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Halftime Report
The Mega Cap Winners & Losers 4/30/26
00:43:06
Scott Wapner and the Investment Committee debate how to trade the winners and losers out of the recent mega cap earnings reports. Meta falls after raising CapEx but Steve Weiss is buying more, he calls in with the details. Plus, Josh Brown spotlights two names in his "Best Stocks in the Market." And later, we hit the latest Calls of the Day.
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- [00:00]
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- [01:01]
Scott Wapner
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. All right, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wachter, front and center this hour. Which mega caps met the moment which did not. We will discuss and debate those big earnings reports with the investment committee. Get you set up for Apple, of course, in overtime tonight. Joining me for the hour, Josh Brown, Joe Terranova, Jason Sniped and Jim Leventhal. Check the markets here. And we do have a big day building because of earnings. Yes, oil's being watched so closely, but earnings are even more so, I think. And the market seems to like what it's been getting. The Dow up one and a half percent today. You got better than 700 there s and p. Nasdaq also doing all right. There's the Russell up one and a quarter percent. We're going to get to all of that in a moment. But I do have a story for all of you that is new at noon today and that is the 3M spin off known as Solventum. Well, it is facing more scrutiny today from Nelson Peltz's Triand Management. Triand, which says it holds around a 5% stake, has sent a new letter to the board pushing the company to make changes. It has been suggesting for many months. It's urged the company to separate more of its businesses, including its dental products and software operations. Well, in today's letter, Trian says if Solventum doesn't separate its health info system software businesses, quote, greater change will be needed. Trian's argued that the company's margins and growth have been pretty anemic since that spin from 3M in 2024. It is also taking issue with the company's capital allocation plans, saying the company quote has been managed in a way that has maximized executive compensation, not shareholder value. Try. And also noting today that the analysts who cover that name thought the spin would mean a $145 share price. Now you can see it here, it trades less than 68. So try and is not happy with that. It's not happy with the performance and now as you heard, not happy with the capital allocation either. We are obviously reaching out to Solventum as well and we're awaiting a response. We do get one.
- [03:18]
Carl Quintanilla
We'll bring it to you.
- [03:20]
Scott Wapner
But the stock investors are certainly reacting to this latest salvo, if you want to call it that, from the super experienced activist, as he would say probably constructivist investor Nelson Peltz as he takes on this company a little bit deeper and something that they've been really urging for many, many, many months. So nobody owns the spin but you had owned 3M.
- [03:45]
Josh Brown
Yes.
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Scott Wapner
And this is the health portion of the business that they spun.
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Josh Brown
Yeah. And 3M was a big winner and Cheyenne benefited from that. And one of the core ideas behind the turnaround there was, look, it was great to be an industrial conglomerate in one era of the market. It now makes less sense. We've got all these disparate businesses, including the health business that became Salventum. Let's give some of these companies within a company their own cap table, their own focus management and their own ability to do deal making. It appears what Peltz is saying is that the deal making here leaves a lot to be desired. And he's not the only one on Wall Street. The average target amongst analysts who cover solventum is 89. The stock is 33% below those levels. So a lot of room for improvement, but the improvement doesn't seem to be happening. And this is at a time where a lot of spinoffs have actually done very well. Remain. Cos have done okay, but the spin offs have actually done better. And this one's bucking the trend.
- [04:47]
Scott Wapner
They're bullish on the overall and longer term view. If the company's management does what they want them to do, they believe that every business inside the company is worth a higher valuation multiple than the below 8 times EBITDA multiple the whole company trades at today. So we'll continue to watch the story. Stocks getting a little bit of a bump. They'd like to see it Get a whole lot bigger one obviously. So we'll continue to follow it. Just wanted to bring you that news which is new at noon and then I want to download these mega cap earnings because that's the biggest story of the day by far. The clear winner of the day by far is the one at the top of your screen. It's Alphabet stocks up 7% hit a record high today. That's worth noting. Jimmy, I'll go to you. Cloud revenue surging the capex number increased the whole conversation going into these prints. If you're going to raise the spend you better have the revenue growth to justify it.
- [05:43]
Jimmy
Okay, that's exactly right.
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Scott Wapner
They do cloud up 63% they take capex to a now a range of 180 to 190 billion. That's from 175 to 185. Seven target hikes today, 450 is the highest at Goldman Sachs and need them as well. You get the first crack in well
- [06:02]
Jimmy
and also the backlog up 50%. And for you know, everybody who's building these data centers, the idea is that these are profitable. Every increment that you bring on, I mean I can remember roughly a year ago talking about artificial intelligence and people asking is it a bubble? And what many of us on the show were saying at the time is it's not a bubble because every increment of compute is profitable. All, all of these businesses are supply constrained. So when you see the capex coming in for Alphabet, for Amazon and you know that it's profitable, the market likes that. Now this was, and you said this Scott, going into these earnings report the question was what is the return on these investments. I know we'll get to all the names and not all of the names are showing the same signs of profitability but Google Alphabet is absolutely doing so. And I find it funny to me at least that as we're talking about this of course we're focused on the cloud services, we what about YouTube? What about the basic search business? What about Gemini? What about the chip business? This particular company has so many shots on goal. I think it's a must own right now.
- [07:06]
Josh Brown
I don't think you get enough credit. Last summer I was in the camp that if Google didn't execute I absolutely could start to eat search and that this would be probably one of the companies that was most at risk. And I think they felt that internally but they did the things that they needed to do to turn things around to the point where now they are the threat. Gemini is the threat to Everyone else in the ecosystem that can't seem to keep up that backlog that you mentioned, $467 billion over half being recognized in the next two years. To your point, if you're a shareholder here and you see the run up in this stock, the thing that gives you confidence to stay with it is the fact that that backlog is going to turn into earnings per share and you don't have to wait some mystical period of time in order to see that. And there's no doubt about the strategy. We can't say the same for Metta.
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Jimmy
I know. And just to, just to put a coda on this, like if you're an investor, you want to own the most winning stock in the market right now and it is Alphabet. And Josh, you know, you've done such a good job of Nvidia over the many, many years and for most of that time Nvidia has been the winner. It's still a fair, fabulous, fabulous company. But right now Alphabet is the name that you must own.
- [08:22]
Scott Wapner
Yeah, Jason, you got next shot.
- [08:24]
Jason Snipe
And then Joe, vertical integration has been the story, right? Revenue was up 22%, EPS up 82. Cloud revenue last quarter was up 48%. Now we're talking about 63%. Now when we talk about early part of the year was all about capex. The capex story is obviously for the hyperscalers. The stock sold off. Now we're already seeing ROI. We see that with the cloud numbers again for 48, 48% year over year. Last quarter the expectation was 50 and they blew it out at 63 to Jimmy's point on search. I think that was a significant number for me because I was wanting to make sure they remained in the mid teens. That was 19% growth year over year. So for me queries are at an all time high. That kind of disrupts this story of LLMs are going to disrupt Joey.
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Carl Quintanilla
Yeah, I don't understand why we make things and not not us on the desk here. But I don't understand why the industry makes it more difficult than it needs to be. It's a simple story to me. You have a risk on type of market. The market very clearly looks at AI and says I don't need to search for the riddle, I don't need to look inside the box to discover whether you're monetizing or not. It's very clear in the case of Alphabet coming in. We talked about this yesterday, Scott, that you have the visibility that they are monetizing. We gave the cloud number yesterday. I said to you. 50% you said. Is that the whisper number? Because everyone was saying 46%. Well, we exceeded even the 50% number. They have tensor processing units. They invested that in 2013. So you're able to see you have the visibility into the monetization and that's why the stock is trading at an all time high. There are other stocks that I don't need to search to uncover the riddle whether you're monetizing or not. In the case of Meta, which we'll get to in a second, I don't even understand why they spend the amount of money that they spend. They have a really good ad revenue driven model. They dominate in social media platforms. They don't have any chips, they don't have any cloud. Why are they spending all the money that they're actually spending?
- [10:23]
Scott Wapner
We just also say that, you know, Sundar Pichai of The group of CEOs may very well be the most understated CEO in the group. He is very not a, I don't mean this in a negative way relative to the others, but he's not a self promoter. He doesn't do that much publicly. But he's killing it.
- [10:49]
Josh Brown
He is killing again, you will not see him signing anyone's bra. I think we could safely say that
- [10:56]
Scott Wapner
that's probably not hear from him all that often. But the stock price has done the talking. Okay? Gemini 3 and that rollout which knocked a lot of people's socks off has done the talking. So that is our declared clear winner. Well, we're declaring our clear loser today is Meta. Take a look at that stock. So they raised their. The stock's down 9%. Okay? They raised their capex. It just continues to put more pressure on their free cash flow and the, the dent, if you want to call it that, in all of these companies, free cash flow has been a pressure point at times, maybe still is to some degree, but the street seems willing to accept it from some more than others. Their sales are up 33% from a year ago, is the strongest period of expansion since 2021. They updated their capex as well, so they raised their capex. But if you're putting too much pressure on free cash flow for the investing community to be able to understand and comprehend accurately enough, you have a downgrade like JP Morgan today to neutral from overweight target 725 from 825. Steve Weiss joins us via Zoom. Is nobody on this desk today owns this name, but plenty in our orbit do. Weiss, where are you looking? We're over here joining us, I'm not sure what planning you were coming back in off of, but we're right here. So you bought more Meta this morning. So are you undeterred by what you got in those Results and this 9% decline in this market today?
- [12:49]
Steve Weiss
I look, I don't strive to own the worst performing stock on any day in any market, but that's where I've got. But as I look at the quarter, the quarter is phenomenal and if they didn't announce the addition of capex, I think you'd see trading up 10% instead of down 10% because every point was a great point. The growth. We haven't seen this kind of consistent growth mid-20s in a long time and it wasn't completely off the table as we know from prior quarters, that they would raise their capex, but there you go, there they did. And they announced a bond offering also today for 60 billion.
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Jason Snipe
See.
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Scott Wapner
So I'm going to let me suggest real quick why, you know, look, as I mentioned, you know, some of the others have raised their, their capex too. But I don't feel like, and I'm throwing this out for you to react to, I don't feel like the street necessarily trusts Meta spending as it relates to what the others are doing at times. This company has spent so much money in disparate places. Now I'm not suggesting that AI is a disparate place because everybody is spending money in that particular area, but a few quarters ago or two or three quarters ago, their spend was greeted poorly. And here we are yet again with the spend being greeted poorly because I'm not sure that the street trusts that the money is being spent the right way or in the right amount. Is that fair?
- [14:24]
Steve Weiss
I think that is fair and that's clearly the reaction that we're seeing. However, I'd answer it this way. The company's still growing and where there have been missteps in spending before, for number one, they've been few and far between. Zuckerberg has been quick to rationalize that spend. We saw with the major headcount additions that all the Max 7 went through. And then he was quick to cut the back with other things that he's done, such as goggles, you know, cut him back. But overall that's what you want a company doing. You know, I want a company particularly of this size. I want to have somewhat of a founder, early stage company mentality so they can continue to grow. It's impossible for companies or it's near impossible for companies that have this size, this revenue base to grow, but he's doing it. So I think there's too much focus on that and I think there's not enough focus on. There's actually been a pretty good steward of capital when you look at the results he's put up.
- [15:26]
Jason Snipe
Now.
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Josh Brown
Steve, I wanted to ask you. So I think Metta is the best user of AI maybe in the world. What they've done with reels and the stickiness and the amount of engagement that they've built. I think no one is better at optimizing the ad and engagement engine using AI. The questions around the stock are okay, but what else? 97% of the business is ads. All of this spending they're doing, nobody knows what the ROI is. And to Joe's point, they're not in the data center business. In fact, they're leasing. If you look at the financial. So I'd love to hear just here, what is matters AI strategy Besides making reels more addictive, is there anything else that we'll see revenue from in the next few quarters?
- [16:15]
Steve Weiss
Well, you know that I think that's a question you can put put out to all of them. I don't think you can draw the conclusion that we really know what Amazon's a spend is going to be like. Sure, they'll pick up more traffic for
- [16:29]
Josh Brown
us has 10 million customers. So we do now.
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Jimmy
Right.
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Steve Weiss
So, so we take a look at the, at the engagement that we have from meta numbers they put out last night. It's, it's worldwide, it's phenomenal. So in some cases, actually when all cases, when you have a CEO to some extent, you've got to say I trust this person to come with products. Remember Instagram he acquired and that acquisition, look at what it's grown to be. So they're the number one ad ad place right now in the world. They've got Google off that seat. So. So what I look at is I've got a company that on 2026 numbers is trading at 20 times estimates went up Revenue guidance. Revenue guidance went up also and it's trading at more than a 20% discount to the S and P which has a fraction of the growth that they have. So that's why attitude down here, I think it's typical panic over, you know, hey, you know the spend when I've got faith in Zuckerberg, the management and the company and it's a cheap stock. So that's why I bought more.
- [17:41]
Scott Wapner
Appreciate you coming on and telling us that, Steve. We'll see you soon. Back on the desk. That's Stephen Weiss. Goes back to what Jensen Huang of Nvidia told me ahead of the Super Bowl. To Josh's point, and I think his direct language was nobody uses AI like Meta or better than Meta.
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Josh Brown
Yeah, for sure.
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Carl Quintanilla
They're a great user of Meta. I think they are excellent at their acquisition strategy. Rather than spending money on trying to grow organically, go make acquisitions again. Would you buy Instagram for a billion dollars?
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Jimmy
Right.
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Carl Quintanilla
WhatsApp was what, $20 billion? They're really good at making acquisitions and building out that social.
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Josh Brown
It's a company that's like trying to make fetch happen. So they've got this. They've got this Muse Spark model. They want to see corporate corporations use it. They want to see it get traction amongst consumers. It's not that no one will use it, it's that you can't even compare it to what's happening on the other side of the fence with Gemini, Claude and ChatGPT. It's not even in the same league.
- [18:44]
Scott Wapner
Okay, so we said clear winner from earnings is Alphabet. Obviously, markets voting clear loser from earnings seems to be Meta. Still suspect Microsoft. Can we call it that? It's down 5%.
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Josh Brown
Super.
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Scott Wapner
But it's super suspect. Right? Their capex Lyft has overshadowed their own cloud growth. Azure was up 40%. They're now forecasting 190 billion in capex. For 26, the street was looking for 160 billion. Four target hikes, two target cuts. Dan Ives still loves it. And 646 is the highest target of the raises today. That's at Bernstein. And they have outperform on that. Jimmy?
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Jimmy
Yeah.
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Scott Wapner
Microsoft.
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Jimmy
Yeah.
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Scott Wapner
You think it's still suspect? Is that okay how we characterize it?
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Jimmy
I think it's absolutely the right way to phrase it. And you know, we look at this and we think about all of these companies. How are they actually engaging the AI universe? We can see that, you know, Amazon, Google, they're building these cloud services. They're engaging it. Well, Microsoft has chosen to partner with OpenAI. We've got it now. OpenAI is no longer exclusive and that's a hit against them. But ultimately, when I look at Microsoft, I see a lot more positives than negatives. Maybe they're not going to be the absolute winner in AI, but as Josh was just saying, there are other models that are also going to be viable, also rans, whether it's Claude, you know, any of these things. And when I look at Microsoft, I think about the software, I think about Azure, I even Think about the gaming platform. There's just again, as with Alphabet, many shots on goal. But suspect is the right way to put it because of the spend and because of the question of whether they have the right open air. Excuse me, the right AI strategy.
- [20:30]
Josh Brown
Can I, can I show you something that's going to blow your mind? Because I think we might have a chart of this, the market. Wall street is doing something very interesting now. It's separating the four hyperscalers. It's two categories. So here it is. This is six months. Okay, so I cherry picked a little bit, but bear with me. Microsoft and Meta are negative. Alphabet's up 35%, Amazon's up 16. What the market is basically saying is we like vertical integration, we don't like hyperscalers that are reliant on third parties. And that is now the new dividing line in the mag seven in the, in the hyperscalers. So think about what Amazon and what Alphabet are doing with chips. Just the chip issue alone. These are companies trainium at Amazon and obviously TPUs at Alphabet. But this idea that they own the whole stack. We own the models. Okay. Gemini Foundational. Okay, we own the chips, we own the data center, we own the customer relationships. We are not leasing property, we are not doing circular deals where we're getting GPUs from someone else. We own the full stack. The market's rewarding that those stocks are separating themselves. Look at the other side. Microsoft, highly reliant on OpenAI and we don't even know where that relationship stands right now. And then of course Meta, which does not own the assets that the others own and is completely reliant on, on third parties. So I think the verticality of the two winners is probably something where the separation will continue. Love to hear what you guys think about that idea.
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Jimmy
I think that's absolutely right. I mean the chips are kind of the key part and you're just hitting on it for the first time. We're 20 minutes into the show.
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Josh Brown
Microsoft, no chips, no chips.
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Jimmy
Alphabet, you've got the TPUs. Amazon, you've got training. That's a key distinguishing.
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Scott Wapner
Not only that, they have a huge backlog.
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Jason Snipe
Huge.
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Jimmy
Right, right. That's exactly.
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Josh Brown
We heard, we heard from, from Amazon that they are now going to start selling chips to third parties. We heard that from Alphabet. Of course Meta is not in a position to do that.
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Jimmy
I think the reason that Microsoft isn't getting clobbered like Meta, however, is because they do have Azure because it already has been services not as badly as Meta.
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Carl Quintanilla
So I Think Scott's right. And, you know, I think the unfortunate thing about Microsoft and Meta is they're playing football in the sec. So if you're measuring Microsoft and Meta against other companies in The S&P 500, these are great companies. They are. But they're being measured against very tough internal competition. And the challenge for Microsoft, we know it, it's the relationship with OpenAI. It's this stain against software, and then it's Copilot. Think about Copilot. Is anyone talking about how great and how you're elevating productivity on Copilot? No, you're talking about the usages.
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Josh Brown
And it's built on someone else. And it's built on someone else's channel.
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Carl Quintanilla
It's built on someone else's model. So not bad stocks. They're not bad stocks, but they're just
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Jimmy
in the wrong conference.
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Scott Wapner
Let's hit Amazon if we could, and then we'll take a break and then we'll get you set up for Apple tonight. Because I characterized Amazon as humming along. Double B, right? Winner, loser. Still suspect they're just humming along. The stock hit a record high today. AWS 28% growth year on year that beat. They didn't change their capex, did not change their capex guide. Google, Microsoft, Meta, they all did. Street likes that fact, as I said, backlog for Trainium. You get this one.
- [24:02]
Josh Brown
Okay, so this is one of my largest positions. Personally, it's the name I've been beating the drum for. I was very wrong. Last year, the stock did not not perform. A couple of weeks back, I showed you guys a technical formation known as an island reversal. Basically, this is what buyers and sellers were doing with the stock. That island reversal obviously has led to what we hoped would happen, which is a pure breakout. Technically, the stock looks Great. Earnings of $2.78 versus $1.64 expected. That's a beat on the bottom line. 181 versus 177 billion in revenue. To beat on the top line gave good guidance, operating margins were good, and they have a coherent strategy. Nobody is like, what is Amazon doing in AI? What are they trying to accomplish? What is the product? What's the roi? All they have to do is execute. I'm sorry, but you can't say the same about some of the other hyperscalers. And I think, again, this is going to be part of that separation where we like aws, we like their position. Position like Gemini, we like Google's position. I wish it were as clean and as clear from some of these other companies that are going to spend $200 billion. But it's just not.
- [25:11]
Scott Wapner
Bear in mind also, Jason, as you prepare to talk about it, the stock, the stock was up near 25% month to date.
- [25:19]
Jason Snipe
Right.
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Scott Wapner
So you had a big run into the print. May explain why it's a rather anemic move today, but the story really feels like it's fighting back all day.
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Josh Brown
Where did it open? Down 4%.
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Scott Wapner
Yeah, well, it was down and it was up and now it's, you know, basically flat.
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Jason Snipe
Yeah. And I think that was a little bit of the concern for me in terms of the setup, you know, 29% in the last month. Right. In terms of the run. But to Josh's point, I mean, you keyed in on a lot of the important metrics. Revenue was up 17%. EPS was up 75%. That includes anthropic gain. Right. Retail margin, which is their core business, up 9%. I mean, the street was looking at 8%. So I think that was, that was important. But the piece that we've all been talking about already is what's going on with the training and chips. That's now a $20 billion run rate business. So AWS at 28 street was expecting 25 to 27. You know, so beat across the board. No change in the capex I think obviously is a strong catalyst given what everybody else is doing. So I continue to like this.
- [26:19]
Scott Wapner
Okay, so there are a lot of stocks moving today. Obviously it's a hugely busy week for earnings. And we've got the big one coming up in overtime tonight, it's Apple. We get you set up next.
- [26:37]
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Scott Wapner
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Scott Wapner
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- [28:09]
Scott Wapner
All right. All roads. Don't they always lead to Apple? Kinda do because they report tonight as you know. So you've heard from the others, you're going to hear from Nvidia in a couple weeks. So. And that really kind of is the biggie now. But this one matters a lot, Joe. So you've been adding to it including yesterday. AI strategy, Capex guide. They still spending less than everybody else. IPhone demand. I should have put that one first. Which has been good. Right. And it was really good last quarter too. Yep. And of course their CEO transition that we want to hear more about and will turn us be on the call tonight, John Ternus with Tim Cook. How will they manage that and just what will we hear from him about Mr. Turnus on what you know, he feels like he's going to, when he grabs the torch, where is he going to run to? Where is he going to take this, this company? Because you know, oftentimes these jobs are a marathon of sorts of. I think the street wants a sprint towards AI. They want, they want a comprehensive, well understood strategy on how they're going to meet that moment.
- [29:17]
Carl Quintanilla
Yeah. And I think Apple does enough external of that AI conversation to keep shareholders anchored and understanding that the path for this company is to continue price appreciation. And I think, I think absolutely see that in front of us now tonight. If the stock comes out and we are lower tomorrow, I will buy more because I am telling you over the next six to 12 months this stock is going north of $300. You have the iPhone 18 launch, you have John Ternus coming in who specializes in hardware. He was the leader in introducing a larger iPhone which is the best selling iPhone when it was introduced ever. They've restored, stored the revenue growth which I think is so important. They're giving you once again mid teens revenue growth. Remember the conversation going back 3, 4/4 it was about the missing revenue growth. And in China you're seeing iPhone shipments that are increasing once again. Now I haven't even mentioned, okay anything related to them monetizing some form of consumer exposure to AI. So I'm giving them the benefit of the doubt. Doubt that at some point they're ultimately going to deliver on that. I think John Ternus is the right person to lead that effort and I think this is going to be one of the leading Max 7 names in 2026. I've said that all year.
- [30:35]
Scott Wapner
You've been saying consistently for weeks, if not months. This one's it. Square is it? I think those are the literal words you used to describe Apple.
- [30:44]
Josh Brown
Yeah, look, Apple, while, while all of the mags are spending 100% or more of their free cash flow. That's not a number I'm making up. That's literally when we talk about 700 billion in capex, that's literally what they're doing. They're taking all of their cash flow and they're reinvesting it. Apple went the other way. I think their capex actually went down last year. It's not that they're not investing. We're talking about huge numbers. But they're not playing the same game. They're playing a different game. They are going to let you, all of these companies build out all of this infrastructure and then they will put their own layer on top and they will extract the Apple toll. I don't care if you use Perplexity computer or you like Gemini. Here's ChatGPT. No problem. Claude Sonnet. Great, you can use that too. Pay us. That's, I mean that's literally. And it's right in front of your eyes. And by the way, to Joe's point, you got revenue growth. Now as part of the, of the story, they refreshed the MacBook, they refreshed the imac. This is a Mac pro. This thing runs like a spaceship. They don't even get credit. They don't even get credit for what they do on the hardware side. On the iPhone side. This quarter, $56.5 billion is the expectation for iPhone. That's a 20% increase from the prior year. And people aren't nearly as excited about that as they are about some of the hyperscalers growth, which is not as good in many cases. So I do think this is the one judge, we were on this show three weeks ago, somebody was saying sell it at 250 because the foldable phone is delayed. No, no, none of us, none of us. Somebody on Wall street. And I said how about this? Do the opposite. Close your Eyes and buy. Here we are 20 points higher. I don't think it's over, Farmer.
- [32:30]
Jimmy
Look. Sure. Close your eyes. And by. Joe, I hear you on 300. I agree with everything that these two gentlemen just said. I am at the same time going to say, I wake up in the morning, there's a lot of stocks. I get excited by this one. It isn't in the top five as far as do it for you, Jimmy. What's that?
- [32:46]
Josh Brown
It doesn't do it for you.
- [32:47]
Scott Wapner
Look, Qualcomm just blows you away every morning when you wake up. Look, just can't. You can't wait to look at.
- [32:55]
Josh Brown
Only Apple had a copper mine.
- [32:58]
Jimmy
Make fun of me all you want. I'm not negative on it. I own it. It's 10% to 300. Will it get there this year? Yeah, I think so. I also think the market will get there at 30 times forward.
- [33:08]
Scott Wapner
Somebody send me an acrobat.
- [33:10]
Jimmy
I. Come on, come on, come on. We're keeping it at this end of the spectrum. Not this end of the spectrum. Look, at 30 times. You're right, Joe. I don't care about the AI strategy. Let them glom on with Gemini or Open Air or whomever. I don't need it. But at 30 times, I'm not waking up and saying this is going to be up 50% of 15%.
- [33:29]
Josh Brown
15% growth in services revenue this quarter. Greater China sales, 20% growth.
- [33:35]
Jimmy
You know what? Give me the Qualcomm. Are we going to talk about it later or you want to talk about it now? Give me Qualcomm.
- [33:41]
Scott Wapner
Well, no, no, no, no, no. Hold on, hold on. He's excited.
- [33:43]
Josh Brown
Big boy.
- [33:45]
Scott Wapner
Don't, don't, don't take him away from this. Drop Qualcomm.
- [33:48]
Jimmy
Okay, look, Qualcomm. And, and what I'm saying to people right now, I want to be very clear. Don't load the boat here, but if you don't own it, you should be starting to buy here because they're telling you that handset demand is picking up and they've got their automotive business. But here's the point. Vis a vis Apple, this is trading at like 14, 15 times earnings. Can I get more excited about that? Yes. I don't hate Apple. But 30 times versus 14, 15 times, that's just. That's a huge gap for me.
- [34:16]
Scott Wapner
So they say that the CEO did, that they would begin shipping data center chips to a, quote, large hyperscaler within the calendar year and an imminent return to growth in China. That's what has the stock. So excited today.
- [34:32]
Jimmy
Yeah.
- [34:32]
Scott Wapner
Welcome. So, Joey, respectfully, I'm going to move on. Okay. The chips I don't need to hear.
- [34:38]
Carl Quintanilla
I already moved on because I don't need it.
- [34:40]
Scott Wapner
I don't need anything more on it.
- [34:42]
Jason Snipe
We could.
- [34:44]
Scott Wapner
Pippa, tell us what's in the news update today.
- [34:48]
Julia Boorstin
Stevens hey, Scott. Well, in the news update we have the White House officials. They are en route to Venezuela to meet with oil, gas and mining executives as well as Venezuelan officials. According to the White House, executives from major oil companies including Exxon and Hunt Oil, are expected to participate. US Officials attending will include Jared Agan, the National Energy Dominance Council director. President Trump is expected to sign an executive order today aimed at expanding access to retirement plans. That is according to sema. For the order will direct the Treasury Department to launch a website called Trump ira.gov where workers who don't have retirement plans provided by their employer can select their own and Florida's Republican controlled law legislature has approved a redrawn map that could give Republicans up to four more House seats in the midterms. Governor Ron DeSantis proposed the map earlier this week and legislators passed it just hours after yesterday's Supreme Court decision weakening the Voting Rights Act. Scott, I'll send it back to you.
- [35:50]
Scott Wapner
All right. Appreciate that, Pippa. Thank you. Pippa Stevens. Coming up, Josh Brown has his best stocks in the market. Got some other names that are on the move on the back of earnings. We'll try and get to all them of of vids after this break.
- [36:04]
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- [36:18]
Scott Wapner
Hey, what's your pin? 2538.
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- [36:34]
Dr. Guy Winch
Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on making mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.
- [37:04]
AT&T Business Representative
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- [37:29]
Scott Wapner
AT&T business Wireless connecting changes everything.
- [37:36]
Jason Snipe
Welcome back.
- [37:37]
Scott Wapner
Best stocks in the market, according to the man to my left, it's Josh Brown. What's the spotlight on today?
- [37:42]
Josh Brown
So we wanted to revisit a couple of names that we had talked about this spring that broke out and we wanted to answer the question, okay, so what do you do when you actually catch a breakout in one of the best stocks in the market? How do you handle it? Let's put up Flex. We talked about this name at $73 a share back on April 9th. We did a whole thing on the show. It was a lot of fun. The stock was breaking above its rising 50 day. That was the setup. Now, obviously, we have a clear breakout here into the low 90s. And what we're talking about in the column is the, the necessity if you're going to stay long and not scalp to move those stops up where you might want them. In the case of Flex, we're talking about the $80 area as being the first logical support. Also want to show you Starbucks again. We did a whole thing.
- [38:29]
Scott Wapner
Let me ask you this real quick. Hold on. I'm sorry, before you go, go, go, go back to Flex. That chart that we showed, I think it was from April 9th. What is it, 25% in 20 days? Yeah, 26% in 20 days.
- [38:40]
Josh Brown
Yeah. So you don't, when you have a stock breaking out, you don't know the extent. You don't know, like you have no way of knowing, like, how far it can get. And you have false breakouts, too. But in the case of Flex was very clear. We had a name that was in the right sector at the right time. Improving fundamentals. And when we talk about charts, it's not witchcraft. We're basically talking about the actual realized behavior of buyers and sellers at a specific level. And so when it took out that old high, we said, this is it. This is the breakout. I don't know that it's going 92 now that it's here. They're going to report earnings next Week judge. So the question is, do I want to take the gain and move on, look for the next stock? And many people do and that's okay. Or if I'm staying long, what's my new risk management level? And so that's what we're trying to do there.
- [39:27]
Scott Wapner
Go to Starbucks because it appears as though they've got it going on again.
- [39:32]
Jason Snipe
Yes.
- [39:32]
Scott Wapner
Nickel has his groove.
- [39:35]
Josh Brown
Yes. So the question is not is Brian Niccol going to turn the company around? I think most people agree if anyone's going to do it, he's the right man for the job. We've seen him do it before. The question was always on the timing. And that's why we defer to price. So we say, okay, maybe, maybe it's this quarter, maybe it's next quarter, etc. Etc. We flagged this breakout at $100 a share. We said 100 to 101 on strong volume. That's your trigger. Here we go. Backstreet's back. They come in great earnings. You've got a company now that is not a questionable turnaround, it's an actual turnaround. And price presaged the fundamental turn. It turns out the hundred million people buying and selling the stock actually might know something. And the amalgam of all of those opinions coming together in the form of a stock breaking out. If you're a trader, you went along the march write up and you used 95 as your stop. Now you've got a clean gain. Your job is to roll that stop higher. I think this name goes to 120, which is the old resistance. Probably the next time it has some trouble, we'll revisit it at that point. But I wanted to show people this is a breakout in progress, no longer a potential breakout.
- [40:46]
Scott Wapner
Okay, so we'll take a break. Lilly Merck, AbbVie. We have to trade those and then we have the set up on some key earnings in the next 24 hours beyond Apple. We'll do it when we come back. Show me Lilly, please. They blew past their estimates. Let's take a look at the stock. Up 10%.
- [41:10]
Carl Quintanilla
Joe T, as I'm speaking. Pull that chart back one year, please.
- [41:15]
Scott Wapner
More than 20,000 people the company says are now taking the company's weight loss pill.
- [41:21]
Carl Quintanilla
Says David Ricks, 12.9 billion in revenue for GLP1 drugs. That's 65% of the overall revenue for the company. What I like about what they've been doing recently and you can see the moderation in price appreciation that was so significant in 2025. I think the reasoning behind that is they are actively spending cash to diversify the business and that's exactly what you want them to do. So this earnings report gives you a little bit of a modest lift in the stock price. I think you maintain your exposure because your optics here are 12 to 18 months in the future. Understanding you have a more of a diversified suite of of products beyond GLP1.
- [42:01]
Scott Wapner
Okay, what about Merck, which you have
- [42:03]
Carl Quintanilla
also a little bit of a muted response here again. And Merck is pulled back off of its recent highs. I think it made those highs in February.
- [42:11]
Scott Wapner
They narrowed their guide. I think that's what the issue is today. Right.
- [42:14]
Carl Quintanilla
The challenge is key. True to Keytruda stepped up here and we saw strong revenue there. That probably reverses in the second quarter. And they have to move away from the reliance on key Trudeau. They're doing it through the acquisitions. They've got about 16 billion in announced acquisitions recently. Returns and Sidero Therapeutics. So doing the right thing. But in the near term they're relying too much on that one specific drop that loses patent.
- [42:44]
Scott Wapner
Abbvie got upgraded today, Jimmy, to buy it. B of A. You have that right.
- [42:48]
Jimmy
It should be. And this is one that people. I think you should buy it right now. Frankly. This has been a long term winner for me. It has outperformed the S&P 500 for years and years with a beta of about 0.6. Meaning you're getting that outperformance with less market risk. Trading at 14 times earnings, 3% dividend yield down 5% on the year. This is your opportunity to build the position. If you don't own it.
- [43:09]
Scott Wapner
Okay, what about Valero, Joe? Which you own personally?
- [43:13]
Carl Quintanilla
I think.
- [43:14]
Scott Wapner
Yes. Yeah, not in the T, just personally.
- [43:16]
Carl Quintanilla
So I, I think we took some of the steam, if you would, out of the response from Phillips 66, his earnings yesterday. Phillips 66 is. His earnings yesterday really lent itself to the entire refiner story. The stock is still, as I look at it right now, it's up 20 basis points. That's fine. Gasoline, as I've mentioned, the futures are at a 52 week high across the board. It's the strongest in the entire complex, even more so than oil refined refining margins ridiculously strong right now. Exposure to these gasoline refiners I think is mandatory if you're going to have energy exposure.
- [43:51]
Scott Wapner
Okay, we'll take a break. We've got the setup coming up next. All right, welcome back. Let's do the setup here. We have Colgate Palmolive tomorrow I bring it up because Jason Snipe owns that name. What do we think here? Yeah.
- [44:06]
Jason Snipe
So listen, the stock has done well this year. I mean it's kind of like the early run with Staples is up 8% so far year to date. So I think for me, EPS guy at 3, $3.89 I think they have to hit that. Organic sales need to be in that 4 to 5% range. And that pet nutrition business is a catalyst for their business. We need to continue to see that continue to grow and cash flow remain strong.
- [44:26]
Scott Wapner
Josh, Exxon is tomorrow.
- [44:29]
Josh Brown
Yes. Obviously you get big swings in the oil and gas sector based on the prices of the underlying commodities. But putting that noise aside, when you look at what the analysts are talking about here, obviously it's overseas projects, it's continued, I think stability in terms of the hedges. And in the end this is going to be, I think one of the most important, strategically important positions I have in my portfolio. If and when it turns out we don't have an actual cease fire and hostilities volatility continue. These are the stocks that work in that scenario.
- [45:02]
Scott Wapner
Berkshire is this weekend.
- [45:04]
Josh Brown
Yeah.
- [45:04]
Scott Wapner
Jimmy.
- [45:05]
Jimmy
Yeah. Just look, it's, it's a microcosm of the overall US Economy. I expect good results from the operating businesses. I expect good results from the shareholder business. And obviously Greg Abel. I think this is his second quarter. We'll see what he has to write. But I expect business as usual. Maybe there's a question about whether he buys back shares. Maybe that's the question to be answered.
- [45:25]
Scott Wapner
Okay, you can watch the meeting live Saturday morning, 9:15am Only on CNBC.com and I urge you to do that. Final trades next. All right, got Dan Ives, got Alex Kanchowitz, Dan Chung, Chris Toomey, Keith Lerner. We're going to follow this market right until the end. Dow's good for about 700 right now, 650 or so. And then we have Apple looming large. So we'll, we'll tackle all that. Lead you right into that. Pretty or close to it anyway.
- [45:53]
Jimmy
Farmer Jim, Cisco Systems. Boy, the company is great, but the stock is just killing it. Get with the winner.
- [45:59]
Scott Wapner
I thought you were gonna pick Qualcomm. I'm not gonna lie.
- [46:01]
Jimmy
I already talked about it.
- [46:02]
Scott Wapner
I know. Well, has that stopped you before?
- [46:05]
Carl Quintanilla
Such fashion.
- [46:05]
Jason Snipe
Add the clean beat on the top and bottom. I like this one here.
- [46:09]
Carl Quintanilla
Zoom Communications keeps going higher.
- [46:11]
Josh Brown
Did Netflix bottom tune in next week? We'll find out.
- [46:14]
Scott Wapner
All right, good stuff. I look forward to seeing seeing you at three o' clock on the closing bell. The exchange begins right now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.
- [46:33]
Edward Jones Financial Advisor
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer the day begins
- [47:08]
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Scott Wapner
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