The Momentum Reset and How to Trade it 7/9/26

Summary

CNBC Halftime Report Podcast Summary

Episode Title: The Momentum Reset and How to Trade it
Date: July 9, 2026
Host: Scott Wapner
Panelists: Josh Brown, Jim Lebenthal, Jason Sniper, Bryn Talkington, Stephanie Link, Kate Rooney, Mike Santoli
Theme: Dissecting the recent volatility in momentum-driven stocks, mainly semiconductors, and discussing how to trade the "reset" across market styles and sectors.

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Episode Overview

This episode of CNBC’s Halftime Report focuses on the pronounced volatility in momentum equities—particularly in the semiconductor sector—and explores how investors can navigate this unpredictable environment. The panel brings together high-profile market participants to dissect recent moves, share trading approaches, and debate the evolving market structure, emphasizing how to remain disciplined amid rotation, rebalancing, and the influence of massive leveraged ETF flows.

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Key Discussion Points & Insights

1. Momentum Trade Mayhem and Market Volatility

• The semiconductor sector has become the epicenter of momentum, exhibiting wild short-term swings.
• Scott Wapner opens by highlighting the "mayhem" in semis: "Few days down, few days up. Just when you think it's collapsing, it rebounds... It’s very hard to draw conclusions on anything happening in the market these days." (01:14)
• Micron is used as an example stock, demonstrating high volatility and technical reset.
• Josh Brown points out the impact of $200 billion in leveraged ETFs, mainly focused on single-stock 2x vehicles, equating to $500 billion in notional exposure. “This has changed market structure. We all have to get accustomed to it. The good news is no one is forcing us to actually react to it.” (02:17)

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2. Trading Through the Reset: Styles and Strategies

• Bryn Talkington describes using volatility to generate premium by writing calls: “I bought [the DRAM ETF] at $60 yesterday... I can sell September $70 calls and collect $7. So I have $17 of total upside in the next two months.” (04:56)
• Highlights the significant earnings contribution of key semis like Micron to the S&P.
• Jim Leventhal cautions: “We cannot call bottoms... The most pertinent advice I can give anybody watching is stay true to your knitting as far as what type of an investor you are... You have to stay true to your knitting, because if you think you’re all of a sudden going to become a momentum investor, you’re likely to get the trade wrong.” (07:29-08:16)
• Jason Sniper questions whether recent action is “rotation or... rebalancing” and sees value in Micron, noting it trades at 7x earnings and is up 257% this year. (09:29)

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3. Nvidia: “Best in Breed” Value or Stuck at $5 Trillion?

• Stephanie Link, who never previously owned Nvidia, articulates her buy case: “It’s 18 times PE. It’s 15 times EBITDA. This is the cheapest the stock has been since 2019. It has underperformed the group... I think it’s going to play catch up because the fundamentals are extremely strong... Free cash flow is going to double from this year to next year to $206 billion.” (11:26)
• Josh Brown supports the move: “I think it’s better than a momentum stock. I think now what you have is a fairly low risk to the future outlook... you don’t have to pay a 40-50 multiple on this thing.” (12:38)
• Bryn Talkington is bullish but questions the psychological resistance at a $5T valuation: “Is this 4 to 5 trillion somewhat like upper Earth orbit that we can’t get past because that’s such a big number?... I’m just questioning, will the market allow a $5 trillion company to go to $10 trillion?” (13:55-14:59)
• Josh Brown: “If you look at the earnings growth... earnings growth is actually outpacing stock price and market cap growth, which is why it’s cheaper today than it was four years ago.” (15:01)
• Stephanie Link counters “penalty box” talk: “Eventually fundamentals matter. And if you can get great fundamentals at a discount, I’ll take that any day.” (16:24)

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4. Mega Caps, CapEx, and Market Leadership

• MAG7 stocks are trading at their lowest valuation premium vs. the rest of the S&P in a decade, as per Morgan Stanley.
• Josh Brown comments on the capex shift: “These used to be companies that we celebrated for their asset-light business models. They have gone in the other direct[ion]. But right now we’re in the building phase, not the harvesting phase of those profits. Hence why these stocks no longer have the premium valuation they used to.” (17:56)
• Jim Leventhal suggests it’s a timeframe issue: “If you have a timeframe of one month, maybe the Mag 7 isn’t for you. However, if you have a time frame of three months or longer, these things are for the most part buys here.” (20:11)
• Jason Sniper adds: “The multiples have come down enough where they become interesting to... not just growth investors, potentially value investors.” (21:49)

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5. Apple: The Silent AI Winner?

• Josh Brown: “Apple has two and a half billion users that I think they will serve as the gateway to consumer AI through those devices. And Apple’s not spending the way that the other six [MAG7 are]... That’s probably why it’s only three bucks off its all-time high.” (22:28)
• Bryn Talkington is skeptical about Microsoft’s “Teams-like” execution on enterprise AI: “I just don’t see the output because we use it [and] you’re getting with the other LLMs... Who are the losers, not the winners, is easier for me.” (24:15)
• Josh Brown: “By not playing the capex game, [Apple] swoops in and says, hey, great job. Thank you for building all these LLMs... We’re going to give our two and a half billion devices access and we’re going to get paid.” (26:33)
• Discussion on Apple’s product pipeline and buybacks, with mention of upcoming foldable and Siri improvements.

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6. Software & Cybersecurity — Selectivity Matters

• Jason Sniper highlights strength in Snowflake (up 21% YTD despite macro noise), whereas broad software isn’t seeing indiscriminate buying. (30:01)
• Josh Brown on CrowdStrike: “More AI means more cybersecurity threats... ARR grew to $5.51 billion, up 24% year-over-year... There’s maybe three other companies you could point to in the public markets that have done what George Kurtz has done.” (32:22)
• Notes market is now smarter about "stratifying the software names rather than just universally hating them."

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7. Josh Brown’s “Best Stocks” and Financials

• Citigroup spotlight:
  • Josh Brown: “Citi is up 65% over the last year through July 7th... This has been a standout name in a group that’s starting to catch fire. But again the 20-year annualized return is negative 4%. I still think there’s room here. This is a very different company.” (36:28)
  • Jim Leventhal: “Still attractively priced. Importantly, this is another one of those areas where different styles of investing intersect... It was a deep value stock, technical term for ugly duckling.” (38:29)
• Discussion of bank sector momentum and risk around earnings.
• Jason Sniper likes Goldman Sachs, citing capital markets rebound.
• Josh Brown: “In financials, the earnings growth again has been outpacing the share price growth for a lot of the biggest components in the financial sector.” (40:53)

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8. AI Industry Update & Anthropic News

• Kate Rooney reports former Fed Chair Ben Bernanke joining Anthropic’s long-term benefit trust to guide AI governance:
  • Quoting Bernanke: “The potential of AI is enormous and so is the range of outcomes. How that potential plays out will depend in part on how institutions we build around it.” (41:18)

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9. Market Structure & Options Activity

• Mike Santoli on momentum resets: “It’s kind of a force of its own... All the volatility is internal. It’s suppressing index-level volatility. That tells the kind of tactical plays you can stay in.” (42:46)
• Oliver Renick highlights a $24M bullish options bet on QQQ for a new high by month-end, indicating conviction in a continued market rally. (44:56)

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Notable Quotes & Timestamps

• “You’ve got $200 billion in leveraged ETFs... That 200 billion is equivalent to 500 billion notional exposure. That’s half a trillion dollars... This has changed market structure.”
  -- Josh Brown (02:17)

• “We cannot call bottoms... Stay true to your knitting as far as what type of an investor you are.”
  -- Jim Leventhal (07:29, 08:16)

• “It’s 18 times PE... This is the cheapest the stock [Nvidia] has been since 2019.”
  -- Stephanie Link (11:26)

• “If you look at the earnings growth since 2022... earnings growth is actually outpacing stock price and market cap growth, which is why it’s cheaper today than it was four years ago.”
  -- Josh Brown (15:01)

• “These used to be companies that we celebrated for their asset-light business models. They have gone in the other direction... Right now we’re in the building phase, not the harvesting phase.”
  -- Josh Brown (17:56)

• “Apple... will serve as the gateway to consumer AI... By not playing the capex game, [they] swoop in... We’re going to get paid.”
  -- Josh Brown (22:28, 26:33)

• “In the software ETF... some was people having genuine concern about certain business models... and some of that is just... wrong neighborhood at the wrong time... But I don’t think we’re doing that anymore.”
  -- Josh Brown (32:22)

• “Citi is up 65% over the last year... This is a very different company.”
  -- Josh Brown (36:28)

• “The potential of AI is enormous and so is the range of outcomes. How that potential plays out will depend in part on how institutions we build around it.”
  -- Ben Bernanke, quoted by Kate Rooney (41:18)

• “All the volatility is internal. It’s suppressing index of its level volatility... That tells the kind of tactical plays you can stay in.”
  -- Mike Santoli (42:46)

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Final Trades (45:50+)

• Bryn Talkington: CBRE -- “Looking for 26% earnings growth at the end of the month.”
• Jason Sniper: Nvidia lightsteps trades – “87% earnings growth.”
• Jim Leventhal: Citigroup – “Earnings coming up.”
• Josh Brown: Live Nation – “Two price target lifts today, Wells Fargo at 222.”

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Timestamps for Key Segments

• [01:14] – Market volatility & momentum trade overview (Wapner)
• [02:17] – Leveraged ETF impact on price action (Brown)
• [04:56] – Bryn on DRAM ETF & call selling strategy
• [07:29] – Jim Leventhal on “no one can call the bottom”
• [09:29] – Jason Sniper: Is it rotation or rebalancing?
• [11:26] – Stephanie Link’s Nvidia buy thesis
• [13:55] – Bryn on Nvidia’s $5T “upper Earth orbit”
• [17:56] – MAG7 capex & valuation discussion (Brown)
• [22:28] – Where will AI capex value accrue? (Brown, Apple)
• [30:01] – Selectivity in software: Snowflake, ServiceNow
• [32:22] – CrowdStrike’s strength, SaaS selectivity (Brown)
• [36:28] – Citigroup as a “best stock” (Brown, Leventhal)
• [41:18] – Ben Bernanke joins Anthropic (Kate Rooney)
• [42:46] – Mike Santoli on volatility and momentum resets
• [44:56] – Options action: $24M bullish QQQ trade (Oliver Renick)

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Tone and Takeaways

The tone is energetic, occasionally humorous, and rigorously analytical—a classic roundtable of seasoned market professionals unafraid to challenge each other. The episode centers on the importance of discipline, style adherence, and keeping a long-term perspective despite near-term chaos in “hot” stocks. Listeners are reminded that “no one can call the bottom” and that understanding the changing market structure is as important as screening for fundamental value or momentum.

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Summary prepared for investors and listeners who want the heartbeat of market action without the noise.

Transcript

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[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.

Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the latest on the momentum trade. That space continuing to bounce. The committee doing some buying there as well. We'll get to that in a moment. Joining me for the hour, Josh Brown, Jim Leventhal, Jason Sniper in Talkington show you the markets here. Green across the board do have that rebound as SEMA was just talking about in the chip space. That's really the epicenter of the momentum trade, but it's been mayhem in that area. That's what we're calling it. Few days down, few days up. Just when you think it's collapsing, it rebounds. Just when you think it's about to rebound further, it falls. Mike Santoli said earlier today that you've only had a couple days in the past month or so where the semis have had less than a 2% Tom intraday move. That pretty much underscores it. Micron's a good example of that. We'll show you the one month. I mean you can see a fair level of volatility in that. So what do you make of where we are? It's very hard to draw conclusions on anything happening in the market these days because it's been, as I said, up, down, up, down and who knows where from here.

[Josh Brown]

I made the point last week that you've got maybe it was Tuesday, I don't know. The days are all blending together for me and I made the point a few days ago that you've got $200 billion in leveraged ETFs. A lot of that is in single stop 2X vehicles. These have become mainstream. That 200 billion is equivalent to 500 billion notional exposure. That's half a trillion dollars. So what that means is on any given day, if there are natural normal sellers of these stocks, the momentum players may or may not exacerbate that move and make it look even crazier and than it would otherwise be. This has changed market structure. We all have to get accustomed to it. The good news is no one is forcing us to actually react to it. Same thing if you're in these names and we own, you know, a whole bunch of these in our Porterhouse portfolio. The thing that you have to just understand is that what comes with the territory of being an uptrending, popular, great earnings growth story stock sometimes is that a lot of people are affecting buys and sells in the, in the derivatives that don't really have a meaningful point of view. They're just playing for. All right, it went down 7% yesterday. Maybe it'll go to up 7% today. And that's actually what's playing out right now here. 0. 52 week highs in the SMH today. But it is bouncing. And if you look at the average Stock in the SMH, it's about 17. About 17% of those are at 50 day highs. So a lot of stocks have been knocked away from their highs. But what you got is a momentum reset. Judge, to answer your initial question, the SMH RSI is now back to a very healthy and cooled off 49. The average 10 day rate of change for a stock in The SMH hit negative 15% during this last drawdown. That means the average stock lost 15% in that 10 day window. And if you've been on the sidelines, you haven't been in these trades, you feel like you've missed out. Well, you finally got an opportunity. Some people won't want it anymore because they'd rather buy a stock that's green. But that's the reality of where we sit today.

[Scott Wapner]

Which is why, Bryn, if you like these stocks and you like this trade, your head's going to spin 10 times trying to pick the exact right moment to get in. Jim demonstrated that by doubling his position in Micron yesterday. It's like if I liked it last week or two weeks ago and then it's lower today, well, how can I not like it today? I assume that's going through your mind as you buy the Dram etf. So take me through that. It was your final trade yesterday and now you followed through and actually bought it.

[Bryn Talkington]

Yeah. So after the show was my final trade. It was at $60 yesterday. Josh did a great job walking through the insanity of the levered ETFs, which is creating huge volatility, which is then in turn for sellers of calls like myself and Kevin, huge call premium. And so I bought it at 60 yesterday as my final trade. And I said, you can sell this September, September 70 calls and collect $7. So I have $17 of total upside in the next two months. If not my $60, I got $7. My cost basis will be about 53. I do think with Micron, Micron did touch the 50 day yesterday. So from a technical perspective, and I said this yesterday, I thought Jim's entry point, I know he uses fundamentals really lined with those fundamentals of bouncing off of that. And I will say, as everyone is talking about, whether it's in emerging markets or the US Micron should be about 15 to 20% of total earnings growth in the S and P this year. That's one name. And then when you look at the EEM, SK and Samsung are also around 15%. And think about that, that includes China. That is emerging markets inclusives of China, two stocks. And then finally SK Hynix is going to do their listing tomorrow. From what I've heard, it's seven times oversubscribed. So I just thought that was a good risk reward ratio. That's why it was my final trade and that's why I bought it after, after the show yesterday.

[Scott Wapner]

Jimmy is a, is a bottom in who knows?

[Mike Santoli]

Who knows?

[Scott Wapner]

Like I said, at the very top, good luck trying to make that call. Because when, you know, people have felt like, okay, the space looks like it's bottomed because it has bounced. Two days later it's back down again. And we're witnessing that this week again. But I made the point of what you told our viewers. How could you not if you liked it? I'm talking about you specifically. If I made the case that I liked Micron a week or two weeks ago and now it's maybe lower or about where it is because it's been bouncing about. What are you going to wait for? Like, what is the signal that you're looking for? Right. You're just looking at the fundamentals and you're like, I believe in the fundamentals as much today as I did then. So I'm willing to make a bet that if I don't Catch the exact right place, you know, I don't know, six months from now, a year from now, is it, I don't know if you're going to hold it that long. Is it going to be higher than it is today? Well, I believe so. So I'm willing to double my position.

[Jim Leventhal]

Scott, I, I can't overemphasize the point that you're making, which is that we cannot call bottoms, all right? And I don't think anybody here does that. We may say things like, look like they're turning. Yesterday, I thought I saw a signal in Micron and I added to it. But actually, by the time we were talking this time yesterday, Scott, you'll remember, I thought, hey, maybe that signal was a false signal. So, to be helpful here, none of us are going to tell you where the bottom is because that's not doable. The most pertinent advice I can give anybody watching is stay true to your knitting as far as what type of an investor you are. If you're a momentum investor, don't suddenly become a fundamental investor. If you're a technical investor, don't suddenly become a momentum investor. You in, in this rapidly rotating market, and it's actually, to me, it seems, Scott, like it's every day.

[Angelica Peebles]

What do you mean?

[Scott Wapner]

Aren't you defining what you are? You're, you're going against what you're doing?

[Jim Leventhal]

No, I'm saying that fundamentally Micron is a value stock to me. Now, this is debatable, that what I just said is debatable. I've had other value investors come to me and say, no, it's not a value stock. You shouldn't buy a stock, a cyclical stock like this at low earnings near the top. That, that's usually countercyclical. However, I am adamantly saying that I think this is a fundamental buy here, based not just on the valuation, but the strategic contract agreements they have, the fact that they're going to start returning capital to shareholders soon. But I don't want to get lost in me personally. What I want to is with these rotations that are happening every day, you have to stay true to your knitting, because if you think you're all of a sudden going to become a momentum investor, you're likely to get the trade wrong. And it's interesting, though, Scott, and maybe this is what you were pointing out, is that at times certain styles will intersect. So I can be a fundamental investor, a value investor getting into Micron, and yet still it is a momentum play. They're not mutually exclusive but please don't start changing your cooking along the way because you think you know where the market is rotating next. Nobody knows.

[Scott Wapner]

Marvell intel am, they're all bouncing pretty hard today. We can cycle through those. As I said, there it is pretty good example of what we're talking about as I send it to, to Jason. How do you, how do you see this trade?

[Jason Sniper]

Yeah, yeah. So I think there, I think there's a lot to say here. I think one of the things that I've been considering as I'm kind of evaluating what's happened over the last couple of weeks is is this really a rotation or is this a rebalancing? Because the, the price action has been somewhat orderly on July 1st. You're starting to see obviously, what has gotten us here. Pull back. We've seen obviously, health care and financial services really start to move forward, and then we're seeing a lot of this push and pull over the last few days. So I think to Bryn's point, what she said earlier about micron representing 15% of the earnings growth in the entire complex is a significant story. I think muscle memory does come back, and a lot of what got us here will continue to just pull us forward. And I just think we're just in this period where we're, we're trying to find from a positioning standpoint where we need to be in the second half. But I continue to believe in, as, as Jimmy is mentioning a Micron, which is obviously up a ton this year, 257%. It's trading at 7 times earnings.

[Scott Wapner]

You think it's a value stock.

[Jason Sniper]

So I, I, I think it could be both. Right. I think at this point because of their earnings picture going forward. This is a story where value investors are interested in plays like this, but at the same time, the momentum is there as well. So I think that's why it's kind of playing in this interesting sandbox where it's getting the price movement that it's asking.

[Scott Wapner]

I mean, maybe, maybe Nvidia falls into that category too, just given where it's, you know, valuation has gone. It's, it's in the, you know, mtum, etf. It's been pretty volatile, hasn't gone much of anywhere. If you back that out, you know, year to date, you'll get a better look at really what Nvidia has done. As, you know, people wait for this stock to get going again. It had that drawdown in the late spring. It had a nice pickup, and now it's been back doing a little Bit of nothing. Stephanie Link joins us now because this is a big deal for her. You bought Nvidia, so it's nice to have you. Thanks for joining. Tell us why. Tell our viewers why this was the time to do that.

[Stephanie Link]

Yeah, I've never owned Nvidia, regretfully, but it's the valuation that is very compelling to me. For what you're getting, this is best in breed on sale and that's what I like to do. It's 18 times PE. It's 15 times EBITDA. This is the cheapest the stock has been since 2019. It has underperformed the group 53% year to date. In the past year, it's underperformed the group by 72%. So it's been a big laggard and I think it's going to play catch up because the fundamentals are extremely strong. This is a company that has 97% market share in server GP in the server GPU market. They have proprietary software platform, they've got new compute platforms that are coming. They're even getting into expanding into CPUs. So this is a company that actually grew earnings 130% year over year, last quarter revenues of 85%, gross margins in the mid-70s. And it's sustainable there, in my belief. And free cash flow is going to double from this year to next year to $206 billion. So I think the fundamentals are very strong. I don't understand why the action has been so poor, but I think the valuation now makes so much sense to me for the long term.

[Scott Wapner]

Josh, good move here.

[Stephanie Link]

What do you think?

[Josh Brown]

Yeah, I look, I'm anytime Stephanie and I agree on a stock, I feel way more confident than when she and I disagree. And Stephanie and I have been talking about Nvidia on this show for the last 15 years and she's made a ton of money in names like Broadcom that have been rallying right alongside. But we're just on behalf of the Nvidia shareholders, we're thrilled to welcome her with open arms. I would point out there's a little bit of a shareholder transition in Nvidia taking place. I think a lot of the action that you're seeing in Micron, those are the same people that were attending earnings release parties in Manhattan two summers ago for Nvidia. The momentum crowd has completely left. The stock I know is a remnant of it that's still held in MTUM and some of the big momentum strategies, but it has not been a momentum stock in a long time. I think it's better than a momentum stock. I think now what you have is a fairly low risk to the future outlook. I agree with what Stephanie had to say there about the proprietary platform. That's why I've been bullish in the stock for a long time. And you don't have to pay a 4050 multiple on this thing like you might have to for some other areas within semiconductors. So I think it's great that she's in and I hope we make money together.

[Jason Sniper]

Bryn, what do you think?

[Bryn Talkington]

So I obviously glad to have you, and I've been in it for a long time. I had some of my position get called away at 200. I do think it's important, though. I get that the company is cheaper today than it's been in a long time, but I do think when I go back, I want to say at the end of 2022, it had a market cap think of around 350 or 60 billion dollars. We're just shy of 5 trillion today. So as a longtime investor, I kind of ask myself, is this 4 to 5 trillion somewhat like upper Earth orbit that we can't get past because that's such a big number and that even though they continue to surprise the stock, it's cheaper. It is a $5 trillion company. And so that, that's, that's why I'm comfortable once again, still sell, because the stock just gets cheaper and cheaper. Jensen saw all of this coming ahead of time, so I think the stock should be much higher. But I'm just questioning, will the market allow a 5 trillion company to go to 10 trillion? I don't know. It may take a long time to do that.

[Kate Rooney]

But.

[Bryn Talkington]

Great ad, but I still like selling calls against it. Yeah.

[Josh Brown]

Hey, Brent, Our mutual acquaintance, Adam Parker, has been writing and talking about Nvidia as though it's not just a company, it's an asset class. And, you know, some people will dispute that and they'll say there's more competition coming and they're not just going to own GPUs forever. And that's fine. But I do think if you look at the earnings growth since that time that you referenced then in 2022, earnings growth is actually outpacing stock price and market cap growth, which is why it's cheaper today than it was four years ago. And I think so long as they can continue with reasonable levels of earnings growth, there's no reason why 5 trillion has to be a hard cap.

[Stephanie Link]

Right, Right.

[Bryn Talkington]

But I mean, earnings growth typically does outpace stock growth. I mean, the earnings growth of Micron is, is threefold of the stock price over the last year. And so that to me, is, is normal. Once again, I'm in Nvidia. I love Nvidia. I think Nvidia should be higher. I'm just saying that it seems to be in the penalty box. So when I look at it, I'm saying, why is it in the penalty box? And so this is just anecdotal. Is it because it's just 10, 10 or 11x over the past three and a half years and it's a $5 trillion company, it's like the biggest company in the world, that the market's just like, okay, that's enough right now. Because it shouldn't be in the penalty box, but it clearly is. It's negative for the year.

[Scott Wapner]

Steph, I'll give you the last word before we go.

[Stephanie Link]

Well, I mean, I think you've seen massive rotation out of Nvidia, by the way, Also Broadcom. These were the leaders for years and now they are the laggers. And I think the fundamentals have only got. And the visibility has only gotten better, and yet the valuations have pulled back. So, look, I own Marvell. And that thing scares me because it goes up a lot and goes down a lot and I'm up 200% in it. So I own some of the momentum in semiconductors. But I think the real way I like to invest is buying low and selling high. And this thing is in the penalty box. I don't know if I would use that word. I think it's too strong. They've done nothing wrong. And earnings revisions have gone up over the last three years. And I think that's going to continue. So eventually fundamentals matter. And if you can get great fundamentals or even if they're good fundamentals at a discount, I'll take that any day.

[Scott Wapner]

All right, good stuff, Steph. Thanks for joining. We'll see you back on the desk. I'll see you this afternoon, by the way, on closing bell. So we'll get into more of that and your broader market thoughts, too. But that's, that's our own Stephanie Link, by the way, guys. I mean, according to Morgan Stanley Wealth Management's Global Investment Committee, the MAG7 stocks are the cheapest in a decade by at least one measure that they look at. The valuation premium over the other 493 of the Mag 7 is now at 10%. That's what they suggest is the lowest in a decade. Goldman's desk today. We like buying the dip in the hyperscalers. So is this a moment to take a look at a lot of its names?

[Josh Brown]

I think we're leaving a really important chunk of this conversation out. Why is that the low? Is it at the lowest premium to the rest of 493? Maybe it's because with one exception, they're taking over 100% of their cash flow and spending on CapEx. And historically the market does not give a premium to companies that do that. In fact, very often it's some sort of an industrial conglomerate esque discount to the overall market. So it's not a mystery, nobody's scratching their head. I think everyone understands the dynamic has changed. These used to be companies that we celebrated for their asset light business models. They have gone in the other direct. I'm not saying it wasn't a good idea, not saying the earnings won't eventually come. I'm not saying there won't be profitability from this activity. But right now we're in the building phase, not the harvesting phase of those profits. Hence why these stocks no longer have the premium valuation they used to.

[Scott Wapner]

It's a good debate as to whether to look at the declines of say off their 52 week highs of a Meta down 25.5% or a Microsoft 32% and then Amazon, you know, Alphabet are about 13 and a half respectively each of those off of their 52 week highs. Whether now is an opportunity, like some of these desks say, to buy the dip, or if it's a signal within this market, the way that the makeup has changed a little bit over the last month or so to pull back some of your exposure. I thought BlackRock's Rick Reeder, who was with me on Closing Bell yesterday, had a really interesting perspective on that. He loves the mega caps he has. He likes tech, he probably likes it or has at least liked it better than most things. And yet here's what he said.

[Rick Reeder]

We have rotated within that universe and I would say, how do I describe it? Some of the companies that are more directly tied to AI we've pulled back a bit and rebalanced a bit in the. Some of that are less haven't been associated necessarily with AI per se. I mean they're all AI related but the ones that are less acutely focused on AI, so we've done some rebalancing within that.

[Scott Wapner]

Okay. I mean I thought that was pretty revealing yesterday from, from Rick, you want to react.

[Jim Leventhal]

Well, I think this depends critically on your timeframe. If you have a timeframe of one month, you know, maybe the Mag 7 isn't for you. However, if you have a time frame of three months or longer, these things are for the most part buys here. You know, I could look at a Meta or an Nvidia for that matter and say it's a value stock. I could look at the price to earnings multiple on both of those names and say they're below the market multiple. So the way is the PEG ratio which Scott, you know is price to earnings over the growth ratio of earnings and for value investors that's a critical measure. So I do.

[Scott Wapner]

He's not a one month investor by the way. You know, I don't know, I'm not mean about the time frame.

[Jim Leventhal]

I was not impugning Rick Reeder. I was simply saying to those people who are asking is it a buy? Is this sector a buy right now? I wouldn't make that call over the next month but past that I would. And here's the important point going back to what Josh said. Absolutely right. These stocks, these companies are sinking all of their free cash flow into capex. Think about what it's going to look like a year from now when they're reaping the reward when that free cash flow reverses the other way meaningfully positive. These companies, we're going to look back on these prices and say what were we thinking not buying them here?

[Scott Wapner]

I don't know. Unless you think that there's been a, a sea change within the, the market, the makeup of the market. If you truly believe that it's changed and there's you know, more money going to go towards other areas like financials and healthcare and some of those more underperforming areas then you know, maybe they're not such a clear cut buy today. I think that's what you extrapolate from reader and how you would counter, you know, Jim's argument that how could you not like these here? Of course they're, they're buys if you're a longer term investor. Well maybe not. If you think that over the next, for the next six months the makeup has, has truly changed.

[Jason Sniper]

Yeah, I think it's an interesting place. Obviously $700 billion in CapEx this year it's only going higher. You know, the plan is 900 to a trillion next year and to, to Josh's point, I mean typically we're not giving a market premium to stocks that are spending in the way that they're spending. However, I do think the multiples have come down enough where they become interesting to, to the, to my point earlier. They, they are more appealing to different types of investors, not just growth investors, potentially value investors that see the opportunity in the long term and see there's maybe some visibility on profitability. So I think that that's what makes them interesting to me at this point.

[Josh Brown]

This is the question, there's only one question that matters. Where is the value of all of this capex most likely to accrue in the end? I gave you my answer. I've been saying all year I gave you my answer. It's Apple. Apple has two and a half billion users that I think they will serve as the gateway to consumer AI through those devices. That's, that's my. And Apple's not spending the way that the other six.

[Scott Wapner]

That's probably why it's only three bucks of its all time high.

[Josh Brown]

Well, I think it's going to print an all time high right now. But look at, look at the way it has separated itself from all of the AI capex spenders. So like who built the Internet at&t Verizon? Like who built that out? Who benefited? Kevin Systrom sold the company with seven employees for a billion dollars called Instagram to Meta. Like where do the profits of this build out accrue? I really think it's going to be the companies that own the other end of it. I'm not saying they will not make money and obviously some of them have the double benefit of. We're also the LLM like Alphabet. Right. So Gemini will profit heavily from the expense that Alphabet, the parent company is plowing in. But it just gets murkier, it's harder to figure out. So I think the market is asking this question and trying to answer it every day that it opens up. Where will the profits of this build out accrue to? We know a lot of them are going to the semis already. We know the semi capital equipment names, we know the memory names, we know the electrification of the date. We know that a lot of profitability is accruing there. How much of it will be left with Microsoft for the build out and all this capex? I'm not sure that the market is as confident.

[Scott Wapner]

Right.

[Bryn Talkington]

Yeah. I think that to turn Josh is to think through where will they not accrue to me is an easier kind of concept to think through. And I think from a consumer perspective Josh is spot on. We don't want another device. I definitely don't want an OpenAI device. Okay. Apple from a consumer, I think they crush it. We're going to spend more time the Enterprise level though, to me, the big question, and I own Microsoft is I don't know if Microsoft can execute on this right. Because I am more and more feeling that their version is more like teams. And Zoom should not exist as a publicly traded company with a $28 billion market cap because there's teams. But teams is so mediocre. And so I think that if you think Oracle, that's a big question, they are tied to OpenAI. And so I think when you think through who are the winners that Apple, from a consumer, I think the enterprise is much more complicated. And to me, I think Microsoft, their cloud business is fantastic, but the money they're spending, I just don't see the output because we use it that you're getting with the other LLMs. So to me that's an easier way for me to put my arms around is who are the losers, not the winners.

[Scott Wapner]

Jason, is this the winner in the group Apple? I mean, it's funny, narrative has changed. The stock charts change too for a while, as everybody knows, they have no AI strategy. What are they doing? What are they doing? And you saw the stock kind of not give them much. Then they get the benefit of the doubt because they're getting it together at the same time that they're doing what Josh was talking about, not spending to the level even close of what everybody else is doing. And now I think in the long run they've been rewarded. That's why the stock is less than 1% away from an all time high.

[Jason Sniper]

Yeah, I think that's absolutely the story. Right. And that has always been the narrative around Apple.

[Scott Wapner]

Right.

[Jason Sniper]

Kind of wait and see and evaluate what the others are doing and then we kind of seize the moment and do what we need to do. From an execution standpoint, I definitely think they're getting, you know, market favor and not spending to the, to the likes of what the other hyperscalers are doing. I think this transition to Turnus, who is a software engineer and, and looking at their product mix I think is going to be an important story too going forward. So, and this, these multimillion dollar buybacks, rinse and repeat. I think that story continues and I

[Josh Brown]

think that's why $100 billion buyback now and September 1st is the first day of John Ternus officially taking the reins. And probably the announcement, his first keynote, probably the announcement of the foldable. The Foldable will move the needle on earnings because they're not going to be able to make enough this year talking about half a million, maybe to a million units shipped by the end of the fourth quarter. But iPhone 18 will be 20 to 22 million units shipped. Should be a significant improvement in Siri AI agentic. Siri. Bring your own LLM. Tell the consumer, okay, what do you like? You like ChatGPT? Great. We'll layer right on top of your existing Chat GPT account. We're getting paid in the app store either way. Oh, you don't like that? You like Claude? Hey, we can work with Claude too. That's what the consumer wants. To Brin's point, the consumer doesn't want a walnut shaped box that Sam Altman built sitting in their living room. I don't know anybody that's looking for that. So I think Apple, by not playing the capex game, swoops in and says, hey, great job. Thank you for building, thank you for building all these LLMs. We really appreciate it and thank you for building the data centers that will distribute them. We're going to give our two and a half billion devices access and we're

[Jason Sniper]

going to get paid.

[Josh Brown]

We don't really care who wins. From my perspective, that is what the market is figuring out. That's what this chart tells you, which is not even a V shape. It's like it's even better than a V shaped recovery in the stock.

[Scott Wapner]

Yeah, I'm about to make a higher high too. All right, that's Apple. We'll watch it. We'll take a break. Calls of the day coming up to debate. Plus Josh Brown's best stocks in the market, the one big bank he is watching ahead of earnings next week. We're back.

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[Scott Wapner]

Cities got a call on software today. Top picks MongoDB, Snowflake and Palantir for now. You guys feel about this space, Jason, I'll give you that. You, you have Snowflake, Brynn has Palantir. But go first with this one because you have service now too.

[Jason Sniper]

Yeah, yeah, yeah. So, so for me on Snowflake, you know, the early part of the year wasn't great. Wasn't a great start to the year, but they really had a strong report last quarter. Eps was up 68%, 33% revenue growth. The North Star for them in terms of revenue growth is 30%. New deal with AWS. I what I will say in terms of their consumption model, those results can be fairly inconsistent. But this is a stock in terms of data warehousing and all the capex spend that we're seeing in this, in the whole ecosystem is one that's worth pumping.

[Scott Wapner]

You wouldn't, if you, if you listened to the, the whole narrative and debate about software, you wouldn't think that, that any of these names are, are having a decent year. This one's up 21%. Yeah. Year to date it's been really easy just to think that all, all of Software X Cyber right, have been dogs, right? This, this one has not.

[Jason Sniper]

No, there's no doubt about it. And you can't be. I think what we've seen in the early part of this year and year to date, you cannot be indiscriminate in this space. Right. There are certain names that are working far better than others. Obviously ServiceNow is on the other side of this, but I do think there's continued upside. But I just think Snowflake, the space that they occupy is a strong one. So I continue to like it.

[Scott Wapner]

I mean service is down significantly on the year, about 30%. Goldman's reiterates buy though.

[Jason Sniper]

Yeah.

[Scott Wapner]

Today you want to take that on.

[Jason Sniper]

So I think for them as a relation service now they're, they're agentic AI tools. They're really embracing the space. I mean I think what we talked about early part of the year is AI is going to replace these traditional SaaS models, blah blah, blah blah blah. I don't think that's a story with these particular companies. I think now the price action hasn't been nearly as strong, but you're starting to see some momentum over the last couple months. It's just pulled back recently, but there is some momentum there. And I think this one is also worthy of ownership.

[Scott Wapner]

Talk about things that have roared back.

[Josh Brown]

Yeah.

[Scott Wapner]

Cyber okay. Crowd strikes up 68% year to date. You go through almost, almost all of these names. Palo Fortnet Crowds Target goes to 235 at Needham today. From the the anthropic news killing cyber conversation that feels like it lasted about 10 minutes because the stocks have come back.

[Josh Brown]

That's right. Jason's right. The SAS, the SaaS apocalypse phase where everything just indiscriminately, if it was in the software ETF it was being sold, some of that was people having genuine concern about certain business models and like Salesforce being the poster child or Adobe maybe. And then some of that is just like, wrong. You're in the wrong neighborhood at the wrong time of night and you're just getting mugged. But I don't think we're doing that anymore because CrowdStrike is a great example. This is a company that has effectively made the case to the street. More AI means more cybersecurity threats. Ergo, more AI means more cyber contracts and more pricing power and more stickiness of the things that they sell to the enterprise and government customer. And that's what's borne out. ARR grew to 5.51 billion, up 24% year over year in the last quarterly reported free cash flow hit a record 468 million, which is 34% of revenue. Operating income another record. The rule of the rule of 40 score here is 59. There's like maybe three other companies you could point to in the public markets that have done what George Kurtz has done. So I'm a long term shareholder. They just did a 4 for 1 split. I haven't sold any, will not sell any. And I think it's a great example of how the market is getting smarter about disruption, risk, and stratifying the software names rather than just universally hating them.

[Scott Wapner]

All right, Angelica Peebles has a CNBC news update for us. Hi there.

[Angelica Peebles]

Hey, Scott. New York City is investigating the inspection history behind a damaged Midtown high rise. The New York Times reports the firm that inspected the building had previously been cited for missing problems at other sites. The building, a former office tower being converted into apartments, was stabilized after buckling columns raised fears of a partial collapse. No Injuries were reported. Congo's latest Ebola outbreak is spreading into new areas. The death toll has reached 600 with over 1700 confirmed cases nationwide. African health officials say this is now the continent's fastest growing Ebola outbreak. And China and Taiwan are bracing for Typhoon Bobby, which forecasters say could be one of the region's strongest storms in years. Taipei officials say offices and schools will close Friday, meaning that Taiwan's financial markets

[R Speaker (Chase Sapphire Preferred)]

will also shut down.

[Angelica Peebles]

The storm is packing winds near 124 mph, with heavy rain expected. Bobby is expected to pass near Taiwan before making landfall in eastern China this weekend. Scott, back over to you.

[Scott Wapner]

Okay, Angelica, thanks for that. That's Angelica. People's coming up, Josh Brown's best stocks in the market. We're back after this break.

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It was a mansion.

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[Josh Brown]

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[Scott Wapner]

All right, we're back. Josh Brown's best stocks in the market. What's that?

[Josh Brown]

Thanks for that.

[Scott Wapner]

Yeah, I'm just trying to.

[Josh Brown]

Scott's like, all right, here's your big segment coming up. Let me read some mean tweets to you. Mean commercial break.

[Scott Wapner]

I thought it was funny.

[Josh Brown]

I'm gonna read some tweets to you

[Jason Sniper]

on the next break.

[Josh Brown]

All right, Citigroup, give me like the ultra long term chart real quick. This was a very, very, very impossible to own stock. This was an ugly duckling Coming out of the great financial crisis, they basically spent 15 years attempting a turnaround in fits and starts. And then finally a few years ago, Jane Fraser is the new CEO. Somebody who behind the scenes had been pulling off deal after deal after deal to streamline this bank. Not in the CEO role. She gets the role and all of a sudden Wall street look at this. Off a cliff. No L shaped recovery they call this. Anyway, that was then, this is now. Citi is up 65% over the last year through July 7th. Congratulations to Jimmy Lebenthal who's been a believer here. That's versus 33% for PNC, 25% for B of A, 18% for JP Morgan. So this has been a standout name in a group that's starting to catch fire. But again the 20 year annualized return is negative 4%. Only negative number amongst the large cap bank. So I still think there's room here. This is a very different company. International Services is the crown jewel. They have doubled and tripled down on that while getting rid of businesses where they don't really perform very well. And that's been the secret shrinking in order to grow more profitably. The company has earnings at the end of next week. This has not been a consistent like you want to be in before the earnings story. We've seen it go up a lot, we've seen it drop a lot. So don't use that as a catalyst. I think Instead focus on 110 to 115. You can see in this chart that's the 200 day moving average, give or take. The stock has obeyed that trend all year. This has been on the best stocks in the market list since last August. It's been in my Porterhouse portfolio at my firm since inception and it has not gotten anywhere near that longer term trend line. That's where I would manage risk from whether a trader or an investor. I think it'll be just fine as

[Scott Wapner]

long as it stays above Jimmy.

[Jim Leventhal]

I agree. There's more to come. There's a lot more to come. We've got the Banamex spin out coming out sometime in the next six to nine months or so. And when Citigroup announces that it's coming out from under the thumb of the Fed and other regulators because there's various consent orders out there, I think that will move the stock higher. It's still attractively priced. Importantly Josh, this is another one of those areas where different styles of investing intersect. So this is one of your best stocks in the market. You have the metrics by which you define that this is still a value stock. For me, there was a period of time when it was a deep value stock, which is the technical term, Josh, for ugly duckling.

[Scott Wapner]

That's right.

[Jim Leventhal]

Deep value equals ugly duckling. But these styles of investing can intersect. There's a lot more to come on this. As I've said, it's still attractively priced.

[Josh Brown]

Yeah. Best quarterly revenue in a Decade. Last quarter. 56% jump in earnings per share from the prior year. Like you can say this is still cheap based on that kind of earnings growth and have room to say. And also I respect the trend here in the momentum. You can say you can walk and chew gum at the same time.

[Jim Leventhal]

Really do have to give a hat tip to Jane Frazier. She's done a fabulous job. The first three years in the seat she was given no credit. Finally the last two years they've given her credit.

[Scott Wapner]

Financials are sort of one of the top sectors this month. We know that bank earnings kick off next week. Is there a reason why we don't have more buying in this space on the committee? Jason, you've got Goldman, you know, Josh is JP Morgan and Citizens. Jimmy, you're, you're Citi and jpm. But you know, there's a belief that what's been a. What was relative to tech, obviously a lagging sector is now woken up. Why isn't now ahead of earnings the time to get a little more exposed here?

[Jason Sniper]

Yeah, well, traditionally we don't just because of the potential volatility and stuff. But I, but I do, I'll say this from a positioning standpoint. Let's guess what financials were. I up about three and a half percent last week. Goldman is my name here. I mean IB revenue was up 48 last quarter.

[Scott Wapner]

Right.

[Jason Sniper]

And I think capital markets will continue to surge. The stock's up 20 year to date. It. There was some pullback on recent weeks but it's starting to get back some of that momentum. But it's, it's just not what we do. But I continue to like the space and IB is our favorite name in

[Josh Brown]

the, in the financials are expected as a group to grow earnings by 10.7% over the next 12 months. That's not screeching hot growth. And it certainly doesn't look like the tech sector.

[Scott Wapner]

Sure.

[Josh Brown]

But it's growth nonetheless. And these, it's not as though these stocks are selling at above market valuations or even above their own historical averages. The earnings growth again has been outpacing the share price growth for A lot of the biggest components in the financial sector.

[Scott Wapner]

All right, we're getting some news on Anthropic. Kate Rooney has those details. I saw a headline move and I'm assuming that this is the news that you're going to deliver to us.

[Kate Rooney]

Yeah. So Scott, we the latest for Anthropic. They're adding former Fed chair Ben Bernanke to this AI governance structure that they have. Bernanke has been appointed to Anthropic's long term Benefit Trust. So this is an independent body. It's meant to help Anthropic, they say, align its mission of building AI responsibly. So it's an independent body. The company itself is a public benefit corporation, but this is sort of a separate group within that. Bernanke of course led the Fed through the 08 financial crisis. Nobel Prize winner in economics. Says here the company says his background is going to help the company think through how AI could affect jobs, could affect the market and then the broader economy. Obviously a big topic. And risk of AI something top of mind for a lot of CEOs. Also a quote here in this release from Bernanke. He says the potential of AI is enormous and so is the range of outcomes. He says how that potential plays out will depend in part on how institutions we build around it. And talks here about the unique governance structure. They also say this, this group has the authority to appoint board members and advise on overall risk. Scott, back over to you.

[Scott Wapner]

That's an interesting development, Kate, thanks. It's Kate Rooney. We'll get Mike Santoli's take on this market next senior markets commentator and overtime co anchor Michael Santoli as you see is here at post nine with the gang. What do you make of this man? I mean we started out the show, it's like this mayhem in momentum because the minute you think know what's happening it you don't.

[Mike Santoli]

Well, and it's also kind of a force of its own. In other words, it's not necessarily tied to the news of the morning. Sometimes you're running away from macro like yesterday and going toward the old broken momentum stuff because it's not really connected to a lot of those inputs. What I find funny today is, you know, all the trading dissent. Everyone wants to know is the momentum unwind finished. Right. Who we need to declare it over. Okay, we've seen this in the past. Sometimes this is enough of a reset. And bank of America's death sentence said semis corrected on nothing. Therefore they should rebound to highs as if doubling in less than three months from the March 30 low was a hundred percent. Getting it to just pure fair value based on fundamentals and giving up 18 off of that was somehow an outlier downside move. Now, bull markets do act like that, right? You got to get more than you deserve as they go along. But I do find it interesting the idea that just because the earnings are holding up, it means a pullback from one of the most aggressive, crowded crescendos of buying in history is somehow finished. So I, you know, I think that's that, that, that's the debate. If I look at how the tape responds, it's very benign, it's very encouraging. It's holding the trend. It's all the, all the volatility is internal. It's suppressing index of its level volatility. That tells the, the kind of tactical plays you can stay in. And that's what's going on.

[Scott Wapner]

This was a late day move yesterday. Remember when we were talking at the end of closing bell before ready to do overtime, you saw the NASDAQ go green.

[Mike Santoli]

Yes.

[Scott Wapner]

And a lot of these names started to get the buyers and now they followed through.

[Mike Santoli]

And I don't know that there's a way to kind of explain it beyond the buyer showed up. People are excited about Hynix. They're marketing that deal. Everyone's saying, fine, there's no reason to take numbers down. Meta's not flinching on capex plans. So therefore a trillion dollars next year looks fine and all you want to buy is the AI hardware. What I find interesting is in the S and P, it's still a zero sum game. Right. What's down today? Nvidia Hyperscalers, the spenders. So we'll see if that resolves somehow.

[Scott Wapner]

I'll see a three. That's Mike Santoli. Options action with Oliver Renick's next. Let's play some options action in Chicago. Oliver Renick, what do you see?

[Interviewer]

Hey, Scott. It's been five weeks and one day since the NASDAQ made a new high. It's been four weeks since it made a new low. In other words, things went from manic to mild real fast. But also according to the options framework we've been using for almost two weeks now that broker dealers are leaning long volatility and likely to act as a stabilizing force in the S&P 500 buying dips and selling rips. But here's the fun part. The biggest trade of the day in the QQQ by a long shot is a bull betting $24 million on a new high by the end of the month. Here's how they did it. They started with a $30 million purchase of 28,736 strike calls expiring July 31, but then sold a 737 strike call spread against it, bringing in $6 million. The net result means they need Q's to cross 750 by the end of this month, which is probably not coincidentally, just a hair above last month's all time high.

[Scott Wapner]

Scott Oliver Runnick, I'll see you at 3. Thank you very much. Finals we're doing next. All right, we'll see you on the bell, three o' clock Eastern. Stephanie Link. Remember, she bought Nvidia. She'll join us with more coming up. Cameron Dawson, Gabriella Sarah Sanitos, Ed Yardeni, Bryn Talkington.

[Bryn Talkington]

What's your final CBRE? Looking for 26% earnings growth at the end of the month.

[Scott Wapner]

Thank you very much.

[Jason Sniper]

The sniper Nvidia Lightsteps trades here 87% earnings growth.

[Jim Leventhal]

The farmer Citigroup just repeating earnings are coming up.

[Josh Brown]

JB Live Nation. Two price target lifts today, one from Wells Fargo at 222.

[Scott Wapner]

All right, good stuff. I'll see you at 3:00'. Clock.

You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

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[Zepbound Advertisement Narrator]

Zepbound is a prescription medicine used with a reduced calorie diet and increased physical activity to help adults with moderate to severe obstructive sleep apnea and obesity to improve their OSA. Zepbound is approved as a 2.5, 5, 7.5, 10, 12.5 or 15mg injection. Zepbound contains Tirzepatide and should not be used with other tirzepatide containing products or any GPs GLP1 receptor agonist medicines it is not known if Zepbound is safe and effective for use in children. Don't share needles or pens or reuse needles. Don't take if allergic to it or if you or someone in your family had medullary thyroid cancer or if you've had multiple endocrine neoplasia syndrome type 2. Tell your doctor if you get a lump or swelling in your neck. Stop Zepbound and call your doctor if you have severe stomach pain or a serious allergic reaction. Severe side effects may include inflamed pancreas or gallbladder problems. Problems Tell your doctor if you experience vision changes before scheduled procedures with anesthesia. If you're nursing pregnant, plan to be or taking birth control pills. Taking Zepbound with a sulfonylurea or insulin may cause low blood sugar. Side effects include nausea, diarrhea and vomiting, which can cause dehydration and worsen kidney problems.

[Shaquille O'Neal (Zepbound Advertisement)]

Talk to your doctor, call 1-800-545-5979 or visit zepbound.lily.com.