Nibbling at Nvidia, Building Backlash, and Korea’s Volatility Curb 7/16/26

Summary

The Exchange: "Nibbling at Nvidia, Building Backlash, and Korea’s Volatility Curb"

Date: July 16, 2026
Host: Kelly Evans, CNBC
Main Theme:
A deep dive into three market-moving business stories: the shifting tides in AI and chip stocks (with a focus on Nvidia), the mounting backlash and regulation around data center expansion amid the AI boom, and South Korea’s new curbs on volatile trading in its tech-heavy stock market. Along the way, top money managers, analysts, and strategists discuss the risks and opportunities in today’s business climate.

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1. AI Trades & Chip Sector Turmoil

Guest: Tom Hancock, Portfolio Manager, GMO US Quality ETF
[01:00 – 08:51]

Key Points:

• Nvidia: A De-Risked Opportunity?

  • Nvidia, despite being the AI “elephant in the room,” has lagged the broader market YTD and now trades at less than 20x forward earnings.
  • “To get a company that can benefit from secular tailwinds at that kind of a multiple, we think it’s pretty attractive.” (Tom Hancock, 02:12)
  • Retail money has “moved on” to memory trade, leaving Nvidia “ripe for the picking.” (03:19)

• Memory Stocks: Look Out for Commoditization

  • Memory names like Micron and Samsung saw surges due to scarce DRAM/HBM supply, but Hancock is wary:
    • “That’s great today for them, but not sustainable long term. Years, but not decades.” (05:17)
    • History shows long-term supply contracts in the semi space aren’t always enforceable, and high prices will attract new capacity.

• Industrial AI Beneficiaries:

  • Shift towards industrials (Schneider, Trane) tied to AI data center and power infrastructure build-outs.
  • Hancock launched a new power infrastructure ETF (KWH) for this purpose.

• Hyperscalers and Tech Giants:

  • Still bullish on mega-cap tech (Microsoft, Alphabet/AWS):
    • “They aren’t selling commoditized infrastructure…What they have around that, the services they offer…is what makes them attractive.” (06:32)
    • Differentiation comes not from hardware but from unique vertical integration and service “lock-in.”

• LLM and AI IPOs:

  • Skeptical of crowding in LLM providers—prefers Alphabet’s Gemini which has “vertical stack” and data advantages.
  • “If there’s one of them we’d give an advantage to, it’s…the one we already invest in: Alphabet.” (07:33)

• CapEx for Hyperscalers:

  • Favor long-term investment, though a pause is warranted if memory prices stay inflated.

Notable Moment:
Kelly Evans quips about the new ETF ticker for power infrastructure:

“By the way, KWH is the new power infrastructure etf so you got a great, great ticker there.” (08:51)

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2. Wedbush’s Top Tech Picks—Alphabet, Uber, Reddit & More

Guest: Eagle Arunian, Managing Director, Wedbush
[08:51 – 14:12]

Highlights:

• Alphabet (Google):

  • “Their ability to monetize on that spend is ahead of everyone else…Their platform, their ability to monetize on that spend, is ahead of everyone else.” (09:32)
  • Search is still thriving, not diminishing.

• Reddit’s Data Play:

  • “Reddit knows they’ve got something critical…and a data asset that’s really differentiated and powerful.” (11:15)
  • Licensing Reddit content to AI platforms seen as a core future revenue stream.

• Xometry (Small Cap):

  • Niche business with strong Siemens partnership. “AI helps them price better…a business that’s hard to replicate.” (11:58)

• Uber:

  • Delivery Hero deal gives Uber international cross-selling advantages; “Those cross-sell customers are three to four times more valuable…” (12:51)
  • On autonomy: “It’s going to take a long time for [AVs] to be kind of fully embedded into our roads. Uber plays a critical role in making that happen.” (13:42)

• Macro Theme:

  • “Everything’s an AI play.” (12:33, 14:12)

---

3. Gen Z’s App Preferences & Anthropic’s Rise

Guest: Spencer Hannis, Senior Analyst, Wolfe Research
[19:53 – 23:15]

Summary:

• Claude’s Popularity:

  • In Wolfe’s intern survey, Claude (Anthropic’s chatbot) was the #3 most used app—ahead of TikTok.
  • Used for programming, model building, and crunching data.
    • “It was actually Claude that came in ahead.” (20:30)

• TikTok’s Slipping — but Not Out:

  • “We were surprised by how low TikTok landed here.” (21:45)
  • Still a major force in e-commerce and for companies like Walmart.

• Gen Z Still Deeply Online:

  • Despite “no phone” movements at some schools, no signs of overall online disengagement.

---

4. Housing Market Update: Weakness in Data

Guest: Diana Olek, CNBC Housing Correspondent
[25:03 – 26:56]

• Pending Home Sales: Down 5.4% month-on-month in June, with worst drop in the Midwest. High rates and prices continue to crimp affordability.
• Builder Sentiment:
  • Fell for the 15th straight month; at lowest levels since 2012.
  • “Affordability remains the home building industry’s primary challenge as…elevated mortgage rates, costly land, rising material prices, and persistent labor shortages continue to affect the market.” (25:03)
• Price Cuts:
  • New builds seeing more price cuts, yet existing housing prices hit record highs in June.

---

5. Fed Watch: Hawkish Tone on Rates

Guest: Steve Liesman, CNBC Senior Economics Reporter
[16:14 – 19:53]

• Dallas Fed President Lori Logan:

  • Explicitly calls for higher rates to stamp out persistent inflation.
    • “It’s time to finish the job of restoring price stability…Inflation does not appear to be headed back to 2%, not on its own.” (16:19)
  • Market-implied inflation expectations show 2.25% over five years, but futures price in a 75% chance of a hike by December.

• Debate on Data:

  • Spirited exchange on whether policymakers are too “backward looking”; Steve Liesman notes, “There is no forward-looking data more so than backward looking data” and all projections are, in the end, extrapolated from past data. (19:13 – 19:24)

---

6. AI Data Center Backlash & Moratoriums

Guest: Bradley Tusk, Founder, Tusk Ventures
[30:15 – 38:54]

Key Discussion Points:

• New York Data Center Moratorium:

  • First state-level legislation pausing new data centers due to concerns over AI energy usage and public backlash.

• Is this Red State vs Blue State?

  • Not exactly—“data centers, by definition, can’t all just be in red states…they need to be close enough to population centers to power AI in those states…You’re seeing legislation, regulation pass all over the country—and those are red states and blue states.” (30:56)

• Resource Use Debate:

  • Some claims that “data centers are now closed-loop systems” and use less water than a golf course.
  • Evidence from places like Virginia, Ohio, Pennsylvania, and Georgia shows energy prices for consumers have spiked when new data centers plugged into the grid—“unquestionably an issue.” (32:49)

• The Path Forward:

  • “Data centers know they’re going to have to meet their own power needs…closed loop systems are not particularly complicated.”
  • Communities will rightfully expect property tax contributions, grid modernization, etc.—“This is a very solvable problem. I just think right now anxiety over AI is so great politically that it’s just driving a lot of governmental action.” (34:23)

• AI and Education:

  • Duality in the debate: some want to remove tech from classrooms, others see AI as a way to personalize learning.
    • “The teachers that we really loved are the ones who, the way they taught and the way that we learned fit together really well. I do think that AI could be really useful…translating learning styles.” (35:04)
  • Host notes the contradictory impulses in our political attitudes to AI—distrust in one area results in broad resistance elsewhere.

• The Political Cycle:

  • Expect bipartisan legislation and “intelligent” regulation after the election, aiming to address real risks without squandering the benefits.
    • “If government is doing its job properly, you figure out how to use regulation in ways that protect consumers…without writing off all the upside.” (37:37)

---

7. South Korea’s Volatility Curb & Emerging Market Risks

Guest: Tim Seymour, CIO Seymour Asset Management
[43:01 – 46:48]

Points Covered:

• Leveraged ETFs & Tech Stock Swings:

  • Extreme volatility in Korean chip giants (SK Hynix, Samsung) has led regulators to curb single-stock leveraged ETF trading.
  • “The Mag 3 outside the US...have been almost the tail wagging the dog of the market.” (43:01)

• International Diversification—A Warning:

  • Top-heavy indices are not unique to the US—the Korean “Kospi” has 50-60% weighting in just a few names, leading to index risk.
  • “If you’re trying for momentum, you’ve been in the right place, but I think there’s still a lot of momentum in these trades…be careful how much you own, but I think there’s still a lot of momentum in these trades.” (45:31)

• Fundamental Risks:

  • Memory chips seeing fundamental cyclical risk—“China DRAM and NAND is coming…these prices aren't here forever.” (46:32)

---

8. Notable Soundbites & Quotes

• On Nvidia’s Moment:
  • “Nvidia…is kind of odd, frankly, how much it’s been neglected…just sitting there right for the picking.” (Tom Hancock, 03:19)
• On Data Centers Meeting Their Own Needs:
  • “Data centers need to pay their own way…closed-loop systems are not particularly complicated.” (Bradley Tusk, 32:49)
• On American Politics and AI Anxiety:
  • “Right now the anxiety over AI is so great politically that it’s just driving a lot of governmental action as a result.” (Tusk, 34:23)
• On Regulation:
  • “If government is doing its job properly, you figure out how to use regulation in ways that protects consumers…while still using AI when it can help solve climate change, major medical issues, or the challenge of educating kids.” (37:37, paraphrased)

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9. Segment Timestamps

| Topic | Timestamp | |----------------------------------------------------------------|---------------| | Opening; Chip sector roundup & Nvidia | 01:00 – 08:51 | | Wedbush tech picks (Alphabet, Reddit, Uber, Xometry) | 08:51 – 14:12 | | Gen Z & AI chatbots; Wolfe Research Intern Survey | 19:53 – 23:15 | | Housing Market Data with Diana Olek | 25:03 – 26:56 | | Fed Policy and Steve Liesman | 16:14 – 19:53 | | AI Data Center regulation, politics, & public backlash w/ Tusk | 30:15 – 38:54 | | South Korea’s tech market volatility w/ Tim Seymour | 43:01 – 46:48 |

---

10. Overall Tone and Takeaways

• The episode brims with cautious optimism about AI and chip opportunities, while acknowledging cyclical risks and the ripple effects of fast-moving public sentiment on policy, especially around energy-hungry AI infrastructure.
• A recurrent theme: The answer lies in nuanced, sector-specific regulation—not blanket opposition or hype.
• Investors are urged to look beneath surface headlines, whether gauging the sustainability of memory chip margins, the relative safety of “de-risked” mega caps, or the risks of top-heavy indices at home and abroad.

Transcript

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[Kelly Evans]

You're listening to the Exchange. Here's today's show. Leslie, thank you very much. The chip and memory stocks are weighing on the market again as we get more Q2 earnings surprises. I'm Kelly Evans and welcome to the exchange. Taiwan Semi, the latest chip maker to deliver good results that failed to impress. We saw the same with ASML and Samsung Memory bearing the brunt of the pain with Sandisk, Micron, Seagate all sharply lower. All of them close to 30% or more from their 52 week highs. What is working? Flip side is health care a big earnings surprise from UNH UnitedHealth. That's really the only reason the Dow is outperforming today. And as strikes and threats continue in the Middle East, United Airlines says it expects $6 billion in added fuel costs this year. But let's begin with the AI trade. Amid the wild swings in the chip and memory space, our first guest says some of the names have finally been de risked enough to look attractive. Joining us in our opening exchange is Tom Hancock, Portfolio manager of the GMO US Quality etf. Really glad to check in with you, Tom. At a time like this, where do you see the opportunities?

[Tom Hancock]

Yeah. Hi, Kelly. Well, I guess you'd say for us the big opportunity is the one that's lying in plain sight, which is Nvidia. We haven't held that stock for a while. We've held other names instead, semicap equipment, things like that. But Nvidia is a stock that basically hasn't outperformed the market year to date. It's up only modestly. In absolute terms it's trading less than 20 times forward earnings. And the way we think about that is sure there's some scope for margin erosion, sure there's some scope to lose share to custom silicon, but they are still the de facto standard in the industry. And to get a company that can benefit from secular tailwinds at that kind of a multiple, we think it's pretty attractive.

[Kelly Evans]

So. So just to reiterate, as we're showing Nvidia down about 2 1/2% there, you're saying. And a lot of people anecdotally I hear are those who weren't early on the trade, those who are not tech special I'm talking about just members of the public who weren't big on Nvidia in the first place are now going. Do you think now's the time? And so I think they're going to really listen to what you're saying here. You say you've not invested in Nvidia historically, but you've bought it recently because it's de risked.

[Tom Hancock]

Yeah, and it's not that we haven't liked Nvidia historically, it's just we felt there are better places in the AI ecosystem to invest. You know the Taiwan semi that you were mentioning and the semicap equipment companies were actually a little bit earlier to get into Broadcom as we saw a custom silicon that they manufacture taking, taking share. But again, Nvidia is kind of the elephant out there, the elephant in the room you might say, and is kind of odd frankly how much it's been neglected really. You can see in the stock price volatility too. I think it's the sort of retail hot money has kind of moved on more to the memory trade. It's almost too big a stock to be swung by leveraged ETFs and things like that. So it's just kind of sitting there right for the picking.

[Kelly Evans]

And I want to mention also I have this sense and maybe you do too, or maybe it's just self evident that you say you're positive on some industrial companies like Schneider or the fact company Train that have an AI data center benefit win from build outs of power infrastructure. Those are both new holdings you say in the etf. So you can again, I think it's going to become more and more easy to find ways that are not just in the memory names to play the AI trade. So I wanted to mention that while also asking you why you're not Invested in the memory stocks.

[Tom Hancock]

Yeah. And to be clear, some of those power stocks, you actually start a new power infrastructure ETF that focuses on those. So Schneider holding, our international quality ETF in terms of the, the memory stocks, the issue for us with the memory stocks is so much of their profitability is coming really through price. There's such a scarcity in the DRAM chips, the HBM memory chips that they're able to get kind of whatever price they ask for. And that's obviously great today for them, but that's not as sustainable long term

[Kelly Evans]

even if those prices are locked in, which is what the bulls say. They say yes, it' from prices, but those contracts are locked in for years at this point.

[Tom Hancock]

Years, but not decades. And we're talking about a couple of years. And there's a pretty, I'd say unfortunate history about those long term agreements in the semiconductor industry. They sound great and then you're often not able to enforce them. So we're actually, I guess we're patient investors and what we see will happen in a couple of years is there'll be more capacity build out driven by those high prices, just like you would see in a commodity sector. And so we want to invest in some of the companies like the semicap equipment companies that would be the beneficiaries of that.

[Kelly Evans]

I want to ask you about the, as they're known, the hyperscalers. The mega cap tech companies are all about to report earnings. You say you still like most of them and I want to know why. Let me quote what Jeff Curry told us on the show a couple of days ago. He's, his thesis is that these companies are turning themselves into something that looks more like a commodity producer. He said you start putting steel in the ground, you're getting cyclical. That merits in his, from his point of view, a 10 XP and certainly not something in the 30s or higher. So especially as they are all competing with each, I always find the more that they're each bragging about their model being the best, they're reinforcing the case that they're competing in a commoditized industry and with the balance sheets and capital plans doing what they are. Why do you like them so much here?

[Tom Hancock]

Yeah, I'd say the, the racer of the models is a little more of an anthropic open AI thing than it is a hyperscaler thing. I guess we'd have a different view about the hyperscalers. They aren't selling commoditized infrastructure. You know, Microsoft's products are very Diverse, very specialized. They get a lot of lock in from their customers. They can't just easily switch even from Amazon to from Microsoft aws. That's not an easy switch to do. So the crux to liking these companies is really not that they have physical assets that are differentiated. Microsoft's GPUs aren't better than anyone else's GPUs but rather what they have around that. The services they offer on top of that. And the hyperscalers are all very unique. Different companies, it's easy to bulk them together but I think they it is the differentiation between them that makes them attractive.

[Kelly Evans]

Yeah and it's a little early to be asking but Anthropic is reportedly going to be public in a couple of months time. What do you think of that? Does it depend on the price that ultimately comes to to market with?

[Tom Hancock]

Well, price certainly matters but that would be an IPO we'd be a little bit hesitant about just because we feel like there is a potential for a shakeout in the LLM provider space and it may prove hard for any of those companies to differentiate from the others and hence command a higher price for their products. If there's one of them that we would give an advantage to it actually be the one we can invest in and do invest in now which is Alphabet. With Gemini they control more of the vertical stacks so they have a cost of goods margin advantage. They have Alphabet data to train on which can be a differentiation. So I don't feel like we need to buy another one right now.

[Kelly Evans]

It's a fantastic product. I say as a heavy user of it. Final question then Tom. Do you want the, the hyperscalers, let's call them the ones that you like thought do you want them to pull back on capex or no? Do you want them to continue or even raise at this point I'd say

[Tom Hancock]

we want them to invest for the long term and we think they have pretty good visibility into long term profitability so we are generally in favor of continuing to invest now they have more better visibility than we do so I'm not going to listen to what they say if they're pulling back. But I think in general yes and maybe my only hesitation to that is if they're really having to pay a lot more dollars for the same thing for memory maybe they should pause until prices come down a little bit but generally we're constructive.

[Kelly Evans]

All right Tom, really appreciate it, thanks. Good to check in with you Tom Hancock from By the way, KWH is the new power infrastructure etf so you got a great, great ticker there. I just wanted to mention that for folks, Tom Hancock. Meanwhile, Wedbush initiating coverage on nearly two dozen tech companies and naming their top picks across the sector, including one under the radar name that's up 177% in a year. Let's bring in Eagle Aruni and he's a managing director over there. Eagle, it's great to see you. Wow. So your top mega cap pick is Alphabet. Maybe for all of the reasons we were just discussing Uber you like we just did a deal that's for large cap Reddit, you like in the mid cap space, isometry in the small cap space. Just talk us through this year.

[Eagle Aruni]

Yeah, sure. And thanks for having me. And I think your previous guest really said it. Well, the thing that differentiates Alphabet among the hyperscalers and you know, generating ROI on their CapEx spend is their, their end to end platform. And I think you can even zero in on, on one factor and that's that search where, you know, a year, a year ago even, you know, people were expecting the demise of Google search and the experience has only gotten better. And so their platform, their ability to monetize on that spend is, is ahead of, of, of everyone else. And so we like them for that in that position.

[Kelly Evans]

Yeah, we've got the Buffett and Perimeter. What did you think when you saw that the other day?

[Eagle Aruni]

Yeah, I thought, I thought it made a ton of sense.

[Kelly Evans]

Yeah, it does. I sometimes I wonder, okay, once everybody sees the same, are we missing it or is this just one of those no brainers where you say that's the trade for the next decade and you don't really have to worry about it?

[Eagle Aruni]

Yeah, well, I think that's what makes a market. But a lot of these things have been misunderstood and you sort of understand where some of the nervousness comes from, from investors that there is a lot of capital being spent here, there's debt being raised and equity being raised and free cash flow being being depressed. Almost literally all the profitability of these hyperscalers is being put back in to invest around AI. So you know, it certainly adds some risk. But, but we think Google is really well positioned.

[Kelly Evans]

I want to skip down to Reddit because your point of view on this could be very, very important for the IPOs of anthropic and open air and those business models. Do you think Reddit ultimately gets more licensing fee income from putting its content on these other platform, these other AI platforms?

[Eagle Aruni]

Yeah, absolutely. I think that's, that's the strategy. I Think Reddit knows that they've got something critical and a data asset that's really differentiated and powerful. Right. We're moving to a world where more and more we're getting our feedback from, from AI and chat bots and people still value real person opinions and those values and those, those views are really important as a data asset. So we think Reddit as that data maybe in a different format than it did in the past, but I think they're, they're in a pretty good position there and that should be a really important opportunity.

[Kelly Evans]

Opportunity isometry and I play your small cap.

[Eagle Aruni]

Everything's an AI play. That was part of our theme around the initiation. Their AI play is that AI helps them price better and that's been a big opportunity for them. But for Xometry More they've got a great moat, a really unique business model that's seeing a lot of growth. They entered into a partnership with Siemens that brings them a lot of new customers. Siemens took a minority stake. And so we think just that partnership alone can drive a lot of upside to estimate revisions over the next couple of years in a business that's pretty hard to replicate in our view.

[Kelly Evans]

And finally, Uber is a little controversial. You've got those who, who see huge potential and others who worry about total disintermediation. You obviously are in the former camp with a $91 price target and they did this deal with who? Delivery Delivery. Deliveroo. Delivery Delivery Hero. Thank you. Yeah. So what do you think about that?

[Eagle Aruni]

We, we really like the deal. We'll come back to the autonomous vehicle stuff after. It's a little bit separate than that at least. You know this, this is about scale, right. And Uber's advantage is scale. The ability to cross sell across their customer base from ability into restaurant and goods delivery. And this opens up a really big opportunity for them internationally. Those, those cross sell customers are three to four times more valuable for Uber and they're in a really unique position to be able to do that. So we like the Delivery Hero deal a lot. I think it's going to help their international growth story pretty powerfully on the, on the side and you know, being displaced by, you know, whether it's Tesla or Waymo. Look, we think that that market, there are some players that can do more on their own, but there are other partners that, that need a network and Uber is not standing still. They launched their, their autonomous solution which is really built around partnerships helping build a network for, for some of the, you know, the mid and long tail of the market they're going to play a central role. And you know, it's taken a long time for AV to roll out. It's going to take a long time for it to be kind of fully embedded into our roads. And I think Uber plays a critical role over the next number of years in making that happen.

[Kelly Evans]

Eagle, thanks for joining us. So you see your top four tech. Everything's in a I play. So here are some more specific ways to do that. Really appreciate the time. Thanks, Eagle. Arunian with Wedbush. Coming up, venture capitalist and political strategist Bradley Tusk. He will weigh in on New York's first in the nation data center moratorium. Is it a good idea? Will more states follow suit? But first, a look at what the interns are saying on Wall Street. Is Tick Tock still king or is Instagram making a comeback? The biggest surprise may be a new app taking Gen Z by storm. That reveal coming up on the Exchange.

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[Kelly Evans]

Some breaking news out of the Federal Reserve. Steve Liesman with the story. Hi Steve.

[Steve Liesman]

Hey, Kelly. Dallas Fed President Lori Logan calling explicitly for the Fed to raise interest rates, saying she sees modestly higher interest rates as necessary to bring down inflation. And this comes after that better than expected June CPI report. But she says one month of relief is not enough. Quote, it's time to finish the job of restoring price stability. Inflation, she said, does not appear to be headed back to 2%, not on its own. She expects some decline in inflation from easing tariffs and more an oil impact, but says that's not enough. Not going to happen on and she notes that non housing Core services has made no progress in two years, remained near 3%. She's concerned CEOs could soon pass along higher costs as well as be raising wages. And she says monetary policy is not restraining the economy. Finally, she says the Fed should not consistently favor one mandate, in this case the employment mandate over another. Doing so, she says historically leads to higher or the need to raise interest rates even more so in the future. Kelly, this is a bit of a graduation from what she said on July 9 where she said I'm increasingly concerned higher interest rates could be necessary. This is a somewhat different, more explicit call saying the Fed should be raising rates.

[Kelly Evans]

I just, I know she's a voter here. Sorry, I meant to mention 3 and 4%. I'm just, I don't have the team in the back. Can we show 5 year forward break evens or 10 year is good as well? The 5 year forward break even. See that's the implied inflation rate by the market over the next five years. The implied annual inflation rate by the market over the next five years is 2.25%. So the market thinks they're basically going to get back to target. There it is.

[Steve Liesman]

Right, but do you know Kelly, how the market thinks they get there? In other words, is there an implication in the market that the Fed, whatever happens, you know, take a train, take a plane, that the Fed ends up reducing inflation? Does it have to do something to do that? That's really the question. And I can, I can, I want to be on statistics here if you want to play this game. Kelly, the market has say a 75% chance of an interest rate hike by December. So the short term futures market has that hike built in. I'm not saying either is right. I think your point is a good one. I think this other point is where there but certainly part of the market sees a hike in there in order to get there. And the question becomes, Kelly, the one that I think we have debated before, we'll continue to debate is will inflation take care of itself? Is it just a matter of these one off things or is there something more persistent going on? It's Lori Logan thinks there is as well as some other people.

[Kelly Evans]

And this, I don't want to belabor it but I think to me it's more. Are they looking at backward looking data or forward looking looking data? Again, to the miss on inflation, to the upside. You know, how do, how do you get ahead of the thing that's coming and not respond to? So anyway, it's more, it's more from

[Steve Liesman]

that I have this, I have this one bone to pick about this idea of the backward versus the forward looking data. There is no forward looking data more so than backward looking data.

[Spencer Hannis]

Just the market that you use the

[Steve Liesman]

backward looking data forwards to project forward. Everybody thinks there's some, what's the word, elixir or great piece of data out there that is forward looking data. Data by definition is all backwards, correct?

[Kelly Evans]

Yes. Forward looking market data I think we should say. But it's because was I feel like he's going to get us maybe more in that direction. It's a very, very curious to see if he does or not. I know we have to go.

[Steve Liesman]

Agreed.

[Diana Olek]

Steve.

[Steve Liesman]

Discussion for perhaps another day. What data looks forward?

[Kelly Evans]

What what financial market data points. How about that? Thank you. Steve Lisman. Anthropic meantime is reportedly moving closer to an ipo with Bloomberg reporting it could now be as early as October. And while some are skeptical the market can handle yet another mega ipo, some surprising new findings from Wolf Research help illustrate why they might want to strike now. Their annual intern survey shows the third most used app among Gen Z interns, following Instagram and Snapchat. Snapchat is Claude. Let's bring in Spencer Hannis, he's a senior analyst at Wolf. Spencer, what are they doing with Claude? Welcome.

[Spencer Hannis]

Yeah, thanks for being here, Kelly. I mean it's very interesting. We just surveyed our interns at Wolf and then some of our partner firms across the street and what we saw was a significant skew towards our interns and people in financial services in general being interested in Claude and, and it even showed up as one of the most used apps in, you know, of all this, all the people that we surveyed and it was a pretty consensus view too. We were, we thought chatbots would have scored a lot better than they did. But no, it was actually cloud that, that came in ahead.

[Kelly Evans]

Are they programming? So I always think of Claude is kind of the amazing programing tool and I use Gemini and maybe some chatbots just for the basic stuff. But are they using cloud for basic stuff? Are they using it for more intensive kind of agentic and programming kinds of tasks?

[Spencer Hannis]

I mean in our business we're using it for model building. You're using it for some, some written research using to crunch, crunch data. I think there's also code coding applications as well. So you know, it's really across the gamut and it's evolving and getting better month over month as we use the tools and our interest are using the tools this summer. You can just see the growth in the adoption and how students are using it today. So it's, it's evolving quickly is tick

[Kelly Evans]

tock stars fading, TikTok star fading.

[Spencer Hannis]

You know, we were surprised by the survey on where TikTok fell. We thought that was going to be, you know, higher than it, higher than it landed. When we do checks across consumer. TikTok is still one of the fastest growing marketplaces. I cover Wal Mart and a lot of other retailers and they're still, they're still, you know, expected to gain a ton of share. TikTok shop is, is one of the areas where a lot of marketplaces place sellers, for example, are investing in. But yeah, we were surprised by how low TikTok landed here.

[Kelly Evans]

Is there any sign, Spencer, that Gen Z is less online in terms of their consumption, for instance? Like you said, it's excellent point about Wal Mart and all these companies partnering with influencers, for instance, Getting Instagram still 63% share, I think. But is there any sign that that's shifting a little bit as I wonder about kind of TikTok fatigue, Instagram too?

[Spencer Hannis]

Yeah, you know, look, I think these, these, these things come and go and there's, you know, Facebook was, was the leader and now you've seen Instagram take more share, you've seen TikTok becomes, you know, more relevant. And I think these things just continue to be a cycle. And so, yeah, we're definitely seeing things shift. You know, in many schools across the country, there's no phone movements. There's other things that are going on that are impacting, you know, that are impacting, you know, usage of phones. But I don't know if we've seen necessarily, you know, people being less online. I think people are still just as connected as ever. But yeah, there are some, there are some pockets of things like, you know, no phones in schools and things like that that are emerging.

[Kelly Evans]

Well, there's so much more in the survey, but this one in particular jumped out. So I encourage people to try to get their hands on the whole thing. Thanks for doing it, Spencer, and coming on to talk to us about it.

[Spencer Hannis]

Great. Thanks so much, Kelly. Appreciate it.

[Kelly Evans]

Spencer Hannis of Wolfe Research Coming up. June was a great month for home construction for the ITB etf. We should say its best month in nearly a year. But 85% of its components are in the red for July and today's housing data doesn't inspire much confidence. We'll look at the latest numbers next.

[Narrator/Announcer]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Landsford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that that may impact your trading. Download the latest episode and [e-mail] Market Update podcast or find Schwab Market Update wherever you get your podcasts.

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[Kelly Evans]

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[EY Parthenon Representative]

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[Kelly Evans]

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[Kelly Evans]

c cnbc.com the homebuilder stocks are slightly higher today, but having a rough start to the month and this morning's dismal housing data doesn't bode well. Diana Olek has more for us. Diana, what do we learn?

[Diana Olek]

Well, Kelly, disappointing numbers today from both home buyers and home builders. Let's start with pending home sales in June, down 5.4% from May and down 0.3% from June of last year. Now, this count is based on signed contracts, so that's people shopping in June when mortgage rates kind of bounced around a narrow but higher range. Rates this week have been on a bit of a roller coaster, but we're now at 6.64% on the 30 year fixed about where we were last month. Now, regionally, sales were down everywhere with the steepest drop in the Midwest, which is a little curious because that's where homes are actually cheapest, the realtors said in the release. This is about higher rates and higher home prices. So affordability now that's the buyers. Now to the builders. Homebuilder sentiment in July fell 2 points to 34, according to the national association of Homebuilders. Sentiment has stayed below 40 for 15 consecutive months. That's the longest such stretch since 2012. Anything below 50 is considered negative sentiment. Now of the index's three components, current sales conditions, future sales expectations and buyer traffic all fell. With that last one down the lowest, the NAHB's chief economist, Rob Dietz, said affordability remains the home building industry's primary challenge as elevated mortgage rates, costly land, rising material prices and persistent persistent skilled labor shortages continue to affect the market. A growing share of builders are now cutting prices and incentives are going up again.

[Kelly Evans]

Do we have any, you know, any numbers on that, Diana, how much they might be cutting prices or how the new percent. Okay. And that compares to the existing home?

[Diana Olek]

Yeah, I mean existing homes. Actually, the last report we got on existing homes showed a record high price, and that was not just for the month of June, it was for forever. Now, homes do tend to be most expensive in June because that's when you know that people are buying the bigger homes for their families because they want to move over the summer. So they put the kids in school in September. But still it was the highest on record for any home price.

[Kelly Evans]

All right, Diana, for now, thanks. Appreciate it. Diana Olek, let's get to Kate Rooney now for the CNBC news update. Hi, Kate.

[Kate Rooney]

Hi, Kelly. Two of eight men charged in an alleged plot to attack last month's UFC event at the White House pleaded not guilty to federal conspiracy charges. Prosecutors say the group plan to use explosive laden drones and snipers to target officials and attendees. They are charged with conspiracy to provide material support to terrorists and murder conspiracy charges as well. That trial is set for September. Meanwhile, the British government is urging FIFA to investigate. Argentina's team players displayed a banner after beating England in the World cup cup, claiming sovereignty over the contested Falkland Islands, which were reclaimed by British forces after a brief war with Argentina back in 1982. FIFA rules do prohibit political messages at matches. And finally, the Trump administration is reviving a policy that could deny green cards to some immigrants who use public benefits, including food stamps, Medicaid or housing assistance. The public charge rule will be formally public published on July 20. It was first implemented during President Trump's first term and then reversed by the Biden administration. Kelly, back over to you.

[Kelly Evans]

All right, Kate, thank you very much. Coming up, should more states follow New York's lead and launch a moratorium on data centers or will they ultimately cave on that? We'll ask Bradley Tusk about that next.

[Narrator/Announcer]

As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward.

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[Kelly Evans]

Welcome back to the Exchange Data center backlash continues to grow. More than a dozen US States have proposed moratoriums, moratoria maybe to pause their development, with New York becoming the first to pass legislation earlier this week. The President calling that move a terrible decision and a truth social post yesterday. Our next guest says the data centers will have to learn to pay their own way for more. Let's bring in Bradley Tusk, the founder of Tusk Ventures. Curious Bradley, for your take on this, a lot of people think we're going to get to a red state, blue state outcome where the red states well allow or welcome the development. The blue states don't. The red states have cheaper taxes as a result. The blue states don't wade into this argument here.

[EY Parthenon Representative]

Yeah, I don't think we will for a few reasons. The first is that there are businesses that can choose to situate themselves in one particular state for tax reasons, regulatory reasons, whatever it is, and it works. But data centers by definition can't all just be in red states. It doesn't work. They need to be close enough to population centers to be able to power AI in those states so it can't physically happen that way. And then in terms of the politics, I think that the president is just misreading it, which is that you're seeing a legislation, regulation pass all over the country. There are states across the country that are passing data center regulation or at least working on it, and those are red states and blue states. There Are a lot of states this year that pass legislation around regulating in terms of chatbot use, mental health education insurance is so widely unpopular that politicians across the spectrum are responding to that.

[Kelly Evans]

But in other words, you think that New York is going to have to, to. To ultimately move forward with.

[EY Parthenon Representative]

Oh, sure. And I think Governor Hochul knows that. Look, for a Democrat, she is very pro business. So. But what that said, she's also up for re election this year. And I think what you see in her executive order is a reflection of a few things. One, AI is really unpopular. People think that AI is going to take their jobs, that it's going to raise their electricity prices through data centers and that it's going to influence their kids in even more worse ways than social media has so far. So they're worried about it. It's unpopular. That's true in every kind of segment of the demographics of American society.

[Kelly Evans]

But those things. Bradley, the one on the resource utilization, we were just talking to Verdev the other day. They say data centers now are closed loop systems. They use less water than a golf course.

[Sandeep Ajla]

Yeah.

[Kelly Evans]

And then on the power question, do we have any data conclusively on whether this is whether and where power bills have gone up?

[EY Parthenon Representative]

Yes. Yeah, we have. So you've seen in Northern Virginia, for example, in Ohio, in Pennsylvania, where especially for the PJM grid, where the data centers did plug in prices for consumers to go up a lot. In Georgia that happened. And 40% of the Georgia Public Utility Commission lost their elections because of it. So it's unquestionably an issue. However, I don't think it's really that much of an issue in the sense that data centers know that they're going to have to meet their own power needs. That could mean behind the meter sources of power like nuclear or turbines and things like that. It could mean using more efficient forms of compute that increase the energy efficiency of it. So there are a lot of ways to solve the problem. And if you read Governor Hochul's executive order, she basically kind of laid out what the path is here with which is, you know, data centers need to pay their own way when it comes to energy. They need to be able to provide and use their own water. And closed loop systems are not particularly complicated. And so I think of all the issues, it's not a real one. And then finally is just going to be the relationship between data centers and communities. If you're going to go into a community and you need zoning and you need permitting and you're going to take up a Lot of space. You have to be a good partner to the rest of the community. And you see the really good data center builders, for example, starting to do things like, okay, do we help with the property tax abatement? Do we help by modernizing the energy grid? You know, there's a lot to be done here. This is a very solvable problem. I just think right now the anxiety over AI is so great politically that it's just driving a lot of governmental action as a result.

[Kelly Evans]

Yeah, no, I take your point that, you know, there's part of this is an effort on. On their part to go in and explain or use examples of, hey, here's how we could help. And because, like you say, they're not an ongoing real job creator. I mean, there's construction jobs to build them, but it's not as if you're putting in something that's going to put, you know, 5,000 people to work necessarily. To the other point, which I think is so fascinating about this backlash over concern about what it's going to do for kids and for learning, I mean, one thing the schools could do is just say, we're going to get technology out of the classroom. And that would go really far a long ways towards allowing some. Some of those concerns that, that parents have, but they don't. There's no willingness or desire to do so.

[EY Parthenon Representative]

Yeah, it's interesting, right, because there's two totally different ways to take what you just said and argue it. So one would be as a way to deal with the concerns that parents have. You could do exactly what you said on the flip side, and this is just my theory, so it could be wrong. When you think about your favorite teachers when you're growing up, I think you or I would say, well, it's because they were really good teachers and they taught a subject, history, English, English, English, English, whatever, is that I was interested in government and that might. Whatever, but that's probably true. But I think there's a third thing that we don't really realize, which is that everyone has a different learning style. You could have 10 people who are equally intelligent and they just learn in 10 different ways. And the challenge for a teacher is they can't teach in 10 different styles at the same time. They can only teach in one. And I think the teachers that we really loved are the ones who, the way they taught and the way that we learned fit together really well. I do think that I could be really useful in taking what a teacher has to say and then translating it. So if one kid Learns best by seeing and one by reading and one by writing.

[Kelly Evans]

Ironic, though, because I agree with you. I think I watch the. It's clear there's a debate in education over whether people should get rid of technology from the classroom entirely or use AI agents to make education more successful. In that exact dualism. It's like if, if we're half a brain to use more AI in the classroom to help learning, then we. Why would we be against AI data centers? So being against them reveals to me that I think people deep down are saying, I don't really trust that this is going to give us better outcomes. So I, I just find in different domains where we're operating off of implicit assumptions that don't all reflect the same point of view.

[Narrator/Announcer]

Totally.

[EY Parthenon Representative]

And I think this is part of sort of both. The fast why is fascinating and really complicated is it cuts across all sectors. It's not one thing. Right? So, you know, you and I could sit here and list 10amazing things that I could do for some society, whether it's making learning a lot easier or figuring out decarbonization or, you know, coming up with drugs that can cure cancer. And at the same time, people worry that it will raise their energy bills or take their jobs away or pollute the minds of their kids. And the reality is, all are potentially true. And if government is doing its job properly, you figure out how to use regulation in ways that protects consumers in some ways, like saying it to a data data center. You can't make homeowners pay for your energy needs or your water needs, but at the same time, use AI when it can help solve climate change or major, you know, medical issues or the challenge of educating kids. And they're not mutually exclusive. But the way that our politics works is that, you know, everything tends to work in these narratives that are just extreme. Everything is either good or evil. And if one side thinks it's good, the other side thinks it's evil and vice versa.

[Diana Olek]

Yes.

[EY Parthenon Representative]

And there might be a good way to run MSNBC or Fox, but it's not a good way to run a government.

[Kelly Evans]

No, I agree. And watching it become very tribalized, you go, well, we're lumping things together that, that, that later on I think we're to look back and say, well, we didn't need to jump to that conclusion. So anyway, we'll see after the year, maybe before it's up, maybe after the election, if there's something more specific to say, okay, with these qualifications, you know, you can move forward. I mean, they've got Micron up in Syracuse, right?

[EY Parthenon Representative]

Totally. And I do think I was talking to a member of Congress the other day about this that, you know, if the House flips, which is pretty likely, I think that you could see bipartisan legislation that the president could support next year around how to regulate in different ways, because it's one of these issues where voters are concerned about it. They may not really fully understand both what the risks and the rewards are. But I don't think politicians want to have to face the voters in 2028 and say, yeah, we didn't do anything about it, and maybe this is totally naive, but perhaps there is a way to actually make whatever that legislation is intelligent enough to capture the concerns that people have, address them properly, but still manage to really use the upside.

[Kelly Evans]

So you should be more cynical than that. And you're not. And that's why we love you, because

[EY Parthenon Representative]

I appreciate that it might mean that I'm wrong, but at least I try.

[Kelly Evans]

There's a path forward. Bradley Banks, good to see you.

[EY Parthenon Representative]

Thanks, Kelly.

[Kelly Evans]

See you, Bradley Tusk. Let's check on shares of Standard Nuclear, which just opened for trade moments ago. We've had so many IPOs lately. This one ticker, STDN, opened at 1350, which is slightly below its $15 IPO prices, is also on the New York Stock Exchange today. Again, Standard Nuclear is actually down about 11% on the Open. We'll keep an eye on it coming up. Netflix reports after the bell, and it's missed earnings estimates only four times in the past 20 quarters. But it's missed on guidance in eight of the past 16 for EPS. We'll get the key numbers to watch this afternoon next, with the shares down 31% in the past three months. Welcome back. Netflix shares are down more than 30% over the past three months. Now come reports that they might get into more live news programming. But Mountain CEO Mark Douglas told us last week that he thinks they should invest more in new shows and movies as other streamers take market share. Mackenzie Sagalos has more as we will hear from them after the bell. Mackenzie and Kelly after four straight earnings

[Mackenzie Sagalos]

reports where Netflix shares sold off on the print, investors are really expected to look past what's likely to be a largely in line set of results and focus instead on engagement and forward guidance now, specifically whether slowing viewing is becoming a bigger problem for the streaming giant Morgan Stanley. Analysts say engagement growth has softened to roughly 1 to 2% and several major shows have seen steep audience declines after their first seasons. The series beef fell more than 70% in season two, the Night Agent dropped 50%, and that is raising questions about churn and pricing power, especially after Netflix hiked the prices in the US In March. Now the counter argument here is advertising. Netflix's ad tier now has more than 250 million monthly active users, up 32% since November, and the company expects that ad revenue to roughly double to $3 billion this year. That could help support both revenue growth and further further margin expansion, even if viewing trends remain relatively soft. And then there's M and A. Investors will be listening for any shift in Netflix's historically cautious stance, including whether it could eventually consider NBC Universal. Netflix has long said it does not want to own legacy networks or traditional media assets, but this is also a company that once resisted advertising and live sports, and both are now increasingly important parts of the strategy.

[Kelly Evans]

We'll see if we get a glimpse not just into the quarter and those trends, but any kind of future strategy hints as well. MACKENZIE thank you Mackenzie Sagalos coming up, South Korea's coffee down more than 20% over over the past month, though still up a nice 62% this year. SK Hynix and Samsung are weighing on recent results. Korean listed shares of SK Hynix are actually down about 30% in July as regulators are now taking steps to curb these wild swings. Is it a red flag for international investors? Tim Seymour weighs in next. Welcome back to the Exchange. South Korea is cracking down on single stock leveraged ETFs after a slew of wild swings in Samsung and SK Hynix. Remember, their combined weighting typically sits between 50 and 60% of the entire Cosby. We're only halfway through July, but SK Hynix is already on pace for its worst month since 2008. In the first 12 days alone, Hynix had eight days of 5% swings in either direction, including last week's 15% drop, which was its worst day ever. For context, the entire month of June and July only had 12 five point swings and May only had eight of them. Let's bring in Tim Seymour. He's the CIO of Seymour Asset Management and a CNBC contributor. Tim Kelly this is a point I think Rebecca Patterson was making the other day as well that this idea that you need to diversify away from the top heavy S&P 500 into international stocks. Well, you need to be careful that international stocks aren't more top heavy and this seems to be an interesting case of that.

[Tim Seymour]

Yeah, the Mag 3 outside of the US so Taiwan, Semi SK Hynix, Samsung, a lot of Investors, seriously, be honest out there folks. Did you even know who SK Hynix was three months ago? And even though this is one of the biggest conglomerates in South Korea, it's a combination of SK Group but also Hyundai Electronics and it's got a very rich history of technological innovation and whatnot. But again, the dynamics that have had this be almost the tail wagging, the dog of the market are extraordinary. And South Korea, by the way, with almost 30% between domestic and local pension funds and the state pension fund, you know, they have a lot of exposure domestically to this. Obviously you talked about the weighting in the index, so there's a lot of focus on what's going on right now.

[Kelly Evans]

Well, let me put it, put the question to you this way. And who wouldn't want to answer the following question? People online are saying the bubble has popped. They take those data points I was just referencing and they say the air bubble is popping. Get out of the way.

[Tim Seymour]

Well, it's. Some of that is healthy, right? And again, talk about leadership. SK and Samsung absolutely led the move in semiconductors through the 50 day. So if you look at the, the stocks or the SMH or whatever you're tracking to get the US dynamic, you can see that the Asian stocks actually led them through. And if you're investing in the United States, semiconductors have led the S and P for three years and have been a reason to own the S and P but obviously be heavy in semi so that leadership and the loss of that leadership is significant.

[Kelly Evans]

What would you do then? You know, especially forget if you're an international quote unquote investor, should a prudent investor make sure they don't have exposure to the Kospi to figure out whether Taiwan, these other markets, if there's, if there's any kind of landmines there to worry about. What does it mean, you know, back here for the U.S. right.

[Tim Seymour]

Well, as someone that runs an international ETF and we have exposure to Korea, I devos my ETF. I mean we're not, you know, we're not trying to time this. We're trying to have exposure to the Asian tech story, which I think that rotation into Asian tech and that includes to me China tech, which is really underperformed. And I think, you know, if you want to characterize what's going on with Alibaba and Baidu and Tencent, these are not only open source models, but these are accelerator chips that are a lot cheaper and a lot less Capex. So I think you just have to know what you own. I think if you're trying for momentum, you've been in the right place, but I think there's still a lot of momentum in these trades.

[Kelly Evans]

And I would be careful on how much you own, but meaning you think more momentum to the downside for things like the Cosby or those, those areas.

[Tim Seymour]

I think part of the dynamic here is access to those markets. Access to the South Korean market hasn't been easy. So these vehicles that get you access have leverage and are more volatile and less efficient. SK Hynix listing on the NASDAQ is a big moment, I think that starts to unwind. Some of those that access premium, even though it's traded at a premium or a discount, depending on which day, I think some of that is slowly letting steam out of bubble or just a big trade.

[Kelly Evans]

All right, session lows across the board. SK Hynix down 12%. And this for you then is a moment where people might need, need to look at. I mean, look, no one wants to dive out of a trade, but I guess that's what you do. If it's a trade, you got to get out of it. It's. If it's an investment, maybe you just can hope for the best management.

[Tim Seymour]

Yeah, sorry, Kelly. Yeah, I mean, I think it's, it's how much do you own? What do you own? Why do you own it?

[Kelly Evans]

But I think for the memory trade too. For, for chips, for all of it, or just this, this, these couple names.

[Tim Seymour]

Yes. The other side of the technical side is this is a fundamental grappling with cyclic cycloality and what has been in the commoditized industry. China. China DRAM and NAND is coming. It's coming from Japan. There's more capacity coming online. This is a story of these prices aren't here forever.

[Kelly Evans]

All right, see xmt. I think those are four letters to know, Tim. Really appreciate it. Thanks, Tim Seymour. And that's it for us. Thanks for watching the Exchange. We'll pick things up with Brian Sullivan right after the break. You've been listening to the Exchange. Make sure you're subscribed to get each episode every day, same time, same place.

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