Protein Goals, Cathie Wood, & A Geopolitical Nobel Prize

Summary

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Squawk Pod Episode Summary

Episode Title: Protein Goals, Cathie Wood, & A Geopolitical Nobel Prize
Date: January 16, 2026
Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin
Special Guests: Cathie Wood (Ark Invest), Peter Rahal (David Protein CEO), Robert Frank (CNBC)

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Episode Overview

This episode of Squawk Pod dives into three high-profile themes:

1. Market and Tech Outlooks for 2026: A candid, in-depth conversation with Cathie Wood (Ark Invest) on the year ahead, tech innovation, Tesla, and crypto.
2. California’s Proposed Billionaire Tax: Robert Frank unpacks the potential impact and controversy swirling around a proposed wealth tax targeting California’s ultra-wealthy.
3. Protein Craze and Food Innovation: Serial entrepreneur Peter Rahal explains how protein became a nutritional focal point, driven in part by the popularity of GLP-1 medications and new science in food tech.

The episode blends serious economic analysis with lighter moments, candid debate, and some playful banter between the hosts.

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Key Discussion Points & Insights

1. Global Geopolitics and the US-Taiwan Chips Deal

• US-Taiwan Trade Agreement: US limits certain tariffs on Taiwan in exchange for $250B in Taiwanese tech investments and credit guarantees. Non-complying Taiwanese chip companies face steep tariffs (04:09).
• Chip Wars & China: The deal is positioned as pivotal in the US-China technological rivalry, with further discussion expected at the upcoming Davos conference.
• Notable Quote:
  "So a new move in the chip war, but also maybe in the larger geopolitical scheme with China. I imagine that's going to be part of the conversation we'll be having a lot next week in Davos." — Becky Quick (03:54)

2. Nobel Peace Prize Sideshow: Venezuela and Trump

• Venezuelan Opposition Leader Maria Corino Machado presents Trump with her Nobel Peace Prize medal — a symbolic gesture, not an official transfer, sparking memes and renewed debate over the Prize’s meaning.
• Host Commentary:
  "Because of Trump and who he is, he will never win the Nobel Prize and he probably should have. And because of Obama and who he was, he did win the Nobel Prize for doing absolutely nothing. So the whole prize itself has been..." — Joe Kernen (05:13)
• Meta-Discussion: Hosts joke about avoiding social media backlash around Trump, haircuts, and contentious topics (06:07).

3. California Billionaire Wealth Tax Controversy

• Robert Frank explains the wealth tax proposal: a 5% annual tax on billionaires' total wealth, with particularly thorny impacts for those with super-voting stock.
• Key Issue: Valuation of non-public super-voting shares could dramatically increase taxes for founders (e.g., Larry Page, Sergey Brin).
• Viral Debate: Gary Tan (Y Combinator CEO) leads criticism, calling the tax "poorly designed."
• Authors of the Tax: Insist the critics' interpretation is "false" and cite clear legal provisions.
• Notable Segments/Timestamps:
  • Tax mechanics and controversy: [07:15–10:55]
  • Possibility of passage & loopholes: [10:55–12:59]
• Notable Quotes:
  "The tech executives I talked to are certain it's gonna pass because it's a tax that only applies to 200 people." — Robert Frank (10:55)
  "If they can get it, they're going to take it. Right? If there's an interpretation that allows them to get the six..." — Joe Kernen (09:43)
• Exit Strategies: Discussion of whether trusts or asset shifts provide relief; skepticism abounds regarding effective tax avoidance.
• Legal Challenges: Likely, with challenges expected in both state and federal courts.

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4. Cathie Wood: Opportunities & Risks in 2026

[Key Interview, 15:21–26:49]

• 2025 in Review:
  • ARK funds among the year's top performers despite two major corrections.
  • Lessons learned: Valuations are likely to compress; historic analogs suggest strong markets can coexist with declining multiples.
• Inflation & Deflation:
  • Input prices and productivity improvements (especially tech) are bringing deflationary pressure.
  • "Our focus is exclusively on technologically enabled innovation... robotics, energy storage, artificial intelligence, especially blockchain technology and multi-omic sequencing, health care. Those are all very deflationary in their impact." — Cathie Wood (17:30)
• Tesla's Evolving Narrative:
  • The market is pivoting from simple EV sales to the Robotaxi (autonomous vehicle) opportunity.
  • Lower-margin auto sales could give way to high-margin recurring revenue:
    "Those margins are more in the 70s and 80s..." (18:51)
• Robotics & AI:
  • Optimus robots offer huge potential but are dramatically more complex than Robotaxi deployment.
  • "An Optimus robot is going to be 200,000 times more difficult to get working correctly relative to a robotaxi." — Cathie Wood (20:15)
• SpaceX Valuation:
  • Predicts near doubling to an $800B valuation, potentially becoming the first trillion-dollar space company, driven by data center opportunities in orbit.
  • "He’s [Elon Musk] not looking at how things are done on earth. He’s trying to figure out what’s possible in space." (22:28)
• Bitcoin & Crypto Outlook:
  • Stablecoins are absorbing some of Bitcoin’s use cases but the crypto shakeout clarified that Bitcoin, Ether, and Solana are the clear top three for institutions.
  • ARK’s Bitcoin targets: $750K base, $1.5M bull case.
  • "Stablecoins are usurping one of the roles that we thought bitcoin would serve in emerging markets especially... We’re holding it where it is. Our bull case at 1.5 million base at 750." — Cathie Wood (24:03)
  • "We actually think we have it on good sources that [the October '25 crypto flash crash] has washed out of the system." (24:03)
• Market Parallels:
  • No direct analogy to 1929, but competitive capital markets and Fed intervention make it a time to watch.

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5. Protein Craze & Food-Tech Disruption

[Peter Rahal Interview, 28:56–37:35]

• Protein in the GLP-1 Era:
  • The use of GLP-1 weight-loss medications (e.g., Ozempic) exposes new risks of muscle loss and amplifies consumer focus on increasing protein intake.
  • Peter Rahal, noted for RXBAR, has launched “David Protein”—high-protein, ultra-low-calorie bars driven by innovative fat replacement technology.
  • "It's the protein of a meal and the calories of a snack is the best way to think of it." — Peter Rahal (30:14)
• The Technology:
  • Proprietary modified triglycerides (‘epg’ from Apogee) deliver fat-like taste and structure with zero caloric absorption.
  • "We propoxylate the glycerol backbone so lipase can't break it down into energy. It tastes like fat, but your body doesn’t register." — Peter Rahal (31:57)
  • Bars deliver 28g protein at just 150 calories.
• Applications & Future Plans:
  • Technology can be used in chocolate (as cocoa butter substitute), fried foods, and other snacks.
  • Frying application is especially promising: "French fries, potato chips, Dorito-type product." (34:17)
• Difference from Previous Fat Replacements:
  • Unlike Olestra, the product is stable, solid at body temp, and free of “leakage” side effects.
  • "It was the Enron of food, really…104 degree melt point. That's the big difference." — Peter Rahal (34:23, 34:37)
• Brand Origin:
  • “David” refers to the Michelangelo statue, symbolizing excellence and discipline.
• Consumer Reception & Flavor Innovation:
  • Wildly popular (“bars flying off the shelves”), limited by production for a time.
  • "I think some people love outrageous, outrageous…" — Becky Quick (37:42)

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Notable Quotes & Memorable Moments

• “If they can get it, they're going to take it. Right? If there's an interpretation that allows them to get the six…” – Joe Kernen on the California tax (09:43)
• "Stablecoins are usurping one of the roles that we thought bitcoin would serve in emerging markets especially..." — Cathie Wood (24:03)
• “An Optimus robot is going to be 200,000 times more difficult to get working correctly relative to a robotaxi.” — Cathie Wood (20:15)
• "This is really true? ... It's like a protein Scud missile." — Joe Kernen and Peter Rahal, on the nutritional profile (30:05)
• "French fries, potato chips, Dorito type product." — Peter Rahal, on future applications of his fat-replacement technology (34:17)
• “Because of Trump and who he is, he will never win the Nobel Prize and he probably should have. And because of Obama and who he was, he did win the Nobel Prize for doing absolutely nothing. So the whole prize itself has been…” — Joe Kernen (05:13)

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Timestamps for Major Segments

• US-Taiwan Chips Trade/Geo-Politics: 03:10–04:09
• Venezuela Nobel Peace Prize to Trump: 04:09–06:09
• California Wealth/Billionaire Tax: 07:15–12:59
• Cathie Wood: Market & Tech Outlook: 15:21–26:49
• Peter Rahal: Protein & Food Innovation: 28:56–37:35

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Summary Takeaways

• Economic and Geopolitical Winds: The episode underscores the intersection of global politics (Taiwan-US-China), state-level taxation, and their impact on tech and finance.
• Investment Outlook: Cathie Wood provides a bullish yet pragmatic perspective on innovation, noting that technological deflation and new business models (robotaxis, crypto) will shape the market.
• Protein's Moment: The health and wellness theme continues with a spotlight on innovation in food science, showing how American diets and consumer trends are rapidly reacting to pharmaceutical and macro health trends (GLP-1s, protein needs).
• Engagement and Humor: The hosts maintain a light, playful rapport even in complex or controversial discussions, keeping the tone accessible and lively.

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This summary provides a complete, timestamped guide to this episode’s topics and thought leaders, ensuring you catch all the substance and witty exchanges, whether or not you’ve listened.

Transcript

[Joe Kernan]

Hey, Fidelity.

[Becky Quick]

How can I remember to invest every month?

[Cathie Wood]

With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs.

[Peter Rahal]

Huh.

[Joe Kernan]

That sounds easier than I thought.

[Cathie Wood]

You got this?

[Joe Kernan]

Yeah, I do. Now, where did I put my keys?

[Cathie Wood]

You will find them where you left them.

[Peter Rahal]

Investing involves risk, including risk of loss. Fidelity Brokerage Services, llc. Member nyse, SIPC.

[Andrew Ross Sorkin]

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[Peter Rahal]

Bring in show music, please.

[Andrew Ross Sorkin]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk pop tech in 25 in the rear view mirror with Reddit trader favorite Cathie Wood of Ark Invest.

[Cathie Wood]

What does last year teach us? We must assume that valuations are going to compress a longtime Tesla bull.

[Andrew Ross Sorkin]

Cathie Wood is staying optimistic.

[Cathie Wood]

The EV sales environment has been challenged, but the market is shifting its focus to the Robotaxi opportunity and New Year New diet.

[Andrew Ross Sorkin]

The craze over high protein eating. David Protein CEO Peter Rahul.

[Peter Rahal]

It's the protein of a meal and the calories of the snack is the best way to think of it.

[Joe Kernan]

You have to gag it down.

[Becky Quick]

No, you don't know. You don't have to gag it down.

[Andrew Ross Sorkin]

Plus, a potential chips deal with Taiwan. The Nobel Peace Prize comes to the White House. And the brewing panic over a potential billionaire tax in California. Our Robert Frank is on the case.

[Robert Frank]

The tech executives I talked to are certain it's gonna pass because it's a tax that only applies to 200 people.

[Andrew Ross Sorkin]

It's Friday, January 16, 2026. Squawk Pod begins right now.

[Robert Frank]

Stand Becky by in three, two, one.

[Becky Quick]

Cuba, please.

[Host (Becky Quick or Joe Kernan)]

Good morning, everybody. Welcome to Squawk Box right here on cnbc. We're live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin.

[Joe Kernan]

Davos haircut right over there. Davos high and tight.

[Becky Quick]

Look at looking fine haircut that would last a month. I find that if I don't do a haircut that's tight enough, then it can go Then I need to come back two and a half weeks later.

[Joe Kernan]

It's a judgment call, but because the, the month long haircut is something people will notice. The three week haircut you might get by with. Right?

[Becky Quick]

That's true.

[Joe Kernan]

So you have to with looking like.

[Becky Quick]

You, but maybe had you're wearing a.

[Host (Becky Quick or Joe Kernan)]

Wig and it never changes.

[Joe Kernan]

I've given up. I've given up. I mean either I get a.

[Host (Becky Quick or Joe Kernan)]

You got a haircut though.

[Joe Kernan]

I know, I know. Or I retrofitted my men's hair club membership or something. I don't know what they think. They just are haters. They just, they hate Trump so they hate my hair.

[Becky Quick]

Meantime, the US and Taiwan reaching a trade deal to build chips and chip factories on American soil. Taiwan tech companies will invest in at least $250 billion in production capacity in the US and the Taiwanese government is going to guarantee $250 billion in credit. Now, in exchange, the US will limit President Trump's reciprocal tariffs on Taiwan to 15% and commit to zero reciprocal tariffs on on generic drugs, aircraft, parts and some natural resources. Commerce Secretary Howard Lutnick telling CNBC Thai Taiwanese chips giant tmc, for example, could also be expanding its Arizona footprint as part of that deal. Lutnick also said that Taiwan based chip companies that don't build plants in the US are likely to face 100% tariffs. So a new move in the chip war, but also maybe in the larger geopolitical scheme with China. I imagine that's going to be part of the conversation we'll be having a lot next week in Davos.

[Joe Kernan]

The Venezuelan opposition leader, Maria Corino Machado. This is kind of a sideshow, presented her Nobel Peace Prize to President Trump and what she said was recognition for his commitments to the country's freedom. On social media, following a meeting with Machado, the president thanked her and called the gift a gesture of mutual respect. President Trump has dismissed the idea of installing Machado as Venezuela's leader to replace ousted leader Nicolas Maduro. Mr. Trump had campaigned to win the Nobel Prize himself, citing some of his foreign policy achievements. The Norwegian Nobel Institute says that the prize cannot be transferred or shared. It's probably obvious that unclear. I'd read he accepted it. I read in your paper that he. It's not clear whether he accepted it. You can't. It's not. You need to have it awarded to you. I don't really know what it means.

[Host (Becky Quick or Joe Kernan)]

But you can give the medal to whoever you want. But they won the Nobel Prize.

[Joe Kernan]

I saw it. I saw a lot of people with Memes saying, here's a real president that won, that actually won the Nobel Prize. My take on it was because of Trump and who he is. He will never win the Nobel Prize and he probably should have. And because of Obama and who he was, he did win the Nobel Prize for doing absolutely nothing. So the whole prize itself has been. Now I am going to stay off Twitter. I'll tell you why. Here's why. Because this is what's coming up next week in Davos. I don't think we've said anything about it. And I just. I don't need it. I don't need it. I don't need it. We're going to, it's going to be. We're going to. I'm going to interview on Wednesday. If you don't like it, just keep it to yourself. If you do like it, you can send it in. But I'm not going to. I'm not responding to any. About hair, about Trump. You can send in some suggested questions. You guys, I'm sorry.

[Host (Becky Quick or Joe Kernan)]

And you won't see those either.

[Joe Kernan]

I won't see those either. But that will be. I think his big speech is Wednesday at 2:30.

[Robert Frank]

Okay.

[Host (Becky Quick or Joe Kernan)]

2:30, Davos time.

[Robert Frank]

Davos time.

[Host (Becky Quick or Joe Kernan)]

Which was 8:30 East Coast.

[Becky Quick]

While we'd be broadcasting.

[Joe Kernan]

Yes. And I will be with you.

[Peter Rahal]

Right.

[Joe Kernan]

Because I wouldn't miss it. But I may have to leave. But then I'm going to do it after that.

[Becky Quick]

Okay.

[Joe Kernan]

At some point. And you can offer questions too. I probably won't answer some of your questions or I won't ask.

[Becky Quick]

I can imagine.

[Joe Kernan]

But there'll be, you know, there will be. I'm open to yours, whatever.

[Andrew Ross Sorkin]

Okay.

[Host (Becky Quick or Joe Kernan)]

Gotta think about something.

[Joe Kernan]

I think as a network we're gonna put our heads together and it will most likely. I think we should keep it to business and economics and things like that. You know, I don't know if I'll ask about you guys, about the Nobel Peace Party. Minnesota. Yeah. Nobel Peace Prize. I may or may not know. I don't know.

[Host (Becky Quick or Joe Kernan)]

But you got a few days to figure it out.

[Joe Kernan]

I have a few days to figure out the flip. I can study on the plane.

[Peter Rahal]

There you go.

[Becky Quick]

Study on the plane.

[Joe Kernan]

There you go.

[Host (Becky Quick or Joe Kernan)]

Well, we are looking forward to that part of our big coverage for next week. But obviously the interview with the President of the United States. Top of the list.

[Joe Kernan]

Tech industry discovering a potential added penalty is in the billionaire tax being floated out in California. Robert Frank looks very distraught. He joins us now with more. But you or your friend?

[Robert Frank]

Neither. This has Become a big controversy on Internet. This is all erupted around a provision of that California billionaires tax that some say would penalize founders. So the tax which could appear on the November ballot, would impose a 5% tax on the total wealth of people worth $1 billion or more. But according to some tech founders and and investors, those with super voting shares could actually face a super sized tax. So according to the bill, some say publicly traded shares will be valued at their public price, but non publicly traded assets could be based on the voting shares which could be far higher. So take Larry Page and Sergey Brin. They each own around 3% of the shares of Alphabet, but they hold super voting shares that carry 10 votes each, giving them a combined majority of the voting shares. Those shares are valued altogether in the market at around $120 billion, which implies a tax of $6 billion. But if their super voting shares are considered non public, since they don't technically trade as super voting shares, they could face, according to some, a tax of $60 billion each. Now, Gary Tan, the Y Combinator CEO, saying on X that this provision really gone viral here. It's proof that, quote, the wealth tax is poorly designed and designed to drive tech innovation out of California. Now the professors who authored the tax told me, quote, this is false as shown by a straightforward reading of the provision. Now taxpayers with publicly traded stocks will be taxed, quote, based on the market value of their holdings. So they're saying, look, this is totally clear. There's no question about this. This is just propaganda on the other side. For more on the California wealth tax and how it could affect those who pay and the California economy, sign up for the Inside wealth [e-mail] InsideWealth cnbc.com Inside wealth obviously these texts and tweets exit went viral in California because there are a lot of founders with these super voting shares.

[Joe Kernan]

Sure. If you, you know, told the IRS that those guys who designed it said that it wouldn't apply to you, that the IRS would definitely take your side.

[Robert Frank]

In California, it's the tax franchise board, whatever.

[Joe Kernan]

I'm sure they'd say, oh, oh sorry, we don't. If they can get it, they're going to take it. Right. If there's an interpretation that allows them to get the six.

[Robert Frank]

Well, and that's the question the authors say there's just no interpretation that allows. That's very clear in the. What are we talking about this provision.

[Joe Kernan]

No interpretation of what we're talking about.

[Robert Frank]

Applies only to publicly traded companies. They're saying that because Supervis voting shares aren't traded as super Voting shares that it would apply. I think that's a legal stretch. But you're right, if there is any legal avenue to pursue it, the tax franchise board might pursue it. Now the other question is why would they, even with private companies, tax Super Voting as if it's separate from the economics? That's what I don't quite understand. And that's where you would get a bigger tax than the actual net worth of a person. A lot more of this. I mean, nobody. We haven't seen any reliable poll. They're still gathering the signatures to actually get it on the ballot. So it hasn't been ensured that it's got a place on the ballot yet in November. So they're still going through that process. Once, once it's officially on the ballot, we'll start to get some polling. The tech executives I talked to are certain it's going to pass.

[Becky Quick]

They are.

[Robert Frank]

I'm not so sure. Yes.

[Becky Quick]

Why are they so certain?

[Robert Frank]

Because it's a tax that only applies to 200 people and everyone will be for that. Now, that's their argument. So I'm a little dubious. Kalshee actually has some numbers showing that it's like 40% likelihood of passing.

[Becky Quick]

And there's no mechanism, unlike so many other situations where people are obviously looking for exits, not exits of a state, but different ways to maneuver their, their wealth. There is no way out.

[Robert Frank]

Well, Larry Page, Sergey Brin.

[Becky Quick]

No, they left.

[Robert Frank]

They left.

[Becky Quick]

No, but I'm saying there's no, there's no way to, you know, move something to a trust or to a this or to a that. My understanding was, for example, that real estate is not being taxed this way, for example, or certain assets are not. So that technically, if you decided to sell said shares and turn those shares into hard assets, for example, that they might not be taxed. I don't know how that would work.

[Robert Frank]

Yeah, I mean, there was reports that Larry Ellison sold his house in December. So I don't know if real estate is excluded, specifically excluded from this. I'll have to check into that. I hadn't heard that. But yeah, I'm sure that a lot of these trusts. There's the Larry Ellison Trust, which of course made a lot of headlines with the WBD deal. I don't know if that really gets you out of it because that could be counted as your net worth. Even if that specific asset is outside the state, it's still your asset and you're a tax resident of California. That's ultimately a decider. But we're going to hear a lot more about this. Very complex, very complex. And as soon as we get some polling, we're going to start.

[Becky Quick]

And is your sense, one last thing, Is your sense that if in fact this goes through and this wealth tax happens, do you think that even more people leave because they think it's going to happen again, or do they think, oh, this was a one time thing and now I don't need to worry about it again.

[Robert Frank]

What the opposition says is they say it's a one time thing, but it's going to become repeated. And we've seen that with ballot taxes before. I think it's even if it passes, it's going to be challenged in court and I do think legally it's going to be tough for them to win.

[Becky Quick]

And that would be in a state court or a federal court?

[Robert Frank]

Both. Both. It could be challenged on constitutionality grounds in both the state and the Supreme Court. So we're going to hear about it.

[Host (Becky Quick or Joe Kernan)]

For a while and that's why we're very grateful to have you with the updates.

[Becky Quick]

Thank you guys. Thank you.

[Host (Becky Quick or Joe Kernan)]

Robert.

[Robert Frank]

Cheese will be next.

[Andrew Ross Sorkin]

Up next on squawk pod, Tesla and crypto bull Cathie Wood, the CEO and CIO of Ark Invest lays out her vision for opportunity in 2026 and beyond.

[Cathie Wood]

Each of the five major platforms, robotics, energy storage, artificial intelligence, especially blockchain technology and multi omic sequencing, healthcare. Those are all very deflationary in their impact.

[Joe Kernan]

Hey, Fidelity.

[Becky Quick]

How can I remember to invest every month?

[Cathie Wood]

With the Fidelity app, you can choose a schedule and set up recurring investment stocks and ETFs.

[Joe Kernan]

Huh, that sounds easier than I thought.

[Cathie Wood]

You got this?

[Joe Kernan]

Yeah, I do. Now where did I put my keys?

[Cathie Wood]

You will find them where you left them.

[Peter Rahal]

Investing involves risk, including risk of loss. Fidelity Brokerage Services llc. Member nyse, sipc.

[Cathie Wood]

Thy ticket lady, Jennifer of Coolidge. Well, many thanks, good sir.

[Andrew Ross Sorkin]

Here is my Discover card. They accept Discover at Renaissance fairs?

[Cathie Wood]

Yeah, they do here. Discover is accepted at the places I love to shop. Geth with the Times.

[Andrew Ross Sorkin]

With the Times. You're playing the loot.

[Cathie Wood]

Yeah, and it sounds pretty good, right?

[Robert Frank]

Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report.

[Peter Rahal]

Before we had ATT business wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a.

[Robert Frank]

14 point turn to get back on route.

[Peter Rahal]

A 14 point turn.

[Robert Frank]

An influencer even livestream the whole thing.

[Peter Rahal]

Not good for business. Now with AT&T business Wireless routes are.

[Robert Frank]

Updating on the fly and deliveries are on time.

[Peter Rahal]

And the influencer did get us 53 new followers though.

[Becky Quick]

AT&T business Wireless connecting changes everything.

[Andrew Ross Sorkin]

You're listening to Squawk Pod from CNBC with Joe Kernan, Becky Quick and Andrew Ross Sorkin.

[Becky Quick]

Here's Andrew joining us right now on the markets, tech crypto and her outlook for 2026. Cathie Wood is here. Ark Invest CEO and CIO 2025 was quite a year both up and down and back again to some degree. When you, when you look at some of the big holdings that you have, whether it be Tesla and maybe we get into crypto and everything else, where do you think things are headed into the extent that there were things that you were wrong about, frankly in 25, what was the lesson?

[Cathie Wood]

Sure. Well, great to see you. Happy New Year, Andrew, Becky and Joe. So yes, last year Morningstar in the Morningstar rankings I think we had at three of the top five or four of the top five were Ark Funds top performing. Of course we had two big corrections. We had the trade turmoil in, in April. That was an amazing buying opportunity. And what we do typically is concentrate towards our highest conviction names when we have an opportunity like that. We did that same with, the same with the government shutdown that was a little, a little less severe. What did we learn? Well, you know, one of the things that we've learned over the last few years is we can see inflation coming down clearly but it in the reported numbers it is stuck. And I think a lot of people are wondering wait a minute, this market is near, near record high valuations. How can this be? This is a set up for a correction. And we're looking at other periods in history. If you, if you look into the 90s, up 97 I think it was and in the 2000, the early 2000s, we had very strong markets as the multiple move down. So what does last year teach us? We must assume that valuations are going to compress and we do, we do that in our bottom up analysis for every company. So but we're pretty excited about the inflation outlook thanks to oil prices, housing prices big time. You see the homebuilders KB Home cutting its prices by 7% and others following and productivity gains, unit labor costs coming down dramatically. I think on a year over year basis they're up 1.2%. But last the last quarter reported they were actually negative. So there are a lot of deflationary pressures. And the last one I'll cite is technology. Our focus is exclusively on technologically enabled innovation and in each of the five major platforms, robotics, energy storage, artificial intelligence, especially blockchain technology and multi omic sequencing, health care. I saw the CEO of Bio. Very good. Those are all very deflationary in their impact. So pretty excited. We think the surprises are going to be on the low side of inflation expectations.

[Becky Quick]

Tesla has always been one of your big holdings, you know, in terms of just sales. Obviously things have been challenged, but there's a lot of excitement about autonomy, there's a lot of excitement about the Optimus robot. What is your, what is your sense of where things stand at Tesla right now?

[Cathie Wood]

Yes, the EV sales environment has been challenged, but the market is shifting its focus to the Robotaxi opportunity. So we're moving from 15% gross margins in autos, the hardware, to more of a SaaS model, where robo Taxi's recurring revenue model is. Those margins are more in the 70s and 80s. And I think, as analysts understand that that's where Tesla is going and they start building in the model for robotaxis, they see, they see a tremendous opportunity. So it's been interesting to me to see upgrades even by some auto analysts now that they're beginning to understand that this is not an auto company. Maybe they're working with their tech analysts and understanding the stock a bit better.

[Becky Quick]

So when you think though, about autonomous robotaxis and you think about robots, what, what does that look like? And is there an argument? Look, some of the critics would say, you know, cars aren't, cars aren't working the way they're supposed to be working right now in terms of what's happening with the EV market. And, and some of these other ambitious efforts are going to take a long time to get to a meaningful escape velocity.

[Cathie Wood]

Well, we're keeping an eye on how quickly Tesla's footprint is expanding here, and it's expanding a lot faster, I think, than many people expected. And it's interesting to watch Waymo as well. We draw in Tex, we draw the footprint and they're competing with each other. Competition is a good thing. So I think this is actually going to happen faster than most analysts think in terms of the proliferation of Robo taxis, especially if we get more federal legislation instead of just state by state. On the Optimus Robot side, there's a lot of excitement in robotics that in the private markets has been a huge space. This, this past year, we at an Optimus robot, our chief futurist Brett Winton, working with Sam and Daniel, have concluded that an Optimus robot is going to be 200,000 times more difficult to get working correctly relative to, relative to a robotaxi. So you'll have, you'll have waves of Optimus improving with time, but full human is, is going to be quite difficult nonetheless. The robots that we're seeing, you know, pick and pac and lifting things, they're starting to make waves.

[Becky Quick]

Should we talk about bitcoin? We can talk about Space X. I mean that's going to probably go public this year. What do you think it's going to go public at?

[Cathie Wood]

Well, this next round is about $800 billion. So a near doubling and we wouldn't be surprised to see it become the first trillion dollar company. And especially now that there's a new opportunity data centers in space to avoid all of the not in my backya obstacles that Tesla and others are facing. So we're starting to do the modeling work on that.

[Becky Quick]

I'd like to realistic do you think that is and what do you think the timeline for something like that is? I mean I know Elon's, Elon's talked about that, but then there's lots of people who have asked questions about just the practicality of making something like that work.

[Cathie Wood]

Yes, we spent our last brainstorm on a good chunk of it on exactly that. And as I said, we're doing our modeling work. As with everything that Elon Musk does, he's going at this from a first principles point of view. He's not looking at how things are done on earth. He's trying to figure out what's possible in space. So as I said, we're doing our modeling work. We shall see. Before getting on to Bitcoin. Andrew, I want to compliment you on your book in 1929. I'm in April 29th and it's been fascinating for me to say, okay, wait a minute. Are we at all in a situation like that? I think maybe in the private markets we have been, you know, the whole idea, not literally but of stock clubs back then. But it is fascinating. The Fed and, and the stock market and others wrestling with one another. I don't think we're in the same situation at all. But I wanted to compliment you and I can't wait to finish.

[Becky Quick]

Thank you.

[Cathie Wood]

The rest of the book.

[Becky Quick]

I hope you enjoy the rest of it. But you're right, there are, there are things feels like parallels in certain ways, but hopefully there's other things that actually don't parallel at all.

[Joe Kernan]

So Kathy has raised a point a lot that when you got more bullish on Stablecoins being maybe would supplant some of the uses of bitcoin. And I mean, stablecoins aren't going away. And that caused you, I think, to even slightly lower your very bullish forecast on bitcoin. Can you just.

[Cathie Wood]

Yes, just tell us your. Yes, that broadcast kind of propagated and everybody thought we were becoming negative on bitcoin. Not at all. Stablecoins are usurping one of the roles that we thought bitcoin would serve in emerging markets especially. But on the other hand, if you really believe bitcoin is like gold, digital gold, look at what just happened to gold. If you assume that bitcoin is going to usurp a lot of gold's role as we get this intergenerational wealth transfer, then our, then our price target, net, net both for stablecoins and gold would actually be going up. We're holding it where it is. Our bull case at 1.5 million base at 750. But I'll tell you what has happened to Bitcoin and all other crypto assets. There was a flash crash on October 10, 1010. And from what we understand, you know, there were a lot of leveraged individuals, investors, others hurt. We think that it has washed out of the system. We actually think we have it on good sources that it has washed out of the system. That correction, it was about a $28 billion hit. We think we're on the other side of that. And so we. We're seeing the crypto asset ecosystem stabilize. And it was a very good test, actually. Very good test. We didn't see bitcoin go down 75, 80% like we have in other corrections. It went down percent, which I know is not comfortable, but that's a victory in this market.

[Becky Quick]

And where do you land? I mean, we've been watching all sorts of folks come up with, you know, new treasury companies around Solana and Etherium and all sorts of other things. How much of that do you think could ultimately crowd out bitcoin or not?

[Cathie Wood]

No, no, I don't think so. I actually think that Dax are clarifying who the big three are out there. It's an interesting. Whereas in the past you'd have a proliferation, you still do, of all kinds of assets and coins. From an institutional point of view, the dad, primarily Bitcoin, through strategy, Ether and Solana, we own Bit, Mine and Soulmate. Those are focusing the institutional mind on the big three. And maybe we've got, we've got another one coming up in hyper liquid. We will see. So I actually think it's doing the opposite than what we've seen happen in or will do the opposite that within what we've seen happen in past bull markets.

[Becky Quick]

Fair enough. Kathy, it is always good to talk to you so likewise. I appreciate that very much. Look forward to seeing you in person very soon. So thanks again. We'll talk to you soon.

[Andrew Ross Sorkin]

Still to Come on Squawk Pod the newest trend in health and nutrition in this world of GLP1s protein. The CEO of one of the hottest brands in the game, David Protein, joins us. Peter Rahal on the special ingredient that makes it all work and where low fat, high protein food is going next.

[Peter Rahal]

So we're using it in sports nutrition. The second best application is chocolate cocoa butter. Great substitute for cocoa butter which we have big plans for for and then frying like french fries, French fries, potato chips, Dorito type product.

[Robert Frank]

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[Becky Quick]

Risk of loss Fidelity Brokerage Services LLC.

[Andrew Ross Sorkin]

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[Becky Quick]

You're watching Squawk Box on cnbc. I'm Andrew Sorkin along with Joe Kernan and Becky Quick. The popularity of GLP1 weight loss medications has drawn attention to possible muscle loss while on those drugs that sparked an added focus on protein intake. And joining us right now is a guy who has been spending a lot of time on protein, Peter Ellis. Here is the Peter. He's the David Protein CEO, also a founder and I should say, created our X bars. Yeah. Back in the day. I remember when you were on how many years ago now?

[Peter Rahal]

Seven years ago.

[Becky Quick]

Seven years ago you had sold that to Kellogg quite successfully. You have now have these bars which are, by the way, flying off the shelves. It's a wild situation. I've become actually addicted to some of these bars and for a period of time, I shouldn't say. I don't know if you want to say. You couldn't actually buy them. You'd run out.

[Peter Rahal]

Yep. You know, it's.

[Joe Kernan]

Where do you buy?

[Peter Rahal]

You buy on our website. Walmart, Target, Walmart or.

[Becky Quick]

But it's like, it's the. What's amazing about these bars without. I don't need to promote it for you, is it's literally 28 grams of protein at only 150 calories a bar, which is like a shocking sort of.

[Joe Kernan]

It's just like. Is it like the Seinfeld yogurt that was supposedly low fat and Everybody gained like 80 pounds and they tested it and it was like. So this is really true?

[Peter Rahal]

Yes, it's true. And it's. It's like a protein Scud missile. It's the protein of a meal and the calories of the snack is the best way to think of it. And that's super valuable offering.

[Joe Kernan]

And you can. Do you have to gag it down?

[Becky Quick]

No, no, you don't have to gag it down.

[Host (Becky Quick or Joe Kernan)]

Can I ask a crazy question? Is creatine ever an issue? Is that a problem that comes in with any of these things? I've had my doctor ask me just if I take protein supplements, which I don't. But ask me if I took creatine supplements because of some of the blood work that they.

[Robert Frank]

So.

[Peter Rahal]

So creatine is no issue. I don't think there's much downside. It's one of the most studied, studied molecules. So it's just amino acid. You can't have it in food because it's hydrating and that breaks it down so it has to be dry. But yeah, lots of benefits.

[Becky Quick]

So you create this new company, David.

[Peter Rahal]

Yep.

[Becky Quick]

It's obviously like become this wild success. Did you think this was what was going to happen? I mean, at this level? I knew because this is probably going to be bigger than Rx.

[Peter Rahal]

Yeah, we'll be bigger than Rx. You know, it turns out it's really hard to get 1 gram of protein per pound of body weight. Like, it's very difficult, especially if you're in a busy lifestyle. And so Americans are looking for an easy way to get a delicious, a delicious product that's high in protein. And if you're taking a GLP1, the messaging is like you must get protein.

[Becky Quick]

And the trick, and we were trying to explain it during the commercial break, but is the science of this in terms of your ability to actually get 28 grams of protein into a small bar that's only 150 calories because you actually found another company and ended up buying another company that produced this technology. Effectively.

[Peter Rahal]

Yes, yes, we acquired a business called Apogee and we merged with them as well. They're still on our cap table. And they were the creators of epg, which is a modified triglyceride. And a triglyceride, like I mentioned earlier, has three fatty acids and that's why it's so energy dense. And then we propoxylate the glycerol backbone so lipase can't break it down into energy. And so it's this beautiful technology where it tastes like fat but then your body doesn't register.

[Joe Kernan]

What was the history you said? It's like wax or something. So it just passes straight through you and is there a problem passing it straight through you or.

[Peter Rahal]

Well, it's at 104 degree melt point and so it doesn't, it's solid in your body.

[Joe Kernan]

Great.

[Peter Rahal]

How solid?

[Joe Kernan]

I mean, I don't want it there, you know, next year.

[Peter Rahal]

Yeah, very solid. It's similar concept of fiber, but it's soluble fiber.

[Joe Kernan]

You were able to. It goes through.

[Becky Quick]

Yes, it's like soluble fiber.

[Joe Kernan]

It's like fiber with trying to eat a lot of protein. You can even try to find either filet or 93% fat free ground beef. But there's still fat, there's still a lot of fat in red meat. So you gotta eat.

[Becky Quick]

How did you find this technology and why didn't anybody do this before this?

[Joe Kernan]

Yeah.

[Peter Rahal]

To question. So sort of like two, two types of companies in the food business. Startups. And then there's like the big, the big CPG companies. Startups are typically Luddites where they're, they're like looking back like RX was this way you're like going back to making it in your kitchen and going back in time. Ancestral living. And then the big guys are focused on earnings per share. Any expensive ingredient like this will dilute earnings per share or disrupt their portfolio. And so it just, it sat empty or idle, this technology because what else.

[Becky Quick]

Can you use it for? So right now you're doing protein bars, but I gather you have ambitions to do all sorts of things with this technology.

[Peter Rahal]

Yes, we're using it in sports nutrition. The second best application is chocolate cocoa butter. Great substitute for cocoa butter, which we have big plans for. And then frying. Frying it is probably the best application.

[Becky Quick]

And so what could you. Frying it like French fries.

[Peter Rahal]

French fries, potato chips, Dorito type product.

[Host (Becky Quick or Joe Kernan)]

That's different than Olestra because that was a non fat.

[Peter Rahal]

Yeah, that the fundamental difference was totally rushed through. It shouldn't have been commercialized. It was a big. Through your body too. It was the enron of food, really. I mean people got in trouble. It's very simple. It's like thermodynamics.

[Joe Kernan]

That's no leakages.

[Peter Rahal]

104. It's 104 degree melt point. That's the big difference. So if I put it on your hand, it's not melting, it's not gonna melt. Whereas a lesser wood, it would spark to melt.

[Host (Becky Quick or Joe Kernan)]

That's the key difference.

[Becky Quick]

Yeah.

[Peter Rahal]

And we serve millions of customers.

[Becky Quick]

GLP one sort of phenomenon is actually beneficial ultimately to what you're doing. Yeah. Whereas every other food manufacturer in the world is sitting around going, this is terrible for us. People are gonna eat less, but in your case, they're gonna eat more.

[Peter Rahal]

This was not intentional. But our portfolio is perfect for GLP1 because if you're on a GLP1, it's forced anorexia and you need to get protein and you need it to taste well and it needs to be a high dose of protein or else you're going to get the.

[Becky Quick]

And how much of that. When you were creating the business plan for this company, were you even cognizant of that?

[Peter Rahal]

I knew it was like a tailwind, but we didn't make the product for it. It just happened that every doctor is going to pontificate about how important protein is. And so, you know, we're just riding that wave. We're not positioning it as.

[Becky Quick]

Can you make even. Can you make it even more energy dense than it is now? So 28 grams of protein for 150 calories. Is that sort of like the upper limit of how the science works?

[Peter Rahal]

Yeah, yeah. The biophysics, we've maxed it out. And if you start to do more, if it doesn't form into a bar or you have bad taste, like protein doesn't really taste good. And that's the key obstacle. But yeah, we're at the upper limit.

[Host (Becky Quick or Joe Kernan)]

Why'd you call it David? Your name's Peter.

[Peter Rahal]

Yeah. So our namesake is the Michelangelo's masterpiece.

[Host (Becky Quick or Joe Kernan)]

I wondered if that's what it was. Okay. Touch the hand of God.

[Peter Rahal]

It's not my name.

[Joe Kernan]

That would be the guy that kicked Goliath's ass.

[Becky Quick]

That too.

[Peter Rahal]

Exactly. What is him. But we're actually more Michelangelo.

[Joe Kernan]

Oh, that's right.

[Robert Frank]

That's who.

[Joe Kernan]

Exactly. Same guy.

[Peter Rahal]

But we're not playing. We're not playing God. We're playing Michelangelo. And if you look at that sculpture, it's a magnificent piece. And it embodies excellence and discipline. And those are the values that we go into our product and how we operate as a company.

[Becky Quick]

So finally, I just tried. You have a new bar that is not 28 grams of protein. Only 20 grams of protein. But it's like a marshmallow. And it is crazy. I mean, like wildly crazy. Like you can't even understand how that. And that's 150 calories too.

[Peter Rahal]

150 calories? Yep. 20 grams of protein.

[Becky Quick]

But it's. But it literally. And it tastes like a marshmallow. It's like a chocolate covered marshmallow. So what did you have to do for that?

[Peter Rahal]

If you aerate whey protein, it turns out you can make a marshmallow. It's very difficult to make. And the purpose of this product was to get people that don't like protein bars. Bars. So most people that don't like protein bars, they don't like them because of taste and texture. And so we wanted to create the most indulgent, delicious protein bar to make it even easier to consume protein.

[Becky Quick]

I will say that there is no way that anybody who. You really think you're eating candy.

[Peter Rahal]

Yeah.

[Becky Quick]

That thing seems like true candy.

[Peter Rahal]

That was the. That was the objective. So thank you.

[Joe Kernan]

Okay. How many flavor. What flavor?

[Host (Becky Quick or Joe Kernan)]

Blueberry pie.

[Becky Quick]

One on there for his stuff?

[Joe Kernan]

Yeah.

[Becky Quick]

Okay, so I go cinnamon. The cinnamon roll. The cinnamon roll is called cinnamon roll. Cinnamon bun. Outrageous. But I think some people love outrageous. Outrageous. Like amazing. No, no, no, no, no, no, no, no.

[Joe Kernan]

We got any protein bar Chocolate fudge. Don't take a shot at me doing that.

[Becky Quick]

Chocolate fudge and blueberry for me. But I don't. But to be honest, my wife doesn't love the cinnamon rolls.

[Peter Rahal]

She's got crust.

[Becky Quick]

She likes the cookie.

[Peter Rahal]

Cookie dough.

[Becky Quick]

Cookie dough. Yeah.

[Peter Rahal]

That's the best seller. Cookie dough. You put in the microwave for five seconds, it changes the product.

[Becky Quick]

Wow. So we should do that.

[Peter Rahal]

Yeah. Highly recommend it.

[Becky Quick]

Not with the wrapper on hard to eat.

[Peter Rahal]

No, never with the wrapper.

[Andrew Ross Sorkin]

Microwave.

[Host (Becky Quick or Joe Kernan)]

Do you get above 104 and then.

[Peter Rahal]

It melts well, then it'll cool back down immediately.

[Host (Becky Quick or Joe Kernan)]

Okay.

[Peter Rahal]

Yeah.

[Becky Quick]

Interesting. Okay, Peter. We learned a lot.

[Peter Rahal]

Thank you, guys.

[Joe Kernan]

He's got to run somewhere. Your shirt doesn't pass right through you. You look like you're headed immediately, huh? If you have to leave, just walk behind the camera. If you really gotta. No, I'm kidding.

[Cathie Wood]

And that is Squawk Pod for today.

[Andrew Ross Sorkin]

And for the week. Thanks for listening. It's that time of year. The Squawk team is traveling this weekend to Davos, Switzerland, for the World Economic Forum. We will have tons of special coverage for you next week right here in your feed as the world's business, political and cultural leaders gather in the Alps. Please listen and let us know what you think in reviews on Apple Podcasts or in the comments on YouTube or find us on xquawkcnbc. We love to hear from you. Squawkbox is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Weekday mornings on CNBC, starting at 6 Eastern. Get the best of our TV show right into your ears when you follow Squawkpod, wherever you like to get your podcasts. It's a long weekend ahead. We'll meet you right back here on Tuesday.

[Peter Rahal]

We are clear.

[Robert Frank]

Thanks, guys.

[Joe Kernan]

Hey, Fidelity.

[Becky Quick]

How can I remember to invest every month?

[Cathie Wood]

With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs.

[Joe Kernan]

Oh, that sounds easier than I thought.

[Cathie Wood]

You got this?

[Joe Kernan]

Yeah, I do. Now, where did I put my keys?

[Cathie Wood]

You will find them where you left them.

[Peter Rahal]

Investing involves risk, including risk of loss. Fidelity Brokerage Services, llc. Member nyse, SIPC.