull market in the second half. But I do think we have to work through the digestion of the run and earnings. You know they're going to be good. Beats and raises are expected. But how many quarters have we seen? Maybe not in May. That May was one where the expectations were low and that reinvigorated the bull market. Tech came in with the air spend. But how many quarters have we seen in 24 and 23 where the expectations were high? In the beats and race they came but the stocks did not accelerate higher. We could see something like that here.
- [07:28]
Josh Brown
I feel like the three of us are chopping through an answer here. I think Josh gave the one sentence that really summarizes it all. You probably don't want to get more bullish right here. If you're long, you probably don't want to buy.
- [07:38]
Carl Quintanilla
I would say for most people the most cost effective hedge that exists is to not put money at risk that you can't afford to lose. Like there's a million different ways to buy insurance and do long dated puts and have trend following rules. And I'm not saying anyone is better than any other. Everyone can pick their flavor. But in the end, the best form of risk management is saying this is the bucket of my assets that I am willing and able to witness a 20% decline in at any given moment. And here is the bucket of my assets that I'm not. And we're not investing money that we can't afford to see a decline with. And it's, it's really as simple as that. So to answer your question, people emotionally extrapolate and they've just made a lot of money so they feel like they're about to make even more. And we get the same way when we just, when we lose money, right? The minute we see a 10 or 20% drawdown, it's like now they're about to cut me in half. So this is like human emotion. There's nothing you can do about it. Some people are more afflicted than others. Some people are able to program themselves to act in the opposite manner. That's Warren Buffett. But in the end, if you can't afford to live, lose the money, it shouldn't be invested in the first place. How's that for a hedge?
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Frank Holland
All right, we go. Important to know, you know, the NASDAQ 100, very close to an all time high. While Bill's trying to trim, you know, else is pretty close to an all time high. Right at it right now. That's Nvidia. You actually posted this week that you're actually giving your followers permission, permission to sell a little bit of Nvidia with the rationale there. We found out earlier this week they can sell those H20 chips in China. Now a lot of people think that's unlocking a whole new chapter of revenue, if you will. And the fact that we also essentially find out that China really needs our US Tech, specifically our hardware, why sell here, especially ahead of earnings?
- [09:26]
Carl Quintanilla
Okay, I'm not selling. I'm giving people permission. Let me give you the context on the China front. Let's just do this quickly. Bernstein reiterated in video $185 target. And what they said was that for every $10 billion in recovered revenue in China, meaning business, we didn't think they could do up until a few days ago that could add 25 cents to Nvidia's earnings per share. So they say that could be like 40, 50 cents in 2026 if they capture back 15 to 20 billion worth of China revenue. Great news. Happy to hear that. As long that be that as it may. Put that aside, we'll assume Bernstein has it roughly right. The big picture is for the last 11 years, I've become the person that's been the most associated with Nvidia. For better, for mostly for better. Although there have been times where the Stock's been in a 50, even a 70% drawdown in years like 2022. There was the crypto crash in 2017, 2017, when they thought all these chips were good for was mining. So I've had the ups and downs, but mostly ups. People walk up to the street, people walk up to me on the street. They come up to me as stores, airports, you name it. The question that I'm getting the most over the last month or so is not do you still like Nvidia? It's should I sell some Nvidia? And I totally get it. Look at what the stock has just done. It's really remarkable. And now it's a $4 trillion market cap. So just for fun, if you Think this is a $5 trillion market cap. You basically need the stock to get to $201 a share. Assuming constant share count, not a lot of issuance. And they're not going to take action on the buyback. If you think it gets to 10 trillion, that's a $403 stock. So, like, do you think it's gonna go to 10 trillion? Could it Maybe. I guess, like. So I'm just looking at it from a risk reward standpoint. I'm not a seller. But if you are so nervous about your position that you're hawking me in the bagel store, the answer I'm now giving you. I used to say no or I would say I don't know. Lol. The new answer is yes. Sell some. I get it. It's a $4 trillion market cap. How bullish do you need to be to think it goes to 10 trillion? You have to be insanely bullish. So if it's making you nervous, you have my permission. Sell 10%. So I don't care, you know, a few points.
- [11:45]
Frank Holland
So you're not selling, but you're saying if this is a place to take profits, it's okay.
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Carl Quintanilla
I sold on the way up on. On two occasions. Not selling anymore. So whatever my position is now, this is what it is.
- [11:55]
Frank Holland
I think you and Kramer have to fight it out over the title of most associated with Nvidia. I mean, you have a dog named. Yeah, that's a different topic. I feel like we're spinning. Josh does not have a dog named Nvidia. I'm gonna answer for family.
- [12:06]
Carl Quintanilla
I came on this show in 2015 and I said Nvidia should be in the fang. And that's when Netflix was the end. So we could roll the tape. Like, that's 11 years ago.
- [12:17]
Frank Holland
I have that tape, by the way. That's actually tape. Somebody probably has to go in a basement. It's not digitized. By the way, you're talking about Bernstein very quickly and just to your point, if you want to take some money off the table on Nvidia, what about the Max 7 overall? We know Bill's taking some of the table with the triple cues. Bernstein also saying that max 7 earnings going to grow. Joe, I'm going to toss this one over to you. They say the eps estimates are 14% higher year over year for this quarter. But the next three quarters, that's going to slow down to 9 to 11%. Still respectable, but it slows down. So are we possibly at peak mag 7? Is this the Time to maybe trim or see your exposure decline to those seven stocks in particular.
- [12:51]
Josh Brown
I think we were at peak MAG7 in the early part of 2024 and I don't think the universal performance of the MAG7 is so critical anymore. We've seen that already so far. If I told you coming into this year you were going to have Apple down 16%, you were going to have Tesla down 20%, Alphabet is basically going to be unchanged and the market's going to move higher, you would, you would look at me somewhat puzzled. So I see that there are periods where some of the back seven seem to have more intense bullish momentum. That clearly right now has been Microsoft in video and more recently Metta. I think from a positioning standpoint, Microsoft is the one that's most intriguing to me because Microsoft appeared to be kind of in this dormant phase in 2024. Now it's reawakening. People are building positioning once again. Sentiment is being restored. Once again. A lot of the hedge fund community had moved, moved out of Microsoft, the momentum funds moved out of Microsoft. I'm raising my hand here and acknowledging that as well. And they kind of put their chips in the names like Meta. So I think it's become idiosyncratic. When you look at the Max 7, I don't think you have to have that universal approach to it anymore. You could very easily see to Josh's point, a sell off in Nvidia and maybe you get some form of reawakening in Apple or all of us Apple shareholders hope, while we get paid to wait, that ultimately that happens. So I see it more as this cyclical moment where the bullish momentum moves from one to the other.
- [14:23]
Frank Holland
You mentioned it. Microsoft also at an all time high is this time to get off the ship on Microsoft? Joe, Josh, I mean I think it's.
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Scott Wapner
Really interesting here with Microsoft is if you look at Microsoft relative to the qqq, it still has not made a record high relative to the qqq. I think there is a lot of power still behind a lot of these Mag 7 names and I expect them to outperform in the back half of the year. Now coming back to why we it's.
- [14:48]
Frank Holland
A name you just trim. So if you're saying form, why would.
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Scott Wapner
You trim the S and P Information technology? S and p is a 33% weighting. I believe we were over 40% information technology. Again, we took bets in April that we want to monetize. I still love looking at Microsoft and and if we may not be overweight in video anymore where it's a 6% weighting in our portfolio is still pretty large after trimming it. Microsoft still 5% weighting in our portfolio. But then we also have names like broadcom at a 5% weighting. So it's really. How do you put that piece of pie together? And we trim, we trim those two. So it's just kind of bringing down that exposure a little bit. Having a little bit of wiggle room and not having your pedal to the metal. You know, full gas here. As as Josh and Joe highlighted reiterated you can't getting more bullish up here is kind of difficult right now.
- [15:36]
Frank Holland
All right, Joe just mentioned Apple. I want to focus on a couple of things. Apple's target price Target raised to 250 from 230. Also reiterated overweight by JP Morgan at the same time you're actually buying some Apple, Bill. So give us the thesis why buy Apple right here.
- [15:49]
Scott Wapner
Yeah, we, we are looking at our main portfolio. We're looking to add Apple haven't done that yet. But in our concentrated portfolio where we own no more than 10 names, we really kind of slashed a handful of them. And Apple which, which we've been underweight in our main portfolio, we're at weight like 3% in Apple. And this concentrated portfolio, it's been on the bottom half of it. So we wanted to increase the weighting here. If you look at, I just talked about Microsoft relative to the Qs, Apple relative to the Q's is going back to really like the 2021, 2022 lows. There's a lot of room here. Now Apple's also unloved. And I'll tell you one thing that's continued to work for me over the last few years is when Apple's unloved, you close your eyes and you buy it. And that's what we're doing here right now. And I expect to be buying more Apple in the coming weeks.
- [16:32]
Carl Quintanilla
I like Bill's move. You know this is a name that's down 16%. It is the second worst performer out of the S&P20. It's very rare that Apple is the worst of the mega cap stocks or one of the worst of the mega cap stocks. The only one worse is here Joe mentioned is is Tesla. The trouble with Apple is that it's still a 33 times trailing P E. My comment to that would be the market doesn't seem to care. It's been an expensive P E for most of the last two years. I think the reason why the market is Giving it that premium is not because they're delivering earnings growth. It's because someday they will again. So that's kind of like a bet that they're going to get their earnings growth story back together. It's a little bit technically in no man's land. 3% above the five day, 5% below the 200 day. But here's the thing. All of a sudden, a couple of journalists, maybe the information maybe to be TechCrunch, someone's going to get word that something special is happening with AI in Cupertino. They won't launch a product, nothing will come out on stage. But like all of a sudden you're going to start to hear this creep into the press. Apple finally got its AI stories drained out that could take the stock to take 250. Think about it, it's a $21 stock going to 25. That's all we're talking about. That happens every day. So for Apple to get to 250 as the sentiment shifts on this debacle, and think about it like, Tim Cook has never been under this much pressure to deliver something. Never. Not in the whole time he's been running the business. It's been milestone after milestone, trillions. Trillions. This is a really big deal for, for Apple, some would say existential. I don't think they'll fail. So they failed so far. And I think all you need is a little bit of an inkling that they haven't nailed. And you don't even have to see the product. The stock will, in anticipation, rally.
- [18:26]
Frank Holland
Sorry, Joe, go ahead.
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Josh Brown
It's interesting because Josh gets asked a lot about Nvidia. I got asked a lot about what should I do with Apple, Should I maintain my position in Apple, should I sell my Apple? And if you, if you look at it from the perspective of the strategy that I am running, okay, on the quality factor, revenue growth has deteriorated. Revenue growth basically has been nonexistent or challenged for the last six quarters and momentum is now somewhat sideways. So don't be surprised if my strategy moves out of it at some point. However, and there is a however to this. Remember, Apple is paying you to wait. They're paying you to wait until they ultimately deliver. And the ecosystem has proven that they will wait. It has proven that over many, many years now as they've caught up to others in terms of innovative products. I think ultimately what will happen here is that Apple will be the one company, the one quote unquote, consumer facing company that delivers a tangible product into the hands of, of the consumer in which the consumer could really identify what is AI going to ultimately do. For me, I think at some point Apple gets there. Whether it's by buying perplexity, which would be.
- [19:40]
Frank Holland
Well, that was going to be my next question. Is that maybe the special thing that you think could happen.
- [19:44]
Josh Brown
I don't think anyplace. I don't think anyone knows the answer to that. I think a lot of people would like to see that happen. That's certainly the easy solution to trying to get them that intellectual capital that maybe is more missing right now in the artificial intelligence story and generative AI. But something ultimately will happen with this company. Sure. And the consumer is the one that's going to benefit. And think about it. It'll be the first real product in the hands of the consumer that's tangible that they could see how I benefit.
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Carl Quintanilla
The triumph of Apple has always been about to your point. It's always been about the melding of hardware and software. There are a lot of great software companies that are in AI. They've made great apps. Like OpenAI is incredible. Obviously they don't have a handheld device. They don't have something that's got a form factor that's physical, that you can touch, that you can. I know they're working on it. Right. Maybe it'll take the form of glasses. Maybe it'll be a medallion. Maybe it'll be a thing that sits on your desk. We'll all find out together. But if Apple can marry cutting edge AI software with the type of hardware that only they can do, to Joe's point, they still have a shot to be the most relevant AI player to the end consumer. No one's really done it yet. It's amazing. But that's where we are.
- [21:01]
Scott Wapner
Until they come out with that hardware. The thing to think about is everybody has that phone in their hands and they are slowly introducing new updates with little bits of AI technology. It's like a frog in boiling water before you even realize it. You're now more married to that phone because it knows you better and better over time.
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Frank Holland
You know all three of you own Apple. Quick question. Does it matter if they acquire it or develop it in house? Does that matter to you or to the stock in your mind and how you view it?
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Carl Quintanilla
It would be weird if they have to acquire it because historically they never have. But in this case I think it's worth the exception because again, Apple's a better iterator than they are a pioneer right now. I think the opportunity screams out for A pioneer. So they don't buy things. They bought Beats by Dream. Like, they literally every year is a new company Apple's about to buy, and it never happens. But I think they should make an exception and they should do a big acquisition here because I think they need to leapfrog and they need a time machine. Buying a company like Perplexity is a time machine. The other thing is, what's the point of having 100, $200 billion in cash if you're not delivering the best possible product? Like, what is it getting you to a Treasury bond yield? Like, seriously, what are we doing here? Is it Berkshire Hathaway or are we a technology company?
- [22:16]
Frank Holland
But does that change your view of the company itself if all of suddenly have to acquire? You mentioned they don't ever acquire.
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Carl Quintanilla
I'll tell you right now, honestly, when's.
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Frank Holland
The last time you've even seen any Beats by Dre? It seems like they integrated that technology into other products.
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Carl Quintanilla
That's my. My point is they don't do this, but I think this street and I think shareholders would be excited to see them break that rule of theirs. And I don't even think the valuation would matter. I think the stock would trade higher because they have so much cash. And it's. On the surface, it appears to be doing so little for them.
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Josh Brown
Look, I heard so many years ago that would reference Apple should buy Netflix because Apple is behind in streaming.
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Carl Quintanilla
Well, I should have.
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Josh Brown
They probably should have, but okay. They ended up okay. Apple TV is not so bad. The same thing can be said as it relates for music. They should buy Pandora or Spotify. Okay, Apple music's not so bad either, so. So they come around eventually and they deliver to the consumer what the consumer is going to find usable and productive.
- [23:10]
Frank Holland
All right, let's move on to some other. Some of Bill's other moves. You made some moves in the industrial space. Kind of walk us through that. We saw, you know, a lot of hype about the trade. Obviously, that's the secondary play there in the industrials. Let's talk about your moves. You trimmed Caterpillar, Mass Tech, and also Wabtech. Why don't we start off with Wabtech? Because you and Joe both own this one wide trim WOB Tech. Right now we're hearing a lot of talk about possible rail consolidation. Is that the motivation?
- [23:34]
Scott Wapner
No, it's. I mean, it's a 3% nearly. Was nearly a 3% weighting in our portfolio. It's still about a 2 1/2% weighting our portfolio. We Trimmed a bunch of names by 10%. Industrials in particular, we've seen a tremendous rotation into industrials and we've actually, a couple of shows ago, a couple months ago here I was talking about industrial renaissance in the sense that industrials are outperforming distribution despite manufacturing, PMI and contraction. I think a lot of this has already started to play out. But again, what we're just doing is monetizing this move that we've had. Wabtech is up 40, 45% off its, off its April lows. Industrials are up quite a bit. You had 15%, 16% year to date. We're just bringing it back to weight as a sector within our portfolio.
- [24:17]
Frank Holland
All right, Josh, when you get to one of your moves as well, this one in the pharma space, it's Pfizer. You've been a long time holder of Pfizer. You decided to change your position there. What's the motivation?
- [24:27]
Carl Quintanilla
Do you know how hard it is to find a stock as bad as Pfizer? Like in the last couple of years, I managed the impossible. I haven't really lost a lot of money here. I think my initial purchase was like 28, but it's a loss nonetheless. But the way I think about these types of things, it's a loss relative to the overall market having gone up so much, which makes it even worse. And I stuck to my guns on this for no reason. I'm not really a value investor, but I just felt the stock was so hated and down so much that it was a relatively low risk entry and at some point they'd find a way to turn it around. I was right about the low risk entry part, but I was dead wrong. There is no turnaround. Maybe it'll happen starting today, now that I'm no longer in the stock. I've seen that before, too. But look, the problem here is opportunity cost. I'm only going to have so many holdings. I'm only going to have so much capital for equities, individual stocks, and this just does not fit with my strategy. So as much as I would have loved to have come on the show and said, remember I told you Pfizer 28, look, I was right. The company's turning it around. The stock is 40. I don't get to do that. I was dead wrong. I'm out of it. It's somebody else's problem now. And may God have mercy on their soul.
- [25:42]
Josh Brown
So health care, I think, is the worst performing sector year to date, somewhere down around 3%. The other side of that to Bill Sale and Wabtech industrials are up 14%. I think industrials are the leading sector so far year to date. Wabtech reports earnings. I believe it is next Thursday. I'd kind of take a wait and see approach on that. Another name and a lot of people, people own industrials right now. We have a significant overweight to it. They are working. It's not just Uber, it's Caterpillar, it's Boeing, it's ge. It's a lot of names that we haven't really thought about in the past. One of the names that we own is Qantas Services. Ticker symbol is power. There was some conflicting analyst reports that were put out recently on this one was raising the price target. I'll read right off here. Bank of America raises the price target to 440 from 370 and then on the other side BMO downgrades it. I think it's important to understand with this company what a critical sweet spot they're in. Fundamentally think about where we are in this country in terms of the power grid. This is the company that actually helps bridge the gap and transition from the renewables to the traditional energy and they are serving the industrial, industrial and commercial community for the grid itself.
- [26:58]
Frank Holland
To your point though, President Pittsburgh this week talking about power, energy and everything else. By the way, on that BMO downgrade actually raised the price target but lowered the rating. So it's kind of like a mixed report there. All right, coming up here on Halftime, the countdown to Netflix earnings. After the bell, everyone on this desk, they own it. We're going to give you the setup. And then later, Josh Brown is back with an update to his best stocks in the market. Halftime's back in just two minutes.
- [27:22]
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- [28:22]
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- [29:06]
Frank Holland
And welcome back to the Halftime Report. It's time for the setup on Netflix that's going to report after the bell today. Shares up just about 1%. Right now. Everyone owns it. Joe, going to come over to you first. What are you expecting?
- [29:16]
Josh Brown
Look, the stock has had a remarkable move. The valuation has moved to its highest level since 2022. The Street's looking for $6.7 earnings, 11.3 billion in revenue. I've said over the last several weeks, I think the back half of the year, the content is very strong. Stranger Things makes the return. You're going to have a lot of live sports. So I'm going to stay anchored to the position personally for sure. I would think the strategy will do so as well. It's rules based. We'll find out at the end of July. I kind of lump Spotify in the same category as Netflix overall. My expectation is look, there's a very high bar that they need to exceed. And I could be talking in the coming days about a stock that experiences a form of correction. But I'm willing to ride through that because I think the fundamentals as you move through the end of the year are very strong.
- [30:09]
Frank Holland
So Josh, what is the bar? We don't know what the net subscriber ads are going to be anymore. They're not going to include those. So in your mind, what's the why is that good?
- [30:16]
Carl Quintanilla
Because it's, it's what, what are we doing here? Or when we're putting out information to the street, are we trying to give investors information that would be helpful to them if they're investing? And if that's the Case this game of how many sub ads were as opposed to how much money is the company making. So I think that that should be the focus. $7.08 in earnings per share, 11 billion in revenue for the quarter. The problem with a lot of people commenting on stocks is they've never run a business before. People who have run businesses the way that they're running Netflix understand that in any given quarter there's going to be ups and downs in things like how many people in this tier, how many people in that tier. That's natural and normal to have the stock be punished by 20%, which is something we saw in 2022, almost 20% in one day over missing the new subscriber number by 2 million subs. It's childish activity. Apple got rid of the handset reports. Nobody cares anymore. Everyone forgot about that. And there's no reason to focus on how many added subs in any one quarter. Focus on the profitability, focus on the revenue growth. They should be reporting a 16% year over year jump in revenue. This week they should be reporting 45% increase in earnings per share. If they can do that or anything close to that. Do investors need to worry? How many people in Spain are on the ad supported tier this month versus last? I don't think so.
- [31:42]
Frank Holland
I mean, if that doesn't matter. But what about average revenue per user, things like that? Do any of those matter to you? Or is it just net profitability, net.
- [31:48]
Carl Quintanilla
Revenue guidance.
- [31:51]
Scott Wapner
Free cash flow, margins?
- [31:52]
Carl Quintanilla
Yeah, the margins is gonna be the big look, right? Like, there's no question that, like transparency is good. But what Netflix has done successfully is they've retrained the street to think about this as a business and not as a game of who could guess the number, right? Like we're talking about jelly beans in a jar. Apple was able to successfully do that. I applaud them for it. So look, the way I think I'm long Netflix, I'm going to stay long into the print. A lot of people miss this. If you missed it, you should hope for the analyst community being quote, unquote disappointed and give yourself an opportunity to buy it. If the stock pulls back 7, 8% on earnings.
- [32:35]
Frank Holland
Stock up about 30% over the last three months. We got to move on. When we get to our headlines with Courtney Reagan back at cnbchq. Hey, Courtney.
- [32:42]
H
Hi, Frank. Well, I'm evil. A male Bovey nomination to the 3rd U.S. circuit Court of Appeals will go for a full Senate vote. All 12 Republican members on the Senate Judiciary Committee voted to affirm the nomination of President Trump's former lawyer. After the Democrats walked out of the hearing, Senator Cory Booker joined his colleagues in leaving, but not before accusing the committee's chair, Chuck Grassley, of rushing the vote without allowing his colleagues to speak. The Justice Department is recommending a one day prison sentence for a Louisville police officer who was convicted in connection to a 2020 raid in that resulted in Breonna Taylor's death. In a memo late Wednesday, the DOJ said Brett Hankinson shouldn't have been prosecuted for violating Taylor's rights during the raid. Hankison is set to be sentenced on Monday and faces a maximum of life in prison. And the national highway and Traffic Safety Administration is losing more than 25% of its employees under the Trump administration's buyout program. That's according to data sent to Congress. The agency has yet to comment. Frank, back to you.
- [33:42]
Frank Holland
Courtney Reagan back at cnbchq. Courtney, thank you very much. All right. Coming up next on halftime, more committee stocks on the move, including today's top Dow gainer. More halftime back right after this.
- [33:55]
Capella University
At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.
- [34:09]
Josh Brown
Edu for the biggest news and exclusive.
- [34:12]
Frank Holland
Interviews from the business of sports.
- [34:15]
Josh Brown
You know, this is a multi billion dollar industry. Get the CNBC Sport newsletter delivered weekly to your inbox.
- [34:21]
Carl Quintanilla
Sign up for free@cnbc.com sportnewsletter.
- [34:38]
Frank Holland
And welcome back to halftime. Let's get to some stocks on the move. United Airlines out with a new 2025 forecast. Joe, we were actually just talking about this yesterday. Your take on the quarter shares are up about 1⅓ of a percent right now.
- [34:49]
Josh Brown
I'm not going to sound overwhelmingly excited about the airlines. We've owned airlines in the ETF before. We have United Airlines now. I know Jim labenthal gets all giddy about airlines and Delta, which has done really well. Congratulations, Jimmy. Stock up a little bit today up on the premise that the business traveler return. There was this inflection point in the month of June. Scott Kirby identified that I think A stock was up 4% at one point. I see it now up about 1.25%. So I think when you look at the airlines in totality, there's this bifurcation discount airline airlines in a little bit of trouble right now. United, Delta, they have the more affluent and business flyer and they're benefiting from that.
- [35:33]
Frank Holland
To your point, premium revenue was up about five and a half percent year over year. Also look at the insurance space. Travelers earnings, those beat, but the revenues, those missed. Joe, take a look at that chart as well.
- [35:43]
Josh Brown
I wouldn't make too much. Look, the insurance companies were one year ago, that's what we were talking about. When you're talking about the financial sector one year ago, it's all the pricing power for all of these insurance companies. Progressive, Chubb, Allstate, Travelers, we've seen a little bit of a deterioration in the momentum. And ultimately where that has landed on the other side is as they've rolled over, you got a little bit of a modest lift. Catastrophic losses for Travelers, not as bad. Again, I wouldn't get too excited about what we're seeing here.
- [36:12]
Frank Holland
All right. Also looking at Berkshire Hathaway under some pressure again this week. Josh, you on this one?
- [36:18]
Carl Quintanilla
I do. Look, there are so many drivers under the hood here at Berkshire, it's hard at any given point to know what's causing the stock to either rally or sell off. And that's the nature of the thing. It's a conglomerate. So you've got the railroad and you've got the cyclical exposure. You've got the utility stuff, which is more on the defensive side. Then you've got all the financial businesses, especially on the insurance side. And then of course, you've got the investment portfolio, which still has its largest holding as Apple, even after all the sales. So I try not to worry on the day to day, why is it up? Why is it down? This is part of my forever portfolio. I've been in the name for a very long time, as viewers of the show know, and I don't react to near term volatility ever.
- [37:05]
Frank Holland
All right, one last thing. Crypto stocks are on the move after regulation bills move forward. Forward. Bill, your take.
- [37:11]
Scott Wapner
I think that this is a pretty good line in the sand on Bitcoin. We own it in portfolios, you know, 1, 110, 112 season above there you have to be long. There's going to be some of the other. The other crypto spaces like Etherium Solana may see some outperformance here after, after Bitcoin has led. But I think there's a lot of tailwinds and that's going to continue to build. You know, I see this as a place you have to be investing.
- [37:35]
Frank Holland
All right, coming up next on Halftime, an update to Josh Brown's best stocks in the market, plus one of his Newest buys. Halftime will be back right after this. All right, welcome back to Halftime. Take a look at Joby Josh. Look at this chart right here. Up big this week. Up more than 4, 40%. You recently got into this. Name your take on the upside move. Shares up about 5% today.
- [38:06]
Carl Quintanilla
Okay. So I brought the stock to the show on June 17, and I took an initial position and I said this is highly speculative. It's really not the kind of thing that I do a lot of. Unfortunately, I didn't buy that much of it. It's up 104% since then. Did not expect that. If I did, I would have bet the rich. So let's just be very clear. This thing took off way faster than I had a chance to accumulate. But I just want to give people an update as to what's going on and why. They just doubled their air taxi production capacity in the state of California and made a major announcement in Ohio. These are EVTOLs. Basically. These are electric vehicle electric vertical takeoff and landing. So they are think of it like a cross between a helicopter and a plane for very short trips. They just want to lift you up off the ground, bring you to your destination, drop you off. There will be a lot of uses for these over the next 10 years. This is the leading company in the space. Just delivered their first production aircraft to Dubai. They're running an ev, an EVTOL trial in Dubai, where I guess the government's allowing them to do more than they could do here. So in the United States, the last thing they have to clear is the final FAA certification phase. That's the next catalyst. I don't know how much the stock rally is already pricing that in. But I'm going to remain long with my position. Very exciting company. Highly speculative. Not telling people to buy it up 100% a month. But keep it on your radar. It's worth learning what they're working on.
- [39:38]
Frank Holland
EVTOLs, also called EVA combo.
- [39:41]
Carl Quintanilla
Call them whatever you want, Frank. As long as the stocks go up.
- [39:44]
Frank Holland
All right, let's move on to Josh's best stocks in the market. What are you highlighting today?
- [39:48]
Carl Quintanilla
We wrote up Fastenal for the CNBC Pro subscribers.
- [39:52]
Josh Brown
I like that.
- [39:52]
Carl Quintanilla
Yeah, this stock is. This stock looks incredible. When you look at a long term chart of this, it's just up and to the right. The buyers come in pretty much on every dip. And the trend line has been pristine dating back to early 2023. Basically what they've done is they've Amazoned the construction business. They have something called Fastenal Managed inventory. It's a digital tech platform so that you don't even have to reorder the things that you're running out of as an industrial company building things Fastenal already knows and they will deliver what you need right to the site. And this has been incredible for the business. 44% of total sales last quarter, which they announced on Monday came in as a result of this FMI technology, this platform that I'm talking about. The important thing to understand here is it's an industrial. It's not a tech company. Doesn't grow revenue at 40% a year or anything like that. But it's incredibly well managed. So we did a write up. If you're a pro subscriber, highly recommend reading what Sean and I had to say and, and what I'm saying about the stock, technically, I think if you want to like follow it on a trailing weekly basis every Friday. Take a look at the long term moving average which we peg at like 36 to 38. Use that as your risk management. If it breaks below there, something may have fundamentally changed. But so long as it can remain above, I think you can continue to ride the stock. So this is on the best stocks in the market list. And I wish I owned it. It's, it's been an incredible performer.
- [41:30]
Frank Holland
Bill, very quick take for you.
- [41:31]
Scott Wapner
Yeah, we own it. And one thing I'll add is, is the market has expected margins to drop and they've continued to expand and that's really helped this company outperform. It is the one industrial name we did not trim, but we trimmed industrials.
- [41:43]
Frank Holland
All right, shares of Fastenal, they're up just about a half a percent right now. Straight ahead, we have our cause of the day. It's a triple play of three committee food related stocks half times back right after this. Break it. And welcome back to halftime. Let's get to our calls of the day. This is time for your yum sound effect. What was that thing you just did?
- [42:28]
Carl Quintanilla
It's lunchtime.
- [42:29]
Frank Holland
This one isn't for shake shack investors. Jeffrey's downgrading the company to outperform Josh, you own this one, by the way. One of the things they really were focused on is that we're showing it right here. Too much optimism around same store sales.
- [42:41]
Carl Quintanilla
Yeah, all right, whatever. You have many downgrades. I've sat in this stock through, I would say like maybe 500.
- [42:47]
Frank Holland
Do you eat there?
- [42:49]
Carl Quintanilla
Very rarely these days. Joe has me on a mission. All right, so here's what I would say. They downgraded, but they raised the target, which is an admission that they missed it. So the target's now 120 up from 100. Look, this is one of the better stocks over the last six months in the space. It's had an outstanding run and it would make sense to me me that it would solidate a little bit. But this is a very innovative company. They continue to find ways to lower costs, open new stores, cost effectively expanding around the world. The Dubai chocolate shakes sold out. And you know this. Look, if you're an investor here, you're not worried about what somebody on the sell side says in the near term. If you're trading it, it's different. You got to pay attention to a Dubai shake. Yeah, the Dubai by the Dubai.
- [43:36]
Frank Holland
This your second Dubai reference?
- [43:37]
Carl Quintanilla
Yes. Dubai chocolate shakes sold out. This is like this is what Shake Shack is delivering. It's super premium product into the market. You can't eat it every day. Obviously I tried, but, but look, I'm, I'm an investor since the ipo.
- [43:54]
Frank Holland
Another restaurant.
- [43:54]
Carl Quintanilla
So I've never, I've never sold it.
- [43:55]
Frank Holland
Another restaurant stock is Chicago guy Bill, you own this one. Wells Fargo reiterating McDonald's Chicago area company as a top I idea. Price Target 350 in the business model.
- [44:06]
Scott Wapner
The franchisee franchising out. I mean it really helps, you know, kind of stay away from the inflation story a bit. The weaker dollar is a tailwind here. It's building out a really nice base and support. Now. Headwind is good resistance from 305 to 310. We like the name and I do see myself maybe adding to this here in the coming weeks.
- [44:24]
Frank Holland
All right, I also have Deutsche initiating Toast at a buy. Josh is one of your other stock. You often talk about initiation price target at 53 bucks. Very bullish on Toast and its products, suites and go to market capabilities.
- [44:37]
Carl Quintanilla
Toast is on the best stocks in the market list. I owned it, of course, long before I've been up in it. I've been down in it. But over the last year it's been an incredible winner. It's up 78% over the last 12 months. It's up 26% year to date. It's up 8% just over the last 30 days. And in addition to the momentum, there's a fundamental story happening here where they are checkmating the entire restaurants and ultimately food service payments industry everywhere you go. Look around, you're seeing more and more of the handheld toast terminals. You're seeing more and more toast at the cash register. That's not going to stop.
- [45:16]
Frank Holland
All right, Toast Share is up about one and three quarters of 1%. Now when you get to our Angelica Peebles with a market flash. Angelica.
- [45:23]
H
Hey, Frank. GSK is falling right now after an FDA advisory committee recommended against its drug for multiple myeloma called Blender Up. So this is the drug that was on the market a few years ago was taken off and they've been trying to reintroduce it. But now these FDA advisors are recommending that the FDA does not approve this drug. Now remember, these are advisory committees. The FDA can still do what it wants, particularly that stock, down about 6%. Clearly, investors concerned about the path forward here. Back to you, Frank.
- [45:52]
Frank Holland
Angelica Peoples right now talking about a move with GSK shares moving lower right now. All right, much more halftime coming up after this, this break. Final trade. Stay with us. And we're back on halftime with final trades. Bill, you're up first.
- [46:09]
Scott Wapner
KGC riding the 50 day moving average all year.
- [46:11]
Carl Quintanilla
Joe Cintas, Golden Cross in Amazon. Pay attention. That's short enough.
- [46:18]
Frank Holland
That's short enough. That's short enough. That's going to do it for the Halftime Report. Thank you so much for watching. The exchange starts right now.
- [46:25]
Carl Quintanilla
You've been listening to CNBC's Halftime Report, the podcast.
- [46:29]
Frank Holland
You can always catch us live weekdays.
- [46:32]
Scott Wapner
At 12 Eastern only on CNBC.
- [46:36]
Edward Jones
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer.
- [47:16]
Capella University
At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.