The Nvidia Aftermath 2/27/25

Summary

CNBC’s Halftime Report: The Nvidia Aftermath (February 27, 2025)

Hosted by Scott Wapner, CNBC's Halftime Report delves into the pivotal movements shaping today's markets. In the February 27, 2025 episode titled "The Nvidia Aftermath," Wapner and a panel of top investors analyze the recent performance of Nvidia stock, broader market sentiments, and strategic investment moves. Below is a detailed summary capturing the key discussions, insights, and conclusions from the episode.

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1. Nvidia’s Earnings Report and Market Reaction

[01:03]
Scott Wapner opens the discussion by highlighting the underperformance of Nvidia stock alongside other chip companies. Despite a positive Dow Jones index, Nvidia and its peers are trading in the red.

Key Insights:

• Moderate Earnings Beat: Josh Brown notes that Nvidia reported a modest earnings beat, not as substantial as previous quarters.
  "[...] it's a beat. It's just not like the craziest beat ever." [02:05]

• Sustainability of Growth: Brown emphasizes that Nvidia continues to execute its growth plan effectively, securing commitments from its top customers.
  "The company is executing on its growth plan for this year." [02:39]

• Long-Term Outlook: Scott Wapner advocates for Nvidia’s long-term potential, citing its P/E ratio and leadership in AI as reasons for optimism.
  "This is a great opportunity to start buying this name if you haven't owned it because the call was just exceptional." [05:09]

• Bryn Talkington's Perspective: While Bryn acknowledges the sell-off as an opportunity for new investors, he cautions that the real sellers have already exited, suggesting limited downside.
  "I think Deepseak did this earnings report a favor. It basically pushed out anybody who wasn't a serious holder of those shares." [03:41]

Notable Quotes:

• "But that should not be interpreted as these are Bad numbers or there's something wrong with Nvidia." — Josh Brown [02:15]

• "I think the stock itself might become a little bit pulled apart from the story." — Bryn Talkington [04:39]

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2. Momentum Trading and Market Sentiment

[06:24]
The panel shifts focus to the broader momentum trading landscape, discussing the impact of retail investors and the shifting sentiments towards high-growth stocks.

Key Insights:

• Institutional vs. Retail Investors: Rob Seachin differentiates between institutional investors who view dips as buying opportunities and retail investors who are more reactionary.
  "Real investors look at this as an opportunity." [10:21]

• Decline of Momentum Indices: Malcolm Etheridge observes a slowdown in momentum trading, noting significant declines in major tech stocks like Alphabet, Microsoft, and Amazon.
  "Those are all this rerating of the momentum trade, they're getting sucked into that." [10:21]

• Risk of Overvalued Stocks: The discussion highlights the vulnerabilities of stocks like Palantir, which have seen dramatic price drops, cautioning against momentum-driven trades without fundamental support.
  "There's just no support underneath this name until I think you get at least $20 lower than this." — Josh Brown [12:22]

Notable Quotes:

• "It's probably the most widely held retail oriented Stock. Palantir." — Josh Brown [15:33]

• "A lot of what you're seeing in the markets is just due to this misunderstanding about how to behave in stocks that have gone up 100%, 200%." — Josh Brown [20:47]

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3. Introduction of a New Private Credit ETF

[35:41]
The panel introduces a groundbreaking financial product: an ETF designed to provide retail investors access to the multitrillion-dollar private credit market.

Key Insights:

• Structure and Controversies: Bob Pizzani explains that the ETF, launched by State Street, invests up to 35% in private credit, surpassing the typical 15% cap for illiquid assets in standard ETFs. Concerns include pricing transparency and Apollo's role in providing liquidity.
  "Another early concern was that if Apollo is the only firm providing liquidity, it naturally raises questions about what type of pricing State Street might get." [36:08]

• Potential Market Impact: The panelists debate whether this ETF signals the peak of private credit interest. Josh Brown remains optimistic, suggesting continued inflows, while others caution about liquidity and structural risks.
  "This seems like the beginning, Devil's advocate." — Bryn Talkington [39:02]

• Risk Management: Rob Seachin emphasizes the importance of partnering with top risk managers to navigate the inherent mismatches in private credit ETFs.
  "You have to be careful. And if you're on the same side of the table, as Josh's point, as the firms that are the most intelligent in structuring these transactions." [40:21]

Notable Quotes:

• "This is going to open the door for a lot more of other ETFs like this." — Bob Pizzani [35:59]

• "Understand it could work well to the upside, but also it could work to the downside." — Josh Brown [41:07]

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4. Strategic Buys and Sells by Panelists

[26:33]
The conversation transitions to specific investment moves made by the panelists, highlighting strategic buys and sells in various sectors.

Key Moves:

• Buying Uber: Scott Wapner discusses increasing his position in Uber, citing its resilience amidst market sell-offs and positive collaborations with Nvidia in autonomous trucking.
  "I bought it like right under 74. So I took that opportunity to add to the position." [26:47]

• Selling McDonald’s and Vertex: Rob Seachin explains divesting from McDonald's and Vertex due to valuation concerns and strategic shifts, despite previous strong performance.
  "We're taking advantage of that recent price move and put that to work elsewhere where we're excited." [28:49]

• Purchasing Amgen and NRG: Seachin highlights adding positions in Amgen for its strong compound growth and NRG for its positioning in the energy sector.
  "For us it's been a Great compounder... attractive valuation at 15 times earnings." [30:43]

Notable Quotes:

• "If there’s some shock to the ecosystem, sure, I don’t think we’re seeing that yet." — Rob Seachin [08:27]

• "We're trying to get out of the investments that we have that are reasonably expensive and go with other investments that have a tailwind but, you know, don't have the same price premium." — Rob Seachin [31:23]

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5. Broader Market Analysis and Future Outlook

[42:23]
The panel broadens the discussion to other significant market players and sectors, offering insights into future trends and investment opportunities.

Key Insights:

• Starbucks Performance: Josh Brown anticipates a positive turnaround for Starbucks under new management, suggesting the stock could reach previous highs.
  "If it can get to that old high 125, 126, that would be a logical place for Price to pause." [42:23]

• PayPal’s Growth Strategy: Bryn Talkington highlights PayPal’s efforts to monetize Venmo, positioning it as a key growth driver.
  "You're squeezing that and making that the profit center for PayPal is really where the opportunity is." [43:23]

• Berkshire Hathaway’s Resilience: The panel praises Berkshire Hathaway for its strong performance and strategic moves, reinforcing its status as a market leader.
  "Berkshire making a new all time high, high margins, clean business, great way to play international." — Scott Wapner [46:02]

Notable Quotes:

• "There's a tremendous amount of opportunity community out there and help you choose the one that fits your life schedule and goals." — Josh Brown [35:10]

• "The key to watch is production growth. It's expected to be up 7% year on year." — Rob Seachin [44:46]

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6. Conclusion and Final Thoughts

In wrapping up, the panelists reiterate their investment philosophies, emphasizing the importance of strategic buys during market downturns and maintaining a long-term perspective.

Closing Remarks:

• Scott Wapner underscores the value of investing in high-quality, growth-oriented companies like Nvidia and Berkshire Hathaway.
• Josh Brown advises investors to focus on fundamentals and leverage opportunities during price corrections.
• Rob Seachin highlights the significance of diversification and strategic reallocations based on market movements.

Final Quotes:

• "There's so much money still flooding towards private credit, Bob, and so much interest from retail getting more exposed to alternatives like private credit." — Bryn Talkington [40:21]

• "Investors need to understand take advantage when the markets sell off." — Scott Wapner [27:23]

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Conclusion

The February 27th episode of CNBC’s Halftime Report provides a comprehensive analysis of Nvidia’s recent performance and its implications for the broader market. The panelists offer nuanced perspectives on momentum trading, the introduction of innovative financial products like the private credit ETF, and strategic investment moves across various sectors. Emphasizing a blend of cautious optimism and strategic opportunism, the discussion equips listeners with valuable insights to navigate the complexities of today’s financial landscape.

For those who missed the episode, this summary encapsulates the essential takeaways, ensuring you stay informed on the critical market dynamics and investment strategies shaping the current economic environment.

Transcript

[Laura Castleton]

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[Josh Brown]

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[Scott Wapner]

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[Josh Brown]

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[Josh Brown]

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[Laura Castleton]

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[Malcolm Etheridge]

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. Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the Nvidia aftermath. That stock under pressure today. Other chips are down as well. We'll discuss what all of it means for that trade. We're going to hit the other big move as well with the investment committee. Joining me for the hour today, Bryn, talking to Josh Brown. Malcolm Etheridge is here. Rob Seechin, too. Let's check the markets here. A little bit mixed today as we do react to those Nvidia numbers. Dow's positive. The others are in the red. So you have President Trump talking about tariffs today. You do have the Nvidia aftermath, Josh. The reaction seems to be not a blowout. Demand is still strong. Deutsche bank says a modest beat, nothing spectacular in terms of guidance. Is that why the stock looks like that?

[Josh Brown]

Yeah, I think that's accurate. It's a beat. It's just not like the craziest beat ever. And understand we're talking about like a company that over the last eight quarters, they not only blow the numbers out, then they give guidance that's so far above where the median sell side analyst is on consensus that it's, it's almost like the analysts have been panting, running behind this stock, trying to keep up with it. Obviously, a phenomenon like that can't last forever and ultimately it's going to run its course. But that should not be interpreted as these are Bad numbers or there's something wrong with Nvidia. The company is executing on its growth plan for this year. We've got confirmation from their five biggest customers that the spend is, that was in the numbers is going to happen. And then Jensen comes out and with the cherry on top, he gives you like 10 unsolicited minutes at the end of the call about how bullish he is because of Deep Seek, which if you remember was the proximate cause of the sell off that we had in January. So I think it's really as simple as, okay, it's a, it's a beat. It's just not the same kind of beat that we saw last quarter, the quarter before. But the market's digesting it and I think ultimately the stock resolves higher, not lower. And I think for people that don't own the stock, today is a great day.

[Malcolm Etheridge]

All right, Malcolm, I mean, you don't own the stock. You look at the price action. By the way, it's great to, it's great to welcome you to our investment committee. We're happy you're here. You don't own the stock. You acknowledge that you missed it. You got a little discount today and the stock hasn't traded well lately at all. How do you see it now?

[Bryn Talkington]

I think realistically, all of the sellers, the real sellers, are out of that stock already. I think Deep seat was what, January 25, 26, something like that. I think that revelation really pushed out anybody who wasn't extremely bullish on this stock. So maybe you see some people taking some profits where they feel like they need to. But realistically, this sell off that we're looking at right now, I think Deepseak did this earnings report a favor. It basically pushed out anybody who wasn't a serious holder of those shares and made sure that if we did get any negative news about Blackwell, which we didn't, we actually got positive news about Blackwell. 11 billion doll of their $48 billion in the quarter were attributable to Blackwell. And on the call Jensen says this is the fastest uptick we've seen with any new technology we've rolled out. So I think there's reason to be optimistic if you're a long term shareholder. But for anybody who is just trading it for the sake of trading it, that's probably the little bit of a downtick.

[Malcolm Etheridge]

What if you're, what if you're not a shareholder? Like you, I mean, at what point do you get interested?

[Bryn Talkington]

I think the train has left the station. That's been My, my stance on, on Nvidia for quite some time because it, it does look like we're probably dislocating from really positive demand. Really positive. What we're 12 plus months out really from where they're able to meet demand. So they've got orders a year in advance. But I think the stock itself might become a little bit pulled apart from the story. And that's what I worry about as a potential shareholder.

[Malcolm Etheridge]

Okay, Bryn, what's your take? Longtime shareholder as well.

[Scott Wapner]

I mean the call was so great. It was a great call. And if you look at this stock on any metric P E PEG ratio, you know this is going to end up being 12 months from now. If you look at a Ford, P e peg ratio, etc. Probably the cheapest of the MAG 7, you look at Microsoft as a 30, Apple at a 30, not even remotely growing at the rate that Nvidia is. And I just think you have this visionary leader that's with, with Jensen looking out so much further than we as investors are or as just individuals can see. And I think that today we continue to get data points that this AI transition is going to be a secular trend, not just a cyclical trend. I think it's interesting. I mean the stock is firmly in that eight month trading window between 115 and 11150 at the, I think at the high. So I think we're going to still be in this trading range. But to your point, Scott, this is a great opportunity to start buying this name if you haven't owned it because the call was just exceptional. 70% margins, that's probably going to go a little bit higher. Just so much growth trajectory and I just don't see any competition from them.

[Malcolm Etheridge]

Rob, it's funny, the, the sentiment around the name has changed a bit. I feel like after Deep Seek, the market is more looking to poke holes in the story than it has in maybe the last 12 months at least. So maybe despite what has been deemed to be a great call from these guys and by all accounts good numbers, not like the guidance was bad. It's just the street has a different bar after Deep Seek.

[Rob Seachin]

I think the Street's wrestling with something else on all these businesses. They're focused on the change in the second derivative, the change in the rate of change. So they all have terrific numbers, but they're not as terrific as they were. But on a relative basis they're still much more attractive than almost anything that you could buy out there you are able to buy. And this is why we increased our position last week, Scott, we're still underweight in video, but we've been buying, as you know, we started buying in the 90s. We bought a little more on the last dip. We bought a little more on this dip. And the reality of it is, I think when investors step away and they're done wrestling with the slowing of the second derivative, they're going to look across the markets and realize that the fundamentals of these businesses, most of these businesses, their earnings have caught up. They've lowered the pricing, as has happened in Nvidia trades at 28 times right now, it's the cheapest it's been in a long time. To Bren's point, it's one of the more attractive. Yes, Facebook is more attractive. Yes. Google Metal, rather, Google's more attractive. And the reality of it is, is once we get this macro headwind, it's not in a downtrend. These stocks is. Jo will tell you, they're still in an uptrend. It looks, looks a little shaky. They've lost some of their momentum, but the fundamentals are still intact. And I think if we do get a little more of a pullback, I'll disagree with Malcolm a little bit. This train has not left the station. It's left the station. If there's some shock to the ecosystem, sure, I don't think we're seeing that yet. You saw the news from the other.

[Josh Brown]

Day to that point like this is this. Nobody is overpaying for Nvidia right now. 28 or 29 times forward P E. Keep in mind, over the last five years, the stock has sold at an average P of 42 times forward. And actually, if you go back to January of 2023, at the dawn of this whole era, it was like a 90 p e which people were screaming how expensive the stock was then at 5x because P E don't matter. But that's another conversation. Right now you are paying a below average P E over the last five years for this name. And if anything, they've earned a higher P E than the market just because of the degree to which they're executing. They haven't had a downside shock, but they haven't had a guy down.

[Bryn Talkington]

That goes to the point I was making about Deep Seek doing them a favor. Right? So they had a 40x multiple on this year's earnings coming into the year. Deep Seek happens, the shares sell off aggressively and it brings that valuation down to about 30 times. Now we're below it with the sell off today. And I think that gave it that, that cloud cover for this earnings report to not have to be as good as expectations would have been had deep seek not happen and the shares sold off. So all of the sellers who really wanted out of that name are already out.

[Josh Brown]

Good point. Went into the numbers in a 12% drawdown. Did not go into the numbers at a, at an all time high.

[Malcolm Etheridge]

No. But you know what? Of late into the number like you what yesterday into the number the Stock was up 4%. So you, so it was trying to be as optimistic as it could be going into the number in the face of what had been not so great. I mean it's down 14% from its January 7th high.

[Rob Seachin]

That's fast money though, Scott. That is not real investors. I think real investors look at this as an opportunity. They're just trying to make sure that there's not some big massive deceleration in cap spending, which again there's no indications that that is happening. No, but the why not be certain.

[Malcolm Etheridge]

About it's fast money. Also in Alphabet which is down 17% from its high and Microsoft which is down 15 from its high and Amazon which is down 12.

[Rob Seachin]

But that's, that's. Those are all this rerating of the momentum trade, they're getting sucked into that. You look at the momentum indices and they're starting to roll over. It's starting.

[Malcolm Etheridge]

They're not starting.

[Rob Seachin]

They roll July, but they've really rolled over. Okay, so you look at it from that time frame, right. And you say okay, you've rerated fundamentals. Now what do you do? Now what do you do? Given the relative attractiveness here, the momentum has been in financials, right. Can they deliver on earnings? I think you got to be more balanced about all this. And while I'm not incredibly enthusiastic about the markets in general, I expect some volatility. I do think that we've rerated enough that you can be selective.

[Josh Brown]

Those are bad. Some of these Alphabet, Amazon are not comps. Keep in mind going back to Q1 20, 23 when this whole thing really got started, Nvidia has averaged quarterly year over year earnings growth of 127%.

[Rob Seachin]

It's just different than Microsoft and different than Google and different than Apple. Right. I mean those are different growth trajectories. There's haves and have nots.

[Malcolm Etheridge]

So we've been watching the momentum trade very closely on this program. As you know, we, we documented it for you on the way up and then we've really hit it hard on the way down and that's the direction it has been going. You know X yesterday when you did get a little bit of a bounce Goldman today on both Nvidia and the market at large is talking about the momentum drawdown says bottom line they believe the print, the Nvidia print was good enough to steady the market and put an end to this specific momentum drawdown. The factor backdrop appears to be stabilizing momentum longs finishing plus 3% yesterday that's the pop that I was referring to and pointing higher again today which many of them of course are. Their trading desk noted a material easing of sell tickets across the semi AI and momentum universe yesterday Bryn we did have the MTUM ETF snap a five day losing streak but the losses are still significant for almost every name in that space led by Palantir is not the worst decliner over a week that's applovin but Palantir still is sort of in the really front and center in that story.

[Scott Wapner]

Right. So I mean Palantir I think at its peak what was it trading at? 110 times sales. You know really just like these parabolic move. I mean I trimmed a huge position last year and we've talked about this and I think where momentum works both ways. Everyone says oh and palantir gets to 90 I'll buy it or 80 but all of a sudden it's working in the other way when you actually kind of look at metrics and that's where I think a name like Palantir could stay in this somewhat short term doghouse from a from a technical perspective because there's just no support underneath this name until I think you get at least $20 lower than this. And so I think a lot of the froth has come out of the name. I don't think we're going to see option buyers as much as they were coming in doing these zero day options for Palantir or even week long because those guys got wiped out. I mean just completely wiped out as the stock has sold off. And so yeah I think this is a really positive sign for the market to have these names come back down to some types of some semblance of.

[Malcolm Etheridge]

Gravity it's got wiped out. I mean that's a good way of putting it. The two week plunge and our our stock desk is just sending this through too. It's on track to have its first back to back week of double digit declines Palantir Since August of 22 the stocks lost nearly a quarter of its value over the last couple of weeks. Malcolm, you got some of These names like CrowdStrike, that's been right in the mix as well. How do you view what's taking place with this momentum trade?

[Bryn Talkington]

But a lot of those momentum trades are widely held by retail. Right? Say for CrowdStrike, 100%.

[Malcolm Etheridge]

Right.

[Bryn Talkington]

What we're really seeing is a lot of retail investors rethinking whether they want to be in this market or not and whether that cash needs to be somewhere else. And so there's a lot of profit taking. You rolled the escalator up and now you're taking the elevator down. And I think retail has to be separated from the broader market in this sense because no institutional investors are selling these names right now. It's. If you look at what's happening with the price of Bitcoin, that's where I'm getting this from. So the vix if you will, for retail traders is the price of bitcoin which has fallen to a level we haven't seen in a while, below 90k.

[Malcolm Etheridge]

Where it still has been holding. Holding.

[Bryn Talkington]

I think those are inextricably linked. The price of Bitcoin and these Robinhood stocks, if you will, that retail owns. That's what's really making this move.

[Malcolm Etheridge]

Okay, so how about that right on the back of what you just said. Bespoke today talks about the bearish retail investor sentiment spooked to the to a historic degree. They say bearish sentiment ticked above 60% for just the sixth time in its history dating back to 87. The five week change in bearish sentiment is the third highest in history behind only December 2000 and August of 1990.

[Josh Brown]

I think Malcolm made the key point here. The retail trader who would probably be likely to respond to a survey like that is over indexed to Coinbase, Robinhood, Tesla, which is in a 50% drawdown. Looks it's a, it's a falling knife. It's probably the most widely held retail oriented Stock. Palantir. On February 19, the day it went parabolic, this stock was selling at 120, you know where the 200 day moving average is 49. There are no professional investors buying the stock that day. Okay, we all know, we all understand this. So it makes sense to me to see a wipeout in sentiment for that trader. The names that they are over indexed to, over leveraged to are acting the worst. And unfortunately a lot of retail traders these days are younger Gen Z's. It's perfectly fine. When I was 26 I wasn't doing responsible things in the market either. I had no idea where I was going, this is how investors learn this. They become better. They go through periods like this. And so you have that retail flush. They collect themselves, maybe some margin calls, maybe some options, expand, buyer worthless. And they say, okay, not going to do that again. So it's perfectly fine to have those types of stocks. The key point here is, with the exception of Tesla and Palantir and Bitcoin, which is not a stock, I call it the 8th mag 7, there's no market cap in any of these other names.

[Rob Seachin]

And the other matter, the fundamentals are vastly different in those names. Josh, to your, to your point, right. Some of the fundamentals of Bitcoin, fundamentals of Palantir, fundamentals of Tesla, are fundamental institutional investors really getting active in those names at these price points.

[Malcolm Etheridge]

I don't, I mean, Brin is a fundamental investor who's buying more Robinhood today. Another one of the stocks that's right there front and center in the conversation.

[Scott Wapner]

Yeah, well, we talked about it, I guess like a week and a half ago. And I said, if Robinhood comes down into the 40s, I'm going to buy it. I mean, it bounced, right. I bought it at 45. When the market sold off earlier, it bounced right off the 50 day. I mean, Robinhood is not trading at a parabolic level. It has an E. And I just think this secular growth trend that you're having, you know, Robinhood just cleaning the clocks of a lot of other, we'll say custodians, just because their user interface is incredible, they're doing great things on Iraq and matching programs, a ton of education. And I think Vlad and them, as I've said before, we're watching them grow up. They have a ton of smart engineers. And so I think this was a really good opportunity to come in at like, I think it was like 4550 bounced off the 50 day. And look, it's already back at 51. And so I'm in this stock long term and so I took the advantage to buy it. But I don't think you can even remotely compare a Robinhood to a Palantir. There's two different businesses and the charts look incredibly different.

[Malcolm Etheridge]

Sure. But when you talk about retail, momentum trading and of the like, I think you can probably put those in the same type of group. Obviously, fundamentals are different, but when you look, Rob, at Arista Networks, we have that in the momentum basket as well. Down 10.5% over a week. You stepped in and bought that?

[Rob Seachin]

We did. I mean, they make essential networking hardware, software that connects GPUs and servers, allows for more efficient compute. They're highly regarded for their AI networking in particular. Main customer base is hyperscalers, which we continue to get good news around. There's not any indication that they're reducing capex. And you know, it now trades at a 37 times 4 P E rich for us, but it's down from 50 earlier this year. These are not staggering numbers. It would be the equivalent of Josh taking advantage of the opportunity and CrowdStrike when it, you know, when it rerated. Right. Great business dominant in that space.

[Malcolm Etheridge]

That's what Malcolm did.

[Rob Seachin]

Okay.

[Malcolm Etheridge]

Malcolm did right. You doubled down on that position during the crowdstrike pullback.

[Bryn Talkington]

I thought that sell off was absolutely short sighted and thankfully the market rewarded me for. Here's the thing you need to know, the only thing you need to know about CrowdStrike as an investor for the last two years, George Kurtz has been getting on earnings calls and basically saying we have a gross profit margin of roughly 0%. But we also know that that's because we're reinvesting in growth as aggressively as we possibly can. And we have levers that we could pull to get that number to about 30% if we really wanted to. Well, last summer it became showtime. Right. So rather than reinvesting all those dollars in growth, you have to believe they had to turn on the growth engine to really show where that profit is going to come from. And that's what's been happening for the last couple of quarters. And I expect that to continue happening for the next year or two in CrowdStrike.

[Malcolm Etheridge]

Remarkable recovery too, which by the way, the price target today, Rosenblatt takes it to 450 today from 385.

[Josh Brown]

One thing just generally on momentum, like some of this is an education issue. It's like remarkable to me you have people who will say like to their friends or they'll go on, they'll go on Twitter. I'm a swing trader. I trade momentum stock. They don't even know how to use RSI. When Robinhood's at 65, RSI is at 77. We're not buying stocks at a 77 RSI. What that means 14 day relative strength is so far off the charts. And so when Brin says if Robinhood pulls back, that's where I want to buy it. Brin understands that concept. We don't want to buy Empire State building charts. We don't want to buy parabolic moves the next day after they've gone parabolic. And again, a Lot of people don't even know what that is or how to calculate it or why it matters. So a lot of what you're seeing in the markets is just due to this misunderstanding about how to behave in stocks that have gone up 100%, 200%. It doesn't mean don't own them. Let them cool off let them come off the stove for a second. And I think there are opportunities in some of these names as as they pull back. I agree with when I like the opportunity in Robinhood today's a better day to buy it than at a 77 RSI a week and a half ago.

[Malcolm Etheridge]

We still react to other earnings as well and there are several marquee names beyond in video that had reported within the last 24 hours salesforce siege they beat their revs miss we can take a look at the stock today. Their their guide was weaker than expected and there is the result on the.

[Rob Seachin]

Chart we think I think this is one of the great businesses. Obviously we bought it when it rerated on a price to sales basis very aggressively very happy. We own it. We happen to be a customer. I am telling you this company is changing the efficiency with the way that we operate our business at New Edge. AI is impressive and process engineering out of this firm is unbelievable. I think there, there has to be some adoption that takes time and I think you'll see it here. It's still not a wildly expensive stock but I think the story is getting traction.

[Josh Brown]

Berkshire Hathaway reported I don't remember talking about it on this show that it's sort of important. One of the largest market cap companies in the world $50 billion in operating income last year. I don't think people understand this is like a Mag7 name that has nothing to do with AI when you talk about profitability on that scale. Stock today making a new all time high raise the roof. Congratulations and one of the biggest winners over the last 12 to 18 months even versus the rest of its sector even when you look at other financials and then they come in and report a blockbuster quarter they choose to do so on the weekends because they don't want coverage. So apologies I'm covering it but like why aren't we talking about the stock or does is go up?

[Malcolm Etheridge]

We talked about it a lot as.

[Josh Brown]

A matter of fact Was I not on that day?

[Malcolm Etheridge]

You think you're on every day. I don't think you are. We talked about it if I if I remember call as well.

[Josh Brown]

We don't talk about if I'm not Here. There's a lot of solipsism coming from me. I understand that.

[Malcolm Etheridge]

I think the segue is going to work here. If my memory serves me right, didn't Berkshire own Snowflake for a minute or early?

[Josh Brown]

They did, right pre ipo. They never bought it. They never bought in the open market.

[Malcolm Etheridge]

Take a look at Snowflake today because that stock is pretty good after its own earnings. I know we're going to see it momentarily. By the way, there it is. BTIG says they're hitting on all cylinders. Strong print, better than expected guide excellent results. The CEO is going to be on closing bell overtime today with John Ford. It's an exclusive interview. You don't want to miss that.

[Josh Brown]

Great set for great segue.

[Malcolm Etheridge]

Thank you. I thought that was going to work. Thank you. In fact, it did work. All right, here's what we're going to do. We will take a break, we will come back. We have a lot of moves to get to. One from Brin. I've got, I don't know, five, six, six, seven from Seach. We will do that when we come back.

[Laura Castleton]

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[Silvana Henao]

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[Malcolm Etheridge]

All right, welcome back. Let's do these moves. We did talk about Tesla and the decline, the substantial one that it has suffered, which Brin is in. And you bought more Uber. We just make the segue from one to another here. But you Bought that. You bought more Uber, correct?

[Scott Wapner]

More, yeah. When the market sold off earlier. Take advantage of a company has nothing to do with. With tariffs. You know, this company is growing. It's actually was in a downtrend, it's now in an uptrend. It bounced right off the 20 day. I bought it like right under 74. So I took that opportunity to add to the position and I think when you have a name that was in a downturn, it's in an uptrend. Obviously Bill Ackman coming into the name is another positive investor catalyst. I just think investors need to understand take advantage when the markets sell off. And there was no reason for Uber to sell off except for the market itself selling off.

[Josh Brown]

Hey. Hey Brian. Did you happen to hear Jensen Wang shout out the Nvidia automotive efforts as it relates to Uber specifically?

[Scott Wapner]

I did it.

[Josh Brown]

Okay. That was my favorite part of the call. Jensen Wang said Automotive is a $5 billion opportunity for them, not long term, like right away. And one of the only companies he mentioned by name, if not the only, was the work that's being done right now between Nvidia and Uber. I don't know if that has anything to do with stock being up a.

[Malcolm Etheridge]

Stick today, but probably has something to do with it. Probably has something to do with it.

[Bryn Talkington]

That was specifically in trucking too though, right? Like his bigger vision is autonomous trucking. That has to. I actually caught that too. And it sounds like that is where he sees the next opportunity for Nvidia to make a big pivot as an autonomous but then autonomous autonomous long haul trucking. Which if you're a long term Tesla bull is probably music to your.

[Malcolm Etheridge]

You don't own Uber though.

[Bryn Talkington]

I don't know.

[Malcolm Etheridge]

Let's talk about these other moves you got Rob. So you sold McDonald's, you sold the whole thing?

[Bryn Talkington]

Yes.

[Malcolm Etheridge]

Why? So.

[Rob Seachin]

So. So we started selling that in January last year. Kind of had a rough year. Wish we would have sold the the entire thing year to date it's up 7. Really? Versus the market kind of flat to down a little bit. It's a full valuation. We're worried about this transition to lower price items. We think there could be a squeeze there and so with a full valuation we're jettisoning it.

[Malcolm Etheridge]

Wasn't this on your list recently of good looking stock?

[Josh Brown]

It's going higher. I think it's making a 52 week high right now. The way I was taught that's not when you sell but you may probably made money in it. So we did, we could. We could we could. We can all agree if McDonald's gets the lower priced menu, right. And then they reinforce that message to the consumer. If that becomes like the thing that they're telling the consumer come back. The Egg McMuffins aren't $46 anymore. The stock is.

[Rob Seachin]

But the egg is going to break out. Are getting a little upward pressure on food price. I agree with you on the momentum and labor costs are going up.

[Josh Brown]

Who do you think has eaten an egg McMuffin last between you and I? Come on.

[Rob Seachin]

Probably you. Okay, Judge, I rest my.

[Josh Brown]

Rest my. The defense rests.

[Malcolm Etheridge]

I feel like it's the opposite though that, that the stock didn't trade well last year.

[Rob Seachin]

It didn't.

[Malcolm Etheridge]

You did not do well and are using this move higher to get out rather than making a lot of money and getting out now.

[Rob Seachin]

So. So the reality of it is we trim most of it in January last year. Good move. Stock was, went nowhere last year. We have a stub position. It's up a bit year to date. We feel like that recent price move, we can take that and put that to work elsewhere where we're excited. You're going to talk about some of the buys.

[Malcolm Etheridge]

Well, let's, let's just talk about one more sell real quick. Vertex. Completely out of that too.

[Rob Seachin]

We are completely out of Vertex as well. It's a name we add in August of 22. We're up 60% since the addition. Up 19% year to date. Again, we're not. We like momentum as a factor, but it's not our principal factor. And we're taking advantage of that recent price move. It's still a high quality business, but it trades at a 27 times forward B in most of the cystic fibrosis opportunity we think is priced in the stock.

[Malcolm Etheridge]

Okay, so let's talk about the buys. You bought more Amgen. Tell me.

[Rob Seachin]

We did. So long term holding for us it's been a Great compounder. Generated 14% annualized returns over the last three years versus 5% for the health care sector. Diverse portfolio, really focused on oncology, cardiovascular disease. And the exciting news here is the attractive valuation at 15 times earnings. And so for us that keeps us interested and we want to top that up again. We're trying to run the ball here. We're trying to get out of the investments that we have that are reasonably expensive and go with other investments that have a tailwind but, you know, don't have the same price premium. And they've done well as well.

[Malcolm Etheridge]

NRG hit a record intraday High in the, in trading today. Earlier you bought that.

[Rob Seachin]

We bought it in January. So you bought. We bought more. This is playing that same distress story that we talked about and got right last year. This is a company that's half the price. Ultimately. Nat Gas is reliable power. And you know, at the end of the day, if you believe in this power to AI, this is a great way to play that. They're incredibly well positioned.

[Malcolm Etheridge]

You bought Texas Pacific Land Trust. That looks to me like a new position. Is that correct?

[Rob Seachin]

That's, that is a new position and that is really a derivative play. It's kind of a unique play on how to get exposure to the, the energy trade. There are royalty company that leases land to these, these businesses and they collect fees from wells, but also based on production volumes in barrels per barrels per oil. With oil in the 60s, you have, that's consistently been a floor and if you're more optimistic by that about that, we think this has leverage to that.

[Malcolm Etheridge]

Give me one real quick. You sold Eagle materials.

[Rob Seachin]

We did. And listen, this is obviously a cement, mainly a cement producer. It's been a good long term performer. We added in January of last year it moved 80% since we bought it.

[Josh Brown]

A cement. Regular cement.

[Rob Seachin]

Regular cement. But what a move.

[Josh Brown]

Yeah move.

[Rob Seachin]

I mean, so that price move, we want to take advantage of that. There's obviously, there's obviously a little bit of a growth scare going on out there right now and these companies are, are being a little challenged. You're seeing that in the bond market, right?

[Malcolm Etheridge]

Let's get the headlines now with Silvana now. Hi, Silvana.

[Laura Castleton]

Hey, Scott. Good afternoon. Members of the Senate Doge Caucus were at the White House today to meet with Elon Musk. Multiple senators and aides tell NBC News President Trump was not expected to attend. The meeting comes after the president's chief of staff, Susie Wiles, met with Senate Republicans on Capitol Hill yesterday. Some Republican lawmakers have expressed frustration with Musk's approach, particularly about not communicating his moves in advance to the Hill. The Consumer Financial Protection Bureau said it's dropping several enforcement actions, including against Capital One. The agency accused the bank last month of taking from customer savings accounts more than $2 billion in interest payments. And it comes as the CFP has closed its D.C. headquarters, fired employees and told those who remain to stop nearly all their work. And North Korea has sent more troops to Russia. South Korean media citing the country's intelligence agency, reporting that additional troops have been sent to Russia's Kurds region. But it's unclear how many were sent so far, the US and allies say the regime has sent more than 11,000 North Korean troops to Russia. Scott, I'll send it back to you.

[Malcolm Etheridge]

All right, Silvana, thanks so much for that. Silvana. Now coming up, the alternative universe. A new ETF just launching giving retail investors access to the multitrillion dollar private credit market. Bob Ozzani has those details right here. Post nine Next.

[Silvana Henao]

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[Malcolm Etheridge]

We are back A first of its kind. Private credit. Private credit market ETF making its debut trading at the New York Stock Exchange today. Senior markets correspondent Bob Pizzani is following the money for us. Now. You will be much more eloquent than I was in the intro which I butchered dramatically.

[Bob Pizzani]

No, it was terrific because all we want to do is see get everybody's opinion on this, tell us, tell us.

[Malcolm Etheridge]

More because my first reaction, I'm sure it was many, but you lay it out.

[Bob Pizzani]

Okay, look, here's the story. Wall street is very eager to provide access to private equity and credit to the masses. And ETFs are the obvious wrapper. Today State street launched an ETF designed to do just that. So this is called the spider Apollo Public and Private Credit etf. What a mouthful. It's even bigger than that. It intends to invest at least 80% of its assets in investment grade debt securities, including, this is the trick, including combination of public and private credit. Now because private credit is illiquid, it has been a problem getting this in an ETF wrapper. Since ETFs obviously need liquidity. They are trying to solve this problem by having Apollo provide private credit assets that State street will purchase and Apollo will agree to buy those investments back if need be. Now normally ETFs are only allowed own illiquid investments up to 15% of the fund. But in this case, private credit can range between 10 and 35% of the fund, but can be above or below that much higher than what it used to be. So this, this filing has been very controversial from the start. One early concern was that if Apollo is the only firm providing liquidity, it naturally raises questions about what type of pricing State street might get. However, State Street REIT apparently can source from other firms if it can get better prices. Another issue is Apollo's required to buy back the loans, but it's not clear how much of the loans they're required to buy back. So this is a potentially groundbreaking etf. If it works, it's going to open the door for a lot more of other ETFs like this. It's going to expand the ETF universe, I guess. Josh, what I'm worried, wondering about and I don't know what the guys think is this peak private credit right here.

[Malcolm Etheridge]

I knew that was coming.

[Josh Brown]

You won't know it's the peak until it's too late. But that. I think we're still a ways off. There's still enough money rushing in. You don't worry about that. I'm curious, what's the, let's say they get up to 35% private credit, what's the other 65% of the ETF? Is it like high yield bonds or.

[Bob Pizzani]

It can be anything. It can literally be corporate debt. There's a whole long list here. There's a 1010 page, small, small pipe but it could be any kind of public.

[Josh Brown]

What's the, what's the, what's the AUM fee? What's the, oh, internal expense?

[Bob Pizzani]

I don't have the number right now. It's close to 70 basis points. 0.7% is what it's. That's high for, for an index ETF, that's very high. But for an actively managed ETF that's not unbelievable to your earlier point.

[Malcolm Etheridge]

Those. Now obviously people talk their book but those who are in the private credit business don't even think we're even. We're not even. The fourth, fifth inning.

[Josh Brown]

Can't believe it.

[Malcolm Etheridge]

There is so much money still flooding towards private credit, Bob, and so much interest from retail getting more exposed to alternatives like private credit. This seems like the beginning, Devil's advocate.

[Bob Pizzani]

That this, this is a big moment. If this goes through, if this works and is smooth for the next few months, there is going to be a, this is going to open the floodgates.

[Josh Brown]

Can I just.

[Bob Pizzani]

Business.

[Josh Brown]

Can I just teach the reasonable to.

[Bob Pizzani]

Ask is this the late stages of the private credit cycle, I mean was.

[Malcolm Etheridge]

What were Bitcoin ETFs, the late stages of Bitcoin interest?

[Bob Pizzani]

No, it exploded immediately thereafter. Are we in it now? I don't know.

[Josh Brown]

This is, this is somewhat different, but I just think like if you really want to invest in private credit, the way to do it, you now have 10 publicly traded companies from, from, from Blue Hour. You have Aries, you have Blackstone, you have blackrock.

[Bryn Talkington]

Agreed.

[Josh Brown]

All of these companies are minting money based on like this avalanche of demand. Some of it's coming from family office, some from institutions. Although they're already big enough, they're now wealth management. Just skip the products and buy be an lp, be a gp, own the equity of the companies that are issuing these funds. Look at what those charts look like. Almost all of them look great.

[Rob Seachin]

And the best underwriting right now.

[Josh Brown]

Yeah, they're great at this.

[Rob Seachin]

This is what they do.

[Josh Brown]

Don't be retail, be wholesale. Okay.

[Bryn Talkington]

Plus the new SEC is going to do away with the accredited investor rules anyway, right? So you'll get your access to private credit, truly private credit, soon enough.

[Rob Seachin]

Yeah, There's a fundamental mismatch here. You're taking long duration loans, not really long duration loans, but longer duration loans and marrying them with immediate liquidity. We saw how that played out in 2008. In my view, you want to be with the best risk managers. Who are the best risk managers? Those that have covenants that will give them a holiday on the leverage they have in those systems so they don't get called out, out at the bottom and everything rallies back up. That stuff happens all the time. You have to be careful. And if you're on the same side of the table, to Josh's point, as the firms that are the most intelligent in structuring these transactions, they all have back leverage. And that's really where you have, you can have issues.

[Josh Brown]

I'll also say I understand it's diversified, it's non correlated, et cetera, et cetera. In a market downturn or in, God, God forbid, a recession. There will be nothing non correlated about this. We got a little bit of insight into what that looks like with B reit, which already is like a year and a half ago, that this will make that look like a picnic if and when we are genuinely worried about the economy. And so like, I'm not saying this is the worst product ever or it's bad, don't buy it. I'm just saying like, understand it could work well to the upside, but also it could work to the downside.

[Malcolm Etheridge]

I mean, that's kind of, you know, warning like Jamie Dimon had many, many months ago talking about private credit. And when it, when it does go bad, it ain't going to be pretty.

[Bob Pizzani]

We'll be monitoring this for liquidity. That's what you want to see. How smoothly does it go? If it works, you're going to see an avalanche of products like Bob.

[Malcolm Etheridge]

Good stuff. Thanks so much for that story. That's Bob Pizzani. Straight ahead. We have stocks on the move from the committee. All right, let's talk about Starbucks, because that stock right there on your screen is trading at levels not seen since May of 2023. Did a riff on this recently.

[Josh Brown]

Yeah, I'll just reiterate what I said on Tuesday. The next area of resistance is125,126. Those are the summer of 2021 highs. This is a company with new management. People are very excited about the potential to get back to basics and emphasize the things that people like about Starbucks rather than the things that they don't. You can see that Nickel is getting a ton of credit already before any sort of fundamental turnaround takes place. The kitchen sink the last quarter. I think the next report will actually be the first positive one in a long time. People want to be in this name ahead of it. If it can get to that old high 125, 126, that would be a logical place for Price to pause. Now that it's broken out. That's 10 points higher to break that level. Forget about it. You're going to have to be in it.

[Malcolm Etheridge]

I think the stock is up 24, 25% since. Since Nikkei got that job. That's right, PayPal. Malcolm, yours trim. Today, the price target was to 76 from 85. Piper.

[Bryn Talkington]

Yep.

[Malcolm Etheridge]

What do you think about this stock?

[Bryn Talkington]

I saw the note and I didn't really see anything egregious about it. They basically rerated a reiterated a neutral rating and brought the price target down a couple bucks, which doesn't scare me very much. I think this year is setting up to be a great year for fintech, primarily because deregulation really means more transaction volume for these fintechs, which is all that really matters for this category. And so PayPal, specifically, the thing that out Alex Chris is trying his best to do is find a way to squeeze some juice out of the Venmo product, reducing friction and throwing it on the home screen at checkout. Pay with Venmo is now a feature. I think squeezing that and making that the profit center for PayPal is really where the opportunity is. So it's a great setup in the shares right now trading well below its 50 and 200 day moving averages. And I think this is a place that investors should be buying this.

[Malcolm Etheridge]

Okay, good stuff. We will take a break. We will come back and do the setup next. All right, let's do the setup before we get out of here today. Brian Dell is going to be a big one after the bell isn't is.

[Scott Wapner]

Everyone should pay attention to their infrastructure structure solutions group. It grew 34% last year. It is almost half of their revenues. These are the networking and servers that go into the AI hardware, the data centers. So all eyes are going to be on that. I think it's going to be a really good print. But it's all going to be about the ISG Group.

[Malcolm Etheridge]

SICI got a yog to eog.

[Rob Seachin]

Yeah, we're looking for negative revenue growth, negative earnings growth as the street largely on weaker oil prices. The key to watch is production growth. It's expected to be up 7% year on year. They continue to be a low cost producer. They will drive operational efficiency and we think that could offset oil price weakness and give you some leverage to the upside and recovery.

[Malcolm Etheridge]

Got 20 seconds on invitation Homes Just because they reported and you own the stock. You got anything on that? Yes, sorry to throw a curveball there.

[Josh Brown]

Yeah, stocks up 5% and change today. This stock's done nothing for two and a half years now. It is a REIT. So most of the return that you're going to get is coming from the dividend yield or the distribution, if you will. Will. But today's a good day. I think this is one of the most underappreciated REITs in the market. It's rental single family homes. If you're not familiar with it and you like dividend income, give it a, give it a look, take a look.

[Malcolm Etheridge]

All right, good stuff. Thanks for that. We'll do finals next. I hope you join me. Closing bell, 3:00 Eastern. Ankara Crawford, Sarah Malik and Sarah Nason Terahano of Goldman Sachs. So we're going to take you through that final stretch today with a great group. Brian, give me your final please.

[Scott Wapner]

Berkshire making a new all time high, high margins, clean business, great way to play international.

[Malcolm Etheridge]

All right, thank you very much.

[Rob Seachin]

Rob seachen amgen. Up 18% but year to date but still inexpensive.

[Malcolm Etheridge]

Malcolm Etheridge.

[Bryn Talkington]

Yes, Prologis, they just announced the dividend raise but I'm focused on the PIVOT to data centers from distribution centers.

[Malcolm Etheridge]

Okay, again, good having you here, jb.

[Josh Brown]

Look at that. All these stocks are up. That's great.

[Malcolm Etheridge]

What a coincidence.

[Josh Brown]

What a day for 3m. Still long. The stock wants higher analysts upgrades continue.

[Malcolm Etheridge]

All right, good stuff. I'll see you on the bell. You've been listening to CNBC's Halftime Report, the podcast you can always catch us live weekdays at 12 Eastern only on CNBC.

[Silvana Henao]

All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn [e-mail].