California Wealth Tax & Top AI Picks for 2026 12/30/25

Summary

Squawk Pod - December 30, 2025

Episode Title: California Wealth Tax & Top AI Picks for 2026
Hosts: Joe Kernen, Becky Quick, Mike Santoli, Leslie Picker
Producer: Katie Kramer
Notable Guests: Ben Narrison (Tenacity Venture Capital), Dan Ives (Wedbush Securities)

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Overview

This episode of Squawk Pod centers on two big stories: a fiery debate over California’s proposed wealth tax—which threatens a “tech billionaire exodus”—and a look ahead at the top artificial intelligence (AI) stock picks for 2026. In addition, the hosts discuss market swings in metals, a contentious shake-up at Lululemon, the future of the Federal Reserve, and the growing impact of AI and retail tech on the economy.

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Key Discussion Points & Insights

1. Metals Market Volatility (01:53–03:51)

• Overview: Significant price swings in metals; silver suffered its worst day since 2021, while copper is experiencing its longest winning streak since 2017.
• Drivers: Profit-taking, increased margin requirements, supply chain shortages, tariffs, and speculative flows (“hot money”) are cited as causes.
• Meta’s AI Acquisition: Meta acquired AI agent developer Manus for over $2B, part of a larger strategy to secure AI talent and tech. The deal comes with geopolitical undertones, given Manus’s Chinese origins and move to Singapore.

Quote:
“There's so much hot money in metals right now... we're seeing the pressure settles of the whip end of it.”
— Joe Kernen (02:37)

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2. Fed Controversy and Policy (04:33–06:36)

• Background: President Trump is threatening to remove Fed Chair Jerome Powell, citing the cost of Fed building renovations. The succession timeline and Powell’s future remain unclear.
• Economic Context: Conversations around recent interest rate cuts and the elusive recession; markets haven’t responded as predicted.

Memorable Exchange:
“They better have good food. That's all at the Fed cafeteria after this. Or at Mar a Lago.”
— Becky Quick (04:51)

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3. Lululemon Boardroom Drama (06:57–08:03)

• Event: Lululemon founder Chip Wilson launches a proxy fight, nominating new independent directors after CEO Calvin McDonald’s exit. The board’s response is cautious; shares have dropped 44% this year.

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4. California’s Tech Wealth Tax Debate (09:46–20:12)

Guest: Ben Narrison, Founder, Tenacity Venture Capital

Summary

• Backdrop: California considers a 5% wealth tax targeting billionaires. Tech leaders and lawmakers are at odds, with some warning of a mass exodus.
• Ben Narrison’s Take:
  • Blasts the move as “political pandering,” arguing that California has a track record of fiscal mismanagement.
  • References the only “workable” wealth tax—Switzerland’s model—is modest and coupled with low income taxes, which is not the case in California.
  • Cites historic instances (e.g., France in the 1980s) when wealth taxes precipitated mass flight of high-net-worth individuals.

Notable Quotes:

• “It's pretty tough to be so... proven to be poor at your job of spending money that isn't yours and then to ask for more.”
  — Ben Narrison (10:53)
• “This is political pandering to the proletariat... It has no basis in anything that works.”
  — Ben Narrison (11:18)
• “Everybody uses the example of the Bezos of the world... but what about the dry cleaner... and 100% of his or her net worth is in that asset…?”
  — Ben Narrison (17:18)

Further Insights

• Penalizing “extremes” (billionaires) also hurts “hardworking people that are sort of getting there.”
• Warns of unintended consequences: “The best and brightest” may leave Silicon Valley, and capital will follow.
• Argues it’s unfair to single out billionaires; “Money is fungible. People can move.”
• Swiss-style wealth tax seen as workable only because it is modest, and overall tax structure is business-friendly.
• Even a “one-time” wealth tax would likely become permanent.

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5. Reverse Logistics: The High Cost of Returns (22:50–28:26)

Reporter: Courtney Reagan

• Big Numbers: 16% of US retail purchases ($850B) in 2025 are returned, costing retailers $75B.
• AI’s Role: Companies are using AI to optimize returns: determining when to restock, liquidate, or landfill, and increasingly personalizing return policies.
• Consumer Impact: Retailers are tightening return policies (shorter windows, fees, more exchanges instead of refunds)—a four-year trend.
• Bracketing Trend: Online shoppers frequently buy multiple sizes/colors with the intent to return—return rate for online apparel is 22% versus 6% for in-store.

Memorable Moment:
“I love reverse logistics... I mean, I like cheese. It's a thing people know that know me. And so I get cheese boards and cheese knives.”
— Courtney Reagan (28:13)

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6. Top AI and Tech Stock Picks for 2026 (29:30–37:22)

Guest: Dan Ives, Wedbush Securities

• Top Picks: Microsoft, Apple, Palantir, CrowdStrike, Tesla.
• Thesis: AI investment “multiplies” across tech: “For every dollar spent on an Nvidia chip, there's an 8 to $10 multiplier across the rest of tech.” (Dan Ives, 31:08)
• Apple: Expected to benefit from a “consumer AI revolution” fueled by a looming Google partnership; $75/share of additional value from AI engagement anticipated.
• Tesla: Autonomous vehicles/robotics estimated to be worth $1T to company value; US is now ahead of China in tech, with Tesla leading “physical AI.”
• Palantir: Potential to reach $1T market cap in next 2–3 years, per Ives.
• CrowdStrike: Cybersecurity’s importance amid the cloud/AI revolution makes it a standout; “stock has a 6 in front of it as we go into end of 26, potentially a 7.” (Dan Ives, 36:07)
• Other Names: Broadcom discussed; inclusion debated but not on the immediate "top 5" list.
• Apple’s “Green Text” Meme: Lighthearted discussion of iPhone vs non-iPhone users.

Memorable Exchange:
“If someone does have green, is that not an apple when you're texting them?...”
“Well, no, but usually that's why we usually delete them from our text chain. I mean, when someone's a green. So that's always a red flag.”
— Becky Quick and Dan Ives (32:46–33:01)

• Fashion Sidebar: Ives's colorful wardrobe is discussed as boosting his profile. “If you're wrong in your stock picks, no one cares about the fact [you're well dressed].” (Dan Ives, 37:03)
• Elon Musk/Tesla vs Google: Dan Ives favors Tesla's scale in autonomy over Waymo's limited city rollout.

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Timestamps for Key Segments

• 01:53 – Metals market and AI acquisition news
• 04:33 – Presidential drama over the Federal Reserve
• 06:57 – Proxy battle at Lululemon
• 09:46 – Introduction to California wealth tax debate
• 10:53 – Ben Narrison on state fiscal mismanagement
• 13:39 – Tax policy, property rights and founder/entrepreneur impact
• 16:00 – Implications for entrepreneurship and Silicon Valley exodus
• 22:50 – Returns and retail AI with Courtney Reagan
• 29:30 – Top tech/AI picks for 2026 with Dan Ives
• 31:08 – Nvidia multiplier and overall thesis for AI megatrend
• 32:46 – “Green text” iPhone/Apple culture conversation
• 36:07 – CrowdStrike stock outlook and cybersecurity theme

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Notable Quotes

Ben Narrison

• "This is political pandering to the proletariat... It has no basis in anything that works." (11:18)
• "If you penalize one extreme, you're going to penalize the hardworking person that's sort of getting there." (12:53, reprised at 13:39)

Dan Ives

• "For every dollar spent on an Nvidia chip, there's an 8 to $10 multiplier across the rest of tech." (31:08)
• "I think 80% of the market is going to be owned by Tesla over the coming years. And I think this really starts the autonomous chapter..." (34:49)

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Tone and Style

• Direct, deeply analytical: Ben Narrison and Dan Ives provide unvarnished, sometimes skeptical views, balanced with optimism for specific innovation themes.
• Lighthearted Interludes: Banter about the Fed cafeteria, returns of cheese knives, and iPhone text color provide levity.
• Actionable, investor-focused takeaways: The discussions are pointed at investors, entrepreneurs, and policymakers interested in tech disruption, tax policy, and market outlook.

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Summary for Listeners

This episode offers a dense, insightful dive into the clash between fiscal policy and Silicon Valley, practical ramifications for founders and venture capital, and a bullish but selective take on where the AI and tech revolution is heading. The discussions with Ben Narrison and Dan Ives provide hard-nosed skepticism on political posturing, taxation, and “killing the golden goose,” balanced by pragmatic optimism about tech’s future—even as California teeters on driving out its best and its brightest.

If you want clarity on how policy, AI, and the tech ecosystem are shaping 2026, and enjoy the signature wit of Squawk Pod’s hosts and guests, this episode delivers.

Transcript

[Joe Kernen]

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[Becky Quick]

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[Ben Narrison]

Bring in show music please.

[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, the political debate over a proposed wealth tax in California that could lead to a tech billionaire exodus from the state. We get the take of venture capitalist Ben Narrison on the potential 5% tax.

[Ben Narrison]

If you penalize one extreme, you're going to penalize the hard working person that's sort of getting there.

[Katie Kramer]

Top tech picks for the new year from the dapper Dan ives. We'll talk AI and his wardrobe.

[Dan Ives]

That's our whole thesis going 2026. For every dollar spent on an Nvidia chip, there's an eight to ten dollar multiplier across the rest of tech.

[Katie Kramer]

Plus the rest of today's news that got us squawking. Silver swings the fight inside Lululemon and our favorite soap opera, the President's search for a new head of the Federal Reserve.

[Becky Quick]

They better have good food.

[Joe Kernen]

That's all at the Fed cafeteria.

[Becky Quick]

Mar A Lago probably already has. Yeah, decent food.

[Katie Kramer]

It's Tuesday, December 30, almost the end of this year. Squawk Pod begins right now.

[Joe Kernen]

Stand by, Joe in three, two, one. His mic here.

[Becky Quick]

Good morning and welcome to Squawk Box here on cnbc. Live from the NASDAQ market site in Times Square, I'm Joe Kernan along with Leslie Picker and Mike Santoli. Becky and Andrew are off the day.

[Mike Santoli]

For the last week or two. We're watching metals again this morning. Profit taking, an increased margin requirements from exchange operated operator CME Group contributing to a big fall yesterday. But a rebound is underway. This morning. Silver dropped nearly 9%, its worst day since early 2021. Earlier, it hit a high around $83 an ounce. Gold was down 4.6%. Platinum and palladium dropped about 15% each. Copper down 4.7%. Platinum up about 3%. Right now, copper is looking to notch its longest winning streak since 2017. There's some issues about supply chain shortages, supply and demand. Obviously copper is a critical component.

[Joe Kernen]

There's some stockpiling. There is a little bit of a tariff component in terms of when you might, you know, be able to move it across borders. And you know, I just think that there's so much hot money in metals right now and it's kind of just we're seeing the pressure settles of the whip end of it. And you know, copper is always a little bit of a, of a, of a follower and more of an industrial. But also there's been this reflation trade that's been in the equity markets as well and seems to be reflected to some degree in copper in the last couple of weeks. Matt A meantime is buying AI agent developer Manus. The Wall Street Journal puts the purchase price at more than $2 billion. Mattis was founded in China as a product of a Chinese startup, but later relocated to Singapore. It launched its first general AI agent earlier this year, which can perform complex tasks like market research, coding and data analysis. It emerged as a notable AI player after claiming its chat bot offered better performance than OpenAI's deep research agent. The acquisition fits with Met, his broader strategy of buying specialized AI startups to acquire talent and fast track its broader AI business. The firm say Mattis will continue operating its subscription service without any disruption. You see not a whole lot of reaction in Meta shares down fractionally, although it's been kind of in the penalty box in the AI story. People are a little bit less confident on the payback on its heavy investment.

[Mike Santoli]

Yeah, didn't Benchmark get some pushback with this one when it had its latest investment, its latest round of. I think they put in maybe $75 million there and then got some pushback about it being a Chinese company. And we've seen such a bifurcation. US AI and China AI. And this is an interest. I don't know if it's a signal of more to come or whether there can be more from here. Obviously they moved their headquarters to Singapore probably to try and combat some of those criticisms. But obviously an interesting thing to note in the whole AI arms race between the two countries.

[Joe Kernen]

President Trump focusing again last evening on the future of the Federal Reserve. Mr. Trump said he would reveal his choice sometime next month. He also renewed a threat to fire current Fed Chair Jerome Powell and sue him for what the president called gross incompetence related to the renovation of the Federal Reserve building in Washington.

[Becky Quick]

They better have good food. That's all at the Fed cafeteria after this. Or at Mar a Lago. Yeah, Mar A Lago probably already has decent food. I think he was, you know, President exaggerates. Stephen Moore Was saying that yesterday at times, but kept hammering on the, the most expensive building ever, ever constructed at 4, $4.2 billion. When he was confronting Jay Powell a couple of months ago and they were together, walking, walking around the building, I, I think he was talking about something that had already been spent and Jay Powell was just sitting there going, no, no, no. Trying to just while he was talking. Jay Powell is going, no, but he got, he got more. He's angry. Not sure why they just cut. Maybe because they've got, you know, they've.

[Joe Kernen]

Cut 175 basis points. No recession in sight over the course of 15 months. And. But, you know, I guess it's just the EU doesn't seem to be responsive at times and when a year or nine months are on pause, you know, so I guess that's, you know, just doesn't sit right.

[Mike Santoli]

Well, also, it's still unclear whether he'll stay on, you know, post may. Whether he'll stay on.

[Becky Quick]

On the board.

[Mike Santoli]

On the board, yeah.

[Becky Quick]

Chairman. Yeah. You said yesterday any normal person would resign. I think that's what, what Trump was saying. If we had no inflation, if it was anchored at 2, it wouldn't matter if there was a recession on the horizon. No, that's right.

[Joe Kernen]

Yeah.

[Becky Quick]

You want everybody, you'd want cheap money for, for people to.

[Joe Kernen]

Right. Or you just get in a hurry to neutral. Whatever you think that is. Which is definitely lower than where we are.

[Becky Quick]

And there may have been. I mean, we have had recession scares over the last year.

[Joe Kernen]

That's right.

[Becky Quick]

Again and again.

[Joe Kernen]

And by the way, September of 2024, the first cut was a deep recession scare. If you look at every market base indicator, it was a mini. And you know, even in October of that year, Kevin Hassett said it was the right thing to do to cut.

[Becky Quick]

Right. That's why there's that saying that, you know, market predicted 9 out of the last 4 recessions.

[Mike Santoli]

Lululemon responding to its founder launching a proxy fight and nominating several independent directors to the company's board. Lulu founder Chip Wilson made his move two weeks after the company announced the exit of CEO Calvin McDonald without a successor. Wilson nominated three people to Lulu's board, including the former co CEO of On Running and ESPN's former chief marketing officer. Shares of Lululemon have fallen more than 44% this year. In a press release, Lululemon said, quote, in the interest of avoiding a costly and distracting proxy fight, the board requested from Mr. Wilson the names of his director nominees to evaluate their qualifications and backgrounds. But Mr. Wilson declined to engage further. Now that the names have been submitted, the board will evaluate Mr. Wilson's director nominees in in due course. The company said it's encouraged by a strength it's seeing in the US and internationally, but it said it recognizes there are more opportunities to really realize value across the country.

[Becky Quick]

You say Mr. Wilson? I guess it's from my childhood. Mr. Wilson.

[Ben Narrison]

Cheese will be next.

[Katie Kramer]

Coming up on Squawk Pod, California's tech elite are up in arms over a potential wealth ticket hats. Ben Narrison, founder of Tenacity Venture Capital, joins us right after this break.

[Ben Narrison]

Everybody uses the example of the Bezos of the world, but what about the dry cleaner that opened one store and then two and then five and then 10? And 100% of his or her net worth is in that asset.

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[Mike Santoli]

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[Becky Quick]

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[Katie Kramer]

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[Becky Quick]

California's tech elite are angry over a potential wealth tax in the Golden State. The heated debate played out largely on X, where some tech leaders have called out Silicon Valley Congressman Ro Khanna for supporting the idea. Why Combinator's Gary Tan has even called for a primary challenge for Ro Khanna. In a statement, Congressman Khanna's office said he has always supported a modest wealth tax on billionaires to deal with staggering inequality and to make sure people have health care, while also advocating for common sense workarounds. Joining us now, Ben Narrison, founder of Tenacity Venture Capital. This is just such a multifaceted discussion we can have, Ben. We've had Roe on many times. I don't think he always did support what he's now calling a moderate wealth tax. I think in the past, he's come down on the side of a lot of his constituents and not. And then I think about, does California need more money to waste? I mean, is that really the answer for how to deal with things out there?

[Ben Narrison]

It's pretty tough to be so, I don't know, proven to be poor at your job of spending money that isn't yours and then to ask for more. California's own accounting group said that they found $9.6 billion worth of waste and inappropriately spent capital and fiscal malfeasance. And, you know, we went from a surplus to a deficit of court. But, you know, this is just the same as always. This is political pandering to the proletariat. It's a let's tax the rich and help you, little guy and gal. It has no basis in anything that works. There's no country in the world where a wealth tax has worked with one exception, that's Switzerland. And they do it in an extreme, logical and fair way. You know, it would take you 20 years of paying Swiss wealth taxes just to equal what you would have paid on a game in the United States through capital gains. So, you know, this is a bunch of chest pounding. I really hope it doesn't pass. We had this conversation when Kamala was running. It's just an idiotic concept that is nothing more than. Than political positioning. Having said that, Mandami won in the same way. So, you know, I'm worried about that.

[Becky Quick]

Ben, there's two issues here. I think if you just. If you boil it all the way down, and one is if someone accrues a lot of wealth paying. And I've seen people say I paid 53% to accrue all this wealth. Now I've got it. It's private property. There's no way that you can just say, now I want some of it. That's confiscatory. You've already paid taxes on it. Then there's founder shares. The people that found a company say it's at a dollar and now it's at $1,000. And they borrow money against the gains to live off those. Then they die and their heirs get it. And it's never taxed, basically. And I almost can see. And Bill Ackman's got a way that you could maybe address that. I don't know how much money it would raise. It's not going to solve California's problems.

[Ben Narrison]

Well, don't forget the fact that there's well documented cases where people, countries and states create wealth taxes and you see massive fleeing of wealth.

[Becky Quick]

You do, but it's France in 1989.

[Ben Narrison]

Lost by their own numbers 10 to 12,000 millionaires when millionaires mattered, you know, back in the 80s.

[Becky Quick]

But it goes against everything we learned about property rights and John Locke and everything else over the years that it's basically confiscatory. And if you go down this slope, I don't know where it ends, but I do at least understand the notion of that. If you never sell anything and you're a founder and you're worth $20 billion and you just live off borrowed money like a billionaire, I can understand how the optics of that make it ripe for.

[Ben Narrison]

Yeah, this is the whole trying to change something buy, borrow and die philosophy upsets a lot of people. It is a tiny, tiny, tiny fraction of the planet to worry about something that impacts one or two bips of the population. And by the way, these are exactly the people that have the flexibility to go wherever they want. So you've seen this. When people change trust law, they move to another place. When people change corporate law, you've seen all the things Elon Musk's been doing about anti Delaware. Now we've got to be in Texas. Money is fungible. People can move. When you're at that level of wealth, you have an enormous amount of flexibility. I've heard so many tales and I've seen people that have had become or coming into the billionaire class that have almost immediately moved to a tax free state. I mean you just saw, I don't think it's because he's a billionaire, but George Clooney is now moving to France. So you know, you're just making it really hard on people. And yes, it is confiscatory because if you take out that tiny, tiny, tiny fraction, you know, drawing attention to the one in a million to try to make a case for something that might impact even 1% is totally unfair. And you know, one of the things that on Twitter a lot of times talking about I don't understand property taxes. I'm paying rent for the house that I own. You know, there's plenty of versions of wealth tax already. Property tax is a great example. When I moved to California, I paid cash for my house because having been an entrepreneur for 25 years, I worried that I might risk it all again. It is really, really hard to address the sort of unrealized capital gains. First of all, everybody Uses the example of the Bezos of the world. You know, they're borrowing against their public stock, they're spending it, they'll eventually die, their heirs will get a step up. But what about the dry cleaner that opened one store and then two and then five and then 10 and 100% of his or her net worth is in that asset and now it's worth $50 million. You know, is it? You know, if you penalize one extreme, you're going to penalize the hard working person that's sort of getting there. Switzerland has made it work because they take a small 10 basis point to 1% wealth tax every year, which is negotiated and generally relatively low. But keep in mind they don't have capital gains and their income tax is like 11 and a half percent. So you can't stick it to us everywhere. I mean you got to sort of pick your battles. Otherwise it's just totally and completely unfair.

[Mike Santoli]

What do you think it means for entrepreneurship? Obviously California and Silicon Valley, a lot of important companies were founded and still remain headquartered there. You know, I get the point about billionaires leaving if this does come to pass. Does it disincentivize people from starting companies, building companies before they get to that billionaire status?

[Ben Narrison]

Sure. I mean you're already seeing a material amount of companies and certainly investors that have moved to for a little while is Florida, Austin, Texas. Anybody with big dreams and aspirations usually is pretty long sighted in terms of what they want to achieve. And so this could definitely impact that. You also have a pretty material. I've already seen big dog VCs leave the state and so that impacts as well because all of a sudden if you have this diaspora of capital that goes out of Silicon Valley to all these little Pocke, Austin, Miami, etc. Then maybe it's just as easy for the entrepreneurs to raise there. You just don't really want to push your best and brightest out of the area. If you look at all the, I think out of all the trillion dollar companies on the planet, the only ones that aren't from Silicon Valley are Microsoft, Seattle, pretty darn close tax free by the way, and Saudi, Aramco and TSMC. But the vast majority came from here. 11% of the jobs in the United States come from venture backed businesses. It's just really, really tough to sort of like basically kill the golden goose. You want to make some goose fillets this year, it's not going to help you very much.

[Joe Kernen]

California has never been the lowest tax place to start a business and yet you've always Been terrible at those numbers.

[Ben Narrison]

Yeah. But a lot of people have already left. I mean, it's been a growing level of issue. I remember I was having a conversation over dinner. I used to live in Inclined Village, Nevada for a period of time. I moved from New York City. New York City used to be the highest tax in the country. So I moved from there to Nevada and then I moved on to California. You know, a lot of great things here. I mean we have some of the most beautiful terrain in the world. It's just a wonderful, wonderful place to live. If you look at the physical environment of what we have here, the natural resources, but it is extremely expensive. It's a horrific tax rate. And you know, look, a lot of people are figuring out where they base their companies. Whether it was a Delaware corp announcing. Maybe if you've got instead of a Delaware corp, you got a Texas corp. Austin becomes more appealing. I've had founders that started from day zero in Austin. But there is a special serendipity here. You're not going to get anywhere else. You're not going to lose everybody. But on the edge, when what's more likely to happen is that companies will start here, but when they get to the level where this, if this were to pass their line of sight to that billionaire status, they're going to move. And that's going to hurt us, is it?

[Mike Santoli]

It's a one time tax, right?

[Ben Narrison]

Well, when was the last time you.

[Mike Santoli]

Saw a Tempo and then just come back?

[Ben Narrison]

In any government ever be temporary? I mean, if they do it once, they're going to do it again. It's just, it's not obviously passed and hopefully it won't be. And all this will just be a classic tempest in a teapot waste of time and people will be trying to drum up the votes they need and they'll move on.

[Becky Quick]

All right, then we're going to continue to talk about it and watch it and watch it play out there. I don't think News isn't Newsom. I mean, Newsom's not even for it. Is he at this point or.

[Ben Narrison]

Well, it would be a little. I mean, in the past he has gone against these sort of offerings. I mean, you know, let's remember he was backed by and is in office because of one of the wealthiest people in the country. Getty, you know, is assumedly still a very close friend of his. And I think he's probably realistic enough about looking at those. Look, Gavin's got issues, but he's a relatively logical person. And this is not a logical thing to try and get done if you.

[Becky Quick]

Lose Gavin on this. I don't know. I'm not sure what that means, but they picked up Roe. Who I was going to. We were going to be on a ticket together. I'm going to have to tell him that that's not happening. The Rojo ticket or Joe Rowe. He wanted Joe Rowe. But I don't want to be president, too. Vice president looks good to me. Not a lot, right, Ben? Kind of.

[Ben Narrison]

I think you should go back to curing cancer. I thought that was pretty cool. I did that.

[Becky Quick]

Yeah. Exactly. Anyway, good to have you on. Thanks.

[Katie Kramer]

Next on Squawk Pod, the big business and potential artificial intelligence opportunity of your post holiday retail returns. Reporter Courtney Reagan joins us.

[Courtney Reagan]

They're trying to personalize either the offer that you get or your window of return, your availability of return versus exchange.

[Katie Kramer]

And top tech stock picks for the new year from analyst Dan Ives, including the AI revolution he sees coming to Apple. Some of us have other concerns, but.

[Becky Quick]

If someone does have green, is that not an apple when you're texting them?

[Dan Ives]

We usually delete that from our text chain.

[Becky Quick]

Right.

[Dan Ives]

I mean, when someone's a green. So that's. That's always a red flag.

[Becky Quick]

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[Mike Santoli]

What made you confident that you could do something that hadn't been done before?

[Courtney Reagan]

I have no fear of failure. Trailblazing women, Changing the game One of my favorite pieces of advice. Think about what your boss's boss needs.

[Mike Santoli]

Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.

[Katie Kramer]

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get.

[Becky Quick]

Your podcasts.

[Katie Kramer]

This is Squawk Pod Stand.

[Joe Kernen]

Joe Bye in three two, one two.

[Becky Quick]

Joe, you're watching Squawkbox on cnbc. I'm Joe Kernan along with Leslie Picker and Mike Santori.

[Mike Santoli]

If you didn't get exactly what you hoped for this holiday season, expect to wait in line for returns, which are again expected to peak for the year this week, according to Adobe Short. Returns are annoying for consumers, but the rising cost of returns is a true pain point for retailers. Courtney Reagan joins us now with more. Hey Courtney, this is one of my.

[Courtney Reagan]

Favorite topics, reverse logistics. I know, it sounds so sexy, right? But seriously, returns is really fascinating to me. That hot pink sweater, not really you. Or maybe you don't really need more cheese knives from your in laws. Or maybe that's just me, but the NRF estimates almost 16% of total 2025 retail purchases will be returned. That's $850 billion worth and it'll cost retail 75 billion. The cost to return an item can be anywhere between 20 and 65% of its original value. Why? Well, because a return triggers a decision tree of sorts. Software and increasingly AI determines the path to recoup the most value at the lowest cost from restocking it in store, shipping it back to fulfillment center, selling to a liquidator or throwing it away. And as online shopping increases, so do returns. 22% of online purchased apparel is returned. That's almost four times the rate for in store bought apparel. This at least according to an ICSC survey. Some estimates actually put that much higher because consumers are bracketing or they're buying more than one size or color and rarely intending to keep keep more than one but expecting free shipping each way. Blue Yonder manages supply chain and returns for 23 of the nation's top 25 retailers. CEO Duncan and Grove says few retailers have one person that owns returns, but those that do see a significant, well, return.

[Becky Quick]

You're talking about double digit improvements in gross margin. You're talking about improvements in sales.

[Joe Kernen]

Like I said, I mean if this.

[Becky Quick]

If you're in apparel and 1/3 of your inventory is being returned, that's basically your largest supplier that you're not managing.

[Joe Kernen]

You've got inventory coming back in a.

[Becky Quick]

Lot of it, which you know, almost a third of it doesn't go back on sale. It goes into a landfill.

[Courtney Reagan]

Higher returns hurt margins. So retail return policies are getting tighter. Even personalized returns. Management firm Loop says the number of brands charging for returns is up 6% year over year. That's the fourth straight year of increases. Some brands are shortening return windows or maybe saying you actually can't get a refund, you actually have to do an exchange. AI is helping making those personalized person to person in some cases.

[Mike Santoli]

Yeah, that, that 22% number is really eye popping. I mean, I'm a culprit of this. I return things all the time. But if it does charge me for it, oftentimes I'll be like, well, I guess I can kind of make this sweater work. Or the cheese knives, which by the way, I'm happy to take off your hand if you need anything to make eating cheese easier. But do, do you expect to see retailers building that into the price of items? With a number that high, it almost. I wonder if it gets to the point where retailers start increasing the prices of the items that they sell online just to kind of compensate for the hit they expect to take to their margins in the future.

[Courtney Reagan]

I absolutely think they have to. If you think about it, we are now conditioned as consumers to want free shipping, but then if we return it, we want that to be free. So imagine the loss even if you take one sweater, right. A retailer shipped to pay it to you. You try it on, you don't like it, now you're shipping it back. They have a loss on that one item, right. Flat out. I mean, how long can they really expect to do that? And so it's a delicate balance because they also want you, the consumer, to be able to feel like that you have the option to try it on and if it doesn't work, to send it back. And that's why I think AI and these different software companies are trying to personalize return policies by person. If they deem you're someone that maybe abuses things.

[Joe Kernen]

That was going to be my question. Is your pattern of return frequency taken into account?

[Courtney Reagan]

Exactly. It very much is by a lot of these retailers and these companies, or.

[Joe Kernen]

Whether you got a really deep discount maybe on the sale. And you know.

[Courtney Reagan]

Exactly, exactly. And so there's all different ways that they're trying to personalize either the offer that you get or your window of return, your availability of return versus exchange. It is a very, very interesting situation. I don't know if you've. I returned something recently to a store and they did ask for my id and actually they, they said, oh, you know, they brought up a previous return that I had returned, something that was a large, A big price item basically that I didn't have gift receipt for as a. Because of that they weren't like they weren't going to let me do it again.

[Mike Santoli]

Yeah, I wonder too if, you know, I will ultimately be used in a way that it makes people more satisfied with their online purchases, that the AI technology evolves to the point where it can say, like this size sweater will fit you. Don't worry about it. And then people will be more inclined to keep it.

[Courtney Reagan]

That's such a smart thought. And that is exactly what retailers are hoping that can be another use case for AI better reviews that are not obviously prepaid for where people talk about the fit. I don't know if you've noticed on Amazon, but they are in some cases starting to flag. This is a commonly returned. And I've seen that a couple times, which has given me pause, thinking, well, I wonder why. Maybe I should look at a different option. Which obviously then could be a loss of a sale, but maybe it's worth it if they end up sending it back anyways. And the retailer, if it's Amazon or a third party, pays for shipping both ways.

[Mike Santoli]

Yeah, I've seen the same thing and I've said, okay, well, I'm going to find a different brand or a different look for whatever it is that I'm purchasing.

[Courtney Reagan]

I love reverse logistics.

[Mike Santoli]

It's so fascinating to me how many.

[Becky Quick]

Sets of cheese cutting knives.

[Courtney Reagan]

I mean, I, I like cheese. It's a thing people know that know me. And so I get.

[Becky Quick]

How many sets do you have cheese.

[Courtney Reagan]

Boards and cheese knives?

[Katie Kramer]

Like four.

[Becky Quick]

There's a joke in there, son. There's a joke in there, but I'm, I'm not gonna do it. I'm not gonna leave it where we stand right now. I can't. You can imagine.

[Joe Kernen]

Way to go, Joe.

[Becky Quick]

Yeah.

[VRBO Announcer]

Yeah.

[Becky Quick]

Santa Claus, definitely. Someone said Santa Claus doesn't exist and neither does the rally. Santa Claus definitely exists. Maybe I can't speak for the rally every year, but we're wondering how many days we got.

[Joe Kernen]

Well, like three more days.

[Becky Quick]

Three more.

[Joe Kernen]

Four, I guess. Including today. It's flat, literally from the time it started. The S and P. All right, we'll see. Yeah.

[Becky Quick]

Hope springs eternal.

[Joe Kernen]

It's lost the little bit of a hold on.

[Becky Quick]

We talked about that yesterday. Yes. So you don't.

[Joe Kernen]

People seem to anticipate these things way more than they used to.

[Becky Quick]

If an afc. You don't care. You're not going to base your super bowl bet on. On anything?

[Joe Kernen]

Well, on something. Maybe football.

[Mike Santoli]

Mike believes in Santa, but not the Santa Claus rally.

[Becky Quick]

Exactly.

[Mike Santoli]

At least not this year.

[Becky Quick]

Let's talk some tech picks for the new year, some potential air plays. Join us now. Dan Ives, Wedbush Securities Global head of technology research. Got kind of a Magnum PI Shirt on. We were. The jacket's muted. You went with the shirt today for this appearance. All right, we can do that, Dan. Since it's the beginning, you know, we're at the very end of the year, so we always want to, you know, think that suddenly the calendar has anything to do with anything. But we are interested in 2026. So you've got some, some tech stocks that you like, and then it's notable that some are missing from the ones that you like. So I'm just wondering, does that mean that you're negative on the ones that don't make the list or that you just like the ones that make the list better and they're all going to go up?

[Dan Ives]

Yeah, it's a great question. I mean, like, look, Nvidia, that continues to be one of our top names overall going into 2026. But I, I mean the reason the five that we pick has Microsoft, Palantir, you know, you look at CrowdStrike and you know what I. And even Apple, it's about the derivatives of the revolution playing out. I mean that's our whole thesis going 2026. For every dollar spent on Nvidia chip, there's an 8 to $10 multiplier across the rest attack. And that's why I think those are the names, those five. Five are the ones specifically going into early part of 26 that I think are going to boom. I mean, that's why we pound the table on those five names.

[Becky Quick]

Exactly. So that you kind of summed it up right at the beginning. You said, look, Nvidia is one of your favorite names, but it's not one of the five that you mentioned. That doesn't mean that then Nvidia is not, not going to do well. You said them quickly. So Microsoft, what's the story on Microsoft Azure?

[Dan Ives]

I mean, look, when you look at Enterprise, as you see the movements in the cloud, Nai Redmond, they're really owning that race. I think this is stock hundred hour upside. That's why Microsoft sticks out on Azure and AI demand front and center.

[Becky Quick]

Great. Apple you mentioned quickly. But Apple just, it doesn't even matter if they're any good at. Some of these new things are just so good at what they do with everything else.

[Dan Ives]

Yeah. And I think the whole thing for Apple is like they've been on a treadmill 2.05 speed.

[Becky Quick]

Right.

[Dan Ives]

They've been nowhere in AI. But now as we go into 26, we expect a major Google partnership in terms of the spring. Now the consumer AI revolution goes through Cupertino and I think that is significant. We talk about $75 incremental of the stock is the AI multiple that starts to increase for Apple. That's why I view that as just a glaring name that sticks out.

[Becky Quick]

If I text someone and it's green, it's like, what's wrong with you? I don't know how other people compete with Apple. The ecosystem is so powerful. I'm a simpleton with this kind of stuff and I just can't imagine trying. You got anyone not have an Apple and not have an iPhone? No one. Who are the. Who has. If you have an iPhone, is it always blue with your text? I'm like a neophyte. Is that the way it works?

[Joe Kernen]

I thought there was some.

[Becky Quick]

There's some messages that could be. But if some. Dan, if someone sound like an idiot. But if someone does have green, is that not an Apple when you're texting them? Is that really.

[Dan Ives]

Well, no, but usually that's why we usually delete them from our text chain.

[Ben Narrison]

Right.

[Dan Ives]

I mean, when someone's agreeing. So that's always a red flag.

[Becky Quick]

I know, it's just I do so many things and believe me, I'm a novice at all this stuff. But Apple's just got a lock. How about Tesla? Why is that trading. What's a multiple now is about robots.

[Dan Ives]

Well, look, I think this, the whole story is the autonomous chapters now coming to Tesla. And I think this give me the most important year in its history for Musk and Tesla because of autonomous and robotics. And I think we think autonomous worth a trillion dollars alone to the Tesla story. Now Musk, wartime CEO, and it speaks to our view. You know, look, for the first time in 30 years, the US is ahead of China when it comes to tech. And I think Tasser front and center in terms of physical AI. That's why we love that name.

[Becky Quick]

Palantir has been in the news lately because some people don't. Some people think it's a short famous people. But it's on your list.

[Dan Ives]

Look, I mean we loved it since it was a young teenager, right? I mean, you know, 1012. Because this is what the haters are going to hate on Palantir. But you're Talking about a company carp, that's, that's changing the whole tech space. No one has what they have in terms of when it comes to use cases and I pay that's a trillion dollar mark cap next two to three years. That's why Palantir valuation expensive by being just starting to actually transform tech.

[Joe Kernen]

Dan, if autonomous is worth a trillion inside Tesla, why isn't way more worth more than that inside of Google? And why isn't Google a better consumer AI play?

[Dan Ives]

Yeah, it's a great question to me. Way more just, you know, $100,000 plus cars. You know you have really on two hands the amount of cities they're in. I just don't think Waymos could scale it to his price point.

[Joe Kernen]

How many hands do you do you need for the cities that Tesla's in right now?

[Dan Ives]

Full speed today, but I again but I believe in 26 there'll be 30 cities and ultimately scale from there. Look, Wemo, we talk about Google. One of the reasons Google's in the AI, the Ives AI 30 is I think Wemo does give a huge value to them, But I think 80% of the market is going to be owned by Tesla over the coming years. And I think this really starts the, you know, it's really the autonomous chapter is the revolution comes to Tesla.

[Becky Quick]

Mm. And then you mentioned CrowdStrike. Maybe you already talked about that. I think Santoli wants Broadcom on this list or something, don't you?

[Joe Kernen]

Well, no, I just think Broadcom by market cap and by the underlying business dynamics kind of belongs with the other Max Sevens.

[Becky Quick]

What do you think?

[Dan Ives]

Yeah, look, I mean it's a great point. Like Broadcom is so well positioned. The reason I pick CrowdStrike is just cybersecurity. What Kurtz and CrowdStrike are doing, I mean you look at all these use cases as they move to the cloud. You're going to need cybersecurity as a core component of AI. And I think where CrowdStrike's position, I think the stock has a 6 in front of it as we go into end of 26, potentially a 7. That's why this is one that just clearly sticks out in terms of CrowdStrike.

[Becky Quick]

Yeah. So was it a conscious decision to be a fashion guy? I mean it has definitely raised your profile even as an more people know who you are. Reminds me of Payne Stewart. I always wondered about Payne.

[Dan Ives]

The late great Payne was the best.

[Becky Quick]

He was the best. But he. And you know what if he couldn't, if he wasn't great, you don't want to be dressed like that. You don't want to be walking around on a golf course. If he sucked, that would be. He couldn't do it. So I figured the same with you. You couldn't do this if you weren't good at what you do. But now you're like, what takes more of your time, the clothing business or the tech stocks?

[Dan Ives]

The clothing business is small. That's just fun in terms of the clothing line. But look, this is all something that came. It was never intentional. Right. It's just always the way I dress. Just funky. People liked it, and it's kind of taken on something of its own. But again, if you're. If you're wrong in your stock picks, no one cares about the fact.

[Becky Quick]

Exactly. I mean, Kevin o' leary might win a freaking Oscar. So, I mean, people can do different things, you know, we don't have to. What do you got? What do you do? You got anything?

[Joe Kernen]

I try to stay out of the way. Dullness is my brand.

[Becky Quick]

Keep your head down and your and your feet moving, Dan.

[Joe Kernen]

Try to drain the drama out of it.

[Becky Quick]

All right? You do very well. I won't ask you. You got kids? I got kids. If you got kids, it's like I got three dogs. Four sometimes. All right. See you later. Thank you, Dan. Thank you.

[Katie Kramer]

And that is squawk pod for today. Thanks for listening. Squawk box is hosted by Joe kernan, Becky quick and Andrew ross sorkin. Another big thanks to Mike and Leslie for sitting in today. Please tune in to our TV show weekday mornings on CNBC at 6 Eastern or follow squawkpod wherever you get your podcasts and listen to the best of squawkbox anytime you want. We'll meet you right back here tomorrow.

[Ben Narrison]

We are clear.

[Joe Kernen]

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