← Halftime Report
Halftime Report
Tech Earnings Push Stocks Higher: Your Next Move 5/27/26
00:46:52
Scott Wapner and the Investment Committee debate whether it's too late to buy the tech high-fliers. Plus, Robinhood will let AI agents trade on their platform, the desk debates what it means for their users and the market. And later, Josh Brown spotlights Transports and makes some moves in his "Best Stocks in the Market." Investment Committee Disclosures
Loading summary
Transcript202 lines
- [00:00]
Commercial Narrator
What does it mean to live a rich life? It means brave first leaps, tearful goodbyes
- [00:08]
Jenny Harrington
and everything in between.
- [00:10]
Commercial Narrator
With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. EDWARD Jones, Member, SIPC Ever wonder who's
- [00:31]
Scott Wapner
out there making the world go round? It's truckers. Who unites baristas with coffee beans? Truckers. Who unites dogs with their favorite chew toy? Truckers. That's why Progressive offers truckers even more protection with cargo plus coverage to keep truckers moving right along. Quote Truck insurance today in as little as 8 minutes@progressivecommercial.com Progressive Casualty Insurance Company and affiliates. Coverage subject to policy terms, limits and
- [00:57]
Joe Terranova
conditions not yet available in California, New York, Virginia.
- [01:00]
Scott Wapner
You're listening to Halftime Report in progress. I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in
- [01:19]
President Joe Biden
differences of 400, 500 and even 600%@the TRUMPRX.gov we recently added nearly 1,000 low cost generics to the website. So we have drugs down 400, 500, 600%. Now you could say 80, 90, 70, 60, 50% if you want. There are two ways. It depends on the way you ask the question. But a pill that would sell in Germany or in, let's say in London for $10, we're selling for here for $130. And I got the countries to all agree otherwise they would have had to pay big tariffs. I don't want to go into it, but I had some very interesting discussions. They said vehemently, no. And then when I said that's all right, we're going to charge you a 50% tariff on everything you sell into America, they said, well, like we said, we'll say yes. And every single country agreed and every drug company agreed. So we have most favored nations. So we were paying the highest drug prices in the world. Now we're paying the lowest drug prices in the world. So that pill that I talked about would go from $10 to 20. The world is bigger than the U.S. hard to believe, but it's true. So it's not like you cut it in the middle. They just had to go up a little bit. But a little bit is a doubling of a price. So A little bit's a lot. So the pill would go from $10 to $20 and we'd go from $130 to $20. Think of that. So we would get, if you remember, some of you were at the news conference, I had my first term where I got the prices down 1/8 of a percent, 1/4, 1/8 of a percent my first term. And I'm so proud of it because prices, drug prices hadn't come down in 28 years and I was the first one to do it. But now I'm getting them down. Now not one eighth of a percent, I'm getting them down 400, 500, 600. Or if you want to use it a different way, you could say 70%, 80%, 90%, 50%. Nobody's ever seen anything like it. And I got that through. Well, everybody knew it was taking place.
- [03:31]
Scott Wapner
We'll continue to watch that Cabinet meeting at the White House, monitor it for any news and certainly bring it to you as it has just started a short time ago. Again, the president addressing his Cabinet. And we'll monitor that. Welcome to the Halftime report. I'm Scott Wapner. Front and center this hour we're going to focus on the record run for stocks and how long this can continue. We'll ask the investment committee that question how to invest in the face of this runaway rally. Josh Brown, Joe Terranova, Liz Thomas, Jenny Harrington, all joining me here at the New York Stock Exchange. Take you to the markets here. A little bit in the red today, but the Dow hits a new high. The Russell hit hit a new high. It has dipped into the red as well. But the story really remains some of these incredible moves that we have seen within the chip space. I want to really zero in on this Micron move, which is memish to say the least. And if there's one stat that underscores the run that this stock has had. Make this longer, guys, for me to show the run that the stock has had, this one might be the most eye popping. Okay. For a Stock that's up 220% year to date, Micron reached $1 trillion in market cap in just 48 days after it was first valued at 500 billion. Okay, 500 billion to a trillion in market cap in 48 days. For context, it took Nvidia near 500 to hit that same benchmark. I think it's constructive to address the fact, Josh, if you don't own it already and you're turning on our program, which led with it today and has been talking about it high up in our A block, as we say every day. Can you still own it? If you don't own it now, can you buy it now? How would you answer that?
- [05:26]
Josh Brown
I would say before you pull the buy trigger, do yourself a favor. Have your favorite LLM X ray, your existing holdings, including your ETFs, your 401k mutual funds. There is a very high likelihood that you do already have exposure to Micron and that taking in an extra position directly into the common stock may not be the smartest thing to do right now. I was talking with Jan Vaneck last week. Vaneck, as many people know, owns the SMH Semiconductor etf. He's got a very good point of view just on the entirety of the space. Micron, differently from many of the other semi related companies, is basically going through this massive uptick in earnings growth as a result of price increases. We know a couple of things. The first we know is that's rarely sustainable past a couple of years before other people start coming up with solutions. You can't just take price, take price, take price forever. And they've already taken a ton of price because there are only effectively two or three suppliers to the space. We also know the programs themselves that are requiring all this memory, the LLMs, the data centers, they will all figure out innovative ways to get by utilizing less memory eventually. It doesn't even take that to happen, Scott. All you need to do is hear one person like a Dario or a Sam come out and say actually our new model is going to be 20% more efficient in our memory use and this stock could be at 702 seconds. So. So I don't love the idea of buying Empire State building charts and I want you to check and make sure you don't already own it before you buy something that's just 100x right before our eyes.
- [07:19]
Scott Wapner
You know Joe, I was talking with a well known investor this morning who is as astounded as everybody else in the move of this stock and was still buying calls.
- [07:35]
Joe Terranova
And I think buying calls is probably the right strategy because if you don't own the stock today and you're going to buy it today, understand you're buying it for the near term return. I say that because if you say to yourself, I'm buying it today and I'm going to hold it over the next 18 months or 12 months, then you have to understand you're going to expose yourself to a significant correction at some point. It's inevitable. Why do I say that? Because this right now has the most attention of any other stock in the entire universe.
- [08:07]
Scott Wapner
That's why we cover, that's why we led with this move, because it is incredible to watch.
- [08:14]
Joe Terranova
Let me support it with some evidence.
- [08:16]
Scott Wapner
Okay.
- [08:16]
Joe Terranova
You have currently on a daily basis this stock trading somewhere near 60 million shares. That's well above its historical average of 15 million shares. Shares. If you look at the options which expire on a weekly basis, the volume on a daily basis continues to grow, the open interest continues to grow. So you use the word before Mimish. I don't know, Scott, I'll leave that to you. You be the judge of that, whether that's the right word to use. But there's excessive speculation in here for sure. I could tell you the market makers, the high frequency algorithm models are all participating right now in this name. And what they're trying to do is just capture near term upside longer term. There is really strong fundamentals in place because high bandwidth memory, the capacity for this company, it's sold out for the entirety of 26 and the demand for 27 follows. And it can be characterized as being insatiable.
- [09:14]
Scott Wapner
Mimish doesn't, by the way, insinuate that the stock doesn't deserve.
- [09:19]
Josh Brown
It's not mesh.
- [09:20]
Scott Wapner
I'm talking in terms of the one day price action moves. You're right Alone, alone like a 20% again yesterday. That's like what we saw in the heyday of the.
- [09:34]
Josh Brown
But you can't move, you can't move a $2 trillion stock with chatter on Reddit. You can move a $25 billion.
- [09:42]
Scott Wapner
The price action in this thing has made a lot of people sit back and say man, this is, it's a good extreme.
- [09:48]
Jenny Harrington
So here, yeah, here's where my head's at on this. I've been reading, or I was reading that article the other day about the market maker, that guy Joe Packy at Morgan Stanley who's, who's trying to figure out how to deal with Space X. Right. And what he's saying is I really need to be sure to get that IPO into the right hands, into long term buy and hold hands. And so I've been thinking about this in relation to Micron. When you see in video it took years to get to go to a trillion dollars and you see 48 days on micron. To me that screams that is Mimish. And the memesh part being Scott, and that it is not in the right hands, it is not in the long term thoughtful buy and hold hands. So then I say to myself, if you were to Buy it today. You know, why would you buy calls? And I think you could still make money. But you need to be very clear that at this moment in time there is not an investment thesis that you can make on, on Micron, but there is a speculation thesis. And you need to say, look, if I was going to make an investment thesis, I need to have a lot of clarity as the next 2, 3, 4, 5 years of earnings. There is not enough.
- [10:50]
Josh Brown
No, you have a backlog. You have a backlog. There's clarity.
- [10:52]
Scott Wapner
For the record, it's John Pacey, not Joe Packy. But nonetheless, please continue.
- [10:56]
Jenny Harrington
Sorry, sorry. Thank you for correcting on.
- [10:58]
Liz Thomas
A pleasure.
- [10:59]
Jenny Harrington
You know, in the moment I get all heated. Anyway, the point is it's still trading at 10 times next year's earnings, right? Why is that? Because there's the backlog, but there's not enough visibility. If there was enough true visibility, it wouldn't be stuck at 10 times. But I think if you speculate and say like hey, where's the momentum taking it? What's going on with this meme trade? Is it going to take it higher? Could there be short term upside from here? Then you do the calls, then you can buy it. But it's a speculation, it is not an investment at this.
- [11:27]
Scott Wapner
Liz, again, you know, price target today, the way that the price targets are moving is incredible in its own right. Barclays today goes to 1175. They were at 675. 675 sounded reasonable, like that's so like two months ago. But now it's 1175. There William Blair goes outperform. They name it the most constructive semi that they expect sustained price increases in memory which is going to drive up their revenue and their earnings potential. That is the fundamental backdrop to a T memory. Price is increasing, revenues are going to increase, the earnings expectations continue to go up. Thus, as crazy as the price action would suggest, the trading has been, maybe it's all justified
- [12:17]
Liz Thomas
in semis. Broadly, perhaps it's justified over a long term period. I think in a short term term period the, the question here and the message that semiconductors are sending and what Micron is sending is that demand is outstripping supply. So prices are continuing to rise, demand will continue outstripping supply. And I think that's what's going to drive a lot of this. But the question that we're asking ourselves on this desk right now is really more of a technical question. Is this the right time to enter a certain stock that's been up so much? When you look at the technical side of it, I don't think you're going to find a technician out there telling you that the stock looks good on a chart basis and it looks like a good entry point. So if you're really trying to make that decision from a trading standpoint, probably not a good time to jump on the semis bandwagon or jump on a parabolic chart bandwagon. That being said, I do think the fundamentals support what's going on right now. If we look out 12 months in the future, can Capex continue at this clip? Yes. Can earnings continue at 20 to 30% growth every single quarter? I'm skeptical of that. So as things start to slow down and get a little bit more rational, the healthiest thing for this market to do would be to spread some of that love into other sectors and other industry groups which would say that semis have to have a cooling off well first.
- [13:32]
Scott Wapner
Well there's another one that's on the front page today too and it has been and it doesn't get talked about as much as Micron does. But Marvell reports Joe after the bell today that stock year to date is up 145%. It's up more than 100% off of the March low. It too gets the love of the street every day new price targets and reiterating outperform. William Blair does that today. Ahead of their number applied in Lam or part of the chip equipment universe that continues those stocks. Stocks continue to get their price targets bumped as well. 540 on applied at Mizuho. Lam goes to 380. You own all three. Marvell applied lam.
- [14:18]
Dom Chu
Take it.
- [14:18]
Joe Terranova
And that's the investment thesis. So I respectfully take issue with what Jenny said that there's no investment thesis surrounding any of these names.
- [14:26]
Jenny Harrington
I didn't say that. I said Micron at this price. Keep going.
- [14:29]
Joe Terranova
Micron at this price. The long term investment thesis is still in play. Is it the right price to buy it? I agree with you. Not necessarily show so but stocks don't go up 800% on a one year basis and have triple digit revenue growth gains without having a strong investment thesis surrounding it. As it relates to Marvell. They have really strong relationships. They have strong relationships with Amazon for training and chips. They have strong relationships with Microsoft for Azure. They right now are the dominant for force in optics connectivity. They will report tonight the options market is implying a 12% move. So there will be that speculation that we're seeing in other areas of the semi halo universe. It's going to be applied here to Marvell. And I think you just have to have a reasonable understanding that all the attention, all the spot right. Is right now on these names. And if you're able to understand that, you're able to stay anchored to the position. However you want to do it. I do it through an equal format.
- [15:27]
Scott Wapner
By the way, don't use a meme ish comment to conflate investment thesis versus crazy price action in a stock. You could have said. But you could have said when the meme stocks and everybody know. I'm not going to mention the names because I don't want to rope the specifics but when you saw those go parabolic like they did. There's. There was though in many cases you could put holes in the investment thesis. This is different. The price action may reflect memesh.
- [15:58]
Jenny Harrington
The point was in the mean boom, the holders that drove the stocks, those prices were not long term permanent holders. That was my point.
- [16:05]
Scott Wapner
Yeah, but I don't think you're suggesting that the same kind of.
- [16:08]
Josh Brown
It's not the same thing. Nobody thought, nobody buying GameStop or AMC for one second thought that there was going to be an uptick in earnings. In fact, they knew there wouldn't be missing the point. No, we're not. Yes, this is literally the point. There is a very different situation with a trillion dollar market cap company that's got 300% earnings growth versus hey everybody, let's get a whole gang together and buy this piece of garbage and hope you're something interesting happened.
- [16:39]
Jenny Harrington
The why I'm talking about.
- [16:40]
Josh Brown
You said there's no investment fees thesis.
- [16:42]
Jenny Harrington
I don't think at this point with the shares at the price that they're at an investment. A proper investment thesis is.
- [16:47]
Josh Brown
It's a valuation argument. There is a thesis either way.
- [16:50]
Jenny Harrington
Okay. To me a proper investment thesis is being. Is predicated on being able to look forward for X amount of years. And to your point exactly, Josh. All they need is for anthropic to say hey guys, we can do this 20% cheaper. Right? If there's. If you can say that statement.
- [17:05]
Josh Brown
I think that's the risk.
- [17:06]
Jenny Harrington
There is too much.
- [17:07]
Josh Brown
I think that's the risk.
- [17:08]
Jenny Harrington
But that's not.
- [17:09]
Josh Brown
You can say. But you could have said that statement at $200 a share and it's 4x. So these are quite. I think I agree with your point that there's not visibility. Find me a stock where you have four years worth of visibility, you know, doesn't know.
- [17:22]
Jenny Harrington
I think that there's Others where you. I think on Nvidia you have a more. You have a more assured visibility on Nvidia.
- [17:27]
Josh Brown
I hope you're right.
- [17:28]
Jenny Harrington
You do, I think, than you do on my.
- [17:29]
Scott Wapner
Why can't you just say. Why can't you say, as it relates to Nvidia, what you want. Can I.
- [17:34]
Jenny Harrington
Let me just, let me just add.
- [17:37]
Scott Wapner
Do you not want to partake?
- [17:38]
Jenny Harrington
No, I feel like whatever I say, you're going to go against it. Go ahead.
- [17:42]
Scott Wapner
Well, why couldn't you, as it relates to Nvidia, say, well, all it takes is for a hyperscaler to say, you know what, down the road we're not going to spend as much as we thought. So how's that any different than the argument that you're making?
- [17:52]
Jenny Harrington
I think it's the path and how they got there. Right. I think that there's more visibility on Nvidia right now. I think if I was talking about the shareholder base that's in there. When you, you see for, what was it to, you know, two and a half years, whatever it took for Nvidia to get to that number, you have a shareholder base that's done more diligence, that's more thoughtful, that's more in it for the long term. That's, you know, that's. They're there with a different.
- [18:13]
Scott Wapner
You don't think there's crossover, crossover shareholder. In terms of the kinds of people who are buying in video, I promise
- [18:20]
Jenny Harrington
you this, in the last 48 days, people have. There's a marginal buyer who's piled into Micron who hasn't thought about the reality in the years ahead. They just wanted to agree with that.
- [18:28]
Joe Terranova
I agree with that 100%. The one factor that I don't think you could dismiss as it relates to any of these memory names is the fact that Micron's capacity is sold out for the entire year, for sure.
- [18:42]
Jenny Harrington
And that's why this year's earnings growth is like plus 600% over last year. Next year's is plus 75% and the year after that is expected to be down 6%. The point is there's limited visibility on this. I think, I think more. If you look at, if you look at the earnings growth trajectory for Nvidia, it's just more steady. So here's Nvidia's next three years and earnings growth plus 87%, plus 42%, plus 22%. That's analysts earnings growth expectations. There's more variability in Micron, but there's more sensitive between the two different kinds of different kinds of things. One's a chip that like. One's a huge complex chip that controls everything and allows. There's memory. Okay, so memories like the most cyclical industry there's ever been. Oh my God.
- [19:24]
Joe Terranova
Jenny, don't say oh my God. Vera Rubin is using the high bandwidth memory for from.
- [19:31]
Jenny Harrington
And what if they get more efficient? If they get more efficient, easier aside. Okay, the efficiency. If there's more efficiency, it's easier to crush memory than it would be to crush the Vera Rubin chip.
- [19:41]
Scott Wapner
The whole point, I agree with that point. The whole point I think as well. And Liz, I think was alluding to this a bit as well.
- [19:50]
Josh Brown
So commodity, you know, you're a commodities guy, you know, this in the end is a commodity.
- [19:53]
Scott Wapner
Investors even, even analysts who are modeling all this stuff are changing the way that they've traditionally thought about memory chips and chips in general. What was a highly cyclical business, this technology has changed that arguably in ways that the community that goes over all this stuff isn't used to thinking about. Like you're not used to thinking about the fact that oh my gosh, is it really possible that a chip name or a memory chip stock could actually not be cyclical?
- [20:25]
Jenny Harrington
Here's the question. It's going to be cyclical. It's just if the old cycle was like this is the new cycle.
- [20:31]
Scott Wapner
No, that's like saying, well, everything could. Well, the transitory thing was right. If transitory is way out here, I
- [20:35]
Jenny Harrington
think it's a same. I think we just need to adjust so that the cycles now are different than they used to be. And we do not know because we don't have history on how long or how steep.
- [20:44]
Scott Wapner
Well, I guess that's probably why you don't own the stock. I guess that's probably why you don't own the stock.
- [20:48]
Jenny Harrington
Also because it doesn't have a dividend yield and it didn't have a 5%.
- [20:51]
Scott Wapner
I know, but if it had one, you wouldn't own it either. If it had one, you wouldn't own it either, by the way.
- [20:55]
Jenny Harrington
I would have. You know what you would remember, I owned both Western Ditch and Seagate back when they had yields. So you know, I would have owned it.
- [21:01]
Scott Wapner
Okay. Okay, thank you.
- [21:02]
Liz Thomas
I think there can be cyclicality in the market that is separate from cyclicality economically, which is what we're normally talking about. And I think Joe made a really good point about high frequency trading and Algos being all in on a name like this. They'll be all out when momentum turns and then we will sit here.
- [21:19]
Josh Brown
That's the market never changes.
- [21:20]
Liz Thomas
We will sit here and question if there was a thesis to begin with. And everybody can debate that. I think there's a thesis. But the price is the cyclicality component.
- [21:29]
President Joe Biden
We agree.
- [21:30]
Josh Brown
Can we all agree on this? If you're buying A stock up 22% on the day, you're probably not a very thoughtful portfolio manager. You're either under so much pressure to show that you have this name on your sheets to your end investor or your retail.
- [21:50]
Jenny Harrington
Yeah. And you're a retailer.
- [21:51]
Josh Brown
We could all agree on that.
- [21:53]
Joe Terranova
Or you're just looking for the next five.
- [21:55]
Josh Brown
Or you think the next 10 points is up.
- [21:57]
Scott Wapner
All right, speaking of next, how many points from here are up? Goldman today raises their year end target to 8,000 from 7,600 because of the resiliency of earnings. So they take their earnings expectations up. And by the way, if you thought that this earnings period was pretty remarkable, the street thinks it's going to continue. Continue. Because we had about 29% earnings growth and the latest results, obviously much of that driven by technology, which was up 50% in its own right. And comp services, which contributed a large amount too. Yeah. But in Q2, up 22%. In Q3, up 24 up. In Q4, up 22 and a half. So Liz, that, that just tells you that the street believes this Runway is long. Morgan Stanley says overweight equities on strong earnings growth.
- [22:47]
Liz Thomas
Yeah, I mean, and I don't think that's ridiculous at all to even have an 8,000 price target on the S and P. Because if you look at year to date, the S and P is up less than 10%, which is less than an average annual return on the S and P. So even if we were to get to average annual return, we don't. We have well beyond average earnings growth going on right now. So we've already experienced mathematically an earnings growth contraction in multiples. Right. We've got PE contraction because earnings are outpacing price growth. And that's a good thing. We had complained for so long that P es were so overblown. So now here we are. Things are cheaper. You're welcome. So even if the S and P gets to an average or slightly above average return, earnings growth in the 20% range, I think. Absolutely. 8,000 is. Is within reasonable expectations, if not even low expectations. Expectations.
- [23:37]
Scott Wapner
Can we talk about a couple earnings reports that are coming tonight and how you all think about it? Salesforce and Snowflake, in the context of this run back this rebound, Joe, that software has had and maybe this is make or break for that rebound. Let's get a real time view on what these companies are seeing, what they're talking about, what the calls are like, what the analysts are asking about. Because software in general has had this incredible rebound too. I think there's a lot of skepticism around it. Incredible rebound from the bottom.
- [24:15]
Josh Brown
Well, for what? For cyber.
- [24:17]
Joe Terranova
Cyber.
- [24:18]
Josh Brown
These are L shaped bottoms. None of these.
- [24:20]
Joe Terranova
Cyber Datadog. Let's look at Zscaler. Look at zscaler. It's about 30% today. Because they are not able in their products to give the assurance that they can offer identity security to the AI agents. So therefore they could be disrupted. They're a software company that can be disrupted. They don't have the qualified product suite that's required right now versus like Josh is talking about some of the cybersecurity names. Look at data. I think pull up Data dog. It's a 52 week.
- [24:50]
Scott Wapner
I will say hold up real quick, I'll come right back to you, I promise. Salesforce, for example, up 23 in a month.
- [24:56]
Josh Brown
You can't even look at it. Look at a. I understand a one year chart. You can't even see that bounce.
- [25:01]
Scott Wapner
I understand that, but that's why I said rebound of late.
- [25:03]
Josh Brown
You see what I mean?
- [25:04]
Scott Wapner
I get, I get that. But if the Stock is up 23% in a month, what's it based on? Yeah, is it based on what they're going to tell you tonight?
- [25:12]
Jenny Harrington
No, it's.
- [25:13]
Scott Wapner
Or is it just based on a group that has rebound.
- [25:15]
Josh Brown
I don't hate, I don't hate the stock here. I don't hate the stock here. I just, I don't think that in any one earnings call they are any of these companies not Salesforce specific. I don't think any of them can permanently dispel this narrative where yes, they're still important, yes, there's still a system of record, yes, they still have long term contracts with the enterprise, blah blah, blah. But every negotiation with every customer going forward is why wouldn't I just build my own model to do this? Even if that doesn't happen, that affects pricing, it affects the length of contracts. You're going to see people shorten up and it's a net negative for the stock. Even if you think the earnings hold up, it's a net negative for the multiple. So I wish them all well. I own a couple of software stocks. None of them have really bounced meaningfully and I think all of them are still going to Live under this cloud for the foreseeable future here.
- [26:11]
Jenny Harrington
Okay, can we get back to Zscaler for one sec? Because I actually sent this article to my team this morning and said I think this is really important to pay attention to. So you know Adam, Chris a Foley at Vital Knowledge who I love. This is what he wrote this morning. He wrote the problem is really the inflationary impact and in his note he says the higher capex outlook isn't so much because Zscaler is buying a lot of extra equipment. It's due to the higher component prices. This is what I worry about and I worry about in next earnings season how we see that start to trickle through and some of these like well loved beloved companies like once the capex is higher and this goes straight to Micron. Right. Like Micron's gain is Z scalers loss. I worry how we may have real haves and have nots. I'm actually even worrying about. I don't know how to phrase it exactly but I'm thinking about like targeted areas of recession. This to me is the downside of the of Micron's wins.
- [26:58]
Josh Brown
Okay.
- [26:59]
Joe Terranova
And I think the market is also very similar sensitive to the fact that software is depressed.
- [27:05]
Jenny Harrington
So that's separate. Yeah.
- [27:06]
Joe Terranova
So to, to Scott's point look at Applovin over the last two days. It's up another 11% today on an upgrade. This is a software company that's 22% below its all time closing high in December. But it's an example of there's nothing really news driven that's acting as a catalyst. It's just the upgrade. So there's this sensitivity that software is very depressed and tonight there is the opportunity for Salesforce and ServiceNow not to give this final assurance that there's not going to be disruption as it relates to software. But for there to be a price
- [27:39]
Josh Brown
recovery I think they have to make the case and they could that agent force and customers are utilizing Salesforce's AI products. If they can do that I think that's the answer answer to how we put a floor underneath the SaaS apocalypse prices if they cannot successfully convince the sell side. Yes, we are the purveyor of AI to our customers. They've seen all the products out there. They like our version. They can't do it. I just don't think the lows from mid April are going to hold.
- [28:13]
Scott Wapner
Okay, we'll take a break. Josh has some new moves. I'll tell you about those. Best stocks in the market. Tell you about those.
- [28:22]
Josh Brown
It's a very Josh heavy second half of the show. Stick around. We'll be right back.
- [28:39]
Commercial Narrator
Looking for a gift to make Dad's Day? Shop Etsy for all his favorites like personalized golf accessories, a handmade leather camping bag, or an original apron for those summer nights at the grill. We can't count the ways your dad means the world to you, but you can count on Etsy to help you find a gift that will make him feel seen. Celebrate dad with original Father's Day gifts on Etsy. Celebrate being human. From college sendoffs to retirement dreams, life is filled with many important milestones. And making sure you have a plan in place to protect the people you love can give you confidence for whatever comes next. State Farm Life Insurance can help protect your family's financial well being through life's milestones. Your State Farm agent can help you choose flexible coverage. You can adjust as your family's needs change. Contact your local State Farm agent today. Like a good neighbor, State Farm is there.
- [29:30]
Discover Card Advertiser
It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover, you can get this Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show see terms@discover.com credit card.
- [30:09]
Liz Thomas
We're back on Halftime report.
- [30:10]
Pippa Stevens
I'm Pippa Stevens with your CNBC news update. Officials say there is no hope of finding any more survivors of Tuesday's paper mill tank implosion in Washington state. One person is confirmed dead, nine are missing and nine others were injured. Crews are working to stabilize the tank before continuing their search to avoid further leaking of a highly destructive chemical mixture called white liquor. Former president Joe Biden is suing the Justice Department to stop the release of audio from private conversations with the ghostwriter of his 2017 memoir. The recordings were a part of special counsel Robert Her's investigation into Biden's handling of classified documents. The DOJ planned to release the recordings and transcripts on June 15 to Congress and the Heritage foundation, which sued for the material under the Freedom of Information Act. And Travis Kelsey is a minority owner of the Cleveland Guardians. The Kansas City Chiefs tight end grew up in Cleveland Heights, announced the minority investment this morning. Kelsey was a top baseball prospect in high school before being recruited to the University of Cincinnati for football. Scott, back to you.
- [31:17]
Scott Wapner
All right, thank you. That's Stevens. Robin Hood unveiling tools today that led air agents trade Stocks and make purchases on users behalf. Stock's up a couple percentage points on that. I would love to know what the investment committee thinks about this story. And Jenny, I'll start with you.
- [31:36]
Jenny Harrington
Okay, sorry, can we actually not start with me because I don't have a strong Josh.
- [31:41]
Josh Brown
So they're actually not first in this public beat them. But this is going to come to every brokerage. Agentic brokerage I think is great because a lot of people work for a living. They're busy at their jobs all day. They're not sitting in front of a screen and they don't have the wherewithal to concentrate and get every single move that they want to make right. If you can give instructions to your brokerage when such and such stock does this beyond a stop loss or a buy stop limit or something and you actually want the thing to do a little bit of thinking but more than thinking execute for you. I think that's where the business is, is going. I think you'll see professionals utilizing these tools as well on larger trading desks. And I think it's a positive development. Of course, like all positive developments and all innovation. There will be people that use this to do things that are not advisable. There will be people that use this recklessly. But the technology is super cool and I think it's great that Robinhood is making it available. I just hope they're doing so in such a way that they won't let somebody block blow themselves up while they're busy working at a school or a hospital or something.
- [32:45]
Scott Wapner
Yeah.
- [32:46]
Jenny Harrington
Eight years and I've never not had an opinion.
- [32:51]
Scott Wapner
I hope you're gathering it because I'm coming back to you just at the end.
- [32:54]
Josh Brown
So how does it relate to Micron?
- [32:56]
Liz Thomas
Oh God, let's not go back an opinion on Micron.
- [33:00]
Scott Wapner
I do when we come back around and I'm going to give you a moment, I'm going to give you a moment to come up with something. So. All right. But the hourglass has been turned over so.
- [33:09]
Jenny Harrington
Okay, I'm scrambling on the clock. I'm working on it.
- [33:12]
Josh Brown
Please.
- [33:13]
Liz Thomas
Yes.
- [33:13]
Scott Wapner
I'm not asking you to speak as a representative of SoFi. Okay. Maybe some similar cohort exist between Robinhood and SoFi. I'm wondering what you think based on the understanding of that cohort that you probably have better than most others, just what you think about this news in general.
- [33:32]
Liz Thomas
Well, I think there's, there's very strong appetite for innovation across that cohort and companies across the ecosystem are going to continue experimenting with AI and with blockchain technology, to figure out what works and where the innovation is good and where it's bad. I think the biggest challenge for a lot of companies, particularly in the brokerage space, is balancing that desire for innovation and giving their customers what they want, while also providing some safety and providing trust. And that's where this experimentation is going to be interesting to watch. And time will tell how it all shakes out and what works and what doesn't. But I think. I think it'll change over the course of this year.
- [34:11]
Joe Terranova
So Robinhood, which we own, is chasing interactive brokers, as is Coinbase. They're all right now trying to diversify the product model and the offering that they have. So they are not known specifically. Specifically for one thing, Coinbase being cryptocurrency, Robinhood being the meme trading. Coinbase announced an AI agent that's going to allow you, whether you want to use Open Air or Claude, to be able to transact on cryptocurrencies. It's just one large attempt by what are less mature trading platforms and interactive brokers to become more like interactive brokers. And I'm not going to be the one to say that they're not going to succeed. Succeed.
- [34:50]
Scott Wapner
Are you tempted to have an AI agent maybe participate in running the Jyoti?
- [34:58]
Joe Terranova
The answer to that would be absolutely never.
- [35:02]
Scott Wapner
Never. I couldn't even get. I couldn't even get the words out because it was such a preposterous.
- [35:06]
Joe Terranova
What would I be doing here if that was the case?
- [35:10]
Scott Wapner
Totally preposterous. I apologize. I couldn't resist. Okay, are you ready now?
- [35:15]
Liz Thomas
Yes.
- [35:16]
Jenny Harrington
Okay. So I really appreciate the discussion that we all had and, well, we have. Yeah, we now we're having building off of that.
- [35:25]
Scott Wapner
It's nice to welcome you to it. Thank you.
- [35:27]
Jenny Harrington
Thank you. Well, you know, it said like Robin Hood and Joe owns it. So I'm like, great. I have nothing to say. I won't need to participate on this one. But I think the challenge is that it's so easy to say that this is all about ethics and that can they build this in a way that gives ethical. You know, that gives ethical responsibility responses and intelligent responses, and then it's easy to poke at AI. And this goes far, far beyond this. It goes to my side of the business, too, when you say, hey, can you use AI as your. As your analyst, can use AI as a portfolio manager? Can you have it do research for you? And I think that the challenge that I keep coming up with is, look, humans aren't terribly ethical either. You know, some of us are, some of us aren't. And this business is riddled with a lot of unethical people. So why should the AI model end up being being any less ethical? Humans make terrible investment decisions and come to terrible analysis conclusions on different stocks. Why would AI be any different? So I think if it can lower the costs and do a better than average job than a human, it could be really beneficial. But it's going to be a challenge to get there and there's going to be all sorts of unintended consequences that we won't know until it's been out for a while. So it's a little scary, but I think it's exciting.
- [36:31]
Josh Brown
It was worth it.
- [36:33]
Scott Wapner
Yeah, it was worth the wait.
- [36:34]
Josh Brown
I like that sounds.
- [36:35]
Joe Terranova
Sounds like you worry the AI agents will put people into Micron.
- [36:39]
Scott Wapner
It's worth the wait.
- [36:40]
Jenny Harrington
This is getting ridiculous.
- [36:43]
Scott Wapner
I apologize for my snarkiness earlier, but it's nice to welcome you.
- [36:46]
Jenny Harrington
We'd be so bored without it.
- [36:48]
Scott Wapner
Nice to welcome you into the debate. Oh, that's what we do.
- [36:50]
Jenny Harrington
Thanks for bringing me back.
- [36:51]
Scott Wapner
Okay, up next, your ETF Edge with Dom Chew. Dom, tell us what's coming up.
- [36:55]
Dom Chu
All right, so Scott, with the big SpaceX IPO looming large, just how much are traders and investors clamoring to get a piece of the action, not just for the highly anticipated ipo, but space companies overall? We're going to take a look at some of the key metrics to watch when ETF Edge on the halftime report returns after this break.
- [37:15]
Commercial Narrator
From college sendoffs to retirement dreams, life is filled with many important milestones. And making sure you have a plan in place to protect the people you you love can give you confidence for whatever comes next. State Farm Life Insurance can help protect your family's financial well being through life's milestones. Your State Farm agent can help you choose flexible coverage. You can adjust as your family's needs change. Contact your local State Farm agent today. Like a good neighbor, State Farm is there.
- [37:45]
Discover Card Advertiser
It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover, you can get this Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms@discover.com credit card.
- [38:11]
Commercial Narrator
Who are you celebrating this? Father's Day. Shop Etsy for original gifts made for every kind of dad. Whether you're looking for a handmade planter for a plant dad, a custom collar for a pet dad, or personalized gift to commemorate a dad's first Father's Day. It's all on Etsy. Celebrate all dads with unexpected gifts on Etsy. Celebrate being human.
- [38:34]
Dom Chu
All right, welcome back to ETF Edge on the Halftime report. Space related stocks have been getting a lot more attention these days over the last several years, of course, but things are hitting fever pitch levels with the upcoming SpaceX IPO. So that bar is high. What constitutes a successful IPO, not just for the company, but investors. And what needs to happen for other companies in the industry to keep that momentum going? Here to help break us all down is Mike Aikens, the founding partner over at ETF Action. This thematic has been in play for quite some time. Space stocks and now there's ETFs galore to match them. What exactly are you seeing about the investor attention, inflow wise or otherwise, to tell you about what's happening with space?
- [39:15]
Mike Aikens
Yeah, so I think like the space ETF play has been around for a while, right? Ufo, there's rocket from State street, there's a lot of tickers have been tracking this. But obviously I think the ETF is just a wrapper. And if you think about it, we're going 4th of July. Think of the ETF as a firecracker, right? You need a fuse, something to light it off. And obviously SpaceX is acting like that. And then with NASA, the ETF that's grown, you know, tenfold in the last three weeks, you have actual allocation to, to that space X. So I think that's just kind of lit the fuse on this. And now you've got a whole lot of attention going to a relatively small space when you get underneath the hood of these ETFs.
- [39:49]
Dom Chu
So it's interesting because many of those space ETFs, they've, they were smaller in size and now they've grown. Not just because of the inflows, because the underlying assets have caught up as well. How much does thematic investing play into asset gathering, especially for these thematic ETFs like space related ones?
- [40:06]
Mike Aikens
I think the ETF provides transparency to what the narrative is all about.
- [40:11]
Scott Wapner
Right.
- [40:11]
Mike Aikens
So you have a really smart people building these products, putting them together and it's fully transparent. So suddenly the world knows. And with thematics you have a very big retail following and it creates that democratization to an instant access to a trade. Now whether that's a good trade right now or a bad trade that's a different story, but they bring attention to it and they make it easy for the masses to understand. What are the companies driving this story that you guys are talking about?
- [40:34]
Dom Chu
It's still the case right now, guys, that There are more ETFs listed than there are actually single stocks in the market right now. Just to give you an idea of those thematic ETFs now, for more, go to etf edge.cnbc.com we got that. And Maurice Potts at TEMA, who has just launched that NASA space ETF. Scott, big conversation. I'll send things back over to you.
- [40:54]
Scott Wapner
Domino. Thank you very much. Don Chu. Josh Brown has new moves plus best stocks. An update there. We'll do them both. Next. Are some moves and best stocks. Josh, you sold Archer.
- [41:22]
Josh Brown
Yes.
- [41:22]
Scott Wapner
You doubled your position position in Joby.
- [41:24]
Josh Brown
Yeah.
- [41:25]
Scott Wapner
So you're, you're a little less into the low altitude economy, a little less exposed.
- [41:32]
Josh Brown
No, I actually am picking, I'm picking one.
- [41:34]
Scott Wapner
Are you picking one?
- [41:35]
Josh Brown
Yeah. So I started out investing in the low orbit economy or whatever people want to call it these days, Low Earth. I, I bought a Planet Labs which I sold too early and it quadrupled. I also bought all Archer and Joby. And I've decided based on recent news and developments that Joby is going to be the one to own, at least in the short term and maybe in the long term, too. They've got revenue, they've got probably a clearer path to FAA type certification and I think they'll get these vehicles working as taxis quicker than Archer will. And so for that reason, I don't want to own both. I want to own the winner and
- [42:14]
Scott Wapner
I think I picked it. QXO is the one you bought.
- [42:18]
Josh Brown
Yeah. New position, very small here. This is Brad Jacobs. He's had lightning strike multiple times with some of these industry roll ups where he comes in, gets very aggressive about acquisitions and ends up taking them over. XPO being the most prominent example. QXO is building products. This is one of the last gigantic fragmented market markets. You wouldn't believe how many companies are out there doing tiles, doing roofs, doing all sorts of things and building products. And he is going to very aggressively roll them up. I think lightning will strike again. It's a starter position. I'm new here but planning to be around for a while.
- [42:57]
Scott Wapner
Okay. Your spotlight today on the best stocks is in the transports. Why so.
- [43:01]
Josh Brown
Yes. So the two stocks we talked about are both down a lot. This one is up a lot. And the best stocks in the market has a bunch of transportation Names. We've been talking about them for a long time. The last time we brought you CSX was on December 22. We said it was a breakout in progress getting out of that 3536 range.
- [43:21]
Joe Terranova
It worked.
- [43:22]
Josh Brown
The stock went up 1012 points. I bring it back to your attention because after a consolidation period it's breaking out yet again. Traders who wrote that December setup have earned the right to tighten their stops. I like 43 which is that rising 50 day at a minimum. You're locking in a gain there but it'll allow you to stay in the stock long enough for investors. I'd use that 4243 zone that has been support prior. I think it will again as the Stock takes out 47. There really are no natural sellers. Everybody long this name is in profits and the fundamental outlook is improving literally by the week. The earnings growth, the operating leverage, etc. So I like the story. I think she rolls above 50.
- [44:07]
Scott Wapner
Jenny, you got XPO, G XO thoughts?
- [44:11]
Jenny Harrington
Yep. I mean they came, they were one company but they're very different now. One's long term freight, one is the operations and logistics side but they're both cheap. So you've got gxo, you know and this is to just a fundamental story.
- [44:23]
Josh Brown
Did you look at this one yet?
- [44:25]
Jenny Harrington
A qxl? Yeah, yeah. It doesn't work because it doesn't have the free cash flow yet, you know but like we own URI United Rentals which was the same thing that he did in the, in the rentals business and it's one of the best performers. It's up like a thousand plus percent in our growth portfolio. So you got to believe in Brad Jacobs. But on our growth strategy we have that 5% or better free cash flow yield. So with GXO you've got a six and a half percent free cash flow yield 15% times earnings on XPO just because it's up 55% this year. The free cash flow yields a little low. It's two and a half percent but trading at 40 times earnings. So we might need to take some off the table there just on valuation story wise they're both great, you know and it's kind of your same thesis. There's just like long term upside in both of them.
- [45:06]
Joe Terranova
We have very strong momentum right now in the transports. Some other names that were not mentioned, FedEx, JB Hunt and Old Dominion which we own in the ETF.
- [45:15]
Scott Wapner
Okay, Santoli's next. Senior markets commentator. Overtime co anchor Michael Santoli joins us for his midday Word. I mean the chips are down. Micron's up.
- [45:44]
Michael Santoli
It is now. I think the more relevant piece of that perhaps today is that the chips in general are down. So after this run, we've had S and P up 19% since the March 30 lows. NDX obviously being sustained by this semi stratospheric move. I think if you want to create a bullish forward looking thesis from here, it's days like today to allow the market market to reset and rebalance a little bit, let the leadership cool off. We have the indexes that are looking pretty stretched versus their trend lines. And so you see things like laggards, the less crowded parts of the market getting a bid because yields are down and oil's down like consumer cycles. I don't think that's a leadership transition. I don't think this is the, you know, called for broadening of the market on a sustained basis. But you want to have it just basically gather itself up a little bit here because otherwise the hard way is you get melt up some blow offs and it becomes a more unstable take.
- [46:40]
Scott Wapner
Yeah, I mean it's one of those things. I mean the market, it's just doesn't feel like it has the wherewithal to get negative on, on much of anything as it waits for concrete developments out of the Middle east and then, and then we'll really find out if there's life beyond the tech trade.
- [46:55]
Michael Santoli
Yeah, you find out if, if there's life elsewhere, if the cyclicals get more than just a reflex trade higher or if it's a sell the news or if it's going to kind of build toward a little more of a crescendo to the upside. But I do think that's right. We are waiting for something to solidify there. And I think that the ideal case is that it doesn't remain in limbo for much longer with Micron, you know, going up 5% a day and getting even more extent.
- [47:21]
Scott Wapner
All right, I'll see in a couple of hours on cloud closing bell and I look forward to that, Mike. Thank you. That's Mike Santoli. We'll do finals next. All right, let's do some calls of the day. We're going to start with Exxon. The targets are 175 from 159. Josh Brown.
- [47:39]
Josh Brown
Yeah, look, I think this is a stock that remains buoyant regardless of the day to day. Will they or won't they? True stuff. And mostly the reason for that is the earnings are going to come in, you've got this elevated price for, for energy and Exxon is playing all over the world, so I'm staying long here.
- [47:56]
Scott Wapner
Okay, point. I like. I like that. Nice. Echo Lab upgraded to a buy target to 325 at UBS.
- [48:02]
Joe Terranova
Joe T acquisition here that will close in Q3. It's called cool IT systems. It's going to shift this company, which is hygiene and water, more towards semiconductor water filtration and get it involved in the AI data center universe. Materials name brilliant. Used to be industrials, now it's materials.
- [48:24]
Scott Wapner
Agilent outperform 153 at RBC. They report earnings today, by the way.
- [48:30]
Joe Terranova
I'd love to see. Remember, last quarter was a pretty bad miss. This health care name needs to tell a pretty good story as it relates to pharma.
- [48:38]
Scott Wapner
Okay, closing bell, three o'. Clock. Stephanie Link, Chris Varrone, Brian Levitt, Dan Ives and Doug Clinton. I look forward to seeing you then. All right, now the last break. Jenny's like, scott, you're gonna love my final trade.
- [48:53]
Jenny Harrington
Love it.
- [48:54]
Scott Wapner
The moment has arrived. The pressure's on. Do you know why I'm a hard, tough critic?
- [48:59]
Jenny Harrington
Do you know what this week is? Next week, Scott, is the Real Estate Investment Trust Conference. All of our favorites.
- [49:05]
Josh Brown
All right,
- [49:07]
Jenny Harrington
your super bowl, my Super Bowl.
- [49:09]
Joe Terranova
What do you got?
- [49:11]
Jenny Harrington
Which is basically a skilled nursing home retirement. So it's perfect in Josh's halo Strategy. It's also 20 times FFO and 10% earnings growth. Okay, so it works.
- [49:23]
Scott Wapner
All right.
- [49:23]
Jenny Harrington
And it's. And it's real estate.
- [49:24]
Scott Wapner
Great. Love it. Look how excited you are about that. Love that.
- [49:27]
Liz Thomas
So excited.
- [49:27]
Scott Wapner
Liz Thomas.
- [49:28]
Liz Thomas
Cash cows. ETFs top two sectors are my two favorites, technology and healthcare.
- [49:33]
Scott Wapner
Jyoti remarkably so.
- [49:35]
Joe Terranova
Strong momentum in Ford.
- [49:36]
Scott Wapner
JB QXL see you three. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [49:52]
Commercial Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the half time 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.com who are you celebrating this Father's Day? Shop Etsy for plant dads and pet dads. Celebrate them all with unexpected Father's Day gifts.