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Halftime Report
Trading the Tech Boom: The Committee's Top Strategies 5/26/26
00:44:12
Scott Wapner and the Investment Committee discuss how they're trading the tech boom and share the best strategies to navigate the high-flying sector. Plus, we hit the latest Calls of the Day. And later, we debate some Options Action we're seeing in the miners. Investment Committee Disclosures
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- [00:00]
Edward Jones Narrator
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- [01:01]
Scott Wapner
I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. All right, thanks very much. Welcome to the Halftime Report. I'm Scott Woepner. Front and center this hour, the tech boom. Apple hits a new record high. Micron surges again and another high flying name getting ready to report its earnings. Earnings. We're debating the markets with stocks at new highs today. Joining me for the hour, Joe Terranova, Stephanie Link, Jim Leventhal. We will go to the markets. You'll see what I'm talking about here. Russell's the outperformer up one and a quarter percent. Dow's a touch negative today but nonetheless there is the S and P. The NASDAQ remains a story. Oil's lower yields are down. The 10 year was below 450. But we're watching all of that. We're actually going to lead today with Apple. It hit a new record high. It has been ripping of late. In case you've been paying attention, let's show you the stock over the last last month because it's coming off its ninth positive week. That's the longest stretch since 2017. It is the top performing mega cap in the month of May. We're less than two weeks away from wwdc. We'll be broadcasting live from that event. Melius today. Apple may be on the brink of some real AI sizzle. It says Target to 385. Target to 380. At B of A. Joe, you get the first shot at this stock which has just blown past the others over the last month. Month and says don't forget about me.
- [02:35]
Joe Terranova
So like everyone else, we get things wrong from time to time in this business. But when you have conviction about something, you have to make sure that you get behind it with your capital and your positioning. And that's the fact with Apple. I said coming into 2026, I felt Apple was the mag7 name that would have the outperformance. It would play catch up relative to the rest of the Mag7ai Halo story. And on March 24th I took my position at 252 and a half and I've now execut four subsequent buys and will continue to buy this name as it moves higher. I understand the valuation is rich, it's in the mid-30s. But I believe we are at the beginning of what will be the moment when Apple finally embraces whether it's generative AI, agentic AI, but delivers to the consumer something tangible in their hands that we have all been waiting for. The iPhone 18 will come out in September. I think you'll see improvements as it relates to Siri and I think this is a moment for very aggressive, momentum oriented catch up trade for Apple and I will stay with that.
- [03:41]
Scott Wapner
Well, they better not disappoint in a couple of weeks when we're sitting out there with the big event going on behind us because the stock's running right.
- [03:49]
Joe Terranova
Haven't they disappointed over the last several, over the last several years there's been grand disappointment surrounding this company. So I think an incremental move in the direction of delivering something to the consumer is all ultimately they really need to do. And if there is a perceived misstep in the stock pulls back, I'll buy more.
- [04:07]
Scott Wapner
What about you? You own it?
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Jim Leventhal
I do own it. And you know, I like the way he just phrased this. You said momentum oriented investors. You know me, Josh, Joe and Scott and Stephanie, you all know me. I'm a fundamental value oriented investor. So I doubled up on this stock about a year ago right after Liberation Day at 190. Now I'm enjoying the fruits of investing low, watching it go higher and I'll sell higher. But like you Joe, I'm just watching the momentum here. I think it's overvalued. Let me be clear about it. I think Apple's overvalued for all the hype about it's going to have some air sizzle. We've heard that many times before in the last three years. I am riding this thing until the momentum wears out and then I will trim it. I will likely maintain a Corporate.
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Scott Wapner
Why do you think it's overvalued at
- [04:51]
Jim Leventhal
mid-30s and the growth rate and earnings ahead of it? I just, I just don't see the growth rate in earnings per share justifying the mid, the mid-30s multiple. Scott, you just, that's, that's beauties in the eye of the beholder. Some people can disagree with me.
- [05:04]
Joe Terranova
Over the last three years, Apple, when you look at revenue growth, came in at a very disappointing 1.6% in the last year. Apple is back to double digit revenue growth. What we knew this company to be previously and maybe now we're seeing participation once again as it relates to, to China. I think there's evidence to suggest that. But overall if you're telling me the story is going to be about a company that's going to grow its revenue back in double digit territory and it really hasn't even realized the opportunity to deliver to its consumers. I like that.
- [05:37]
Jim Leventhal
Compelling, you know, you know how I invest. You almost can probably finish my sentence for me. The peg ratio is 3.5 now. I'm enjoying this run and I want you to be right because I'm not selling but indicative of the market overall. I wake up in the morning, I think to myself, boy, I should probably trim something like Apple, like Cisco, like Qualcomm. I'm just not doing it because this is a momentum driven market right now. If you want to tell me the fundamentals support it, I want to believe you. I don't. But I want to believe you. This is a momentum driven market.
- [06:08]
Scott Wapner
Doesn't own it either. No, you probably would lean more on Jim's side because I think you've even said on the program that you think Apple's overvalued at its current valuation.
- [06:18]
Stephanie Link
Yeah, 100% I agree. I actually agree with both of them. I understand why Joe likes it and the momentum is there. Absolutely no question. And you do have a potential catalyst, WWDC and I think they probably will deliver this year versus last year which was a really big disappointment. But you do have a new CEO. I suspect they'll be probably conservative. I, at the same time I agree with Jim because I think paying mid 30 multiple for low double digit earnings growth, upper single digit revenue growth, that to me is just not compelling. I have so many other technology stocks, Scott, that I find much more compelling.
- [06:55]
Scott Wapner
This is a big week for you because Marvell reports. I know you know, people don't talk about it in the same light as they do the Microns of the world. Look at Micron again, right as we're having this conversation, it's like you look at this and you do a double take every time you look at it. The Stock's up another 17% today. You want to talk about a price target bump. So by the way, the market cap goes over a trillion for the first time ever, the stock's at 881. UBS put a price target of $625 on this stock. Their old target was 535. I'm not sure as long as we've been doing this show, which is going to be 15 years in October, I've ever seen a price target increase of that magnitude on a company that big.
- [07:51]
Stephanie Link
Because we are short memory and compute. And they are the beneficiaries of all of the MAG7 spending $761 billion this year in AI capex and it's going to be probably over 1 trillion in capex next year. All you need to do is read Andy Jassy's shareholder letter. He's the CEO of Amazon. It's a great letter. And he goes through why they are going to spend $200 billion this year alone because they see the returns in the future years. So eventually the Mag Sevens are going to be aggressive buys again. But at this point in time, people are selling these, some of them anyway, and they're buying what the beneficiaries are and that is the semiconductor sector. And I went back and I looked at technology just in general. I mean the earnings growth last quarter quarter was 50% for the XLK, but the earnings revision, Scott, were up 25%. 90% of them were semiconductors. So it's sort of an interesting time. I'm, I'm nervous about Marvell only because
- [08:53]
Scott Wapner
up 150% year to date.
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Stephanie Link
The only reason I'm nervous about it. But they are going to grow their optics business 50% and then they're going to grow their custom asic business by 20%. 20%. They're, they're saying it's going to go to 100% by fiscal 28. So I think you're looking at earnings power at this company north of $6. And then you look at the valuation on that basis. It's not that expensive. However, it is very much. You know, it's had a nice run and I would not be surprised to see a pullback in what's the value there in the sweet spot of where you want to be.
- [09:26]
Scott Wapner
Sorry, what's the valuation on a Marvell relative to a Micron, which is like microns around eight.
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Stephanie Link
Right. Well 12. It's at 12 times the forward numbers. Micron is. No, this is if you believe my number at $6 a share. This thing is at 35 times forward estimate. It's not cheap but you're growing substantially. And I think it's actually less cyclical than a Micron. I don't, I'm not saying that you don't want to own Micron or hold on to it. I think you own it, Joe. Right. But I just feel like there's a, there's a different story here with Marvell. This reminds me Scott of Broadcom five years ago because no one really talks about it and they haven't been talking about it until as of late they have, but it was kind of undiscovered and off the radar. By the way, I'm going to throw in another name that's off the radar synopsis. They also report to they sell software that goes into the chips and chip complexity is up 50% year over year.
- [10:17]
Scott Wapner
You're saying that Marvell for example deserves much more premium valuation because it's less cyclical.
- [10:25]
Stephanie Link
Right.
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Scott Wapner
Than some of the other chip names have historically been.
- [10:28]
Stephanie Link
Right. I mean the optics business is going to grow 50% and it's all about inference right there. Right there. And so that's growing like a weed. I bet, I bet you 50% is probably on the low end of what they are going to do. And then again the custom Asics business, they have an 80 share with Broadcom in this business and you are seeing increases in silicon content and more adoption in the custom Asic world. So I could see. And by the way they have the Google Anthropic a partnership as well. So there's a lot there that could, that could, that can go.
- [11:03]
Contessa Brewer
Right.
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Stephanie Link
I just wouldn't be surprised though. You see a little sell on the news. I think it'll get, I think it will get bought.
- [11:09]
Scott Wapner
You got you. You have the two M's Marvell and Micron.
- [11:12]
Joe Terranova
So at the end of January we bought Marvell at 165. I think Steph is completely accurate in identifying this as a potential name that is kind of under the radar. And some of the what the street has fallen asleep on it. The 12 month price target for Marvell is $163.
- [11:31]
Scott Wapner
So UBS goes to 300 today from 85.
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Joe Terranova
Community Scott has to come up.
- [11:36]
Scott Wapner
Yes, well they all are. Shows you how offsides many on the street have been on the name. If you, if you have a target of 85 and the stock's been running so much that you have to now go, go to 300. If that's not a case study in under appreciation or underestimation of part of the story, then that is the definition of reiterated as well.
- [12:00]
Joe Terranova
Top semi pick at JPM, $2 billion investment from Nvidia. As you cited partnerships with Microsoft, with Amazon, with Alphabet. So this is. I like your analogy to Broadcom. I think that works well. I think this is clearly under the radar as as much as it relates to Micron. I just want to address one thing. Look, right now this is a white hot momentum market. Look at momentum today as a factor. It's up nearly 3%. It's up 30 something plus percent so far in the quarter. So that's problematic for me in the Jyoti ETF because we're not concentrating in the direction of momentum. But I have to say this, I feel phenomenal about where we are being equally weighted to these momentum names because, Scott, I think that's the way you have to own these names right now. I don't think you can concentrate any more. And we own Western Digital. I don't think you could concentrate in the direction of these memory names anymore. They've gone parabolic. You're exposing yourself to a significant correction. Be there, but kind of be there.
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Jim Leventhal
Other things have gone parallel.
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Joe Terranova
Be there in a very moderate way. And the equal weight strategy I think is the right way to do it. Look at DRAM, okay, look at the DRAM ETF. Congratulations to Dave Mazda and Round Hill. They're at $10.8 billion in a whim currently. There was never to your point last week, Scott, when the market corrected memory and that DRAM ETF saw inflows every day when everyone else was concerned that momentum was rolling up. So I can't emphasize enough it's the degree to which you own these names when they go parabolic. And I don't think you concentrate right.
- [13:37]
Stephanie Link
I think there's better value right now in Broadcom and in video. And I don't own Nvidia, but Broadcom for certain again today they have an. Yeah, but it's only up 21% year to date. And I know it's had a great last year, it's been a great couple of years, but I actually think they have a lot going for them. They have an AI pipeline of $100 billion by 2027 is a very good and by the way, then you get the networking kicker to it, that's another 40 billion. There's a chance that this company can do north of 16 to $18 a share. By fiscal 27, maybe it could be higher like in the low 20s. And that's. That makes this stock very attractive too.
- [14:13]
Scott Wapner
Let's look at Qualcomm because it's a new record high in its own right today. Jimmy, I'll, I'll toss this one over to you. I don't know what the, the P. E off the top of my head is.
- [14:24]
Jim Leventhal
We low 20s, 22.
- [14:26]
Scott Wapner
And how does that, how does that square up with how it has historically traded?
- [14:31]
Jim Leventhal
There's a lot of hype in Qualcomm. Look, I want to be clear and I'm going to use Qualcomm as an example. This is a frothy market right now, in my opinion, okay? This is a market in which one should be prepared to trim. I don't care whether it's the memory names or Qualcomm, but Qualcomm, you know, there's news today that they're going to provide chips to tick tock. Okay, great. And there's a hyperscaler unnamed that it's supposedly providing chips to as well. I get it, I get it. But here's the basic news. Their earnings estimates have been going down, not up. So there is a lot of hype. There is a lot of earnings estimates
- [15:05]
Scott Wapner
have been going down, not up, but the stock's been going right. So that's at odds with one another. There's a friction there.
- [15:12]
Jim Leventhal
You understand why I'm a little like why I'm not saying to everybody, go out and buy the stock.
- [15:16]
Scott Wapner
No, no, no. I'm actually, I'm confused as to why you haven't trimmed it already relative to some of your comments earlier about other stocks. I actually when you're telling me that earnings estimates are going down as the stock price goes up. So that sounds like red siren flashing.
- [15:32]
Jim Leventhal
Yeah. So Scott, you, I don't know where you were. Frank Holland was on two weeks ago. I actually did trim that day. I didn't know you weren't going to be here. I usually wait for these things when you're here, but I did. And you know what?
- [15:41]
Scott Wapner
The time you're trading around my presence.
- [15:43]
Jim Leventhal
Well, I appreciate you, okay, but you know, then we have these discussions like this. Look, you know what? It's just by the stock price, it was the wrong thing to do to trim it. So I'm watching this. It's same true for Cisco where actually the earnings estimates are rightfully going up. Same thing for Apple staff. You already heard me.
- [16:01]
Scott Wapner
Say that Cisco 135 today over at B of A. They reiterate the buy there.
- [16:05]
Jim Leventhal
Yeah. And low 20s multiple there. But the earnings estimates are going up. So you know what, I'm just going to ride that one. But I'm telling you Qualcomm, I got an itchy trigger finger, same with Apple, frankly, to trim these things. But I've learned from my buddy Joe over here, working with him for 13 years, I've learned respect the momentum. And that's all I'm doing, folks. I'm respecting the momentum.
- [16:25]
Scott Wapner
So Edgar Didi is, is once again addressing them the, the state of the market, if you will. The fact that there, you know, has been an exuberant feeling around many names in which he says the entire rally has been driven by forward earnings. So he's making a fundamental case. The multiple has contracted. FOMO inflates the P E. This market did the opposite. That's why they're not in the bubble camp. He says FOMO is based on hope and hype. FIMO is based on fundamentals. At 21.1 times forward earnings, the S&P 500 is not irrationally valued unless a recession is coming in the foreseeable future and we don't see one. FIMO is fabulous earnings momentum replacing fomo. Okay, according to Yardeni. So we're not. We just had a conversation about a Micron, which you look at now almost every day and it's up double digit percentage points and you're like, oh, that's just Micron. That's what it does. And then Marvell, which is straight up to the right and a lot of these other names are straight up to the right. And the questions are being asked about a bubble and he and some others are coming out and suggesting no because their earnings are justifying what the price action in the name has been.
- [17:44]
Joe Terranova
The earnings are absolutely remarkably strong. And I think you could say that not just for the recent quarter, I think we're coming up now on seven consecutive quarters of double digit earnings growth for the S&P 500. If you could accept the fact that where we are today going into June of 2026 and that earnings growth is really, really narrow, it's really about technology. Now I could find the earnings growth in other places like industrials, as long as you could tell me the story that those industrial companies are contributing to the build out of the data center or they have some involvement in AI. So as, as long, long as you're willing to accept the fact that the earnings growth is Narrow and it is concentrated in the direction of AI. Then I think you, you are allocating accordingly in that direction. And you're not treating this as Some.
- [18:41]
Stephanie Link
There were seven sectors though that grew earnings over 13% last quarter alone. And I'll give you technology, definitely and comm services Both grew about 50%. But discretionary grew 40% and materials grew 40%.
- [18:55]
Scott Wapner
I know, but if you take out, do you know the number? I'll come right back to you. I come back to you because I
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Stephanie Link
know you're going to say, but do
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Scott Wapner
you know the number of discretionary earnings growth without Amazon?
- [19:04]
Stephanie Link
Yes.
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Scott Wapner
Okay.
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Stephanie Link
And actually they're the fourth largest in terms of earnings growth. But there are three other names that grew more. Expedia is the number one company on the list. So I went down and looked at every single name because I thought the same thing. And it was very broad based, believe it or not. And so I think you had, you know, discretionary do well last quarter. Materials do well last quarter. Financials were up 23%, utilities were up 18%. This if we get through this war, which eventually, hopefully we will, and sooner rather than later, I think you will go back to the playbook of what we saw in January and February of a broadening out because of the earnings story.
- [19:39]
Scott Wapner
That's the point we want to hit if and when this war ends, like really ends, like really, really ends. And I mean really, do you go to the broadening playbook for real? Because even though you said financials and their earnings growth was 20 something percent, whatever number you use, the sector itself is one of the worst performers year to date. So great earnings growth hasn't meant anything for that sector. And then some others. And by the way, Chris Harvey, who was on with me from CIBC the other day, he raised his price target on the S and p to above 8,000 in part because he believes of almost an everything rally. But the war has to end because you have to get oil prices down and you have to get yields down, which many believe will happen. Is that going to finally be the thing that does it?
- [20:28]
Stephanie Link
I think so. But I will tell you that I believe inflation is going to stay elevated because of the AI food food chain and because we are short all the things that we talked about earlier and it's driving better than expected GDP growth of 4%. And just kind of the law of large numbers, when GDP is growing at 4%, you're, you're going to have higher than average inflation. So I think it could probably be two and a half, 3%. That's where we were actually in February before the war. So the war will be welcome. With good news, oil prices will come down substantially. That's to going good news. That'll help the consumer. But I do think this explosive growth in the economy is going to lead to stickier inflation over time.
- [21:09]
Jim Leventhal
You can use the equal weight S&P 500 ETF as a way of measuring everything that we're talking about. So obviously tech earnings, you know, blew the COVID off the ball this quarter, up 40%. But the equal weight is 50. Okay, fine. Either way, enormous. Okay. The equal weight S&P 500 is growing at 4 14% earnings growing at 14%. If we didn't have those tech numbers, we'd be saying hey, that's great for the market overall. And coincidentally the RSP is trading at approximately 14 times earnings. So for my favorite ratio, the PEG ratio, It's at a 1.0, which to me indicates. To answer your question, Scott, you can go into these areas if you think the war is ending and you're seeing today some effect of lowering oil prices on things like, like airlines which are rallying Delta at a record high today, just as an example. And if you see yields come down not to 4% on the 10 year because I don't think you're going to see that. But if you see it come down to 4.4, 4.35 where it was not that long ago, many of these other non tech sectors, some of them indebted like financials, will likely do quite well. So I actually do believe the war will end at some point in time. I think I made Delta my final trade on Thursday on exactly that premise. And I do think the rally will broaden on the back of earnings growth.
- [22:26]
Joe Terranova
Broadening the possibility for that is there. I'll acknowledge that. Steph, you cited Expedia. I think you said Expedia had the best earnings in consumer discretion, over 300%. Do you own it? No, I do. It's the worst performing consumer discretionary stock that we have so far year to date. It's down 21%. It's up 3% today. Why? Because it's feeling some relief as it relates to the war. But you need a very clear and well defined resolution from my perspective to the end of this war for me to accept the fact that we are going to return to Valve to value rather. And the broadening out narrative taking hold
- [23:03]
Scott Wapner
of Jonathan Krinski on the discretionary space today says it's so bad, it's good you've got a lot of stocks. Well, at some point stocks have been banged around enough, been banged up enough that they're looking actually attractive. Based on what the outlook could be, it's the worst performing sector year to date on an equal weight basis. It's back to.08 levels in terms of relative performance versus the S&P now. Yes, it's predicated if WTI pulls back, the consumer sector should see a meaningful near term tailwind. Really like you know, I'm thinking obviously. And then there are stocks within that universe that look pretty good, whether it's Dick's Sporting Goods, I think Reports tomorrow or this week, Norwegian and some other names in that universe as well.
- [23:52]
Joe Terranova
So the consumer discretionary sector has not been one of the sectors that I have been able to trade or invest around with a strong degree of success over the last several years. I think there's a lot of complexity to it. I think there's a lot of names that run hot and cold. And quite candidly, I think when you're allocating in direction of consumer discretionary, really look back on what your performance is because probably it's Amazon and it's Tesla that's bailing you out more than anything else. If you think about names that we used to talk about and how they go through cyclical experiences of being the favorite name on our show, Lululemon, down 61% now in the last five years. We are all used to talk about that stock. Chipotle. We consistently talked about that stock. How about Domino's? Have you heard me talk about Domino's recently? It's down 26% in the last five years. You could go to your Under Armour, you could go to your Nike. So consumer discretionary has this complexity and then you get the turnaround stories. You've now Target, you've nailed Starbucks. Those are both turnaround stories. Jimmy Ford is becoming a turnaround story once again. I have ebay which is a turnaround story. So I think when you look at consumer Discretionary you kind of have to understand the cyclicality of it. I think that's the first place that you begin when you're investing in the consumer discretionary sector and understand that really secular themes, except for Amazon and Tesla, I'm not sure they really exist.
- [25:16]
Stephanie Link
Consumer is healthy. According to Brian Moynihan from Bank of America. He was on on the tape last week talking about how the consumer spent 5% in the month of April and only 50 basis points of that was gasoline. So they are spending. He said it was very broad based that credit quality continues to be excellent and that they're low, they're lending more, which is what we want the banks to do. So to me, I think, yeah, the. There's a lot of hit and miss in retail but I do think that there's plenty of options.
- [25:47]
Scott Wapner
A lot more miss than hit. A lot more missed than hit. Right. I mean if you to your point, you know the consumer. Yeah. Seems like the consumer's hanging in there. More so at the top than the bottom of the cave, I suppose. But the stocks have been such underperformers.
- [26:03]
Stephanie Link
I think you have to be a stock picker in this sector for sure. I mean I own. It is very.
- [26:08]
Joe Terranova
It's hard to. Again, I own Ulta Beauty last year. That's all I do is talk about Ulta beauty. It's down 14% year to date. That's not because of the war.
- [26:16]
Stephanie Link
No, I understand but at some point the valuations are do matter and when you have something like not Ulta but something like Target trading at 15 times forward estimates with a 3 1/2% dividend yield. Just getting their act together now. 5.6% comp is very respectable. I don't know the last time that they beat on a comp basis to Wal Mart but Wal Mart was fine too at 4.1%. They were both very conservative with their guidance as they should be. But I think there's a. There's a story there at Target and the valuation makes sense. Dick's always trades crappy around their earnings. They report. Report tomorrow. I wouldn't be surprised to see it down a little bit because it's up 15% year to date. But that too also trades at 15 times earnings. And they're crushing it at the Dick's core business. 5% comp as expected. I think they'll do that. They got a turnaround footlocker. I think they're in the process of doing that. So I think that there are some stories out there within discretionary that actually are very cheap and attractive for the long term.
- [27:06]
Joe Terranova
Look, your definition of the economy, I will not disagree with that at all. One thing I haven't had the chance. I haven't been on since Kevin Wash was. Was nominated.
- [27:17]
Scott Wapner
Sworn in.
- [27:17]
Joe Terranova
Sworn in. Thank you. Since he was sworn in on Friday. I will say this. A couple of months ago we were talking about running it hot. Right. Let's run the economy hot. I think that's absolutely what's going to happen here in 26. I don't see any rate hike. I don't understand why people are talking about a rate hike. I don't think that's happening at all. I think we are going to go and push growth to the strong, strongest degree and I think the inflation is going to ride along with it higher and higher.
- [27:40]
Scott Wapner
And President Trump made his economic environment as we were sitting here, you know, on the day of the swearing in was Friday, when he said, straight up, let it boom, said the president, making the point that, that you're making. So we'll see. I mean, the debate in this room,
- [27:55]
Jim Leventhal
you'll get inflation with that eventually, but you're going to get the growth eventually. I got it. I mean, get past the midterm elections and then you're going to have to to deal with that inflation, see what
- [28:05]
Scott Wapner
the productivity boom does to sort of offset a lot of that. We're gonna take a break.
- [28:09]
Jim Leventhal
I like that.
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Scott Wapner
We have more calls of the day ahead. We're back in just two minutes.
- [28:20]
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- [29:21]
Edward Jones Narrator
There's a fire inside you you can't ignore. Stand still. Not a chance. You're a lifelong learner who's come this far far. Now we are here to help you keep going further. Capella University. What can't you do? Visit Capella Edu to learn more.
- [29:51]
Scott Wapner
Let's talk about some calls the day Lily price target to 1251, not 1252. Okay. 1251 from. From 1113. That's it. B of A. They just tweak their forecasts. Put a multiple on that and get your number.
- [30:10]
Joe Terranova
Yeah. So We've been talking about this quite a bit over the last several years. The fact that Lilly really trades like a biotech company. When you look at their revenue growth, which is remote, remarkable, running 55% in the last quarter, that's statistical evidence to it. Over the last three years, you're talking about revenue growth at 32%. The thing that I find very compelling about the story right now is they are taking the growth and they are reinvesting it into areas of the market that diversified the product line. So it's not just an, and I understand, understand, it's the GLP1 story that's driving Lilly higher, but it is now investing in other medical areas that will allow them to diversify the story over the next three to five years. And I think that's incredibly important if you are a shareholder of this company, to see them reinvesting in the diversification.
- [31:05]
Scott Wapner
They announced their three vaccine developer acquisitions today. Wolf is addressing the space industry as a whole of health care. Is it finally turning the corner? They do mention Lilly, kind of. You have to mention Lilly if you're talking about this space. Yes, indeed. It looks like the tide is starting to turn. You sold your XBI recently.
- [31:25]
Joe Terranova
I did. Probably sold it a little bit too soon. But you're never going to look back and be upset about ringing the register and taking profit on something. I had the XBI ETF, the biotech ETFs and since the end of the summer last year and sold it last week. I think somewhere around 127.
- [31:41]
Scott Wapner
I know, but what if you're, if you write a book that, that says buy high and sell higher, do you need to write a little chapter on buying high and not selling it high enough?
- [31:51]
Joe Terranova
No, there's a chapter that actually speaks about that. You will make mistakes in this business and that's what this business is all about. When, when you make a mistake, you have to forgive yourself for the mistake and move on. And actually, Mark Fisher, our good friend, always used to say this. When you go through a bad period of trading, the best thing to do is spend a little money on yourself to make yourself feel better.
- [32:14]
Jim Leventhal
I like that philosophy. It's a great forgive yourself.
- [32:17]
Scott Wapner
Did you, after you sold the xbi, did you go out and buy yourself something?
- [32:21]
Joe Terranova
I celebrated a little bit. I mean, I had a phenomenal meal at Bemontes on Saturday night, which I know you were ending yourself.
- [32:28]
Jim Leventhal
You know, it's weird talking in the A block about certain tech stocks getting ahead of themselves. The thought that I had is when I do trim these. It's probably these pharmaceutical companies. These vertex is AbbVie, AstraZenecas, which are fine companies at fine multiples. But we really haven't done anything for several months that I will probably cycle the money into. It will undoubtedly be early. I will have to forgive myself. Scott, you may forgive me when I'm early on.
- [32:53]
Scott Wapner
Doubt it.
- [32:53]
Jim Leventhal
Maybe. Doubt it.
- [32:54]
Scott Wapner
Yeah.
- [32:55]
Joe Terranova
Did you have.
- [32:56]
Scott Wapner
Did you have the pork chop parmesan?
- [32:58]
Joe Terranova
I did.
- [32:58]
Scott Wapner
Muscles.
- [32:59]
Joe Terranova
Mussels. White, White and red. So good. The ravioli with the bolognese sauce. Steph, you did great. You got to go to Bermontese.
- [33:07]
Scott Wapner
All right, let's continue that conversation. Steph, you own UnitedHealth and Natera.
- [33:11]
Stephanie Link
Yeah. I mean, UnitedHealth actually has been a good stock this year. It's up 18%. I think Helmsley is doing a really good job at executing. They beat and they raised. Raised. I can't remember the last time they beat and raise. It's been years. And that was. That happened last quarter. And I think the real opportunity for the company is the medical loss ratio going lower. That's a positive, and that's why they beat the numbers. And so I like what they're doing. I don't think it's expensive. About 18 times earnings. It's not super duper cheap, but it typically trades at about 20 to 23 times. So I think there's still value there.
- [33:41]
Joe Terranova
Let me just give you three names that we hold in the ETF and health care. Working really well. How about Merck? Merck up to 122. Gilead and Amgen also working particularly well, obviously in the biotech large cap space.
- [33:54]
Scott Wapner
Okay, we have more of the day's big movers. That's straight ahead. Plus, options action from Chicago is coming up as well. Back after this.
- [34:05]
Joe Terranova
As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward.
- [34:17]
Paul Griggs
America, 250 years. To me, this is the story of reinvention. This country is adaptable. It is agile, and it is enabled. And to me, that results in an America that always leads. I'm Paul Griggs. I'm the US senior partner and CEO of PricewaterhouseCoopers. PwC as we know it Today was the result of a combination between Price Waterhouse and Coopers and lybrand back in 1998. But the firm has its origin story right here in this country for more than 175 years. At PwC, we engage with more than 20,000 clients across the American economy. We help the system run and we help the system evolve. 175 years ago, we were focused predominantly on on ensuring that the capital markets as we know them had trusted financial information. We're still putting trust into the capital markets, but we're also now helping businesses evolve. The next era of American growth will be defined by exactly what has gotten us here, which is you face disruption. You put people who have grit and agility alongside that disruption, but the innovation that this country produces and that produces amazing outcomes that are far beyond what any of us could otherwise expect. America's superpower is no doubt its ability to reinvent. PwC has been a part of the American story for 175 years, and I can't wait for 175 years more.
- [35:50]
99% Invisible Narrator
A History of the United States in 100 Objects is a brand new podcast from 99% Invisible and BBC Studios. Each week we're looking at a different object from across American history with a unique story to tell about who we've been, what we've built, and what we've allowed ourselves to forget. Some of these objects are well known, many are not. But all of them carry the story of how we got to this moment. Find A History of the United States and 100 objects on the 99% invisible feed wherever you get your podcasts this
- [36:22]
Movie Trailer Announcer
Friday, From Focused features and the producers of Darkest Hour comes the untold true story of D Day. Facing the wrath of nature and with the largest seaborne invasion in history at stake, the fate of the war rests on the shoulders of two extraordinary men. One impossible decision. Featuring powerful performances from Andrew Scott, Brendan Fraser, Kerry Condon and Damian Lewis, the Untold True Story of D Day. Only in theaters this Friday. Rated PG13 may be inappropriate for children under 13. Experience it in Dolby Cinema.
- [36:51]
Scott Wapner
A vacation rental shouldn't come with surprises. It should come with verbo care and 247 life support.
- [36:55]
Stephanie Link
If the hot tub's broken, that's a Verbo care thing.
- [36:57]
Edward Jones Narrator
If my teenager starts calling me Leslie,
- [36:59]
Scott Wapner
that's a family thing. Leslie.
- [37:00]
Stephanie Link
Leslie.
- [37:00]
Scott Wapner
Verbo Care and 247 Life Support. If you know you've ERBO terms apply. See verbo.com trust for details.
- [37:20]
Contessa Brewer
Hello, everybody. We're back on Halftime Report. I'm Contessa Brewer with your CNBC news update. The ongoing Ebola outbreak in the Democratic Republic of Congo and Uganda is now spreading faster than it can be contained, according to the International Red Cross. It warns the outbreak risks becoming the deadliest on record without urgent international action. More than 900 suspected cases of Ebola have been reported in the region and more than 200 deaths linked to the disease. Jonathan Andik, the son of Mango's late founder, says he is temporarily stepping down from his role at the company to focus on clearing his name. Antick was arrested last week on suspicion of involvement in the 2024 death of his billionaire father in an open letter to the staff, and it called the allegation serious, unjust and unfounded. Disney's the Mandalorian and Grogu earned an estimated $82 million over the weekend at the box office, surpassing projections. But still, this is the lowest opening haul for a Star wars film ever released by Disney. Internationally, the film grossed around 63 million in ticket sales, $83 million. But it's a disappointment.
- [38:30]
Scott Wapner
Scott Contestant thank you, Contestant Brewer. All right. We didn't talk about some software earnings that are especially important this week in light of the run back that that space has had. Salesforce and Snowflake are tomorrow. Steph, have you Snowflake? So the fact that this space is rallied for like a month straight makes it peculiar to wonder how the market's going to take the numbers now.
- [38:58]
Stephanie Link
Yeah, the setup is not as good as it was, but I think that Snowflake will be a good quarter. Net new product revenue growth of 30%. EBIT margins of 9 with a plus sign next to that. I think the whisper is like 10, 11. That's a little rich to me. But the channel checks are really pretty good from the hyperscalers in terms of cloud adoption of AI. So I think it's going to be good. Here's the thing, they have a very tough comparison for next quarter. So I don't know if the guidance is going to be like that. 27 to 30% growth on product, net new product revenue. It'll be strong. But I just wonder, given the run that it's had off the lows, does it give back some? It might, but the story is still pretty, pretty good.
- [39:38]
Scott Wapner
I, you know, that's for you to say. Obviously, I, I don't invest in the stock. Obviously I can't anyway. But I've just reminds me of the conversation we had with Gerstner, Brad Gerstner, recently, where he revealed on this program that he no longer owns it in his, I guess in his hedge fund.
- [39:57]
Stephanie Link
Otherwise, maybe I'm behind because I thought he still owned a small position, like a 5% position.
- [40:02]
Scott Wapner
No, not for 5%. I don't, I don't think that's, that's a big position.
- [40:07]
Stephanie Link
No, relative to the other names that he owns much bigger. So I don't know, we might be looking at different things, but that's okay. Look, I mean, I think that I'm just listening.
- [40:14]
Scott Wapner
I mean I'm just recalling what he said when I asked him directly on the show.
- [40:17]
Stephanie Link
Well, I mean, I don't know why he would have sold it. I think the fundamentals are strong. They back they're going to see net new product revenues at a new record this quarter if they can do $76 million. And I think that they can, I think even if they guide conservatively, which is what they tend to do and the stock falls, it's been usually a pretty good buying opportunity because if you believe in AI and you believe in all the data that is needed for AI, they actually do all of that. They have clean data. They make all the data clean so you can use it, make it more accurate.
- [40:47]
Scott Wapner
I think his point is that this, the nothing's clean at the present time in the software space. Well, it's so hard to figure out what's what. It's too hard. You don't know what is justified to be down as much. You don't know what's justified to be down even more than some of these names are already down. Well, that's why the conversation is critical this week with I don't think that
- [41:11]
Stephanie Link
is going to disrupt mission critical software. That's why I own Synopsys. I don't think they're going to be disrupting something like a snowflake which is actually helps AI and the adoption rate. So I think you could have said the same thing about cybersecurity two months ago. And they were down, all of them were down on the year and they have had an enormous rally off the lows and actually year to date they're up a lot now. So I think you have to just be patient, pick your spots. And I'm going with where the CEOs are buying their own stock, to be honest with you. And that's the, that's the fact with Palo Alto, CrowdStrike and even Snowflake, I
- [41:47]
Joe Terranova
would, I would agree with that. Just as it relates to chip design software, you want Cadence, right? Cadence. Also we own synopsis as well. But Cadence is at a 52 week high. So that's not going to get obliterated.
- [42:00]
Scott Wapner
Chip design software Regard Santori's next. Senior markets commentator in the overtime co anchor Mike Santoli is here for his midday word. How are you feeling about this market market today?
- [42:15]
Mike Santoli
Pressing, pressing the usual bets is really the rule. I mean, a lot of the market has kind of, you know, softened up from the open where it was very broad to the upside. But the stuff that's standing out is the old stuff. It's momentum, high beta semis, all the rest of it, you know, crude, Brent crude is up like four bucks off yesterday's low. So obviously the market is not going to jump to any conclusions or price in anything dramatic happening there. And that's okay for the index because we have all the other stuff going on. What I have been interested in is the kind of flip side of the momentum, excitement and the extension of that trade, which is kind of low beta quality and places where people were hiding domestically. I mean, Costco down, Wal Mart down along with other staples. So I think it's still this, this kind of churn trying to hold near the highs. Eight week streaks are a sign of underlying strength. But at some point, you know, unless we're going to just completely kind of melt up and blow off in the leading sectors, you probably do need to continue to kind of find other sources for some of the spot.
- [43:15]
Scott Wapner
All right, I'll see you in a couple of hours. On closing bell, that's Mike Santoli. Oliver Renick is next because he has options action from the CBO in Chicago and he is going to tell you about a specific trade in a space you don't want to miss. Got some options action today from Chicago. Oliver Renick is at the CBO Global Markets taking a look at the miners. What's the trade?
- [43:54]
Oliver Renick
Good morning, Scott. Gold's down right now, but options volume volumes in both the commodity ETF GLD and gold miners GDX are leaning bullish right now. More calls are being bought than puts in gld. And GDX was hot out of the gate this morning with more than five times more calls than puts by volume early on. The most popular contracts by volume in both funds are looking for sizable short term gains in GLD. The June 18th 44040 strike calls are most traded and need about a 7% move. In GDX. The 100 strikes expiring June 18th need a 14% move. But here's the thing to be sure, one whale in GDX is swimming against that current scooping up at least a million dollars of the 85 strike puts that expire July 17th. So the question for traders here, Scott, is in gold miners, do you follow the crowd? A lot of small bets on big gains for the big size trader who's betting on some slippage back to last week's lows.
- [44:57]
Scott Wapner
Okay, good questions. We'll ask our panel.
- [44:59]
Joe Terranova
Oliver.
- [45:00]
Scott Wapner
I'll see at 3. Thank you. Oliver Renick joining us from CBO. You have it. Newmont. I mean, what do you think about what he just told you?
- [45:07]
Joe Terranova
So Newmont is in the etf. It's been there for several quarters now. The fever broke in precious metals, silver, gold.
- [45:15]
Scott Wapner
On January 29th, you sold the GLD.
- [45:17]
Joe Terranova
So I bought the gold. On March 24th. Gold kind of rolled over, was challenging. The 200 day moving average, I bought it at 404. I sold it out on May 6th at 432. And the reason being was a relative underperformance that I was seeing versus, quote, unquote, other risk on assets. I don't think we've seen that risk on mentality being applied to gold and silver like we are other areas of the market. The momentum, momentum is not in place. In fact, the gld, if you look at it, it's rolling back over towards its 200 day moving average at 400.
- [45:51]
Scott Wapner
I like that. Bought it high, sold it higher.
- [45:53]
Joe Terranova
Yeah. In that. In that regard, mission accomplished.
- [45:57]
Oliver Renick
Yeah.
- [45:58]
Joe Terranova
I didn't celebrate with a dinner at the Montes for that one, though. I should have.
- [46:03]
Scott Wapner
That's okay. We have more time.
- [46:05]
Stephanie Link
More time.
- [46:06]
Scott Wapner
Not now.
- [46:06]
Joe Terranova
Finals are next.
- [46:10]
Scott Wapner
All right, Dan Greenhouse joins me today. Cameron Dawson, Abby Yoder, Matthew Boss, Walter Isaacson talking about the future of AI and jobs.
- [46:20]
Joe Terranova
Hope you'll join me then.
- [46:21]
Scott Wapner
3 o', clock, final trades. Farmer Jim Abbey.
- [46:26]
Jim Leventhal
We talked about pharmaceuticals earlier. I can't give you a catalyst to this. This is just a good long term hold at a great price right now.
- [46:33]
Scott Wapner
Okay.
- [46:35]
Stephanie Link
Stephanie Link, Deckers Outdoor. They had a great quarter. They raised guidance. Hoka sales rose 15%. They're back.
- [46:43]
Scott Wapner
Wow, Joe.
- [46:45]
Joe Terranova
Over the last two years I've owned Goldman Sachs. I continue to own it because they keep presenting these phenomenal cyclical opportunities. The next one comes with SpaceX IPO fees.
- [46:54]
Scott Wapner
All right, good stuff. Thanks, everybody. I'll see you on the closing bell. Three o'. 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.
- [47:10]
Edward Jones Narrator
All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy. But only as an expression of opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftimereportdisclaimer A History of
- [47:45]
99% Invisible Narrator
the United States in 100 Objects is a brand new podcast from 99% Invisible and BBC Studios. Each week we're looking at a different object from across American history with a unique story to tell about who we've been, what we've built, and what we've allowed ourselves to forget. Some of these objects are well known, many are not, but all of them carry the story of how we got to this moment. Find A History of the United States in 100 objects on the 99% invisible feed. Wherever you get your podcasts.