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Next for Nvidia, "AI-washing," and a Software Bounce? 2/26/26
00:41:48
Nvidia is on pace for its worst day since last April, but Deepwater Asset Management is staying bullish. More than 50,000 layoffs were tied to AI in 2025, but are companies merely using it as a scapegoat for job cuts? Plus, the software stocks Raymond James says are poised for short-term bounce.
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Hello, I'm Ben Rizzuto, wealth strategist at Janus Henderson Investors.
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Credit stop if you cancel any lines. Qualifying credit required. You're listening to the Exchange. Here's today's show. Thank you very much. Scott is in video overspending our employers AI washing and don't look now, but software is rallying once again. Welcome to the Exchange. I'm Kelly Evans. And a reversal lower in shares of Nvidia is weighing on the overall market today. The Nasdaq is down 1.8% right now, which is near its session lows of about a 2% drop. Dow is actually only down about 226. That's half a percent. S&P down 1%. Speaking of reversals, Salesforce turning positive after its results last night. Remember, it initially dropped 4%. Now it's up about 2.6, similar to what we saw with Workday yesterday. We'll explore whether this is a broader turning point for software stocks. But as mentioned, the biggie in video giving up all its earlier gains after a blockbuster quarter and better than expected, expected guidance last night. And the shares are now down 4.6%. And that's where we begin today. The stock is now having its worst day since last April. But my next guest is still bullish. Let's bring in Gene Munster, managing partner at Deepwater Asset Management. Gene, I might cite this Michael Burry, you know, point here where he talks about their performance. What's, what's the word? Obligations, commitments, what have you. And question comparing them to Cisco from the late 90s and saying as soon as the tide turned, they had too many obligations, the revenue couldn't keep up. Just what do you think is going on with the stock today?
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Well, I think part we need to look back what's happened since February 5th when the hyperscalers came out with those monster guides from Google and Amazon. The shares of Nvidia are up 8% since then the Nasdaq is flat ish since then, up a half a percent. But I think that you have to put into context. Some of this was known when the initial guidance came out for April. If you look at the high end of their guidance, it calls for 79% growth. They'll probably beat that. The whisper number I thought was 70%. The input number was 65. But if you kind of play the tape back here and look what the stock has done more recently again over the past few weeks, I think it's pretty well known they talked about on the call that about half of their revenue comes from basically four customers. And the road to understanding the mechanics of this business are pretty straightforward. It's the hyperscalers, then it's the first companies. That's probably 70%. So I think a lot of this reaction is in part just buying the rumors, selling the news. I think there is another aspect just around kind of the fatigue that Wall street continues to have around the trade. And just quickly, Kelly, to put some of that into perspective is that if you look at, if we rewind to October 28th, that of course, was when Metta gave their guidance for the big Capex step off. Their shares traded down on that. That was a change in the narrative. Since that point, shares of Nvidia are down 10%. The NASDAQ is down 5%. And so this essentially has been 80 trading days here.
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But it's ironic because, Jean, you'd think that the turning point would have come when someone like Meta said we're not going to spend any more. Then I could see in video shares pulling back. I just think it's hilarious that it's, it's because they're spending more, which should inherently benefit Nvidia and the whole ecosystem. And yet Nvidia still isn't trading well. I'm also looking at the revenue quarter and these increases that we're seeing is almost unprecedented in modern times. It doesn't, it just doesn't matter. I mean, they're beginning to have the, the comping problem, right? Like, it's, it's been so good. I'm sure everyone's thinking ahead four or six quarters ahead from now and wondering what that's going to look like. So it's settling in. That's fine. I just wonder if we go back to this whole question about purchase obligations. $95 billion is a big number. Just tell me why again, you don't think that's. They're just going to grow into that or grow out of that, so to speak.
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E
Well, you know, part of this conversation is really looking back to of course, Cisco and dot com and I would say that it's. I think it's very healthy to have a debate whether or not this can continue. But I think that there are some pieces around the narrative that I think are lazy. I think part of kind of looking back at Cisco, this is a very different dynamic. And to answer your question is that what we saw, of course during.com was these companies, they're typically advertising businesses that were seeing some pretty profound growth, 100, 200% type of a growth. What we're talking about with these AI first companies is 1000% growth. Jensen referred to Anthropic's growth rate in 2025 is 10x. They'll probably grow at a similar rate this year. And so I think at the end of the day, this whole question about the circular financing piece about the sustainability is this house of cards really comes down to a fundamental question which Jensen talked about on his last question on the call, which is, do you believe.
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Right.
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And that last question came from a Goldman analyst. And he basically said, what's the sustainability of this? Jensen took seven minutes to answer that. He basically went off on a manifesto. But that's really what it comes down to is if you believe that this, these tools are having the kind of power that people who are using them, present company included, are seeing, I think that you get really confident that this can continue. We're still in the second inning, so
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let rattle then in the remaining moments that we have, Jean, rattle off. For those who listen and say, okay, you're right, it's okay that the stock's going nowhere for nine months. This is still an entry point. You know, what is on the punch card for you for owning the next couple innings of the trade just in terms of companies?
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Yes, I think that. So Nvidia is one we still own, but I don't think it's going to be at the top of the performance list. I still think companies like Google and Google and Apple, on the personalized AI that still hasn't broken out, we have an ETF loop which basically focuses on sub $500 billion, which really is just a basket of those. So feel really good about a mix of kind of those smaller cap versus the large cap.
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Can we talk about Apple for one final second before you go? Are they over here just kind of chuckling while everyone is at each other's throats and spending all the cash flow that they have and going to the debt markets to build out AI and Apple's like, yeah, you know you can use ChatGPT Gemini on the iPhone. Like we're good, we're fine.
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Yeah. Ironic on now Apple's weathering the storm so well and of course on Monday we're going to get some of those new products. It's not going to be the signature question around what's going on with the new Siri. They're probably going to have some touchscreen Macs. Cheaper Macs, but kind of and a cheaper iPhone. The punchline here is that the Apple's business has been profoundly impacted by this upgrade pool from 2021. They've showed up, it's grown, iPhone's grown 15% plus year more recently. The question about going forward, like how can this play forward? Apple still hasn't played their AI card. This what we have seen with openclaw has opened my eyes in terms of the power of these agentic personal assistants and Apple's in an incredible place around that. And ultimately they're benefiting from not being in the air for more recently. But I still think that they will get that bid, get that multiple expansion when they do show that they've got the chops with the new Siri and really become a pioneer in this personalized AI.
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All right, we got to go. Gene. A little bit later on our technical analyst thinks the bottoms in for software stocks. Do you agree?
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Disagree. I think some software companies usage base are going to do great. I think the ones that are seat based are going to still have a head when they need to really have a moment where they stand up like Google did a year ago. They until we see that better than expected seat growth, I think the jury is going to be out.
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So that wasn't a moment for Salesforce or Workday with those reversals we've seen on earnings. You don't think this is that moment?
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I don't think so. I think what we saw kind of this profound moment a year ago with Google, the search business in the April quarter, then again followed up in the June quarter. The issues that Salesforce is running up against in terms of lower knowledge workers that's going to be impacting the business towards the end of the year. That's when they need to show up.
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All right, Jean, we'll leave it there for now. Always appreciate it. Thank you.
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Thank you, Kelly.
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Jean Munster from Deepwater Asset Management. Now while the Mag 7 and the software names have been struggling, we've seen a big rotation into the old economy with sectors like energy and industrials leading the market this year. And that's where my next guest is seeing opportunity going forward. He says, go for hard and not for soft. With us is Charles Barinskoy, the vice chair and head of the investment group at Ariel Investments. So pleased about msg, I imagine. Charlie, welcome.
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Very happy with msg, but that's absolutely right. Part of the hard economy. The technology world talks about software and hardware, and we don't tend to talk about it outside of technology, but it's a very important concept. MSGS owns the Knicks and Rangers. We can do all we want with AI. It doesn't affect the fact that people still want to go watch basketball. And so MSGS is going to now split itself into two companies, the Rangers and the Knicks. They're right now, on a combined basis, trading way below the values of what you could sell the Knicks and the Rangers for. So we're very excited about msgs. We're very excited about msg. The Garden itself is irreplaceable in midtown Manhattan. And so hard assets, companies with real assets that are not going to be knocked around by AI is where we're finding opportunities.
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What's more, Charlie, is a lot of people in the tech world are insisting that live events in person with real people getting, getting off the Internet, that is what the next generation wants. That's where the next big money is to be made. Especially in a world where you don't even know what you're seeing online anymore. You get comments from AI bots, you don't even know if. It's like, I'm finding myself spending more time on LinkedIn because I'm like, these are real people who I can actually connect with and see in the real world. And I, I think in a weird way, the rise of AI actually propels investments like those in sports, where people are meeting and watching things in real life, 100%.
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I don't know about you, but I'm getting fooled all the time by a video that turns out to be phony. And so seeing things live is absolutely positive. We're seeing great numbers in terms of live events. And of course, the big beneficiary of that is the Sphere, another Jim Dolan company that stock is up, I think, 170% over the last 12 months. And that's a. That's taking advantage of this in spade. What Sphere is doing wonderfully is repositioning old IP like the wizard of Oz and new IP like Metallica and having them play at the sphere in a spectacular experience that you just cannot replicate on your, on your iPad.
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I don't know how new Metallica. Listen, I would have to get into kind of an old name anyway, but to those of us is always going to be okay. So you still are talking about the broader kind of hardware supply chain. I don't necessarily see the memory stocks in here. I'm not sure that's, you know, your bread and butter per se. But you see the Korean stock market crossing 6,000 yesterday. They were all celebrating basically because of the memory names. Where do you see tons of value still to be created and made?
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So it's where I don't see value. And that is that. One of Warren Buffett's greatest contributions to investing was the concept of too hard, that it's just too hard to pick winners in memory. And so I remember when I was younger getting into the business, everybody was sure that intel was going to be the big chip winner. And of course it hasn't been. I never heard of Nvidia in 2005. So it's just too hard. So we're finding things that are consistent, sustainable, that I can analyze, that I can measure their economic moat. Some of the things that I think are not too hard are energy. There's going to be more demand for energy with AI. The biggest source of energy in the US even electricity is natural gas. And so the demand for natural gas is going to be going up. That is an out of favor sector that people haven't liked for a long time that was trading at less than 7 times earnings. Lots of energy names doing very well, lots of car names doing very well. The hard economy is where we're seeing opportunity residual.
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Was that a Honeywell spin off? You like that? Yeah. The Honeywell thermostat business. That's right. You like that one? It's doubled over the past year. And what, what about Finia? That's the name we haven't talked about. As you mentioned, you also like Barrick Mining, you like apa.
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Yeah, these are all hard companies with real assets. Finia is the turbo charge business in the automotive industry. The cars still are trying to get more and more efficient in how they use gas. This is the powertrain business. It's a very modest market cap. The stock got very cheap because everybody was worried about moving towards electronic electric vehicles. Now is there more hybrids and internal combustion vehicles? Finia is very well positioned and again extremely cheap, trading at about 13 times earnings. So there's the theme that this is not. You haven't missed it. Value has outperformed this year by a lot. But these stocks are still much cheaper than the soft companies in tech.
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And your aerial focus fund up 35% over the past 12 months. I mean, that's pretty much doubling the S and P. You mentioned the big themes for you going forward. It's not just kind of hard versus soft or maybe these are other parts of that. You've been talking about inflation for a long time. That that fits in here. Just explain on tariffs and on Iran. Both of these are things that you say, you know, these are the big themes going forward. So how exactly do you invest accordingly?
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Yeah, this one is tricky. Whatever you personally or I personally think about tariffs, the stock market has made itself clear. The stock market doesn't like tariffs. The stock market thinks that tariffs are taxes. The stock market thinks that tariffs produce inefficiency where countries try to prop up industries that they don't have a competitive advantage with. So the stock market liked the ruling that we got out of the Supreme Court. Everybody's talking about how Trump will get around it, but he's doing it with 150 day exemption. And so after 150 days he's going to have to revert to the other lower level. So tariffs are very important because tariffs are very detrimental to the economy. The other is Iran is going to shake things up if that happens. The President would really like to not have another war. He campaigned on not having these endless wars. But he also will not stomach a nuclear Iran if in the next couple of days we bomb the nuclear sites. That's going to have big impact on the oil market. And I think frankly it's going to be increasing the risk premium. Watch for Iran.
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Yeah, it's weird to me to watch the oil price having peaked about a week ago and now it's come down significantly. I mean, who knows? I mean, it's just going off the best information it has. But what do you think about that?
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I just think we're still at depressed levels. We were over 80 a year ago. Now we're in the mid-60s. For WTI oil, natural gas is still extremely cheap. Longer term, the demand for oil and gas is growing and that is a change. People thought electric vehicles were going to put a cap and that we were actually going to have declining consumption of oil worldwide. We are not. We are going to be over 100 million barrels a day and growing natural gas consumption is going to grow long term. Some of these companies are very well positioned to take advantage of that long term trend. And I think these stocks are cheap. People haven't wanted to own energy names. There's real value in a lot of the energy complex.
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Yeah, and I should correct myself because oil's back on the move again. It was more around 63 much earlier this morning, back up to around 66 right now, so jitters abound. Charlie, we'll leave it there. Thanks so much today. Appreciate thanks, Kelly. Charlie Berbrinskoy from Ariel Coming up, more than 50,000 layoffs last year were tied to artificial intelligence. Or so they say. But is AI just a scapegoat for struggling firms doing job cuts? We'll explore that next. Plus, software stocks are trying for a three day win streak, but they're still down 30% from their record highs. We'll give a technical take on this struggling group when the Exchange comes back.
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That's joingelt.com Amazon, Klarna, Dropbox, Pinterest. They're all very different companies, but they do have one thing in common. They've all cited AI as a factor in recent layoffs and they're not alone. In fact, more than 54,000 layoffs last year did cite AI as a reason, according to Challenger, Gray and Christmas. But as a recent piece in the New York Times asks, are companies just using AI as an excuse for job cuts? For more, let's bring in Peter Capelli, professor of management at the Wharton School. I think you were quoted in this piece, Peter, as well. So it's great to see you or maybe.
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Thank you.
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Maybe I'm connecting the wrong dots there, but what do you think is going on in terms of the actual impact of AI so far on the labor force?
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Well, I guess particularly with respect to layoffs are three options, right? I mean, companies announce layoffs and sometimes never carry them out. Especially if they say we're going to cut 10% over the next year. They know almost nobody goes to check to see whether it's true. Another option is that they are cutting because of AI, but they anticipate that it will take jobs. When you look at Amazon's announcement, for example, that's what they say. They say not, they don't say it has taken over these jobs. They say they anticipate that they will in the future. And the third option is they want to cut for some other reason. They're under pressure from investors this year partly because everybody else has cut. They feel you should cut too. And they say we're doing it because of AI, because it sounds like the smart thing to say. It sounds like you're forward looking. There's pretty good evidence that some of that is going on because at least one survey of executives reported that 36% of their AI efforts were performative. They weren't really doing anything.
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We spoke with a pay group the other day, PayScale, who kind of said similar to what you're saying, which is when they survey kind of check the data on their, on people using their, their technology, they don't see direct kind of because of, they said cuts might be about a third come up about a third of the time. But it's, it's hard to exactly draw the line from implementing this technology to, you know, immediate changes in the workforce. Do you think that, that that's still to come? Do you think that companies are just being cautious? It's, it has to be playing some, some role at the margin.
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No, Yeah, I think what, what goes on. So I've been looking at companies that have really done something, not ones who say they've done it and it's hard to find that many. It's hard to find Them that have done something, of course, you're only seeing the ones that actually work. But what you see from that is it's a ton of effort and a ton of upfront money to try to get these tools, AI tools to work. You got to train them, you got to have just your workforce, all kinds of stuff. It's not quick, it's not easy. And the payoffs are going to come down the road through increased productivity. So I think what you will see is reduced hiring in the future. Now, that's exactly what you would want, right? We would like productivity in the US to go up. We would like it to happen slowly and gradually so we don't get a lot of layoffs from people going forward. That's what it looks like to me. It's having an effect where they've introduced it. It's hard, it's expensive. I think a lot of CFOs are starting to question whether it's really worth it because they're not going to see the benef markets interest in increasing productivity, and that's years out. So I think we are going to see some effects, but they're going to be down the road.
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I've even forget who some analysts were starting to question whether I will actually end up being more expensive than people. But I suppose we're a ways from that point. Peter, how would you characterize the deployment of AI across the workforce with, for instance, the Internet or other kind of technological shocks that come to mind? Is there a playbook?
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G
Yeah, that's a really good question. If you look back at search engines, for example, which for a lot of work is a bigger change, like producing documents than the change from search engines to ChatGPT. Right. You had to go to Library, you had to gather the data, all this kind of stuff. You know, you just don't hear any stories about how chat, I mean, about how search engines wiped out millions of jobs. All you hear are stories about how it created jobs and created companies. And I think one of the problems with the current discussion is we're focused just on what AI could do to get rid of jobs. They're not thinking about all the things that need to be done and should be done that we can't do now because programming is too expensive. Right. So I think that will be the big bang. We'll start to figure out why in every organization there's an opportunity to use these things to solve new problems, to develop new products, just as we saw with search engines.
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Will you write a rebuttal with me to the. Did you see the Citrini piece?
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Yeah.
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Happy to do that.
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All right, well, how about this? I don't know if I you would write it better than me, but I endorse it. I'll blurb it. We'll come on and we'll talk about it. How about that?
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All right.
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Very good, Peter.
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Thank you. Really, really appreciate it. Thanks for joining us today.
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My pleasure.
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Peter Campelli from Wharton. Coming up, a major deadline looms in. A first of its kind decision by the Pentagon on anthropic that could have big ramifications both for our national defense and for government control of AI. We'll get the very latest and as we head to break, take a quick look at shares of JM Smucker soaring about 8% today, their best day since March of 2020. After striking a deal with activist firm Elliott Management. Smucker said the engagement was constructive and it'll add two new members to its board. The shares are now up more than 20% from their recent lows. And of course, Staples have also been in favor this year. More of the biggest movers when we come back.
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The same Monday.com designed for every team. The same Monday.com with built in AI scaling your work from day one. The same Monday.com with an easy and intuitive setup. Go to Monday.com and try it for free. Welcome back. You're definitely seeing a cautious tone in the markets today. Could have a lot to do with just general chatter around Iran. Something to keep an eye on. But we also have Nvidia shares reversing lower and the Nasdaq is down nearly 2% right now. As for some of the other movers, Paramount Skydance is up 10% after seeing revenue and streaming subscribers inch higher. The Paramount plus now has 79 million subs and the shares there are up 9 and a half percent. We're also waiting for whether Warner Brothers Discovery's board will deem their $31 a share all cash offer as superior to Netflix's. If so, that would trigger a four day matching period. Netflix shares up about 2% today and the co CEO Ted Sarandos is also visiting the White House today to argue on behalf of this deal. WBD of course is about flat and C3AI shares are plunging after the company posted a wider than expected loss and announced it's cutting 26% of its workforce. The CEO says the company's cost structure was simply too high. Its fourth quarter revenue guidance of between 48 and 52 million was way short of the streets of $78 million estimate. The shares are now down 80% from their 2020 IPO. Also watch Zoom. It is plunging today nearly 14%. They had a mixed quarter. Revenue guidance was above expectations but profit guidance missed. Shares are having their worst day in three and a half years. Dan Ives though out with a note saying don't forget about their 2023 stake in Anthropic. The pre tax gains on strategic investments was nearly half a billion dollars, up from 150 million a year ago. See if that provides them some cushion. Meantime, Anthropic has until tomorrow night to decide whether it'll give the military broad access to its AI models or run the risk of being labeled a supply chain risk by the Defense Department. Kate Rooney is here with the details. Hi Kate.
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Hi Kelly. We just heard from a senior Pentagon official on this who told CNBC the Department of War sent Anthropic its last and final offer Wednesday night to allow the Pentagon access to Anthropics Claude which is the AI model for lawful purposes. It's either that Kelly, or to be labeled a supply chain risk. As you mentioned, this is according to sources and that designation would be a big deal. It is typically reserved for companies tied to American adversaries. Take Huawei for example. Axios now reporting DoD is asking Boeing and Lockheed Martin to outline how much they actually rely on Anthropic's AI model. Claude I have also been told that the government could invoke network the Defense Production act, which would basically let it use emergency authority to force Anthropic hand in this. Anthropic investors that I'm talking to are the most worried about that supply chain issue. So they've been privately calling this situation a lose lose for CEO Dario Amadei if he does bow to the administration. There are risks in being seen as abandoning any sort of safety standards that are one big reason that enterprise customers tend to really trust them. They've really won in that area. Amaday does not budge on the other side, he does risk upsetting the White House, as it seems he may have already done. The CEOs don't want to be guilty by association. One investor telling me the actual government contract, it's about $200 million for anthropic. So it's not material yet. And they're 15 almost, excuse me, $14 billion in revenue. Another, though, says it does threaten total addressable market. That could have a chilling effect on its future enterprise business. Anthropic has told us it is working towards a solution with the government, Kelly,
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but the latest reporting is that the Pentagon might be taking these steps maybe to compel them to comply.
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F
That's right. And starting to lay the groundwork for that supply chain designation. So there are sort of these two binary outcomes. One would say this company is a big enough risk that companies that work with the Pentagon or really with the US Government should not work with Anthropic. It's that big of a risk on the other side. The other option is say we actually need your technology and we're going to force you to comply. So there is not a clear line into what that actually looks like. But they seem to be taking this seriously. Anthropic is in a tough position here. As I described, that sort of lose lose. Investors are saying it's not clear which outcome is actually better for the company at this point. There are downsides to both. This is a very touchy situation and it does also speak to other companies likely looking to fill the void here and moving in for those government contracts. The landscape is changing dramatically.
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Right.
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Do they sense an opportunity or are they looking for kind of a precedent setter here? Kate, for now, thanks. Appreciate it. Kate Rooney with the latest. Let's get to Christina. Parts and Evil is now for the CNBC News Update. Hi, Christina.
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Hi, Kelly. Well, a group of pro Trump activists
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reportedly circulating a draft executive order claiming
- [29:15]
H
China interfered in the 2020 election.
- [29:17]
A
That's according to the Washington Post, which
- [29:19]
H
reports the activists say they're coordinating with the White House.
- [29:22]
A
The executive order would reportedly serve as the basis to declare a national emergency
- [29:28]
H
in an attempt to exert presidential power over voting. The president has repeatedly claimed without evidence
- [29:34]
A
that the 2020 election was rigged. New York Mayor Zoran Mandami reportedly made an unannounced trip to Washington today.
- [29:41]
H
The New York Times writes he's there for a meeting with President Trump and that one of the people familiar with the plans said it would focus in part on building housing in New York City. Cindy McCain is stepping down as the head of the UN's World Food Program.
- [29:55]
A
Mrs. McCain cited health reasons for the
- [29:57]
H
decision to leave the humanitarian agency, calling her time there, quote, the honor of a lifetime. The widow of the late Senator John McCain said she experienced a minor stroke in October. She has run the World food program since 2023.
- [30:11]
A
Kelly. All right, Christina, thank you. Coming up, some big positive reversals in software names like Workday Yesterday and Salesforce Today. So is the bottom in or not for the IGV for software more broadly? Our chartist says yes. We'll dive into that ahead. And as we head to break, here's a look at the Nasdaq 100, down nearly 2% today, with Broadcom, Lam Research, PayPal and Applied Materials on the bottom right there, all among your worst decliners. We'll be right back. Welcome back to the Exchange. Software broadly is down about 8% this year, nearly 10% this month, but it's starting to put together a string of positive days, including today's 1% gain. My next guest thinks this is a sign we're near the bottom as the sector approaches key levels of technical support. Let's bring in Javid Mirza, a technical strategist at Raymond James. All right, sir, you can see we all are all looking at this together, trying to figure out is this marking a turning point? And look at the NASDAQ 100. We showed this a moment ago. The whole thing is down about 1.6%. And you know what's leading the way? Atlassian.
- [31:19]
B
So what I would say here, Kelly, thanks so much for having me on. Really appreciate it, is three things I want to talk about. First of all, the backdrop, hardware versus software. And then I think where we are now, I think there's a compelling reward risk ratio for adding exposure to software stocks here. And then third, most importantly, what clients care about, which is where we are headed. So just the bigger backdrop. A month ago, we put out a note just telling clients, clients, look, we're seeing this rotation out of software and into hardware. But notably, we highlighted that big technical Support was around 10% lower and so now we've hit that technical support, we're right, a key level near the four year moving average. All of that is constructive. Over the last couple of days we've started to see signs of support. That suggests price momentum is improving, relative strength is turning up and we're finally seeing institutions stepping in and buying. So what I would say here is at the very least we've got a short term low and next upside target from yesterday's close on The S&P 500 software index which you've got up there is around 6500. So that's around 4 1/2% from yesterday's close. More importantly now though is where are we headed? So if we can take out that 6500 level then that is going to confirm. Look, we've got a series of higher highs and higher lows in place that would tell us that we've got an uptrend.
- [32:42]
A
Right.
- [32:42]
B
And importantly that means we've got an intermediate term or three month rally which then tarts support and resistance around 70 200. And the reason that matters is that's a sizable gain. That's 15% upside from current levels.
- [32:56]
A
We talked to Gene Munster at the top of the hour about this and he said he, he wasn't sure whether he would call it, you know, a bottoming point for everyone. He said for some he's still worried about the seat based names like a Salesforce, like a workday. Can we. You're looking at the Salesforce chart. What do you see there?
- [33:11]
B
100%. Great question Kelly. So Brian Peterson, our fundamental analyst, he's got a strong, strong buy on it and it's really great when you see fundamentals tentacles align which is what we're seeing right now. And so we're seeing Salesforce or ticker CRM putting in a. No, putting in a low and we're seeing that institutional volume coming in. So we are starting to see institutional buyers step in here. But the key takeaway is if we see this as at least you can see it's a short term low, it's doing pretty well versus the the broader market today which is a sign that it's outperforming which is telling us on a relative performance basis portfolio managers are adding exposure. But notably I would say the next resistance level, the big one is around 226 which is 18% upside from yesterday's close. We like it here. Technically it's bottoming and fundamentally we like
- [34:01]
A
it as well one more than and it's been a volatile one.
- [34:04]
D
Oracle.
- [34:05]
A
Javid, what do you see when you look there?
- [34:07]
B
Yeah, so that's a great question. Oracle has come, it's been under a lot of pressure and it's come right back to key technical support around the four year moving average. So it's chopping around. They're still trying to find the floor. Here it is trying to re accelerate. So broad, broadly speaking and what we're talking about, the sector, the subsector is it should give a lift to all the stocks roughly. But CRM is definitely one that we like a lot here at these levels.
- [34:35]
A
All right, Javid, thanks for joining us. Appreciate it. Thanks for having Mertza from Raymond James. Coming up, did tech execs just declare the start of the next leg of the air race? And if so, will the early winners be able to stay on top or should we expect expect a leadership rotation? We'll discuss that next. And agentic AI inflection point. Got that? Agentic AI inflection point. That's what Nvidia's CEO is calling it. But what on earth does that mean? And could it reset the tech leaderboard? Let's bring in Deirdre Bosa with today's tech check to shine a light more on this. Deirdre, welcome.
- [35:17]
H
Kelly, it already is changing that leaderboard. So what Jensen Huang is saying essentially is that the race at large has changed. We are now in the agent era and that means a different cast of characters, different cast of winners, different tools. Take a look at this chart posted by Andreessen Horowitz partner Olivia Moore. She used yip it data that tracks new premium subscriptions across the major AI platforms. OpenAI dominated the chat bot era, no surprise, peaking at nearly 1.7 million new subs a month early last year.
- [35:46]
C
Year.
- [35:46]
H
But that growth this year has been stalling right at that inflection point Huang is talking about. Meanwhile, cloud has been steadily climbing. Now this all matters because Open Air built its lead answering questions. But the competition has now shifted to agents. And that is AI that runs tasks, operates software, executes entire workflows. The latest releases reflect that Open Air ship Codex, a full coding agent, Anthropics Claude Code hit $1 billion run rate in just six months. And yesterday Perplexity jumped back into this race with an autonomous agent called computer that can take one prompt and run with it for hours across multiple models. So in this light, Kelly, it's also interesting to look at Google in that chart I showed you. Gemini, yes, it got a big bump when it launched its latest model, Gemini 3. But it faded fast, arguably because it was still a better chat bottom in a market that is moving past chat bots it didn't have or at least it didn't properly demonstrate the agent capabilities which are developer tools, deep integrations that are becoming the hallmark of this new race now for investors that suggests that even a great model launch, it's not enough if you're winning the wrong war. And right now this is anybody's race to win. I don't know if you got to read it, Kelly. Howard Marks new note that was out today and he talks about thinking it was a bubble, you know, late last year to using Claude and just being blown away by its capabilities.
- [37:10]
A
It's so funny you say this. You always like forward stuff to yourself. You save a print. So now make sure that I read that later. I need to just defend. I can't have you talk like to Gemini like this. Because what is interesting Deirdre, about that is for someone like me, my workflows are pretty simple. It's basically it's like a research assistant, it's a Google. And so in that sense I use it all the time. I'm not trying to build software but I take your point that that that's where a lot of the market is going. And so when we hear a jet I keep hearing this phrase agentic AI and so am I to think then really what this means is it's beyond just the chat bot.
- [37:45]
G
It's.
- [37:45]
A
It's that I can go, that can go and do stuff and build stuff for you. And hats off to Claude. I mean they really are all the buzz. They've as you as your data shows they've really kind of taken a beat here.
- [37:56]
H
I know. Okay. In a sense it's a chap on as well because yes, I'm experimenting with creating software and in Excel and in PowerPoints. That is not sort of my primary use case. So I'm having a lot of fun. I'm learning a lot doing that but it has changed even my daily workflow and I assume I'm using it in similar ways that you are as a research assistant. The best way to describe it Kelly, maybe for our jobs is it went from like a chatbot to like a full on producer. That's what I feel like it's doing. It's helping me create documents and as a result I'm just doing more and more. Yes, absolutely.
- [38:29]
A
I love how we're like you know, talking about but like I don't yet see and I'm nervous about giving it Any control. Because I read about how people are like, you know, I turned my computer over to this chatbot and when it deleted my whole inbox, like, I know that would happen to me.
- [38:41]
H
I hear you. And that makes me a little nervous too. I have been using the integrations, even just for example, in my Google Drive. I keep absolutely everything in there and I can give it a task like go into my folder From February of 2025, rename all the documents so that I can find things more easily, and it goes ahead and does that. I'm watching because like you, I'm a little nervous as well. But that's one example. Another example is it's creating like a whole research packet for me that I have to use for an event next week. And it does that in such a more efficient way. And when I fact check it too. Actually, I didn't trust some of the other chat bots. Bots to do this stuff factually. But I've been working now sort of in another chat bot for over six weeks. And it's just the hallucinations are a lot less. It's a lot more accurate.
- [39:29]
A
Claude is more intuitive, more accurate, and there's fewer hallucinations for you.
- [39:32]
H
Is that specifically opus 4.6. Go down to Sonnet and it's not the same.
- [39:38]
A
Interesting. No, because I think the more that people use these tools, the more they realize, like this is my experience with the chatbot, there's decay. The first answer is very good. Maybe the second one is very good. You get to about the fourth or fifth or sixth. You're like, time for me to change topics. So I'm just curious how that would apply to the real world workflows. Yeah, yeah.
- [39:56]
H
And you know what, it's funny, I. I've been using ChatGPT. I was tweeting about this for, you know, three years, very often, almost on a daily basis. And I haven't opened it since mid January because I just. It's been a different sort of thing. I know you're on Gemini, but I recommend spent trying some of the other tools out there.
- [40:13]
A
Am I going have to pay for it though? This is like.
- [40:15]
H
You will have to pay for it. Yes.
- [40:16]
A
Key point, you will have to. I'll expense it. No, Deirdre, thank you very much. Appreciate it.
- [40:22]
G
Thanks.
- [40:22]
A
Deirdre Bosa. Coming up. Gold and silver are still surging higher, up another 10% or so this month. Copper, that's up a percent and a half as well. But take a look at lithium. It's sitting this one out it's down nearly 5%. Still, that drop isn't stopping this name who should. Shares are up 33% this month. Message me on X if you can guess it or on LinkedIn. I'm a LinkedIn girl these days. You know, real people, real stuff. We'll talk to the CEO next. Welcome back to the Exchange. As you just saw on your screens there, Dom, brought down to over here, this market action, we have intraday reversals in the major averages, not just in individual stocks. Put that Dow chart back up for a moment. We went green briefly after being down 245 points. Look at that just a couple of minutes ago.
- [41:31]
D
There's a little bit, I mean, right now with the Dow, you have a little bit more of that kind of exposure to the financials trade side of things. That was a trade that had some relative strength earlier this morning into the early afternoon where we are now kind of gave a little bit of that back again and we're starting to see a little bit of that recurrence. This is not a massive intraday reversal. Yes, right.
- [41:52]
A
This is just a strange pattern. Look, as we know, there's a lot of geopolitical overlay here. We're very headline sensitive. Whether it's Iran or anything else going on, on in, for instance, the NASDAQ, there's probably two competing forces that, that NASDAQ 100 chart, if we can put it up behind us, can beautifully illustrate. On the one hand you have in video which is kind of weighing on the AI trade, but on the other hand, you have Atlassian leading the way. You have some of those software names that had been harder hit which are enjoying a nice bounce today. So it's this, this tug of war, really.
- [42:18]
D
Well, even, even Salesforce, right, has seen some of that kind of more downside and it kind of rebounded a little bit. Again, these are names that have been kind of battleground stocks. Now at this point, for those people who are trying to figure out whether there is an extreme value trade that is developing within some of the AI disrupted or that kind of first or second ripple effect ripple order type names, and then whether or not those particular names represent some kind of an opportunity at this point, if you juxtapose that against what we've seen seen on some of the hardware names, right, Semiconductors, for instance, the memory chip type stocks, there is extreme amounts of momentum there. So the question now becomes whether or not there's a point at which the deeper value for some of these AI disrupted software names becomes a little bit more of a compelling case versus the massive, maybe single two factor momentum type runs, growth type runs that we've seen in other parts of the tech market. Overall, it's interesting.
- [43:13]
A
Listen, today we've got soft, you know, if you wanted to look at some of these pair trades and the reversals today, software versus semis down 33% year to date, up 5% today. I levered up 9% today, down two and a half percent. So clearly the market is churning and trying to figure out what's going on with the leadership and this to some extent reflects that. We also have a few more earnings this afternoon. They're not maybe quite as big as the likes of Salesforce, but every little data point is going to help people decide which side of the trade.
- [43:40]
D
It's not even just that. If you look at the way that the earnings season has played out so far, from a fundamental standpoint, it's been a darn good earnings earnings season. The stock price reactions after some of these major reports has not maybe been as intuitive or indicative of what people thought it would be like given some of the stronger fundamental stories that have been taken. So if you look at the earnings season from a fundamental standpoint, there's still growth. It's pretty healthy. And even the forecasts aren't even that bad. In fact they're pretty good. The stock reactions on the heels of them have been a little bit more tepid and if that continues, that's going to be interesting. The other divergence I'm watching right now that I'm going to see maybe try to play out. For the longest time now we've seen high yield debt, you know, non investment grade debt. It's been holding up relatively well, in fact pretty decently. I mean it's relatively flat so far this year. But if you take a look at some of the funds that track the index level, junk debt type funds and then you look at some of those ones that focus more on the CCC or lower credit rating part of the spectrum. There is a divergence developing there. So high yield overall from an index level holding up well. But the less credit worthy parts of that spectrum in that high yield portfolio are tracking a little bit worse.
- [44:51]
A
Trying to figure out where private equity,
- [44:53]
D
where private private credit and everything else does.
- [44:55]
A
All right, Don, thanks for now. Appreciate it. Again, the Dow briefly turning green there, still down about 37 points. That's it for us. Thanks for watching the exchange. I'll throw things over to Brian Sullivan for power lunch and I'll see you after this quick break. You've been listening to the exchange, make sure you're subscribed to get each episode every day, same time, same place.
- [45:19]
B
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