CNBC Halftime Report – "The Year’s Stretch Run"

Date: October 31, 2025
Host: Scott Wapner
Guests: Josh Brown, Jenny Herring, Jim Lebenthal, Kevin Simpson, plus guest appearance by Brian Belsky

Episode Overview

This episode focuses on the “stretch run” for the 2025 market, with special attention to the massive impact of mega cap tech earnings, capex (capital expenditures) acceleration, and investors’ evolving expectations as the year closes. Scott Wapner and the Investment Committee analyze key trends in tech, the risk of a Capex bubble, market leadership, upcoming non-tech earnings, and notable stock moves outside of tech.

Key Discussion Points and Insights

1. Mega Cap Tech Earnings: Capex Still King

• The dominant theme of the week is accelerated and sustained capital spending (“capex”) by tech giants, especially in AI infrastructure and cloud.
• Josh Brown notes that expectations for a slowdown were decisively refuted; the "spend is not just accelerating into next year—it’s becoming existential for these companies."
  • Quote [03:06]:

    “This is the year that it went from being optional and ambitious to spend, to existential to not spend. We heard Zuckerberg say things like, ‘I’d rather overspend by, you know, $100 billion than underspend.’ ... This story has absolutely dominated the market all year.” — Josh Brown

Breakdown by Major Techs:

• Amazon: Fastest AWS growth since 2022; capex raised for 2025.
• Meta: Announced 2026 capex “notably larger”; scrutiny remains high due to prior overspend.
• Alphabet: Surpassed $100B in revenue; search worries overblown.
• Microsoft: Azure revenues up 40%; massive ongoing infrastructure investment.

2. Meta's Spending: Is the Market Spooked?

• Meta’s heavy spending is being viewed more skeptically by the market than similar moves by peers.
  • Scott Wapner [06:02]:

    “Any other company says, yeah, we’re upping our capex, it’s probably rewarded. There’s a little bit I think of PTSD around Meta and their money and how much they spend and how much is too much.”

• Jenny Herring argues that fiscal discipline is what powered Meta’s rally; the market may be worried about whether new investments will pay off.
  • Quote [06:41]:

    “It’s going to ultimately be a fine line between who overspends severely, who spends correctly. We’re in a very euphoric, extreme kind of sense right now.” — Jenny Herring

3. Capex Bubble or No Capex Bubble?

• Discussion of Michael Burry’s cryptic warning (“sometimes the only winning move is not to play”) sparks debate about the risks of overbuilding and borrowing to fund capex, especially in data centers and AI.
  • Josh Brown [13:01]:

    “If you’re not a professional short seller, you probably should not be spending a lot of mental energy trying to figure out... now is when I want to make an aggressive bet against this trend because it could run you over, go on for years.”

• Jim Lebenthal explains the logic behind debt financing for data centers and why it’s not immediately alarming, as long as cash flows back the borrowing.

4. Broadening Out: Stocks Beyond Tech

• Kevin Simpson and others discuss opportunities in “old tech” (IBM) and cyclical or value names (Allstate, Walmart, Home Depot), highlighted by IBM’s earnings resurgence:

  • Quote [20:28]:

    “Given a few more months, we probably would have joined [those who gave up on IBM]… Even if by accident, it’s incredibly AI adjacent. Very profitable. Profitable quantum computing is without question something that we’re very excited about.” — Kevin Simpson

• Simpson’s portfolio shifts toward insurance, retail, and other value names as a potential hedge against a tech “bubble.”

5. Netflix: Attractive After the Selloff?

• Josh Brown reviews Netflix’s recent rough patch and possible M&A ambitions (e.g., interest in WBD assets):
  • Quote [24:48]:

    “It’s an incredible library, an incredible content producing studio ... you cannot emphasize enough how incredible it would be for any streamer, especially Netflix, to take things like the DC Universe and Harry Potter... But the price, you’re talking about a $70, $80 billion deal. It just sounds fantastical to me.”

Important Segments & Timestamps

• [02:32] — Josh Brown’s ‘Big Take’ on mega cap Capex: No slowdown, the trade is not rotating out of big tech, but broadening is beginning elsewhere.
• [06:02] — The panel interrogates why Meta is scrutinized more harshly for spending than peers.
• [09:43] — Market strategists on whether capex discipline is peaking and highlighting possible signs of mean reversion (JP Morgan, Tony Pascarello of Goldman Sachs).
• [10:40] — Jim Lebenthal: “We’re on the back stretch … this is a horse race" as AI infrastructure investment enters a new phase.
• [13:01] — Michael Burry “bubble” post is discussed, with warnings not to short the capex trend prematurely.
• [17:34] — Debt funding for data centers explodes; is it risk or prudent capital management?
• [20:11] — IBM’s transformation and outperformance; opportunities in non-tech names.
• [22:11] — Preview and expectations for upcoming non-tech earnings (TripAdvisor, Marriott, DoorDash, McDonald's, Qualcomm, etc.).
• [35:11] — Josh Brown’s “Best Stocks in the Market” features Ford and GM, whose stocks have outperformed expectations despite early-year tariff fears.

Notable Quotes & Memorable Moments

• Brown, on tech capex ([03:06]):
  “This is the year that it went from being optional and ambitious to spend, to existential to not spend. We heard Zuckerberg say, ‘I’d rather overspend by $100 billion than underspend’... This story has absolutely dominated the market all year.”

• Herring, on market cynicism toward Meta ([07:49]):
  “On a year-to-date basis, [Meta] was still one of the stronger ones out there… I don’t really know why it wasn’t [rewarded more]. Maybe it’s cynicism. Makes no sense to me.”

• Simpson, on Meta vs. others ([08:54]):
  “AWS, Azure, Google Cloud—those are revenue streams those other Mag 7 names have that Meta doesn’t. By choice, it’s a closed ecosystem, which I think is to its benefit.”

• Laventhal, on the "race" in CAPEX ([10:40]):
  “This is a horse race and you’re on the back stretch now ... Meta may be having a bad week...but again, that’s just for now. These things will change.”

• Brown, on whether this is a bubble ([13:01]):
  “It’s so hard to understand whether or not it’s a bubble based on future fundamentals that are about to deliver ... if you’re not a professional short seller, you probably should not be spending a lot of mental energy trying to figure out...when I want to make an aggressive bet against this trend...it could run you over, go on for years."

• Simpson, on value stocks as a hedge ([21:31]):
  “If this trade is Bubblicious or whatever ... maybe we need to expand our mindset outside of that and continue to build up some of these names that are out of favor.”

• Brown, on Ford & GM outperformance ([35:14]):
  “Ford and GM are on my list of best stocks in the market ... auto sales are much more heavily influenced by the stock market wealth effect than they are by the impact of tariff-driven inflation. That’s really the story on these two names.”

Outlook and Strategy

Guest Interview: Brian Belsky (Humorless Investment Strategies)

• Believes we’re not at a market top; expects positive but normalizing performance in 2026-27.
  • Quote [30:03]:

    “Normalization, Scott, means kind of high single digit performance, high single digit earnings growth, a 10-year treasury between 3.5 and 4.5. That’s a really great environment for stocks.”

• Sees market leadership broadening beyond mega caps and expects traditional stock-picking to continue its comeback.

Market Preview: Non-Tech Earnings Next Week

• The team previews upcoming earnings for TripAdvisor, Marriott, McDonald's, DoorDash, DraftKings, Qualcomm, and more.
  • Jenny Herring ([41:04]):

    “We love Marriott ... what I’m looking for in this is a read on the consumer … Marriott’s a great company to listen to to get a feel for what the consumer is really looking like.”

  • Jim Lebenthal ([42:08]):

    “Qualcomm is kind of the most important of those …the numbers ... are what they are. But what is the tone and verbiage from the analysts; that’s going to determine what the recommendations on the name are.”

Final Trades and Rapid-Fire Picks ([48:51])

• Josh Brown: Rocket Mortgage – “Great quarter. Very tough environment that should be getting better.”
• Kevin Simpson: Meta
• Jim Lebenthal: Cleveland Cliffs
• Jenny Herring: Bristol Myers

Episode Tone & Takeaways

• The tone is energetic, analytical, and grounded in current market realities.
• Mega cap tech remains central, but cracks in the “all-tech” narrative are appearing.
• Guests strongly recommend selective investing and warn of the dangers of overreacting to each quarter’s news in “boom and bust” fashion.
• Value and cyclical names are increasingly in focus for those looking beyond AI and data centers.

Useful for Those Who Haven’t Listened:
This summary captures the critical debates and actionable insights around capex acceleration, the prospect of a bubble, and how to navigate a tricky but still bullish market environment as the year closes out. It also highlights stock-specific trade opportunities through the eyes of seasoned investors, alongside a flavor of the show’s dynamic back-and-forth style.