← Halftime Report
Halftime Report
Trading the 'Tech Palooza' 10/28/25
00:47:22
Scott Wapner and the Investment Committee debate mega cap tech stocks as Apple and Microsoft hit major milestones. Plus, the desk shares their latest portfolio moves. And later, Josh Brown spotlights two energy names in his "Best Stocks in the Market." Investment Committee Disclosures
Loading summary
Transcript147 lines
- [00:01]
Michael Santoli
Introducing Fidelity Trader plus, the next generation of advanced trading from Fidelity.
- [00:06]
Josh Brown
Customize your tools and charts and access.
- [00:08]
Scott Wapner
Them seamlessly across desktop, web and mobile. For faster trades anywhere you go, try the all new Fidelity Trader Plus. Learn more about our most powerful trading.
- [00:19]
Josh Brown
Platform yet@fidelity.com TraderPlus investing involves risk, including risk of loss.
- [00:25]
Scott Wapner
Fidelity Brokerage Services, llc Member NYSE SIPC the heaviest metal credit card of all time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the international space Station and wielded at business dinners like a samurai sword. It's a classic corporate power move, but the real power move having end to end visibility on your most critical shipments. FedEx the new power move. 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, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour at Tech Palooza today as Apple hits a major milestone. OpenAI makes news and Nvidia's CEO taking center stage. We are trading all of it as usual with the investment committee. Joining me for the today Josh Brown, Joe Terranova, Anastasia Amoroso and Rich Saperstein. We will check the markets. We do have a bit of a mixed picture. At least the Russell's down but you do have the Dow and the Nasdaq are nicely in the green today. Look at The S&P 500 not that far away from 6900. We thought okay, 6800. We need to close above that. We certainly did. And now we're on the march higher than that. So we're going to get to the Jensen Wong news right when he takes the stage. Christina is down in D.C. and we'll go to her when we see that. Joe, you could start a number of different places, but I think we should start with 6900 in sight for the S&P 500.
- [02:12]
Joe Terranova
Yeah.
- [02:13]
Michael Santoli
And certainly we're advancing today on the strength of the max 7. So so far year to date it had been Metta and Microsoft and Amazon back in February, Nvidia that had made new all time highs more recently. It is about a breakout in Alphabet. It's a breakout in Apple. Pick the reason that you want to cite for that breakout. But it's a rebuilding of positioning. And I will tell you this, I think Tesla's coming to the party. Tesla last made its all time high in December trading about 465 for 88 would be a new all time high. It's past earnings. I think Tesla's the next one that's going to do it. So it can act as a very clear catalyst here, the coming days. This collaboration of 5 mega cap earnings. I would be absolutely floored if all five of them miss and had a detrimental effect on the market. I spoke to you about that yesterday. But it is the strength and the power of the max 7 right now that is really propelling this market towards 6900. And if those earnings are good 7000.
- [03:14]
Scott Wapner
I think we need to hit the Microsoft news rich because it's a really interesting development. So OpenAI completes their restructuring. It solidifies Microsoft as a major shareholder. But the news that is even I think more important to investors is what we're learning from a report in the last 10 minutes or so. Whereas Microsoft will receive 20% of open air revenue in a for profit move. Okay, so, so that news in and of itself. Microsoft's up almost 2%. It is the best of the bag, at least of the tech ones. Right. Tesla's having a nice day too. But this is significant news for a stock that you own in Microsoft. Right.
- [03:57]
Joe Terranova
It's just continuous. To add to the value of Microsoft another 135 billion added today. And it's consistent with a Microsoft being the intersection of software and AI. I think the big item for tomorrow's earnings report is going to be the results of Azure. They've been growing at 33%. I think analysts are looking for the mid 30 type growth and we expect them to achieve that.
- [04:26]
Scott Wapner
You know, I want you to hit the Microsoft thing too because you have the name. This strikes me as a very significant development. It is that they're going to receive 20% of open air revenue. A company that is now valued. OpenAI is at a half a trillion dollars. Who knows what it eventually is going to go public at. But outside of Nvidia, it's obviously the most exciting thing happening within the whole AI trade. You can only imagine what their revenues are are going to climb to. And the fact that Microsoft, according to this report, is going to get 20% of that. Wow.
- [05:08]
Michael Santoli
Microsoft is going to get 20% of that. I think this also removes a degree of uncertainty that had existed for Microsoft over the last several months in terms of what the agreement ultimately would look like and what the relationship would be for Open Air with other cloud providers. This is actually a good thing for other cloud providers. This is a good thing for the Oracles of The world. Yes. In fact, as part of this agreement, we're understanding that OpenAI potentially spends up to 250 billion in the coming years on Azure. That's good. But it gives OpenAI the flexibility to go to other places. So this is without question a clarifying moment for all parties involved. This is good for the AI spending halo and this opens up the opportunity to broaden out that spending to a lot of different paces that previously maybe didn't exist.
- [06:01]
Scott Wapner
Yeah. Josh, what stands out to you today in this market? Again, we're waiting on Alphabet. You got Apple above 4 trillion. Jensen about to take the stage in a stock that you own as well.
- [06:14]
Josh Brown
To me, like the biggest thing, I can't believe no one's talking about it yet, is what does this mean for Apple's partnership with OpenAI? Because effectively, I wouldn't say, like, I wouldn't say it's a merger, but like this official, official, official financial tie up between Microsoft and OpenAI that's obviously in addition to the technological tie up. I don't know, like, does Apple have to do a deal now with Gemini or is Apple going to be ready on a standalone basis with foundational LLM model internally? Because the Siri slash Apple intelligence revamp coming on the heels of the rollout that nobody particularly was excited about is going to be, I think critical for Apple and I don't know, do they, do they want to double down on this existing partnership they have with OpenAI or in light of this now becoming a formal deal with Microsoft, stake in OpenAI's revenue, do they run into the arms of, of Alphabet and Gemini? I think it's a really fascinating moment in the development of all of these platforms. But I think that's like, to me, the biggest open question that's now raised. Now that we know what this relationship between Microsoft and the chatbots products is.
- [07:37]
Scott Wapner
Going to be, I mean, they're open air is going to, you know, this restructuring announcement is to become a more traditional for profit business. And if you're telling me today that Microsoft has now, because there's been some questions about the relationship obviously over the last six, eight months, that now we have a firm view of something that you could potentially model into Microsoft's own numbers, that, that seems extraordinary.
- [08:08]
Anastasia Amoroso
Yeah, I think this is a really big move from Microsoft. And you know, one stat that I came across is actually the sizing of the revenues of not only OpenAI but anthropic and also some of the other AI large scale models. And if you look at the growth in the revenue in 2025 it is forecast to grow 228%. Scott so you know, we're starting from a relatively small place, you know, where the revenues for some of those AI labs have been. But the scale, scale, the pace of growth is really quite significant. So the fact that Microsoft and others are going to benefit from that, that's great. I think that also bodes well for the overall ecosystem because why would hyperscalers continue to spend on cloud computing is because our customers see demand for cloud computing and customers are clearly monetizing their AI capabilities and therefore they're going to continue to require cloud services. So I think this is very supportive actually of the development of AI to.
- [09:04]
Michael Santoli
Respond to Josh's concerns surrounding Apple as part of this agreement. So now Microsoft and open AI, it does not include consumer hardware. So OpenAI has the ability to jointly develop products with third parties. Enter Apple if you're interested in your consumer product.
- [09:23]
Scott Wapner
Yeah but I mean don't, don't forget they, they bought, didn't they buy Jony Ives company And aren't they working on something? So that seems like more of a long shot to me. If you're talking about going to Apple for hardware when they bring the, the king of the iPhone or certainly one.
- [09:44]
Josh Brown
Correct concerns for, for Apple also that the hallmark of, of Apple and its products and its ecosystem is the self contained privacy within. That's like one of the most important aspects of this whole iOS ecosystem. The idea of going deeper now I think with a, a chat GPT integration into Siri like more substantial than it already is and a vice versa like a two way street versus Apple finding someone else to partner with I think is, it's more like look we know they're negotiating. They've done a ton of business in the past with Google on search. I really think that like a big catalyst here for both Alphabet and for Apple could be something where it gets confirmed that the Apple intelligence revamp in 2026 is going to heavily involve if not be based upon Gemini. I think that, I think that this almost makes that have to be the way that Apple chooses to go. And I doubt they're surprised by this. By the way, I'm just saying like that brings this conversation back to the fore once again. As a reminder, this is the biggest tech hardware company in the world for consumers and we do not know what their AI product is going to be. It's really extraordinary. We just don't know as shareholders, as users. That is the big question mark out there. And this I Think introduces a new level of uncertainty.
- [11:16]
Scott Wapner
Can we just hit Apple? I mean, might as well. I don't want to gloss over the fact that it got above $4 trillion in market cap. We had been waiting for that moment to happen. You've had a lot of optimism around the iPhone of late and you've gotten some positive calls from the Street. Baird hikes its target to 280 now, not that far away at all. Evercore 290. It's funny, Barclays reiterates their underweight on what they consider to be an uncertain growth backdrop, regulatory risks and services. It's worth mentioning just because it's an outlier in relation to some of the other calls that are there.
- [11:53]
Michael Santoli
It's remarkable. You know, Josh brings up the point where they haven't delivered on a actual consumer AI product, but yet the mark, the market is giving them the benefit of the doubt. Here they are joining the $4 trillion club. So there have been some reports recently that the uptake on iPhone 17 looks about 14% stronger than on iPhone 16 over the last 10 days. I would counter that with really what happened in August began the beginnings, if you would, of rebuilding of positioning, rebuilding of sentiment and very strong momentum that has propelled Apple much higher in a Mag 7 environment where it appeared as though there were other names like Metta and Microsoft that were already full in that regard. So the positive momentum remains in place. You know, I established a position in August based on that quote unquote clearing event that we saw in the Oval Office with Tim Cook and the President. I still maintain some of that position. I will maintain that position into earnings and see where we go on the other side.
- [12:54]
Scott Wapner
You want to kick around Alphabet because they're the ones that are going to kick off this whole earnings parade tomorrow along with Microsoft and Metta. We should certainly hit what's been going on with Alphabet, which has had a nice run over the last month. Let's get a one month guys or even a month to date. If we can show what's happened with Alphabet. It's the best of the hyperscalers by a good margin. It's up 10% month to date. So you can see what this stock has done. What does that do to where the expectations are when you know this? This stock has defied the odds in some respects. We've asked questions about their search leadership, whether that's going to be eroded by the likes of OpenAI, which in the last seven to ten days announced their own browser. Give me something quick on that. And then I'm going to, I'm going to move off of it.
- [13:45]
Joe Terranova
Seven products with over 1 billion daily monthly users, 170 billion in cash flow. Over the last two years, the revenue per employee increased by 30%. We're talking about greater efficiencies, greater cash conversion, and they're reinvesting back in their business. So it's a core holding for anyone who wants to be in that space.
- [14:05]
Scott Wapner
I'll come back to you in a moment. I told you we're waiting for Jensen Huang of Nvidia to take the stage at their event in Washington, D.C. he has and Christina Parcanevolos is there. Christina?
- [14:16]
Christina Partzanvelos
Thank you, Scott. So he is taking the stage. He's going to be announcing a few partnerships throughout the next two hours or so. But, but we know one of the bits of news that already came out is the investment in Nokia. That'd be a $1 billion investment. They are specifically working on their 5G and 60 software that would be running on Nvidia chips. We saw the stock price halted, then it was up about 17%. Nokia going to be issuing 166 million shares. In regards to what I heard from the conversations on the floor here, I spoke to many CEOs from cadence, perplexity, Core, Weaver Power is definitely a theme. And everyone, this is a tech event. So you can imagine that everyone is going to be incredibly bullish, especially the CEOs of said companies. But they seem to think that things are going to improve and that the administration is going to administer some type of deal to get the snowball going to build out this infrastructure. And the same thing, the same theory can apply to China conversations. So we know Jensen Huang is even going to Korea right after this. I don't know literally right after he's jumping on a plane, but he's going over there. And the outcome is that there could be some positive momentum for these chip stocks, AMD as well as Nvidia. The fact that they could be granted opportunities to continue shipping to China, I'm not sure yet just which iteration for Nvidia, for example, but C.J. muse, one chip analyst from Cantor Fitzgerald, I was just talking to him and he says that's not priced into the market just yet, that the China market would reopen for both AMD and Nvidia.
- [15:46]
Scott Wapner
Okay. So thank you very much for that. I know we'll be leaning on you throughout this to have any of the developments of what actually happens in addition to what you've given us the preview for. So Christina, thank you very much. Christina Partzonevolus let's come back to Alphabet for a moment. So you have no concerns about a dominant place within the search ecosystem being eroded, whether it's in any short order or over a longer period of time based on, you know, OpenAI with their own browser? The way that search has been fundamentally changed in this country and if not the world.
- [16:19]
Joe Terranova
I do have some long term concerns, but the short term deterioration is not a big deal for me. I mean remember we're talking like with Apple there's China risk, with Google there's very little to no China risk. And with Google there's so many different shots on goal. Even if search, which is their core business gets eroded over the term, long, long term, there's so many more moonshots that will occur. Think about Waymo right now gaining traction all over the country. So yes, I'm concerned about search erosion, but this is a core holding in everyone's portfolio.
- [16:52]
Anastasia Amoroso
Yes, but I think, I think trend.
- [16:55]
Scott Wapner
Hang on, Josh, I'll come in a minute.
- [16:56]
Michael Santoli
Hang on.
- [16:56]
Anastasia Amoroso
Just a comment here on cloud and the growth of importance in cloud for Google, for Microsoft and really for everybody else. I mean just looking at Google Cloud for example, IT represent about 3.6% of revenues back about in 2017. But you fast forward to 2026 and we're looking for Cloud to be about 16%. If you look at Microsoft, that goes From I think 29% to 46% over that 10 year timespan. That's where the monetization of AI lives right now. All of that capex has been put in the ground over the last couple of years and maybe over the next couple, all of that does have the chance to be monetized through cloud and I think that's what investors are coming around to likely in the case of Google, certainly Microsoft and Amazon as well, Meta.
- [17:37]
Scott Wapner
So you don't, you don't mention matter, which is interesting to me because it feels like we're not talking about meta nearly as much as we were. The price Target goes to 900 today reiterated by at Seaport. You own the stock month to date it's up 2.5%. So 2 1/2% versus the 10 for Alphabet. What's going on here?
- [17:59]
Michael Santoli
I think they're, you know, look, it was early in terms of the appreciation. It got ahead of all the other max 7. I think more recently there should be some concerns surrounding what the ad environment is and what the ad spending ultimately is going to look like if we continue to see what appears to be a little bit of a deceleration in the economy. So I think that's one of the challenges that we're seeing here for Metta.
- [18:24]
Scott Wapner
But you could say the same thing though about Alphabet, but you didn't.
- [18:28]
Michael Santoli
Well, the difference between Metta and Alphabet was just where we were from a standpoint of positioning and sentiment. You had already at the beginning of the year built up significant length in Metta. Metta was one of the clear leaders of the Mag 7. It was one of the VIPs of the Mag 7. That was not the case for Alphabet. The only thing you could say for Alphabet at the time was it was a mid teens valuation and that was compelling. There were struggles about the concerns that you were citing as it related to search. That has all cleared itself. But it was later on in the year that you saw that building of positioning. And I think that's where the distinction is between where these two stocks ultimately are. Metta needs to clarify that the ad spending is going to remain strong in the coming quarters.
- [19:14]
Scott Wapner
Josh, you know Amazon, if you look at that, it's one of your favorite stocks. I know it. It's the worst mag seven this year. It's up only three and a half percent year to date. They do the announcement of 14,000 rolls that are going to be reduced at the corporate level. UBS bumps the target today to 79. It was at 271. It's not a huge jump but nonetheless, I mean they think it's a coiled spring. What about you?
- [19:41]
Josh Brown
They have to deliver. This is one of my worst ideas of 2025. I had felt from the beginning of this year that this, it was going to be Amazon's turn. We have seen this rolling rotation of different mag7 names going on these insane runs and they kind of appeared to have been on a merry go round. Apple would be out of favor and then all of a sudden add 25 points. We saw obviously Alphabet made a huge run and we've seen better as well. Amazon just hasn't had its moment yet. And so me thinking that it had the potential to outperform the overall mag7 this year. Obviously we're here almost November has not been correct. But I'm not bailing because I still believe Amazon has that ability to pull a lot of levers. Unfortunately, one of those levers is layoffs. This is one of the companies that in the pandemic era had ramped employment up more than any other company I could think of. And obviously in recent years they've been, they've been cutting that back. First on the blue collar side. Now it's hitting the, the corporate or the white collar side. And you know, clearly Wall street likes that news. I would just, here's what I would say going into earnings, I don't know if going into a holiday quarter, it's a great sign that Amazon is sandbagging its own earnings report with reports of massive layoffs. Like, as a long, it's probably not my favorite thing to have seen. I would almost prefer, if you're going to do that, make that part of the actual earnings announcement. I'm not sure why they're putting that out first. And maybe there's nothing to it. I think the people on the desk in New York would agree with me, though. Typically not the greatest sign in the world when a company does this two days before they report.
- [21:31]
Scott Wapner
Yeah, we do have some breaking news I want to get to down on Capitol Hill. Emily Wilkins has that for us.
- [21:38]
Emily Wilkins
God. Well, yes, the Senate has now voted for a 13th time time on reopening for the government. And for the 13th time, that vote has failed. We are not seeing any movement. Gridlock is continuing here in the halls of Congress. But just outside Congress, we are seeing pressure build on lawmakers to go ahead and pass the stopgap and end any debates and negotiations around it. We actually saw a number of bank groups, including the American Bankers association, that represents a lot of the big banks, credit unions, the independent Community Bankers association, all come out, say it's state time to pass that clean stopgap to get the government reopen. We also saw the largest union of federal workers come out with very similar messages yesterday. And we're seeing a number of business groups representing international businesses as well as those representing restaurants, family businesses. All of them are really beginning to beat this drum and say, hey, it's been long enough now. We've been almost an entire month into this shutdown and it's critical to reopen because of course, the longer it goes, the more impacts are felt. Not to even mention that you have SNAP funding that runs out at the end of this week, another pay period for military members that could potentially get missed and a lot of concern yet. It doesn't seem to impact Congress yet, but this pressure, it's only building day after day.
- [22:53]
Scott Wapner
SCOTT okay, Emily, thank you for the latest down on Capitol Hill. Emily wilkins, Guys, let's throw up an intraday if you could. Yeah, perfect. Of the S and P. I just want to note a headline that is moving just to keep an eye on in the context of geopolitics, multiple news Organizations including our own at NBC News is reporting that the Israeli Prime Minister Benjamin Netanyahu has ordered what is being called, quote, powerful strikes in the Gaza Strip immediately. Certainly in the context of the recent truce between Israel and Hamas. It is newsworthy in and of itself to bring that to you, but worth keeping an eye on. Clearly we could take a look at oil as well. Just to always look there as one of the first spots for any movement in any market related complex and you can see a little bit move higher in crude which is pushing about a 2% gain. So we'll just watch that as this next, you know, 35, 40 minutes that we're on the air at least develops and, and see if there's any more market reaction. I thought it was interesting too as we bring it back towards the story that Cathie Wood of Ark Invest is commenting on the possibilities of an AI bubble. She says, quote, I'm not saying there will never be any corrections. Of course there will, as many people worry, okay, this is too much, too soon. But if our expectations for AI, especially embodied AI in the way that I just described, are correct, we are at the very beginning of a technology revolution. So that would suggest that she doesn't see a bubble at least yet in AI. You guys have a thought there?
- [24:36]
Michael Santoli
Look, the concern that I have looking forward is the number of agreements and the spending commitment from OpenAI, a private company that we don't have the ability to have that clarity and to be able to have price transparency and to either pay the premium or discount the news that we're hearing from them. That's ultimately the current, the concern that I have now. Look, we're living in a world where if you get the agreement, you're good. Josh is talking about Amazon. I see the biggest challenge for Amazon Cloud and the lack of agreements that it has in the air space. They haven't announced anything with Open Air. You haven't seen any collaborations in other directions with, with AI curating. So to me that's the big problem. But looking forward, it's got to be this behemoth open AI and the reliance the market has on its spending.
- [25:26]
Scott Wapner
I want to get to a couple of moves you have related to the whole trade. You bought more Dell and you bought more IBM within, within the past couple of weeks. Can you tell me more?
- [25:35]
Joe Terranova
Well, this is part of our theme of the concentric rings around the core of the data center, build out and AI infrastructure. So Dell, the infrastructure division, year over year is up 4,44%. I would encourage everyone to listen to the last few interviews Michael Dell has made and listen to the last earnings report. They're expected to have 100% year over year growth in their infrastructure Division. It's a 10% operating cash flow business and they're bringing seven down to the bottom line. It's an incredible return of capital story plus a growth story here. So surrounding the infrastructure build out, you.
- [26:15]
Scott Wapner
Know, the build out which you're a big believer in from a power production standpoint through your Vistra and some of the other plays you have. Qanta services goes to 415 today at Mizuho Open Air says the US needs more power. Quote Electrons are the new oil, but that's a really interesting quote Wells Fargo today on the utilities and independent power producers quote. This is not a fad. Don't worry about chasing it. Is that fair?
- [26:41]
Michael Santoli
Of course it is. And you know, we've talked over the last month or so about when you consider your allocation in a portfolio to energy, which for an S and P weighting is somewhere what, around 3%? Utilities are somewhat similar. You look at what energy is doing and you say to yourself, I'm going to remove that, or maybe you're going to lower the exposure and I'm going to have to include utilities because they're going through a secular paradigm shift and they are incredibly important in this conversation as it relates to power generation. They are ultimately going to be the solution.
- [27:13]
Scott Wapner
Okay, we'll squeeze in a quick break. Richie's got another move and we'll get to that on the other side. Plus, I want to hear from Josh on that big Berkshire downgrade that we got yesterday. Just something you don't see very often. It's one thing to cut the stock, it's another thing to suggest that investors sell it. We'll see what he thinks next.
- [27:33]
Ad or Sponsor Voice
Ever wonder why so many people regain weight after stopping a GLP? 1 up to 40% of the weight lost can come from lean muscle. This weakens the body, slows metabolism and makes it easier to put the pounds back on, creating a cycle of dependency. Prolon's five day Fasting mimicking diet offers a drug free way to maintain results and support long term metabolic health when paired with proper diet and exercise. In just five days, it activates fasting pathways to burn fat, protect muscle and rejuvenate cells, all while letting you enjoy real food. Get 15% off plus a $40 bonus gift when you subscribe at prolonlife.com PandoraPromo these statements have not been evaluated by the FDA. These products are not intended to diagnose, treat, cure or prevent any disease. See site for details.
- [28:21]
Michael Santoli
Smarter by CNBC make it career and income boosting online courses to help you.
- [28:25]
Josh Brown
Be smarter and more successful.
- [28:27]
Michael Santoli
Get the newest course now.
- [28:29]
Josh Brown
How to communicate using AI. Go to CNBCMakeIt.com courses special offer ends October 28th.
- [28:49]
Scott Wapner
All right, welcome back. Told you we have another move to get to. It's in the financial space, which is one of the worst sectors this month, down 1.5%. So it's lagging along with a few, few others. You bought Wells Fargo. That's a new position for you, right? Why, why that one?
- [29:03]
Joe Terranova
If you think the economy is going to grow due to deregulation, ease of permitting 100% expense and you're going to have more loan demand. There'll be greater transactional volume and M and A. But with Wells, they'll benefit from all that. Plus the fact that the asset cap has been lifted.
- [29:21]
Scott Wapner
Right.
- [29:21]
Joe Terranova
With banks you have to look at two things. The ratio to book value and return on tangible common equity.
- [29:28]
Scott Wapner
Give me a longer view, guys, so we can encapsulate what happened after earnings, please.
- [29:32]
Joe Terranova
It's 1.9 times book compared to three at J.P. morgan. All right, so we also own J.P. morgan. And the return on tangible common equity.
- [29:41]
Scott Wapner
Like a one month, please, is roughly.
- [29:44]
Joe Terranova
A figure of 15, 16% and growing. They're aggressively buying back stock and here's a stock that has not moved with the PAC yet. So.
- [29:52]
Scott Wapner
Well, I mean it had the big move off earnings. Right? That, that's sort of what I wanted our viewers to see. That's what I was alluding to. There it is.
- [29:59]
Joe Terranova
And it's going to go higher. Look at, remember the ratio of to book value and the return on tangible common equity, two factors compared to all the other banks. This is an attractive bank right now.
- [30:12]
Scott Wapner
How about J.P. morgan, Josh, which, which Kramer was suggesting could be the next company to hit $1 trillion in market cap. It's the only of the large banks that you own. He says, quote, the banks are on fire right now. Right now this stock is ridiculously cheap. This thing trades at 15 times this year's earnings estimates. If we get a little multiple expansion and people say they start paying 17 and a half times next year's earnings estimates, then JP Morgan wins the race in a heartbeat. What do you think?
- [30:44]
Josh Brown
Yeah, I mean, I'm long JP Morgan. I don't doubt that ultimately it could get to a trillion. I just don't know if, if it can continue to rise at the pace that it's been rising. And to to rich his point, I actually think the shorter term setup, I think Wells Fargo is a no brainer. That stock looks like it's going to 100. Both of these names are on my list of best stocks in the market. Both of them technically look great. But I do think Wells Fargo, which is now just barely broken above the February high, whereas JP Morgan's got gone all the way already. Like this thing is already had its explosive move. So if I'm thinking purely about Q4 of this year, I think WFC is the faster mover. As a longer term investor though, I'm not swapping out of one for the other because long term I do think that's right. I think JP Morgan will forever, at least for as far as the eye can see, be the larger of the two companies with the more premium valuation.
- [31:44]
Scott Wapner
Right.
- [31:44]
Josh Brown
And also outperform.
- [31:45]
Scott Wapner
So let me get to the Berkshire downgrade which I really want to hear your thoughts on because it just doesn't happen that often. You almost never get a sell call on anything that would be tied to Mr. Buffett. So it happened yesterday. It's KBW quote, many things moving in the wrong direction. You want to take aim at this here, what you think?
- [32:08]
Josh Brown
I actually think the analyst is right at what they're pointing out. And I think the real question is so the issues that they're raising are real, they're not all new. So here are a couple of things KBW is saying. Margins are peaking at Geico, which is one of their most important insurance businesses on reinsurance pricing pressure. We really didn't have a big hurricane season this year, at least not yet, thank God, knock on wood. The problem is you don't get the same premium growth if you're not doing new underwriting in the wake of a disaster. It's just how the business works. Everyone knows that knowing what the weather has been is not an edge. Lower investment income. Treasury yields are coming down. They own, you know, 350 billion or so in cash on the balance sheet. Of course, that's investment income that will be lower. The railroad has China exposure. Oh my God. Is that brand new news? I don't think so, no.
- [33:03]
Scott Wapner
But should they not? Should they not have. Let's get a little provocative, I suppose, and pose the question, should they not have sold? And I don't know the reasons why, obviously, so I'm just throwing it out there. Should they have sold down the Apple position the way they have? It's still huge, but that obviously gives them Less of a chance to capture what has been a pretty darn good move by Apple.
- [33:26]
Josh Brown
Yeah, I read an article saying that Berkshire left 50 billion on the table by selling apps. They stop. By the way, they're still in Apple but they sold two thirds of the position and they shouldn't have. Yeah, okay. Nobody should have ever sold Nvidia in the history of mankind. Like I think that's disingenuous to be honest with you. That kind of like going back armchair quarterback. They caught so much of the Apple move, not catching the last 20 points. And with the full position on, I really don't think is is a black mark on the track record of Berkshire's investing. I think bigger picture here, the analyst raises legitimate issues and probably Berkshire won't have as good a year in 26 as it had in 25. But I think most of the people who own the stock are not worried about 26. They're long term investors. I'm in the B shares, so 1B share is the equivalent of equality. It's 1500 versus the A share. I'm not selling any and I've sat through other downgrades of the stock before only to see it go on to make new highs. So I'm not reacting.
- [34:36]
Scott Wapner
All right, so we will squeeze in another break. You know about the health care hot streak by now because we've been talking about it a lot and, and deservedly so because it is a hot space and there's a new hot trade from Joe Terranova. We'll tell you about it when we come back. The heaviest metal credit card of all time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the international space station and wielded at business dinners like a samurai sword. It's a classic corporate power move. But the real power move, having end to end visibility on your most critical shipments. FedEx, the new PowerMove.
- [35:24]
Ad or Sponsor Voice
Busy work weeks can leave you feeling drained. Prolon's five day fasting mimicking diet rejuvenates you at the cellular level, lets you enjoy real food and does not require an injection. Developed at USC's Longevity Institute, Prolon supports biological age reduction metabolism, skin health and fat loss when combined with proper exercise and nutrition. Get 15% off plus a $40 bonus gift when you subscribe at prolonlife.com PandoraProMo.
- [36:03]
Emily Wilkins
We'Re back on halftime. I'm Kate Rogers with your CNBC news update. Just moments ago, Israeli Prime Minister Benjamin Netanyahu directed Israel's military to carry out powerful strikes in Gaza. It comes after Hamas returned the partial remains of a hostage overnight that Israel says soldiers had already recovered nearly two years before. The Israeli military claims Hamas planted the remains at an excavation site. Hamas has not commented. The National Hurricane center is telling people in Jamaica to take cover now as the Category 5 Hurricane Melissa approaches the island's western coast. Officials say the monster storm will bring catastrophic flash flooding, landslides and destructive winds. Some 240,000 people are already without power before Melissa has even made landfall. And Elon Musk officially launched his Wikipedia alternative Grokipedia. He first announced he was working on the website last month. Calling Wikipedia woke brockipedia's articles are fact checked by Grok, the AI chatbot. From Musk's example, AI startup and visitors to the site cannot make edits. Back over to you Scott.
- [37:07]
Scott Wapner
All right, Kate, thank you. That's Kate Rogers out in one market. All right. You bought more xpi.
- [37:12]
Michael Santoli
Absolutely.
- [37:12]
Scott Wapner
Just trying to play some momentum which you know a thing or two about.
- [37:15]
Michael Santoli
So you do more of what is working in life 52 for the IBB and the XBI and you're looking at what potentially could be a multi year breakout. Began this building this position in early October, made several purchases, another one today. So we raised the cost basis up somewhere around $105. I think there's more to go here. 125 I see in the intermediate term.
- [37:39]
Scott Wapner
As a clear target, one of America's top rated financial advisors doesn't like health care at all. The reason anything right now.
- [37:46]
Joe Terranova
The reason why I don't own health care is because of 10 year patent protection. I'd rather own large cap tech with large moats around the business, recurring revenue. And I don't have the volatility of a pharmaceutical, let alone a life science company.
- [38:04]
Scott Wapner
When was the last time you owned one? It sounds like that's a philosophical thing of yours that I can't. When did you own one ever?
- [38:12]
Joe Terranova
Years ago, Five years ago.
- [38:14]
Scott Wapner
Okay, so you just have a thing.
- [38:15]
Joe Terranova
Yeah, yeah. I'd rather get into the discourse of are we in an AI bubble and what's the return on this capital capital that is being deployed? Because you know we have clear views on that and I think that's more sustainable.
- [38:29]
Michael Santoli
I have a couple interesting. No, but look, it's very clear. Number one, when you think about health care as a sector, it identifies with the quality factor. And if the market makes this long awaited pivot back towards quality in 2026 because it feels it needs to be more defensive, you're Going to see that health care is going to benefit in that environment. And so far, month to date, health care is the same second best performing sector next to technology. We are seeing individual names that are exhibiting momentum for the very first time. How about cvs, a name that I think we've totally forgotten out about. It's back into the 80s. Viva.
- [39:02]
Scott Wapner
CVS.
- [39:03]
Michael Santoli
CVS. Viva Systems. Pull up a one year chart.
- [39:06]
Scott Wapner
People look at that and think snoozer.
- [39:09]
Josh Brown
Pull.
- [39:09]
Michael Santoli
Pull up a one year chart of cvs. As I'm talking, another name shot. Strong momentum near term. Gilead Veeva, which I know Josh has, that's working well. And then more recently, intuitive surgical coming back to the party. So there are some names in health care that have been dormant for the better part of 2025 that appear to be awake.
- [39:29]
Scott Wapner
Try and rope Josh into this like you're looking for backup.
- [39:32]
Joe Terranova
He owns viva.
- [39:33]
Michael Santoli
I know he owns viva.
- [39:34]
Scott Wapner
You said Gilead.
- [39:36]
Michael Santoli
Gilead.
- [39:37]
Josh Brown
Well, hey, Rich.
- [39:38]
Joe Terranova
Yeah, you did. Gilead is.
- [39:40]
Josh Brown
Let me.
- [39:41]
Scott Wapner
You said that Josh owns Gilliam's viva.
- [39:43]
Michael Santoli
Sorry, I apologize.
- [39:44]
Joe Terranova
You said something really important I want to add to things that are doing well.
- [39:48]
Scott Wapner
Yes.
- [39:49]
Joe Terranova
Okay. So that's our theory also, which is what's been working. Let's stay with it and let's add to it. And that basically has us overweight in this infrastructure. Power and banks.
- [40:03]
Scott Wapner
All right.
- [40:04]
Joe Terranova
We're very focused in those sectors.
- [40:06]
Scott Wapner
I gotta get a break in Josh. You're just gonna have to wait and save it up for your best stocks in the market because that's coming up next. All right, welcome back. Let's get to Christina Parts. And Navalos has been watching and listening to Jensen Huang who's made some news here.
- [40:35]
Christina Partzanvelos
Yeah, he just announced a collaboration with the Department of Energy. They will be building seven new supercomputers here in the United States to advance the nation's technology, specifically in the sciences and physics, etc. And this is something that we also heard from AMD earlier in the week. So really a lot of countries around the globe, especially the US are trying to advance the technology with supercomputers, which is a lot more complex than just your average GPU and AI system. The other bit of news too is that Jensen Huang was on stage talking about an open system called NV Q Link, which would join forces with 17 quantum companies. And this is about sharing data. So that was a little bit more vague just because he just finished talking about it. And then last but not least, Nvidia and Nokia. So we know that Nvidia is investing $1 billion in Nokia. This will be a part of the Ariel Wren offering. And he says that the market could hit 200 billion by 2030. The investment in Nokia caused the stock to pop at and t Verizon less so. But essentially think of it like AI services coming onto the edge because it involves 6G. And if we're doing all of these chatbots, queries or deep research, you need to have the infrastructure in place in the United States to handle that compute. And so that's where Nokia would come in to play. The 5G and 6G software would run on Nvidia chips. So that is why you're seeing such a reaction in the stock guys.
- [41:55]
Scott Wapner
All right. Yes, you are. Yes, you are. Of some 27%. Christina, thanks. And we may come back to you depending on what else Jensen has to say on that stage. In the meantime, we'll do Josh Brown's best stocks in the market. We know he loves Nvidia. But what else is on the list that you want to spotlight today?
- [42:13]
Josh Brown
I want to talk energy, which we almost never talk about on the show because this sector has obviously shrunk in importance relative to some of the companies that we spend the a block on. But I do still think there are opportunities here. We got a really good report, for example, from both Baker Hughes and Valero, which are 2 of the energy names that we've talked about as best stocks the market. I have two more with earnings reports coming up. One is Phillips 66, which I own personally. We talked about it on the air. I bought it a couple of days later. They're going to report tomorrow. And I think this is the type of situation where, you know, we watched Marathon, we watched Valero. These stocks have broken out, they've retested, they've maintained their breakout and they look great. Phillips has really been the laggard and I think this could be the quarter where they get their act together. So we're looking on 30 billion in revenue and $2.29 a share. The most important thing here with these names is returning capital to shareholders. So that's what I'll be watching for as long. The other one very quickly that that I think is worth getting into here would be Marathon. I think you stay the course. People are asking me, what do you do here? If we could just pull it back and get a little bit of a longer term chart, what do you do here? I just think the refineries that we have that are publicly traded, there's only a couple of them. They look really Good. And so if people are asking me, all right, this thing broke out, now what do I stay with it? My answer would be yes. I think the stock wants 200.
- [43:45]
Michael Santoli
Joe, I can confirm on Baker Hughes. I own that bought the refiners over the summer, all three of the names that Josh has mentioned. I exited on Marathon just because my exposure to the refiners was a little bit more than I was comfortable with. Too much leverage tomorrow in Philip's 66. I'm not correcting Josh, but I think what we want to hear from them is that more importantly, they're paying down debt. Their debt level is too high. You got to get that debt into the mid teens versus above $20 billion. And that ultimately might mean that they actually do pay less to shareholders in the form of a dividend.
- [44:22]
Joe Terranova
We don't own any oils.
- [44:24]
Scott Wapner
Another philosophical.
- [44:28]
Michael Santoli
What are you?
- [44:28]
Scott Wapner
Is max seven or bust?
- [44:30]
Joe Terranova
No, but it's timing. It's timing. We've been at oil for a while. No reason for us to get back in $60.
- [44:37]
Michael Santoli
Oil is a great environment for refiners. Sorry.
- [44:39]
Anastasia Amoroso
Well, it is. And I think it's not so much about the price, it's about the volume and driving volume production in the United States. I think that's the objective for us. It's also focused on natural gas and the independent power producers, they use natural gas. So that's where we are in the energy economy.
- [44:54]
Scott Wapner
All right, up next, Santoli, as in Michael Santoli. He's on the other side with his midday word. Mike Santoli, our senior markets commentator, is here. I mean, if you, if you want to be negative, you're swimming against a pretty good tide right now. And that's what it really feels like. You got the headlines from Nvidia, Stock up, Apple, Fortune, Trillion mega caps about to report positive trade headlines regarding China. There's another one about tariffs going down.
- [45:26]
Michael Santoli
You know, you're definitely working against most of the news flow. Obviously, actually capital flows are running in favor of, of the bulls and higher valuations. The one thing you could do is tactically say, look, maybe things haven't traded as well as you'd like. Off of what seemed bullish headlines. Semiconductors are just mega overbought just based on their own trend. So it's not about you make a call about the underlying demand. But the NASDAQ 100, the semiconductors index, it looks like they're getting kind of crowded and stretched because we didn't have that much of a reset. And then, I mean, I guess more atmospherically, you say, oh, we're hitting trillion dollar market cap thresholds. Apple, for one, is only a sample size of 3, but it's never gone above a trillion dollar threshold and not actually come back more low it by multiple hundreds of billions at some point. So I don't know if that means anything, but it could give this sense out there that, you know, we've reached a destination as opposed to, you know, gotten to a new starting point.
- [46:22]
Scott Wapner
That's an interesting intraday jump yet again for Apple. And you talk about the semis. You know, they're the group outside of the hyperscalers that you'll keep the closest eye on over the next few days. Positive headlines from the hypers equal positive stock moves for the chippers.
- [46:37]
Michael Santoli
You know, these guys had to reopen Nokia. The ADR is over there because of just a whisper from. From Nvidia.
- [46:43]
Scott Wapner
Yeah, we haven't heard that name in a long time, have we? All right, I'll see you on closing bell. It's Mike Santoli. We'll do finals after this.
- [46:50]
Michael Santoli
Are you following the Halftime Report podcast? What are you waiting for? Look for us in your favorite podcasting app. Follow the Halftime podcast.
- [47:10]
Scott Wapner
All right, highs of the day, as you saw for the Dow. And we have some key names reporting in the next 24 hours as well. You know, the mega caps are coming, but so is Visa. That's after the Bell today.
- [47:22]
Michael Santoli
Joe T. I would expect it to be good as it has been in the last several quarters along with MasterCard. It is a core holding.
- [47:31]
Scott Wapner
ADP again, is that you?
- [47:34]
Michael Santoli
It is AD. ADP is a name that we've had in Jyoti for several quarters now. They are delivering on more than anything else, the management of the balance sheet. I know that people incorrectly look at this and say, okay, what's the labor force participation figures or what do we look like in the labor market right now? This is really about internally managing the balance sheet efficiently.
- [47:57]
Scott Wapner
Really sensitive about how people view adp. Right.
- [48:00]
Michael Santoli
Well, I think it's a mischaracterization and I think they need to be rewarded in particular in the C suite for what they've done.
- [48:07]
Scott Wapner
Right. He seemed a little serious about that, didn't he?
- [48:09]
Joe Terranova
That's philosophical.
- [48:10]
Scott Wapner
Philosophical doubt. Otis. Worldwide before the bell tomorrow. Josh.
- [48:17]
Josh Brown
Yeah. This is a small holding of mine. It's a small company, but effectively it's a services business. Obviously, everyone knows Otis Elevator, but that's not the important part here, actually manufacturing elevators. It's the maintenance contracts with elevators. It's not the kind of thing where you could install one and wash your hands of it. You have to pay somebody literally by law every year to keep coming back. And that's the business here. And I like it.
- [48:44]
Scott Wapner
Okay. So I hope you join me on Closing Bell. Adam Parker, Lauren Goodwin, Chris Heise, Matt Boss, Mike Mayo, and the mentalist Oz Perlman. Can't wait for that. He's got, as usual, something up his sleeve. I don't know what it is, but I can't wait to see it.
- [49:00]
Joe Terranova
Final trades power Power Vistro VST. All right.
- [49:06]
Scott Wapner
It's really original. Down three and a half percent.
- [49:09]
Michael Santoli
Yeah. Jyoti PayPal CEO Alex Chris is engineering a turnaround.
- [49:14]
Scott Wapner
All right, Josh.
- [49:17]
Josh Brown
Netflix tussling with the 200 day. I think it'll reverse back a of.
- [49:21]
Scott Wapner
Bunch and Anastasia qqq Stick with what's working.
- [49:25]
Anastasia Amoroso
It could be a big week for it.
- [49:26]
Scott Wapner
Yep, no doubt. All starting tomorrow. I'll see you on Closing Bell. The Exchanges now. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live, weekdays at 12 Eastern only on CNBC.
- [49:43]
Ad or Sponsor Voice
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 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 Tonight's meal tilapia.
- [50:24]
Josh Brown
Surprise with Boiled cabbage. Begin cooking steps 1 through 50 now.
- [50:27]
Scott Wapner
Are you kidding me? Making dinner shouldn't feel like doing a thousand piece puzzle.
- [50:31]
Ad or Sponsor Voice
With Blue Apron's new one Pan assemble and bake meals. The hard part's already done. Pre chopped ingredients, zero stress. Just assemble, bake and enjoy.
- [50:40]
Scott Wapner
No complicated steps.
- [50:42]
Ad or Sponsor Voice
No mountain of dishes.
- [50:43]
Scott Wapner
Try assemble and bake today.
- [50:45]
Ad or Sponsor Voice
Get 20% off your first two orders with code APRON. 20 terms and conditions apply. Visit blueapron.com terms for more.