Josh Brown (2:46)

And.

Joe Terranova (2:47)

And it's built upon the staggering growth that you're identifying. But guess what, even more than that, if we could get oil prices lower, now you bring back that broadening narrative. And that's pretty, pretty interesting when you hear about AN S&P 8,000 target.

Scott Wapner (2:58)

Yeah, I mean, the sector performance over the last month, it's obviously top heavy Tech and comm services, 18 and 16.5% respectively. Discretionary is 14. Amazon obviously playing a large role in that because over the last month, that name has ripped by nearly 40%. But Steph, the story is earnings. Q1 earnings growth is 28%. And at the very top of the stack, Comm services earnings growth, 55%. Technology earnings growth, 52, discretionary Again, I'll throw Amazon in there with a heavy weighting. It's 38%. Materials quite well also. And then it's sort of steadily declines from there as you get a little bit lower.

Stephanie Link (3:43)

Yeah, so the broad base feels good. I know it's very much technology, but it's other stocks, too. So the top five names so far, Micron, Valero, Ford, Nucor and Travelers. I mean, that's pretty diversified if, if you ask me. But I think more impressively is earnings. Not only 28%, sales growth is 11, and we're seeing margin expansion of about 100 basis points. That is very encouraging, especially in light of higher commodity costs for many, many companies. So we go back to why it's all happening. It's because the Atlanta Fed Tracker now is running at 3.7%. It's been all over the place, Scott. You know, we pre war, we were 5, 3. Then we got down as low as 1, 3. Now we're at 3.7. So it's directionally getting better. And I think in the face of all this unknowns, it's very impressive how much we've rallied from the March 30th lows.

Scott Wapner (4:33)

Oh, it sure is. And estimates keep going up for earnings. That's part of the point here, too, is that Earnings growth for Q2, 22% for Q3, 23 and a half for Q4, 21.

Sarat Satt (4:48)

Yeah. And I think that's providing this foundation for this market because I think going into this quarter's earnings, we all knew earnings were going to be pretty good. But what were companies going to say going forward, given with all the macro issues, the global issues, and I think what you've come out so far is companies basically saying guidance is going to stay. We think earnings are going to improve, operating margins are improving and I think that's providing this tailwind to this market.

Scott Wapner (5:12)

Be nice if you had I guess, a little more broadening, Josh, wouldn't it? I mean obviously technology stocks have just outperformed everything else. The gains from the March lows for example, Alphabet's like up 42%, Amazon 37, Nvidia almost 20, etc. Etc. And we told you about the sector performance with tech and comm services leading the way. However, only 53% of S& P names right now are above their 50 and 200 day moving averages and the equal weight S&P 500, the RSP is coming off its 9th down day in 10. What do we make of all of that? How do you put that into context about what's really happening within this market?

Josh Brown (5:55)

Yeah, I think it's a, I think it's a great observation. I think it's important for people to have the context of not just all right, the market's rallying but like we're in earnings season and we already knew going in the standout earnings growth performers were mostly, not all, mostly going to be concentrated in and around the CapEx theme. It's the whole economy right now. So we look, there are times where we have an economy that's driven by this phenomenon, that phenomenon, sometimes it's a big tax cut, sometimes it's, you know, some sort of an industrial boom, sometimes it's the housing market, it's the capex story. That's what's going on. That's what the leaderboard of the S&P 500 for the most part reflects. Doesn't mean that we don't have stocks going up in health care because we do. Doesn't mean we don't have stocks going up in consumer discretionary, because we do. But the vast majority of the gain that we're getting on, on profitability, it's coming either directly like these freak show memory chip stocks which nobody should think they'll ever see anything like this ever again happen overnight. But even putting that aside, when you listen to the commentary coming out of the caterpillars of the world, we just, we have this, this moment where people are building very large scale projects and that's engaging some of the most important companies away from tech as part of that. And I'll throw utilities in there. So that's what's Driving the earnings growth, that's just driving the economy. That's just driving investor enthusiasm. So that separation that you described, Judge, nobody should be surprised by it. If we think that earnings are the most important ingredient into what makes stock

Scott Wapner (7:43)

prices move make making some people certainly nervous. You know, Julian Emanuel was bullish the market was with me yesterday on closing bell of Evercore and raised his earnings estimates but said there's a lot of similarities in some of the things that he's seeing in this market between today and 99. I mean Josh talks about what's happening with Micron and some of the memory names show Micron again today. I mean it's like Every single day 12% today. Not normal Intel. You know, intel had a, had the feel as though it was if not back it up a lot longer. So it's up 14, 14 here. But like, you know, I don't know, a few years intel had this feeling within the marketplace among the investing community is like this was on the outs with its nose pressed against the glass. It was never getting into the party. Government takes a stake and all of a sudden that and this is now a data center, a major data center play. And I don't know how you would characterize that move from you know, 40 to over $100 a share. But are these things that need to be timestamped because I've got people who are messaging me saying this is not now the theater of the absurd and it's not going to end well I

Joe Terranova (9:05)

think that you could clearly identify areas of the market where that's an accurate statement. And I think the market has excessive speculation for sure. Do I think there's universal expect excessive speculation? Not to the degree that we saw it in the late 90s. And I think the pre existing condition that kind of benefits the environment now it allows for this earnings growth is these mag seven companies came into the AI build out incredibly cash rich which was a much different situation than you saw in the 90s. The cash was sitting on the balance sheet. The cash was available for them to invest the capex in AI itself. So I think that's obviously a positive condition that when you try and compare it to the late 90s, I think it's a different circumstance. I do think in general a lot of people like to make this binary assertion, okay, it's the 90s, it's not the 90s. Well if there's anything in your portfolio where you feel as though there could be a similarity to the 90s, then guess what, you're overexposed no, but you're intoxicated with the performance.

Scott Wapner (10:15)

For example, you know, for somebody who runs an etf, whose hands are tied to. Other than, you know, for quarterly rebalances, what's the thought process when you're sitting on a micron in the Jyoti and you're essentially forced to sit there and just watch it go parabolic, knowing that you can't do anything about it, but if you owned it personally, you certainly would have more options. I'm wondering what the. The pro versus average Joe mentality would be in a name like that.

Joe Terranova (10:44)

So you're going to find my answer interesting. First of all, is 500 US large cap companies. So you could make an argument that the strength of the balance sheet is a little bit different and the volatility levels are also different. But guess what? When I look at it and I say to myself, okay, what exposure do we have currently? I wish we had more momentum. I wish that we were a little bit less quality. We're 50% momentum. We're 50% quality. Quality is not getting rewarded. So far, year to date, quality is up, I think 3% because you have momentum is up nearly 20%.

Stephanie Link (11:20)

But that's because you have cap goods are exploding. You have regional PMIs that are north of 55. We haven't seen that in forever. And that is everything to do with AI and the data center and the grid and power. I feel like I say every single day that's where the momentum is. But this is in the second inning. You've got Amazon, Google and Microsoft with $1.3 trillion of cloud backlog. We are short everything and that's where the dollars are going. That's where the earnings are coming in. So I know you're in momentum. I think that's great.

Joe Terranova (11:56)

50.

Stephanie Link (11:56)

50, I think. I think this whole theme is in very early innings. And you. I mean, I.

Joe Terranova (12:02)

So based based on what you're saying, I should probably be 64 momentum or 70, 30 momentum.

Stephanie Link (12:07)

It's never bad to own quality, though. No, I don't know.

Joe Terranova (12:10)

I understand that, but Scott asked a great question. In the environment we're in now, you're kind of trying to challenge yourself on how long can this environment continue? If the current environment continues as it exists right now, to your point staff, then you probably want to be 60, 40 momentum or 70, 30.

Stephanie Link (12:26)

When we cite all these numbers, these are huge, huge. Not 1.3 trillion in cloud backlog from three companies. That's enormous.

Josh Brown (12:34)

I think on the memory chip side.

Scott Wapner (12:36)

Yeah, go ahead.

Josh Brown (12:36)

I think on the memory chip side, this is worth pointing out, yes, today we are, we're in a substantial shortage. And you're looking at companies going from saying we think we might earn $2 this year, but $50 next year. That's, I mean you can't have stocks go up a thousand percent in a year unless the earnings estimates are doing something ludicrous like that. It also helps that these were commodity companies the way they were looked at. So these didn't start out at 30 times earnings. These started out at like 4 times earnings. So you have like the simultaneous once in a lifetime, maybe once in a thousand years overnight explosion in demand for what they do, coupled with the fact that there's this bottleneck, this like three companies who can do it, coupled with the fact that we don't even know where this demand ends. To Stephanie's point, the Capex numbers keep going up and nobody owned these stocks. Growth managers did not own these stocks 18 months ago. So you have this once in a thousand year scenario where a Sandisk and a Western Digital, they become the most popular stocks on earth overnight. Don't have a lot of competition. But what ends up happening is the market responds. Yeah, the market responds. And the technology, the technology people will tell you is here's what's going to happen. And we don't know when, but it will. All of a sudden we're going to start to hear that the models are becoming more efficient to be able to run with less memory, which will reduce cost and raise efficiency at the data centers. And ultimately it will look absurd to have bought a stock that went up 4,000%. We just don't know what the trigger and what the tipping point is. So never do, Joe.

Scott Wapner (14:25)

Right, we never do. That's the point. We never do.

Josh Brown (14:30)

We never do's point throwing out quality and just saying, you know what? I can't miss this memory chip thing. I don't care how much it's up.

Scott Wapner (14:41)

No, I could just tell you that there are every single chart that our control room threw up in the context of the conversation that we're having now looks near identical. Every single one. You should throw up from last summer.

Stephanie Link (14:56)

You should throw up some industrials too.

Scott Wapner (14:58)

And I'm just thinking, what I was looking up is I was like, what was that company that recently said they were pivoting to data centers? And I'm like, it was all birds. And I'm thinking to myself like we're having a conversation about, you know, what looks to some to be the absurd, absurdity of the market in certain areas and specific names. And then I remember back to, we literally had a footwear company say they were pivoting to data centers and we discussed it for an hour and we laughed and then we moved on. But those are the types of moments that you remember when things, if and when they do turn.

Sarat Satt (15:36)

Yeah. And look, I think these points being made about the memory and the commodities, like take this similarity. The memory companies are not putting a lot of money back into R and D. They're providing something, a product that the Capex needs. At this point it's kind of like copper, right? You're not providing any value or steel or aluminum. So at some point when either as Jos very pointly said, it becomes cheaper to get memory or the demand just starts to subside, your long term value cash flow is not going to be there. They're not going to produce the next Nvidia chip that's going to be better. It's just a memory chip that has to be a little bit better, which is a very different market.

Scott Wapner (16:15)

But if I, if I own any of these names and I've been watching, you know, this conversation, I've been looking at the charts and what am I supposed to do?

Joe Terranova (16:25)

The degree of ownership. You have to understand your degree of ownership. And it's very easy. It's been my experience, experience the entire time I've been in this business. People get intoxicated by the return and they tend to over allocate in the direction of where they're getting the most return. I will say this to Steph's point. You are seeing the earnings growth visible in other places. Rockwell Automation is up what, 11% today on really strong earnings. And these companies comprise a lot of the momentum funds that we're talking about about right now. I know Mike Santoli loves the SP MO. Relative to the MTM, SP AMO is up nearly 3% today. We're not talking about small cap companies. We're talking about a large cap universe of stocks that are benefiting from earnings growth.

Scott Wapner (17:12)

You just sold Rockwell in the rebalance. Steph owns the name. It's surging. Let's show it again, please. After, after they raise their guide. Stocks up 11%. Absolutely, Stephen.

Stephanie Link (17:22)

I mean this is all about electrification. Automation, robotics. I think robotics are in the second inning. We have 4.7 million robots around the world. We're going to get to 155 million robots by 2050. Amazon is the leader with a million robots already. But Rockwell Automation helps these, these companies get more efficient with Their robotics and their automation. And the whole point of. I always emphasize margins. Margins are so important. Important because if you have the top line and that's growing and then you have margin expansion that's growing, which it did by the way, up 320 basis points year over year, you get a huge earnings beat. And this company is very conservative and they guided much higher. Free cash flows fall in their way as well. So Rockwell is a great story. I think it's one of my favorite industrials at this point, even up 11%. But you know, you go back to any of these industrial companies that are tied to AI and data center and cloud and all that, I mean Eaton today, I know it's down, it always trades crummy on the quarter, but I mean, my goodness, like they had orders up 42% and backlog up 44% in their electrical Americas. And you know, this follows Quanta Services doubling their total addressable market two weeks ago. So to me these are also plays that you can identify with this theme. And I do not think a lot of people own these names. I think they're starting to, but I think people are starting still very entrenched in the Mag 7 and I think you are going to see a transition a little bit into these other parts of the market that are benefiting from the same.

Scott Wapner (18:49)

Glad you bring up Eaton. It's not like we, we just threw up full screen that, you know, Eaton falls on disappointing guidance and blah blah, blah. I mean disappointing should be in quotes.

Joe Terranova (19:01)

Do you know why their guidance was good?

Scott Wapner (19:04)

It just wasn't good enough. Yeah, it would.

Joe Terranova (19:06)

It was 10% versus 8%. The street expected 8%, they said 10% but everyone else wanted 15 to 20.

Scott Wapner (19:14)

Back the chart up also from last. The same point of time that you've just showed the other ones for me, please. To show you why, you know, stock goes up, expectations go up.

Stephanie Link (19:25)

Yeah. But estimates are going up across the board for this entire sector. This theme of data centers and grid and power, I mean we just simply don't have enough. I mean, power, my goodness. I mean where, where are we going to get it from? Coal, nuclear, renewables. Yeah, but not, it's not going to solve the incredible amount of demand that we have coming down the pike.

Scott Wapner (19:49)

The beat goes on. You know, for, for a lot of these tech names. Searat, Alphabet hit a record high today. You have a number, you know, Amazon hit a record high. You own both of those names.

Sarat Satt (20:00)

I do. And look, Alphabet had a phenomenal quarter and they're firing it all cylinders and they have the chip side, they have all the other parts of their businesses that are really growing. So I think, you know, this is a must own for us in our core portfolio. And then Amazon has kind of turned it around. We were all buying Amazon. It was totally out of favor. And if you look at kind of their execution, whether it's the robotics and the retail, now it's satisfied satellite, they're really performing. And I think there's a lot more Runway on an Amazon.

Scott Wapner (20:27)

By the way, Josh, just because some are warning that this isn't going to end well doesn't mean that the expiration date, so to speak, is anytime soon. Because there's no expectation whatsoever that the hyperscalers are going to dial back their spend. All you need to do is listen to Andy Jassy with Kramer last night on Mad Money, who he continues to suggest that Amazon investors like you are going to continue to be rewarded by all the money they're spending. Katie Huberty at Morgan Stanley just raised her own hyperscaler capex projections again. Even More so in 2027 than in 26, which is why I said what I did. That doesn't mean, even if you're concerned about what's been taking place, that the expiration date is anytime soon. If she is looking out and says I'm raising my numbers for 27 and we're here in the earliest stages of 26, then the Runway appears to be long.

Josh Brown (21:28)

Okay, well first of all, my, one of my favorite quotes about Wall street, but it's from the movie Cocktail is, is Elizabeth Shue telling Tom Cruise I don't want this to end badly. And his comment is everything ends badly, otherwise it wouldn't end. Of course this will end badly. The question is the degree of how badly. But the thing is all of the people saying this won't end well. I've seen this movie and now it ends, blah blah, blah. They've been saying that for 15 years. We've listened to this. I was on the show with you Judge. We did an episode about the unicorns. There were 15 companies in the private market worth more than a billion dollars. And we were debating like is this a bubble? Think about how quaint that is. We're now going to watch trillion dollar companies come public 12 years later. So I don't think that that's really a way to successfully to invest to try to guess at, ok, this, today's the end. Every investment you make today, from today forward, this is it. This is going to all lose money. Normal people aren't doing that. We're not playing, playing that game anymore. I do think that asset allocation is you get out of jail free card. Yeah, you'll have some losses if and when this ends. You don't have to lose everything. You don't have to be leveraged. You don't have to be running around like, you know, the most over leveraged person out there. So most people aren't. The more productive thing to do is to do what you just did. Look at the people who are spending the money because that's really when, if and when this ends badly, it's going to come from basically the companies that are funding all of this, financing all of this, doing all of this in forward investing for themselves. And the number one thing that I've heard people get wrong, they make these comments like, oh, well, when Amazon decides they're going to spend less than all of a sudden Amazon is spending on behalf of, I don't know, 50 million customers who are themselves, themselves spending money at Amazon. This is not a question of seven CEOs making capex decisions that dictate the fate of the universe. Their customers, the end users are using these AI products and services. Is that about to stop? Is anybody sitting with an LLM saying life was so much easier before I had this. So I don't like that kind of talk. I don't think it's helpful. You haven't heard me do it. And the same people doing it today, we're doing it 10 years ago, 12 years ago, 10 years ago. It's a tired shtick and it's not helpful to investors.

Scott Wapner (24:06)

You'll get another test on the 20th when in video reports. Not that you expect them to say anything different than anybody else has. By the way, there was a note service now today sees $30 billion in revenue by 2030. On the AI uplift, I should note that Jensen Huang and Bill McDermott are going to be on Power Lunch today. So you'll get the CEOs on power, you'll hear from them directly. Not that you expect anything but you know, positive outlook. There's no reason that they would give any, anything otherwise, really. All right, let's do this. Let's, let's squeeze in a break. We, we still got to talk about Palantir because that stock was lower on its earnings. We got to get Josh's take on, on GameStop and eBay. Can't wait to hear that we do all that ahead. What made you confident that you could

Stephanie Link (24:59)

do something that hadn't been done before?

Contessa Brewer (25:01)

I Have no fear of failure.

Julia Boorstin (25:03)

Trailblazing women, changing the game.

Contessa Brewer (25:05)

One of my favorite pieces of advice,

Stephanie Link (25:07)

think about what your boss's boss needs. Leadership can look in many, many different forms. It really, really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things.

Julia Boorstin (25:19)

Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday, wherever you get your podcasts.

Scott Wapner (25:29)

All right, let's look at Palantir. It's down seven and a quarter percent after earnings was the problem here.

Joe Terranova (25:36)

I think sentiment more than anything else is a classic example of a stock that was went in with bearish sentiment based on where prices they missed by $9 million. On commercial revenue the expectation was 604 million. You got 595 million. They also told you that there was a shift in accounting in the revenue from the commercial segment to the government. But again overall you have this bearish sentiment that's pervasive it in the software stocks right now and they're going to get punished if there is even the slightest misstep.

Scott Wapner (26:11)

Well, when you trade at a forward PE of 100% how can you not mention that?

Joe Terranova (26:17)

I'm not disagreeing with.

Scott Wapner (26:18)

Because Morgan Stanley talks about that. Yeah, it's the best growth and margin story in software. They agree with anybody who says that. However, to generate a compelling return, shares have to grow into the current valuation. The valuation rich, your margin of error

Joe Terranova (26:32)

in that type of situation is basically slim to none.

Scott Wapner (26:36)

But stocks was down 22. It's down 22% this year.

Joe Terranova (26:39)

That's right.

Scott Wapner (26:39)

I mean a heavily loved name to

Joe Terranova (26:41)

a heavily loved name in 2025 for sure that quickly fell out of love. At the end of 2025 a lot of people rightfully moved to the sidelines. They questioned the valuation. The revenue growth is still there, the business is still there, the commercial segment is still growing. And if you're thinking long term, yeah, it's a stock you want to own. But in the near term I understand why the Stock is down 7%.

Scott Wapner (27:04)

All right, what about Coinbase cutting 14% of staff? They, they're talking about that today. They sent an email to employees posted on online by Brian Armstrong. Steph, you own Coinbase.

Stephanie Link (27:16)

Yeah. I mean it's not surprising just given the volatility of crypto and all the spend that they're doing and all the M and A that they're doing doing and maybe they over hired. I'm all right with them getting skinnier but it is at the expense of people versus what they're doing and be and relying more on AI TransDigm.

Scott Wapner (27:33)

Let's hit that one. It's higher at least the last we checked. Sarat, want to get you into the game here.

Sarat Satt (27:37)

Yeah. Earnings are up stronger than expected. I mean revenue for the last five years compounded at over 16%. So after markets airlines. This is a stock that actually has demand for the next few years and you can see it in the pipeline.

Scott Wapner (27:50)

Lowe's got downgraded today to neutral from buy to 60. Risk reward balanced at these levels given where their earnings growth is they say constrained.

Sarat Satt (27:59)

Yeah, I think you've got two headwinds there. Obviously oil prices for the consumer kind of where they're going to spend their money and then interest rates also at the 10 year so you've got a little bit of a slowdown in demand

Scott Wapner (28:11)

About Target reiterated outperformance. I do a double take on that. 140 bucks is the target at Oppenheimer as they suggest Steph Green shoots are emerging in the turnaround efforts.

Stephanie Link (28:25)

Well I think that's one of the reasons why the Stock is up 30%. And I just checked Wal Mart. Another great year for Wal mart. But it's up 17%. I can't remember the last time Target outperformed Walmart on a performance basis in the market. But this started with their analyst day back in March where they did start to talk about traffic was starting to get better. Maybe they'll start to see positive same store sales margins actually can expand and they can do something like $8 in earnings power. It really is just execution under this new CEO. Surprise. It has surprised me for sure. But it's trading at 16 times forward estimates and yields 3 1/2 percent. So it's still pretty attractive.

Scott Wapner (29:02)

Yeah. To your point if you back that, if you back those two things up.

Stephanie Link (29:05)

Yeah.

Scott Wapner (29:06)

There's no comparison.

Bill Baruch (29:07)

Right.

Scott Wapner (29:07)

That's why Wal Mart was like at $1 trillion in market cap. I don't know if it still is but it did hit that level relative

Stephanie Link (29:12)

to where that has been the winner for sure. But you know me, I like a turnaround story. It sometimes takes long but it's happening

Scott Wapner (29:19)

trillion by the way I did okay. What about Devon? Upgraded to a strong buy today. The Target goes to 72 at Ray J. You bought it in the latest rebound.

Stephanie Link (29:28)

Yeah.

Joe Terranova (29:29)

You had this merger that's happening with Kotera. The merchant merger was approved. I believe they're going to be reporting earnings either tonight or tomorrow. Check me on that. We heard from Diamondback earlier today. They're increasing production. And I think universally you're going to see a lot of these shale oil output producers that are going to be increasing production. What does that mean? That means that the return in terms of capital allocation is probably going to be a little bit less. Diamondback talked about that tonight, so watch for that theme.

Scott Wapner (29:58)

All right, we'll go to Contessa Brewer, who has the CNBC news update for us today. Hi there.

Contessa Brewer (30:02)

Hi there, Scott. Senate Republicans have now proposed directing as much as $1 billion to the secret Service for security adjustments and upgrades, including for President Trump's planned ballroom. The lawmakers tucked that funding into a $72 billion spending package to fund ICE and U.S. border Patrol. It was unveiled late last night. The proposal states the funding cannot be used for non security elements of the ballroom project. James Murdoch, the media investor and son of Rupert Murdoch, is on is an advanced talk to buy Vox Media's New York magazine and podcast division. That's according to the Wall Street Journal. That deal would be through Murdoch's Lupus Systems investment company, which has stakes in the owner of the Tribeca Film Festival and the parent company of Art Baseline. And Meta will start using AI to scan users photos and videos for visual clues to figure out whether kids younger than 13 are using its platforms. Meta says it's not facial recognition, but rather it's looking at general indicators like height and bone structure to determine users ages. Scott, you should see my floor director out here and the skeptical look he's giving me over that story.

Scott Wapner (31:12)

All right, contestant, thank you. Thank you. That's Contesta Brewer. Coming up, Josh's best stocks in the market list. We get his take on ebay too. Remember, that's been on the list. Now it's on GameStop's list. Is it? We'll see.

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Scott Wapner (31:59)

What made you confident that you could

Stephanie Link (32:01)

do something that hadn't been done before?

Contessa Brewer (32:03)

I have no fear of failure.

Julia Boorstin (32:05)

Trailblazing women, changing the game.

Contessa Brewer (32:08)

One of my favorite pieces of advice. Think about what your boss's boss needs.

Stephanie Link (32:12)

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.

Julia Boorstin (32:21)

Julia Boorstin hosts CNBC Change Makers and Power Players. New episodes every Tuesday, wherever you get your podcasts.

Scott Wapner (32:31)

Welcome back. It's time for Josh Brown's Best Stocks in the Market. And if you've been following along, ebay has been on the list. Now we can show eBay and GameStop, because last I checked, they were both lower. I would love your take on the offer, the interview, and where it leaves us.

Josh Brown (32:57)

Okay, well, let's start with the interview. Cause like everyone else, I thought it was hilarious. I. I sent an email to Andrew Sorkin and Becky. I said, it's half cash, half stock, half vibes. What don't you understand? And actually, if this were 2021, this might have worked. Because I think the thing that the current market environment is not as Mimi, as that market environment was. Can you imagine him announcing this in like, August or September of 2021? Like, people would have gone crazy for this idea. Because the truth is he knows he's a good operator. Like, Chewy was a very successful business. And he knows a lot about stock market psychology, which is what enabled him to literally save GameStop. The company was on life support, and now it's not. So the reality, though is this is like gigantic company relative to the size of GameStop. And we would be talking about just way too much dilution. And you just didn't get the response in GameStop shares that maybe they, they had expected the $20 billion, you know, TD letter, the highly confident letter. That in and of itself is a little bit Mimi. That's kind of a throwback to the junk bond guys in the 80s. The Drexel guys used to, you know, make that part of a deal where you would just say, hey, we could probably get the money. But I just read the Wall street analysts comments and the skepticism was overwhelmingly negative. The last thing I would say in, in Ryan's defense is there is precedent here of smaller companies making bids for larger ones and winning. AOL Time Warner, Vodafone, Manisman, Comcast, AT&T brought broadband, Craft, Cadbury, Kraft was smaller. Charter, Time Warner Cable. So it has happened. But this one, the chasm is just so wide. Ebay is just too, so much bigger. So eBay is on the best stocks in the market. I still think the stock works from here. No, it's pulling back a little bit today as people sober up. But above 95, I think you want to stay long.

Scott Wapner (35:13)

Okay. What About Casey's General Stores, which is on the list too now, right?

Josh Brown (35:19)

Yeah. So we, we sort of did like a little bit of an update here because Casey's has been such an outstanding performer and we want to stay long. Stocks that are working, but we want to raise our stops. The news is on Friday they graduated Casey's General Store from the S&P 400, which is mid caps, into the S&P 500, which is the big boys. This is probably the only pure play breakfast pizza name in the index right now. So if that's important to you, here you go. What we would do here is we would say the line in the sand is 720. That's your rising 50 day. If you're a trader, I think if you're an investor, there is no real clear risk management line. So maybe just take some off the table. You up 30% from the middle of March. Take a little bit of your exposure off the table and let the rest ride. But we basically said this was a company that would benefit from higher gas prices, that would lead to increased revenue and it would lead to increased cash flow, at least in the short term. And that's exactly how it played out. The timing here was delicious. And here we go. This name is still off to the races.

Scott Wapner (36:26)

Okay, we'll take a quick break, come back. Bill Baruch's got a number of new moves. He will join us next for his buys, his sells and more. Next. All right, Bill Baruch's been making moves. I told you before we took a break. He joins us now. There he is. Hey there. All right, so let's do the sell first. It is Thermo Fisher that you bounced. It's down 14.5% three months. It's been the anti rallying stock in this bull market. Tell me more.

Bill Baruch (36:59)

Yeah, over the last couple of weeks, I've joined the show and there's been a theme to our moves. We've been trimming names that have little to no momentum. And lacking a clear catalyst in Thermo Fisher falls right in there. So we've been cutting those. We've been netting cash in our moves. Overall, we Thermo Is, is it 1% organic revenue growth, operating margins, they compress about 10 basis points. Stocks down 20% year to date and it looks pretty ugly, you know, so we would move away from it. The entire space there has really struggled too, specifically in the industry of life sciences.

Scott Wapner (37:34)

All right, so you trimmed Amgence. Those shares are down 12 and a half percent in three months. So that whatever that that's fine. We don't need to go into more detail, I don't think. But you bought Eli Lilly. That's a fresh move. Yeah. Why'd you do that?

Bill Baruch (37:48)

Yeah, you know, they get netting the cash out of this. We used some of that cash to buy Eli Lilly. I think there's a clear catalyst there, especially look at 156% year over year earnings growth. They've been able to to use aggressive leverage in their balance sheets. You know, it looks to be paying off pretty well and Zbound is been ramping faster than almost any other drug. Now I like the move. Obviously we did this after the move last week and I like that move. On a technical basis, it was sort of a false breakdown. And I think here, this really sets the stage for what we've come to know from Lilly, that momentum and that's what we're moving into because I think thematically we're going to see a good rally that could stretch through the end of May and maybe into some June. And I want to be able to capitalize that on that within the book.

Scott Wapner (38:35)

Okay. Joe, what do you think about this? You have this?

Joe Terranova (38:37)

Yeah, I do. Back to $1 trillion in terms of market cap. I think that's where Lilly is headed. Excellent earnings report last week that restarted the momentum. It was challenging. The 200 day moving average, the that time you've had a nice bounce subsequent to that. But I like what they're doing in the interim. They're generating significant amount of capital for the from the obesity drugs, are taking that capital, they're investing it into other places, other areas, other products. The diversification story benefits the shareholder. Looking at the long term.

Scott Wapner (39:05)

You have Thermo?

Sarat Satt (39:06)

I do and I disagree. I mean I'm a value guy. I think you own the Thermos, a high quality franchise. They've been a serial killer compounder. I think things are going to turn around to the administration. More spending on the pharma companies, more spending globally. And if you've been a long term investor of Thermo, this is the time you own a high quality company when it's out of favor.

Scott Wapner (39:26)

This is also, I mean honestly, I think this more speaks to rather a disagreement, a difference in investing styles. Yeah, you're more of a longer term investor, clearly. But Bill's more tactical in nature. Stocks down a bunch in three months. Markets rallied. It's like I'm done and I could

Sarat Satt (39:45)

see because the catalyst with Thermo is going to be back ended anyway on the earnings call, what they Said was we're going to hit our targets, which is more back ended. So if you're a, you know, if you're trading the stock, you're not going to see something unless something happens that we don't expect. Yeah, it's the third, fourth quarter earnings that are going to move this stock and the whole sector because I mean the whole health care lifecycle alliances, whether it's Danaher, whether it's Thermo, a whole bunch of them have been taken out.

Scott Wapner (40:08)

And just so our viewers are clear, since I teed it up that way, your average holding period, three to five years. Yeah, it's a long time. Bill, your average holding period for your names is what?

Bill Baruch (40:19)

Well, we don't buy a name that we don't expect to hold for three years. But if there's lagging momentum and we see better places to put that capital in the near term, we're going to move on it.

Scott Wapner (40:28)

Yeah, but how long do you own this one? How long?

Bill Baruch (40:31)

We've owned Thermo Fisher on and off for three to four years. It was a good stretch in 24.

Scott Wapner (40:37)

How long did you own it this time? How long do you own it? Six months.

Bill Baruch (40:40)

Six months.

Scott Wapner (40:41)

Okay, there we go. That's what I was getting at. Thank you. See you soon. Bye. Bill Baruch. Up next, Mike Santoli, he's next commentator and overtime co anchor Michael Santoli is here at the desk. Back from the Berkshire meeting. Yeah. And what are your thoughts on this market?

Mike Santoli (40:57)

Parts of this market want to bubble. It's not there, but it really does have that impulse behind it. Now, the good part of it is the parts of the market that are leading and are most stretched are also the parts with the strongest earnings momentum.

Bill Baruch (41:12)

Right.

Mike Santoli (41:13)

So it's not as if it's happening in a vacuum. And I'm not really one who gets concerned about, oh, it's narrow leadership. It's not so much that it's narrow, it's just that it's just so much upside momentum and doubling down on the same themes every single day in the memory and broader chip area that I think you have to say, do we chase it? Do we allow it to calm down and what else is going on? So micro caps, the Micro Cap index and the Mag 7 are both up 20% from the March 30 low. The S&P is up 14. So that's this weird barbell of like the biggest, most reliable stuff and the spec stuff all moving very fast.

Sarat Satt (41:47)

Fast.

Mike Santoli (41:47)

I think the economic data are holding up and so therefore it's okay that the Fed's going to be a little more hawkish. It's okay that we have kind of yields up as well as stocks up. But I don't know, it's getting a little bit delicate in terms of this interplay.

Scott Wapner (42:02)

What do you make of the that equal weight being down nine of 10 days while, while all of this is going on?

Mike Santoli (42:06)

It's completely that kind of the, the obverse of all this which is, you know, the rest of the market is just kind of, it's hanging in, in there or just maybe just wallowing. I think I'm a little more focused on equal weight consumer discretionary continuing to make new relative lows. It is 10, 11% off its highs. It's the capex over consumer which is fine because the S and P is kind of a capex index. But exactly how much do you want that relationship to get?

Scott Wapner (42:32)

Yeah, I've been, look, I was looking today as you see discretionary up a bunch. A lot of the restaurant stocks are nasty over the last month. It's just not a pretty picture.

Mike Santoli (42:40)

No, it's not recently travel related things like that. Although you know today the builders are up a little bit. Right. Because you have some relief on the, on the housing number. So you know, I don't think it's one of those things where it's just all or nothing. It's just kind of one theme is so dominant. It's overshadowing it and consuming, consuming all the oxygen. And the question is, do we get something in the way of a rebalancing and rotation or is it just the whole market needs to have a little bit of a break.

Scott Wapner (43:07)

I'll see you in a couple of hours. It's Mike Sentoli. The setups next. I'm over before the bell tomorrow. Surrot give me something I think focuses

Sarat Satt (43:16)

beyond growth and cash flow and what is Waymo and others going to do that business?

Scott Wapner (43:21)

Jyoti Disney is tomorrow before the bell to the first earnings period for the new CEO.

Joe Terranova (43:26)

Yes, 60% of revenues, the theme parks. What has been been the challenge as it relates to rising gas prices. Interesting statistic here. First time ever for Jyoti that we just own Disney and not own at Netflix.

Scott Wapner (43:40)

Oh okay. Thank you very much for that Live Nation after the bell today. Josh.

Josh Brown (43:46)

Revenue should be up almost 6% I think this is obviously a business that's in a great place. So some of the Q and A will will be about the ongoing threats of litigation, etc. But overall I expect them to have nothing but great things to say about the second half of this year, especially this summer.

Scott Wapner (44:05)

Okay, thanks everybody. Finals next. All right, 3:00 Eastern Time. Closing bell. Adam Parker Cameron Dawson Keith Lerner Stacey Raskon Jonathan Krinsky Michelle Roths talking some biotech. Josh Brown.

Josh Brown (44:19)

What's your final trade going into the earnings? Long live Nation. Longtime shareholder intend to stick with it regardless of results.

Sarat Satt (44:29)

Surround Transdi. This was a great quarter. It turned around what we expected for the earnings and I think you want

Scott Wapner (44:36)

to own this stock of 5% thereabouts. Who's UnitedHealth?

Stephanie Link (44:39)

Me. I think Helmsley is doing a really good job. He's executing and numbers are actually moving higher. Stocks at 19 times earnings.

Scott Wapner (44:46)

Okay. Interactive brokers.

Joe Terranova (44:48)

Yes. New all time high. Number one financial sector stock we own.

Scott Wapner (44:51)

All right, good stuff. We'll see at 3. The exchange is right now.

Julia Boorstin (44:56)

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Wrong.

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