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Nvidia Invests in OpenAI, Pfizer Pushes into Obesity and $100K H-1B Visas 9/22/25
00:43:57
Nvidia shares hit a record high after announcing a $100 billion investment in OpenAI. Is Pfizer about to become a major player in the obesity space? Plus, how Trump's new $100K H-1B visa could impact hiring.
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- [00:00]
Jeff Bridges
Morning, Zoe. Got donuts.
- [00:02]
Dana
Jeff Bridges, why are you still living above our garage?
- [00:05]
Jeff Bridges
Well, I dig the mattress and I want to be in a T mobile commercial like you teach me. So Dana.
- [00:12]
Melissa Lee
Oh no, I'm not really prepared.
- [00:15]
Dana
I couldn't possibly at t mobile get the new iPhone 17 Pro on them. It's designed to be the most powerful.
- [00:21]
Melissa Lee
Iphone yet and has the ultimate pro camera system.
- [00:24]
Jeff Bridges
Wow, impressive. Let me try. T mobile is the best place to get iPhone 17 Pro because they've got the best network.
- [00:31]
Melissa Lee
Nice. Je free. You heard them.
- [00:33]
Jeff Bridges
T mobile is the best place to get the new iPhone 17 Pro on us with eligible traded in any condition. So what are we having for lunch?
- [00:42]
Melissa Lee
Dude, my work here is done.
- [00:44]
Jeff Bridges
The 24 month bill credits on experience beyond for well qualified customers + tax and 35 device connection charge credit send and balance due if you pay off earlier Cancel Finance agreement. IPhone 17 Pro 256 gigs 1099.99 A new line minimum 100 plus a month plan with auto pay plus taxes and fees required. Best mobile network in the US based on analysis by Oklahoma Speed Test Intelligence Data 1H 2025 Visit t mobile.com it's not rocket science. Grayscale has been educ investors on crypto for over a decade. Grayscale invest in your share of the future.
- [01:09]
Mike Santoli
Investing involves risk and possible loss of principle. Visit grayscale.com for more information.
- [01:15]
Melissa Lee
You're listening to the exchange.
- [01:17]
Dana
Here's today's show.
- [01:23]
Melissa Lee
Thank you, Scott. Welcome to the Exchange. I'm Melissa Lee along with Mike Santoli. Stocks modestly higher with the S and P and Nasdaq starting the new week with record highs. A big tech mix. Nvidia, Apple, Tesla, the upside standout. Strong demand signals on open happening weekend for the iPhone 17. T Mobile CEO telling CNBC it was their biggest iPhone weekend ever. And of course Nvidia hitting a record high after making a big announcement just moments ago for $100 billion partnership with Open Air. We'll have much more on that in just a moment.
- [01:51]
Mike Santoli
Gold also setting another record. It's on track for its 36th record close this year. Silver trading at the highest level in 14 years as well. Crypto meanwhile, selling off a bit. Bitcoin down 2 1/2% or so. You see a theory and down 7% at the moment. You know, we come into this week with the market arguably due for a breather, looking a little stretch. We got the Fed news out of the way. Maybe it's time for a rest. And the majority of the market is resting. Most stocks are down today. But in a very familiar story, you have just another enough of an upside push in some of the old familiar favorites in Mega Cap and you have the indexes moving ahead right now, even though yields are kind of trickling higher as well.
- [02:34]
Melissa Lee
Yeah. And it is amazing in a way, you know, that Apple is doing so well today afterwards because you know, it had such a big rally on tariff relief and going into the iPhone launch and then even after that for analysts to come out and say today and yesterday over the weekend, analysts like a Dan Ice, for instance, a big bull on Apple, that it actually did better than by by about 10 to 15% really speaks volumes in terms of how low the expectations were going in, in terms of the number of phones that would be sold.
- [03:01]
Mike Santoli
It does. It also shows to me whenever you have one of the Mag 7 names that has this long period in the wilderness and everybody kind of writes it off and neglected. We saw it with Alphabet, comes roaring back as soon as you have a little fundamental excuse and it just kind of gets locked into the same momentum mode. So maybe that's also what we're seeing. Also the fringes of the market, you know, the meme stock stuff and the recent ipo, they're all kind of flying. So we'll see if that actually comes back to bite at some point. We do begin though with that big news in the chips world. Just in the last hour, CNBC breaking the news that Nvidia will invest up to $100 billion in OpenAI as part of a data center build out. This partnership is about building an AI infrastructure that enables AI to go from the labs into the world. This is about the AI industrial revolution arriving. It's a very big deal.
- [03:58]
Angelica Peebles
As Jensen said, building this infrastructure is critical to everything we want to do without. Without doing this, we cannot deliver the services people want. We can't keep making better models. And now that we really see what's on the near term horizon of how good the models are getting, the new use cases that are being enabled, what people want to do. This is like the fuel that we need to drive improvement, to drive, drive better models, to drive revenue, everything.
- [04:22]
Mike Santoli
Nvidia shares hitting a record high on that news. Let's bring in Stacey Raskin, senior analyst at Bernstein covering U.S. semiconductor. Stacy, great to have your way in here. First off, do we have a sense of exactly mechanically how this is going to work? Is Nvidia giving over time 100 billion in cash as an investment in open air and they'll come back and buy Nvidia products. Is it going to be an investment in in kind in products or do we not know yet?
- [04:50]
Jeff Bridges
I don't think we know anything yet. They said that the details will be worked out I guess published over the next few weeks. It sounds like though that the 100 billion it looks like it's incremental as the capacity is built out. So the first 10 billion looks like it's going to come in the second half of next year as they ramp up Vera Rubin over to open AI. So I wouldn't anticipate that there's 100 billion lump sum all at once. It looks like it'll come out over time, over some period of time as they build out up to what looks to be 10 gigawatts of capacity the first gigawatt second half of next year.
- [05:23]
Mike Santoli
And what is your key inference from this in the sense of what it means for size of the market, the pace of the build out, whether there's still scarcity, whether there's enough power to have this all happen?
- [05:35]
Jeff Bridges
Yeah, yeah, no, those are all great questions. I mean look, as of right now we clearly there's, I mean one of the primary overarching themes seems to be a shortage of compute. Everybody out there who's involved in this seems to still be scrambling for, for compute. And so I do think that that is, is, is part of this. And you know, Jensen's throwing out some big numbers for what he thought infrastructure spending would be by the end of the decade. I think he said 3 to 4 trillion. Like, like who knows? I don't know how big, but I do think that it's big. So you have that. I think the power question is very interesting. You know, I think customers are lining up a power in front of these kinds of investments on years in advance because the power infrastructure as it sits isn't there. That has to be put in, in front. And people have really thought about whether or not power might actually be like the primary constraint as we ramp all this up over time. It may not even be compute like over time. I mean look, Open Air has, has very, we, we saw with Oracle and some others last week. Open Air has some, some very robust goals for what they want to bring to the market. To the world of AI. There's a lot of infrastructure that needs to be put in place. I guess they, they see this is as one of the better ways to actually get that, get that done TBD on the mechanics and what this will look like as it ramps out over the next, presumably over the next several years.
- [06:58]
Melissa Lee
Stacey Jensen, during the John Ford interview said that this is additive to anything that we've contracted already. And so do you, do you read that as this is effectively a guidance raise?
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Jeff Bridges
Well, I mean, they haven't given specific guidance on revenues and he's already given some very sizable numbers for infrastructure spend. But I mean, fine, like if it makes it, if it makes it easier for me to believe a $3 trillion infrastructure number, I don't need it to be upside to that. If it makes that number more plausible, I think that's fine, frankly.
- [07:30]
Melissa Lee
But you mentioned that we're going to get a lot of the details in the coming days because it hasn't been finalized. But at the same time, how do you get excited? Do you think the market is right to boost the stock by about 4% when it's Nvidia giving over money for them to buy chips? I mean, it seems like a shell game almost. Can you walk us through that logic?
- [07:50]
Jeff Bridges
You could argue either way. So right now, again, the stock is up and again you can argue that at least I can chalk in numbers like revenue dollars that are clearly going to be there next year. And you know, this has been the story on the space in general. I mean, for two or three years now, it's been number go up and like number seems like it's still going up at the same time. Like I hear you, you know, that's. There's already been some worries about, you know, if you want to call it like circular dynamics here, you know, where in video or others are like funding customers who are using that money to buy parts and to buy infrastructure. And certainly this is, we've seen some things like that on a, on a much smaller scale. This is, this is bigger and I mean it will clearly like start to raise some questions, especially as this goes. But at least in the very near term, at least today, like the number go up thesis seems to be carrying. At least, at least today.
- [08:40]
Mike Santoli
Yeah. And I guess, you know, the risk has been arguably overthinking it. Right beyond what you just said. Right. It's going so fast. It's. The numbers are getting large in a hurry and it seems if all the players are racing to keep up. Every single week there's been one of these signature announcements. It was Oracle's revenue guidance last week, even the Nvidia intel news, it got the stocks excited. And now you have this. So I guess where would you navigate within your group in terms of sticking with what's already the obvious winning category or looking for Other things, I mean.
- [09:16]
Jeff Bridges
Look, our general call on the space this year, if I wanted to sum it up in one sentence, was, was pretty much own the high quality names and ignore most of the rest. And I still think that's probably valid. We can have what I think is a legitimate debate on sustainability and everything that these types of things will raise those questions. But at the same time, right now I don't think the trade is over and I still would want to be in the high quality in my coverage. That would be Nvidia, that would be Broadcom, those kinds of names.
- [09:42]
Melissa Lee
At the same time for Broadcom, you saw the stock take a dip exactly when this was announced. As you know. Wondering how you interpret that.
- [09:48]
Jeff Bridges
Well, I mean Broadcom, when they reported not that long ago, they reported a very sizable new customer for some of their customer A6 next year, which is widely believed now to be open AI. I'm not sure that this is the same thing. That looked to be much more of an inference part. Especially if they're delivering like the brand new, like Ruben. I don't know if this again just the scale of this. I wonder if this would be more around training versus inference. I don't know that this necessarily has anything to do with. With each of these had anything to do with the other. But I do think, I mean look, to the extent that Broadcom was rising on Open Air hopes, if Open Air is going big with somebody else, I'm not surprised that Broadcom is not off that much but off a little bit today on the. It doesn't shock me.
- [10:31]
Mike Santoli
Yeah, Open Air seems to be going big with anyone it can find. Maybe it's not exclusive. We'll see what that all means. Stacey, great to catch up with you. Thank you.
- [10:40]
Jeff Bridges
You bet.
- [10:41]
Mike Santoli
All right, coming up, the S and P and NASDAQ are at all time highs. But our market guest is still only seeing bullish inflows in the options market. We'll get her read on whether the rally has come too far too fast.
- [10:53]
Melissa Lee
But first, the biotech deal of the day. Pfizer buying weight loss drug maker Matsera in a $7 billion deal. Will it be enough for Pfizer to move the needle in OBEs? What's next? The exchange is back right after this.
- [11:07]
Mike Santoli
This is the exchange on cnbc.
- [11:14]
Jeff Bridges
Morning, Zoe. Got donuts.
- [11:16]
Dana
Jeff Bridges, why are you still living above our garage?
- [11:19]
Jeff Bridges
Well, I dig the mattress and I want to be in a T mobile commercial like you teach me. So Dana.
- [11:26]
Melissa Lee
Oh no, I'm not really prepared.
- [11:28]
Dana
I couldn't possibly at T Mobile get the new iPhone 17 Pro on them. It's designed the most powerful iPhone yet.
- [11:35]
Melissa Lee
And has the ultimate pro camera system. Wow.
- [11:38]
Jeff Bridges
Impressive. Let me try. T Mobile is the best place to get iPhone 17 Pro because they've got the best network.
- [11:45]
Melissa Lee
Nice. Jeffrey, you heard them.
- [11:47]
Jeff Bridges
T Mobile is the best place to get the new iPhone 17 Pro on us with eligible trade in in any condition. So what are we having for launch?
- [11:55]
Melissa Lee
Dude, my work here is done with.
- [11:58]
Jeff Bridges
24 monthly bill credits on experience beyond for well qualified customers plus tax and $35 device connection charge credit send and balance due if you pay off earlier. Cancel Finance Agreement. IPhone 17 Pro 256 gigs 1099GB 29.99 A new line minimum $100 plus a month plan with auto pay plus taxes and fees required. Best mobile network in the US based on analysis by Ooklab Speed Test Intelligence data 1H 2025 Visit t mobile.com it's not rocket science. Grayscale has been educating investors on crypto for over a decade. Grayscale Invest in your share of the future.
- [12:22]
Mike Santoli
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- [13:01]
Mike Santoli
Welcome back to the Exchange. Pfizer is buying weight loss drug maker Med Serra as it tries to break into the growing obesity drug market. Angelica Peebles has the details. Hi Angelica.
- [13:11]
Emily Wilkins
Hey Mike. That's right. Pfizer is paying nearly $5 billion upfront and up to about 7 billion for Medcera and its portfolio of experimental obesity shots and pills. So Medcera's most developed drug is a GLP1 shot that can be given weekly or monthly. They're focused on weekly and we're expecting data on that drug really any day now. And Pfizer executives today suggest suggesting that they saw at least some of those results before they made this deal, and they like what they see. But Sarah is already planning to start phase three trials next year for that drug. But the bigger opportunity that Pfizer sees is combining the GLP one shot with another drug that Medcera is developing that targets a different gut hormone called amylin. And Pfizer executives on an investor call this morning saying that they believe the combination could deliver category leading efficacy and competitive tolerability, which they think will make a highly competitive and convenient treatment option. And of course that's the question we're right now is how are you going to compete with what's on the market? But it'll be at least a few years before any of these drugs might reach the market. It's still probably faster than if Pfizer didn't make a move. Remember, Pfizer was working on pills that just weren't very well tolerated. And so this is a space that Pfizer has been very much wanting to get into. And this gives them a faster path. Lyric analysts predicting that the Matsera acquisition alone could give Pfizer at least $5 billion and in peak sales. So definitely an interesting move, guys.
- [14:32]
Melissa Lee
But in terms of that Ambulance Amelien analog shot, Angelica, that's still in early stages, which you mentioned. And it would also be going head to head with a Lilly Amylin program, which is already, I think, at a more advanced stage at this point.
- [14:47]
Emily Wilkins
Yeah, so that is an early stage. It's phase one. And so at this point, you know, it's going to be years even just to get that GLP1 shot, the standalone on the market. I've seen analysts talking about 2028, 2029. So we are talking years down the. But listening to Pfizer this morning, what they think is really differentiated is the fact that it's a monthly dosing. So even if you have category Summer, right from Novo, for example, that that's a weekly shot. Here's something that's monthly. And so that's where they see the biggest role at this point. And that's why they're so excited. But again, like you said, there's going to be competition. You have everybody really working on Ambulance right now. This is kind of the next big thing. You have Lilly, Novo. Everyone wants to get on this space, space. So the question for Pfizer is really, you know, can you compete and how are you going to make sure this is competitive towards the end, if not the early part of the next decade?
- [15:37]
Mike Santoli
Yeah, Angelica, we're showing Pfizer shares up, you know, three quarters of 1%, not very much, but being up when you're paying out, you know, upfront for revenues that are going to be pretty far down the road, I guess it shows that the market just wants these companies to be involved and have some kind of laying the groundwork to be in this segment when the rest of the business is considered to be, you know, no growth.
- [16:02]
Emily Wilkins
Yeah. I mean, for Pfizer especially. Right. They have so many questions. Like a lot of other big pharma companies, they're expecting patent losses towards the end of this decade. So they need something. And there are a lot of questions I think that they have, you know, that have been raised this year about where exactly the obesity market goes. Is it just Lillian Novo winner take all, or can these other companies come out and be competitive? And I think for Pfizer going after Midseratsera is one of the hottest companies out there right now in this space. They just went public back in January and already getting scooped up. I've heard it was a competitive process. Pfizer had to make these negotiations. You know, we'll get, of course, more of those details when the regulatory filing comes out, but they talked about that a little bit today. And so, you know, I think for Pfizer, there are questions. They've had some deals that haven't really panned out for them in the past few years, but they still have, you know, of course, that big seegin deal that they're hoping will pay off. And today they, you know, sort of presented it as oncology is one area where they've already made these big bets and now they see internal medicine, including obesity, as another main area for them. So, you know, I think another area to watch.
- [17:10]
Melissa Lee
Angelica, thanks. Angelica Peebles, our next guest, says this move makes Pfizer a more credible threat in the obesity landscape. For more, let's bring in Evan Segerman, head of health care research at BMO Capital Markets. Evan, great to have you with us.
- [17:22]
Angelica Peebles
Thank you for having me.
- [17:23]
Melissa Lee
You've got a buy rating on Pfizer and a $30 price target. I'm wondering, buying this portfolio of very experimental obesity drugs, that is phase one drugs, effectively, does this make you a lot more bullish?
- [17:36]
Angelica Peebles
I am bullish because I think Pfizer's foray into obesity has been. We've been waiting for this to happen. Lodoglopron, Daniel, Glipron, their small molecule glip1s didn't really go anywhere. I feel like they can really make a mark here. What's most notable to me is that they have once monthly assets coming from the medsara portfolio, which is different than anything Lilly or Novo has. We've talked a lot about Amgen's Maritide, but there were tolerability issues back presented at the ADA meeting. So I am excited. I also want to note that their oral peptide does not have the food effect. We've talked a lot about this, me and you, Melissa, about having to fast before you take oral semaglutide. You don't have to do that with this product.
- [18:14]
Melissa Lee
So in terms of the. The amolin offering, the amylin analog, do you think that they could actually compete against a Novo and a Lilly whose programs are more advanced than the ones that they're acquiring from Medcera? Or do you have. Do you have to believe that the obesity drug market is so big that there are room for a few different Amylon competitors?
- [18:34]
Angelica Peebles
I think both. I think it's going to be that big. And I think in order to be successful, you really have to have scale. This is a market that is going to be driven by volume and not by price. We've seen that pricing already under pressure from both Lilly and Novo. When it comes to competing versus Lilly and Novo in the Amblin space, I think that the once monthly option and the oral option that they also have could be very interesting. Category seven was.
- [18:56]
Mike Santoli
Okay.
- [18:57]
Angelica Peebles
We've spoken about that as well. It kind of disappointed last year, so it's not really the most exciting. And of course, Nova's gonna have manufacturing challenges because there's a dual chambered pen component, so it's a little harder to make.
- [19:09]
Mike Santoli
Evan, it strikes me that when you see these obesity treatments having so many other effects, beneficial effects on so many other conditions, if you're a big pharmaceutical company serving all these other markets with different diseases and conditions, I guess you have to feel as if, you know, obesity might be kind of the skeleton key to a lot of this stuff. And you have to protect yourself by being involved in a big way. Can everybody be involved?
- [19:34]
Angelica Peebles
I don't know if everyone can be involved because there's a lot of infrastructure buildup that's required to be successful. You really need to have a large field force when you're eventually selling these. You need to have big, complex contracts with the payers. But to your point, obesity is a precursor to many diseases. So if a big pharma company wants to be successful and really help human health, this is a great place to start.
- [19:55]
Melissa Lee
Last week we had a lot of data from the diabetes meeting in Vienna. And I'm just wondering if, in your mind, if something has changed amongst investors for Novo. It does seem that there's been a major sentiment change, a flip, if you will, of the switch in terms of how much more bullish investors are getting on Novo given the data readouts they got last week in different surveys.
- [20:17]
Angelica Peebles
Right. I think that, you know, folks like the valuation disconnect between Lilly and Novo. Novo trades at a bit of a discount. I also think they like the fact that the new CEO is coming in. They're really making some changes. I've gotten some inbounds, most recently on the Evoke trial, which is looking at oral semaglutide and Alzheimer's disease. I think a lot of folks are really interested in that. That data is going to be presented at a meeting in December. So people are warming up. But from my perspective, I want to see more kind of action and more results before I do that upgrade.
- [20:48]
Melissa Lee
All right, the jury's out for you still. Evan, great to see you. Thanks.
- [20:52]
Angelica Peebles
Thank you.
- [20:52]
Mike Santoli
Evan Siegerman Coming up, Oracle shares hitting an all time high as the cloud giant announces a C suite. Shake up the details and what it could mean for the negotiations around Tick Tock. Just ahead.
- [21:10]
Jeff Bridges
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- [21:41]
Angelica Peebles
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford 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 may impact your trading. Download the latest episode and subscribe at schwab.com/market update podcast or find Schwab Market Update wherever you get your podcasts.
- [22:13]
Mike Santoli
That big in video Open Air news we got less than an hour ago really highlights the size of the dollar values going into AI infrastructure build out. Well here is the aggregated numbers for all invest information technology capital investments as a percent of gdp. It's very material right now. Now it's close to four and a half percent. The only other time it was this high is right around the year 2000. You see how fast it ramped back in the late 90s from about 3% of GDP up almost to 4 and a half percent. I mean right now 5% of GDP is like a trillion and a half dollars. So these are real dollars also maybe helps explain some of the dissonance with, you know, we have a weak labor market. Some parts of the economy are looking like they're squeezed or stalling out. Meanwhile, now we're tracking 2 to 3% real GDP at least based on Atlanta Fed. So I capex a big piece of that. The question is, is it overbuilding? Are people going to overshoot on this one the way we did last time? That is something that remains to be seen. Let's get over to Kate Rogers now for a CNBC news update.
- [23:15]
Melissa Lee
Hi Mike.
- [23:15]
Kate Rogers
The new US Envoy to the United.
- [23:18]
Stephanie Roth
Nations, Michael Waltz, said the US and its allies will, quote, defend every inch of NATO territory. In his first appearance since becoming ambassador, Waltz made the comments during a Security Council meeting regarding Russia's violation of Estonian airspace on Friday. Russia, for its part, is accusing Estonia of falsely claiming that the jets violated its airspace. Florida is launching a tool today to combat violent extremism in the state. The state's attorney general, James Uckmeyer said Florida residents can report acts or threats of violence. Anonymous previously of Meyer said it was important to, quote, protect a free market of ideas in reference to the assassination of conservative political activist Charlie Kirk earlier this month. And Nissan is developing vehicles with self driving technology. The Japanese automaker will use technology from the UK Based AI startup Wave. Nissan said the vehicles are set to be available in 2027, but it didn't say which models will come with that self driving technology. Nissan's newly appointed CEO has been trying to turn around the business back over to you.
- [24:23]
Melissa Lee
Thank you, Kate. Kate Rogers, coming up, companies scrambling as President Trump slaps a $100,000 fee on H1B visas. Our next guest says this is posing a serious risk to the program and to two sectors in particular. As we head to break, here's a look at two utility names climbing on the back of that Nvidia Open Air News Vistra hitting a record high while Constellation is now less than 4% from last month's all time high. Back right after this. Welcome back to the Exchange Evercore, writing that while the odds of a bubble scenario for stocks are increasing, there's still a long way to go for that to become reality. The S and P and NASDAQ touching record highs yet again today. Our next guest says she is only seeing bullish signs right now. Joining us with a read on the options market, Mandy sue, head of derivatives market intelligence at CBO Global Markets. Manny, great to have you with us.
- [25:17]
Mandy Zhu Sebo
Hey Melissa, great to be here.
- [25:19]
Melissa Lee
So I'm wondering if the bullish activity if that sort of tenor change at all post Fed or has it been bullish all along?
- [25:26]
Mandy Zhu Sebo
So if anything, I would say the bullish activity has actually picked up following the Fed meeting last week. So, for example, on Friday we had a record amount of single stock options trade in the market. 54 million contracts, and most of it actually coming from the call side. And I would say in particular, we're seeing it obviously in the names in the max 7, but also at the index and sector level, we're seeing it a lot of times in these small caps. So people playing catch up in the market using options, small cap stocks obviously having lagged the broader market quite a bit so far this year when it.
- [26:01]
Melissa Lee
Comes to the big cap tech names and when it comes to index options. Manny, are you getting the sense that this is to protect positions, that they're hedging positions, or are they actually getting more bullish?
- [26:12]
Mandy Zhu Sebo
I would say it's a good mix.
- [26:14]
Melissa Lee
Yeah.
- [26:14]
Mandy Zhu Sebo
So people think obviously options typically tend to be speculative, but a lot of people could be using it to replace underlying stock positions, in which case it's actually taking risk off the table. One metric that I do want to highlight is that something that we track is looking at the large cap names in the market and seeing how many of those names trade with what we call inverted cost skew, which means actually so much demand for those upside calls that the calls are actually more expensive than the at the money options, which has historically is very rare. Last week that percentage went from 3% to 12%, so quadrupled in the matter of a week, which is very unusual.
- [26:53]
Mike Santoli
You mentioned it's unusual. It's rare to see that kind of pricing activity, but what does it represent? Is it show overaggressiveness on the, on the bullish side, people willing to pay up that aggressively for that upside exposure?
- [27:07]
Mandy Zhu Sebo
Yes, we're seeing it in the single stock activity. In terms of the flurry of bullish call buying that we're seeing, the index side, we're seeing a decline in hedging demand. So if you look at like the cost of puts, for example, those upside calls, so you put those two together, that to me tells me that investors really reaching for the upside here using options. And I think, you know, it contrasts obviously also with what's going on in the underlying stocks. Because if you look at the sector rotation that we saw last week, there's certainly a big shift away from the defensive initiatives towards the cyclical sectors. So, you know, I would say the risk on sentiment, you can see it through options. And you also see it through the underlying sector rotation that we saw last week as well.
- [27:50]
Melissa Lee
So the options market on equities indicate bullishness and at the same time you're seeing in terms of the auction options activity in bonds that the bond market is actually pricing in higher inflation. So is the message overall that the markets are signaling a growth environment? Environment.
- [28:07]
Mandy Zhu Sebo
So I don't think so. I think this is where markets could be vulnerable kind of in the week, the month ahead is that right now both the bond market and the stock market are signaling that the Fed is going to shift focus away from inflation towards the weakening labor market. And this is despite expected inflation actually rising. If you look at what is being priced into the bond market, is that going to actually going to happen? Will the Fed really kind of look through if CPI goes core, CPI goes above 3%, will they cut rates as expected? I think that's to be seen. That's the first point. And the second is that people I think are focusing on the rate cuts and the easing of financial conditions and not on the underlying reason why and that is the weakening economy. So to me, you know, those are kind of, you know, what I would watch for is if we do start to see either a pickup in inflation or a more dramatic deterioration in the labor market and underlying economic data. Because that I think is what could potentially be a hiccup for markets down the line.
- [29:05]
Melissa Lee
Mandy, thanks. Nice to see you. Mandy Zhu Sebo.
- [29:10]
Mike Santoli
Coming up, Oracle shares higher after big C suite changes the details and the role Oracle will play in the future of tick tock. Next.
- [29:35]
Melissa Lee
A surprise executive shakeup at Oracle Software. Kat stepping down as CEO as a software company splits the role in two Christina Parts and evil has got more on today's tech check. Christina.
- [29:44]
Dana
Melissa Oracle is making its biggest leadership move in just a decade. Like you said, set for Safra Katz stepping down after 11 years as CEO to become executive vice chair of the board. She's handing the reins to two technical insiders as co CEOs you got Clay McGorick and Mike Cecilia. This isn't though your typical succession story. Oracle deliberately choosing to technical leaders and they use the term technical even on the press call this morning over traditional business executives. Clay McGaugh joined Oracle in 2014 from Amazon Web Services. He built Oracle cloud infrastructure from the ground up. Cecilia oversees industry specific applications and AI solutions. And so Oracle at this moment in time too is just really riding an unprecedented wave of AI driven demand. The company is part of a consortium with Silver Lake and Andreessen Horowitz to control 80% of TikTok's US operations. Maybe this frees up cats to be involved with that. Bloomberg reports Oracle is in talks with Meta for a $20 billion cloud deal. The deal would power AI model trading and deployment. Overall though, the CEO transition really reflects the broader shift towards technical leadership over the, dare I say, traditional MBA style management. Oracle has evolved, we know, from a legacy software firm to an AI infrastructure powerhouse. Katz guided that transition, no doubt. The stock, even just this year alone has soared 95%. Now Oracle needs leaders who can execute billion dollar technical contracts and that's where those two CEOs come into play.
- [31:09]
Melissa Lee
And what does this mean for the TikTok deal, Christina?
- [31:12]
Dana
Well, TikTok keep in mind ByteDance owns 20% stake in TikTok. TikTok is said to give or copy the algorithm and share it with the United States. The United States is going to test that algorithm, retrain it. Oracle would play a huge role in monitoring that. And the fact that you have this transition, you have two technical guys that understand the infrastructure as well as the applications that build on top of it. Very relevant to Tick Tock. And there's speculation that maybe Safra cats would have a bigger role in the joint venture that they're building here in the United states specifically for TikTok.
- [31:45]
Mike Santoli
And Christina, the I guess just reading between the lines you mentioned the backgrounds of the two new CEOs here. Does it imply that the kind of that legacy business that we always knew Oracle for, for decades is just, you know, it just kind of takes care.
- [31:59]
Dana
Of itself essentially because one of them, McGurk has been there since 2014 and has understands that legacy build business and they're all trying to take it to the next level. And it makes me think of a Bank of America note that I read very recently talking about in a US Tech apology tour and how we always say that these guys are, you know, legacy players but have really revamped themselves to be relevant in the times. Maybe IBM is missing from that pack, but Oracle is one of those names that has really been part of all of these infrastructure deals that are constantly being announced with OpenAI, Stargate, you name it, sovereign AI buildouts in Europe and the Middle East. So Oracle is definitely moving beyond just that legacy business.
- [32:42]
Mike Santoli
Yeah, I guess. You know you mentioned IBM might be off of that list. It's almost as if Oracle is Broadcast is sort of the shining example of the reinvention.
- [32:51]
Dana
I would imagine you could throw Cisco though too.
- [32:54]
Mike Santoli
I suppose Cisco is involved. I mean, frankly, Broadcom, you know, if you look, yes. If you looked six, seven, eight years ago, what really comprised Broadcom, it's it was not exactly, you know, leading edge going to build the future.
- [33:07]
Dana
And to that point, there was a note or research coming from Asia today saying that Broadcom could overtake Nvidia in terms of being the second largest, largest customer for tsmc, which I think is very telling, speaking to Broadcom's custom chip business and how important that's going to be in the near future. The stock, though, is down about one and a half percent solely because Nvidia and OpenAI, you know, discussed their deal about teaming UP and building 10 gigawatts. But Broadcom, perhaps this could be a buying opportunity because they're still very much part of this equation for sure.
- [33:39]
Mike Santoli
Yeah. Stacey Raskin saying that maybe, maybe OpenAI is not the mystery buyer that Broadcom is had mentioned. I mean, everyone is trying to, I guess, get the leg up on on the next secret deal. Christina, thanks very much.
- [33:51]
Dana
Thank you.
- [33:52]
Mike Santoli
All right, coming up, President Trump revamping the H1B visa application process. And it could have big implications for big tech. That is next. As you hit your break, check out shares of StubHub falling for a fourth straight day since its debut in an IPO last week. Remember, shares priced at 2350, they are now 24% below that level. We are back right at the.
- [34:33]
Melissa Lee
Welcome back to the exchange. President Trump increasing the fee for an H1B visa to $100,000. Emily Wilkins joins us from D.C. with the story and the potential fallout. Emily?
- [34:44]
Kate Rogers
Hey, Melissa. Well, yeah, as you said, White House, they're now attempting to calm some of the concerns that businesses have around that new $100,000 fee for H1B visas was announced on Friday, went into effect just yesterday. So lots of scrambling still. But that 100,000 fee, it only applies to new applicants, not current visa holders. And it's a huge jump still from the current cost of a balance 1700 and about 4500. That's what it normally costs a company. But Trump administration officials say that they really want companies to prioritize American workers and that's what this is designed to do. Now, exemptions from the fee can also be made on a case by case basis according to a White House fact sheet. That would be done by the Homeland Security Department if that exemption serves the national interest. And that could apply not just to certain tech workers, but also top skilled individuals in other fields like trained physicians who usually serve in rural areas on this visa the announcement did lead to panic and confusion. Over the weekend. You saw Microsoft, Amazon, Goldman Sachs, all among companies sending urgent messages advising employees to not leave the country. Amazon currently has the highest number of employees with an H1B visa with over 10,000. Microsoft and Metta both have over 5,000. More changes relating to the visas are expected. The Labor Department is now tasked with updating the prevailing wage levels for the H1B program. And Homeland Security will also be coming up with a more detailed rule on how to prioritize high skilled and High paid H1B workers.
- [36:20]
Melissa Lee
Melissa, at the same time, Emily, this is all part of a suite of measures surrounding immigration. Can you give us sort of the high level view? Because there's also the gold card, the platinum card. They're increasing the fees here. It seems like, like if you can afford it, you can find a way to the United States.
- [36:36]
Kate Rogers
You know, Melissa, that is sort of the very interesting thing that's happening concurrently with this, the Trump administration opening up this path for those who have the money to be able to pay to come to the US And I think this all circles back to what the Trump administration initially promised, what Trump promised on the campaign trail with changes to how immigration would work. I think the question here is what kind of pushback is he now going to be hearing from Elon Musk, Musk, from Jeff Bezos, from all these other tech CEOs who have, you know, really had very close relationship with Trump in his second term? How might they wind up pushing or changing some of these policies? Very curious to actually see what Homeland Security comes up with when they come up with the rule, because that will be much, much, much more detailed and see if there are any potential loopholes for some of these tech companies to continue bringing these talented, high skilled individuals.
- [37:27]
Mike Santoli
Into the U.S. yeah, I guess, Emily, from the administration's point of view, they're at least in part making the argument that this program has been utilized just to kind of source kind of rank and file tech workers to some degree, as opposed to strictly those with, you know, particular skills that can't be replicated here. I guess that'll be put to the test as well.
- [37:49]
Kate Rogers
Yeah, that, that is what the White House has claimed. But then again, you've already seen pushback from a number of these companies saying, hey, we need the best and the brightest to be here in the, we want them here to be innovating, we want them here to be leading, and we cannot get the best and brightest from the entire world if we do not have an ability to bring them. And it should be noted that with some of these bigger tech companies, they're probably going to be able to still find a way to bring the absolute best to the US and working for the company. But it's a lot of these smaller companies, the ones that we think of as the disruptors, the ones we think of as coming up with some of these new and bolder innovations that really could be hindered if they're not able to get those visas ideas or if folks studying in the US and have these big ideas can't be able to stay because they simply do not have that hundred thousand dollar fee.
- [38:37]
Mike Santoli
Yeah, for sure. Totally changes the equation for, for those companies. Emily, thank you. Our next guest says the administration's changes pose serious risk to both the program and to companies, particularly in tech and finance. Joining us now is Stephanie Roth, chief economist at Wolff Research. Stephanie, you've crunched some of these numbers, I guess to, to try and figure out exactly what it might mean in terms of cost, in terms of maybe number of workers and effect on the labor supply. What are the, the main findings?
- [39:06]
Stephanie Roth
I think the first thing to focus on is the median wage for these people. It's about 120,000. So to the point that was made earlier, perhaps it's not all companies just bringing in very high skill level of workers. It might be the more mainstream type of tech workers which they could potentially source from the US So it is very likely that the program will be reduced significantly in size when we get to next year. And by the way, the youth unemployment rate is fairly high in this country. So it is very possible that companies will be able to source a bit more from the US which then puts the program at more significant risk.
- [39:39]
Mike Santoli
I mean, what are the numbers? I mean, I think annually it's a few hundred thousand that are new visa holders that are brought in. Is there that much slack of this type of worker in among US employees that could be filling those roles?
- [39:56]
Stephanie Roth
Yeah. So the program is currently about nearly 400,000 visa holders, but that's given that the program is three years with a possible three year extension every year it's up to about 85,000 workers. So to the extent that a large share of them could be sourced from internal and then the rest of it can be sourced externally for the companies that are willing to pay the fee. And it's a one time fee, not an annual fee as was initially alluded to on Friday.
- [40:20]
Melissa Lee
But in terms of the idea that, you know, companies are sourcing, not extremely specialized individuals to come to The United States and they're overlooking U.S. candidates. Are there the U.S. candidates to fill these jobs that have traditionally been filled by H1B visa holders and if they do fill from the United States, presumably the wage would be higher.
- [40:43]
Stephanie Roth
Yes, that is fair. While technically the rule is that they have to be paid a wage that's similar to the wages for their foreign born counterparts, given location and industry, there's evidence that they're getting paid more similar for an older worker compared to the native born counterpart. So it does appear like there is a bit of a sort of wage gap, that these people are being hired at a bit of a discount. Although on paper they are paid a similar wage compared to sort of someone that's, that's more native born. As for number of people, the youth unemployment rate is nearly 10%. And then we are concerned about AI automating a lot of jobs out there. Well, a lot of these jobs are white collar jobs. So it is very possible this could be a help to the situation where we are concerned about AI taking a lot of white collar jobs. There might just be a reshuffling in the labor market. So perhaps there is some positives that could come out of this type of policy.
- [41:41]
Mike Santoli
I guess it's just, if nothing else, incrementally, another restraint on labor supply. We've already obviously been cracking down on, you know, you know, immigrant populations in general. And you also have seen a little bit of an erosion of not much, but I guess a little bit of standstill in the prime age labor force participation. So what do you make of the overall supply demand dynamics in the labor market and how do we read through that to figure out what the underlying economic trend is?
- [42:09]
Stephanie Roth
Yeah, so right now it's an interesting story because you, you are sitting here with blue collar workers. At the margin there is less supply of them. Granted, supply and demand have come back down pretty considerably throughout the course of this year because tariff policy has weighed on the economy. So now we're in a steady state balance where there is certainly a lot less supply of workers. But the demand has also come down quite a bit now into the future. We might have even reduced supply from a white collar worker perspective. But the challenge is to sort of model and estimate is AI could have a material impact in terms of the sort of the white collar labor force. So the expectation is net immigration will be quite slow for the next couple of years. That's not an area where I can have an impact, but it does have an impact on the white collar workers, which is exactly the program that we're talking about. And specifically it's tech, the medical field, perhaps there was some news today that perhaps that might see some exemptions. Finance is also a big driver of a lot of the hiring within this program. So these are the parts where I might be coming from the job. So we might actually be in an environment where supply and demand, even on the white collar side, is sort of more balanced as well. Because, because right now there is more of a supply than a demand, which is why you're seeing the unemployment rate start to edge up in a lot of these areas, right?
- [43:27]
Mike Santoli
Yeah. So this could, I guess, maybe mitigate that, the effect, I guess that we're waiting to see in tangible terms. Stephanie Roth from Wolff, thank you very much.
- [43:38]
Melissa Lee
Take a look at this. Baird is out with a list of companies in the tech and services sector that could be hit hard by these visa changes. Names like Infosys, Cognizant, Tata, Deloitte and IBM. You can head on over to CNBC.com for the full list. Coming up, a real estate deal, an EV pivot and the club's millennials and Gen Z can't get enough of all that. And more coming up in today's Rapid Fire. The Exchange will be right back. Welcome back to the Exchange. Let's catch you up on a few more stock stories that are on our radar. Time for Rapid Fire. First up, Compass agreeing to acquire rival Anywhere real estate parent company of Century 21, Coldwell Banker and Sotheby Properties for $1.6 billion. The deal could create a company with about $10 billion in enterprise value. Would be one of the largest residential brokerage deals ever. And of course, this comes at a very difficult time in the housing market when there's not a lot of velocity in transactions here.
- [44:39]
Mike Santoli
Yeah, textbook says. Okay. You have overcapacity because activity levels are low. You might want to kind of consolidate, become more efficient. It is a bit of a financial swing. You know, you saw some of the work. Compass shares are down, down. You know, there's some debt on anywhere and, and all the rest of it. So maybe a little bit risky on that front. Plus, I don't know if the economics of that business or where they were supposed to have changed a fair bit with those sort of like fee restrictions and things like that.
- [45:04]
Melissa Lee
Exactly.
- [45:05]
Mike Santoli
At this point, it just seems like a mop up.
- [45:07]
Melissa Lee
Yeah. I mean, it's interesting to see how big Compass has gotten just in terms of principal brokers. I mean, just because you're doing so many acquisitions, the number is up.23% in the latest quarter. So it's sort of an interesting. You want scale, but, but you don't really see the cost savings yet, but maybe that.
- [45:21]
Mike Santoli
Yeah, they say it'll be there.
- [45:22]
Melissa Lee
We'll see. Next up, we've got a few EV headlines today. Porsche shares posting their biggest drop ever after the company scaled back its EV plans, a pivot that will cost more than $2 billion. That forced both Porsche and parent Volkswagen to cut full year guidance. Meanwhile, Piper Sandler upped its price target on Tesla by $100 to $500, writing that while China may be Tesla's biggest competitor when it comes to EVs, those companies still look to Tesla, Tesla for guidance on, quote, real world AI. And speaking of Chinese EVs, a recent filing shows Berkshire Hathaway is sold out of its BYD stake entirely. Berkshire first bought BYD 17 years ago at Charlie Munger's urging. BYD's have soared more than 4,000% during the years Berkshire has owned them.
- [46:06]
Mike Santoli
Yeah, not bad. I mean it was during the financial crisis essentially that they were bought and we don't know where they, they've sold them but, but I don't know if there's a way to knit together all those things that if you are a from the ground up native EV maker, you have the opportunity to actually get scale and get the economics right. And then if you're, you know, legacy internal combustion engine maker, it's been tough for everybody to sort of invest in parallel with their core business.
- [46:32]
Melissa Lee
Yeah. And of course China and Europe, they're very competitive markets and there's a need and want for smaller, more affordable cars in those two markets specifically. So you see a bit of a shakeout there, especially when it comes to, to byd, which has been really competing very hard to the point of giving away price so much that margins are really being sacrificed.
- [46:49]
Mike Santoli
Transportation did see a BYD car did set the speed record in a German test track.
- [46:55]
Melissa Lee
Oh, so they perform as well.
- [46:57]
Mike Santoli
Yes, for certain production models.
- [47:00]
Melissa Lee
Right. All right, next up, data center ETF dtcr. Is the ticker on that one touching a record high last week? Up more than 7% so far this month. But this, this comes amid growing backlash against data centers. Florida Governor Ron DeSantis has been a vocal opponent due to power supply concerns in a recent report showing that $64 billion in projects have been canceled or postponed. His argument is that everyday Americans will pay much more for power.
- [47:25]
Mike Santoli
It's happening.
- [47:26]
Melissa Lee
These guys are. Power sucks.
- [47:27]
Mike Santoli
It's actually the source of a lot of political ads and things like that. Now they're not going to stop building them. It's just going to be hard for them to get through in a lot of local areas. So I think it's a growing story. Over time we'll see how it plays through.
- [47:37]
Melissa Lee
And then you see all these power companies. That's why they're trading on high vistra. We are highlighting Vistra and Constellation. Exactly. Well, that does it for us, right?
- [47:46]
Mike Santoli
We did it.
- [47:46]
Melissa Lee
Yep. We did it. Thank you for watching the Exchange. I'll see you tonight at 5 on fast power. Lunch starts right now. You've been listening to the Exchange.
- [47:54]
Dana
Make sure you're subscribed to get each episode every day, same time, same place.
- [48:00]
Mike Santoli
It's not rocket science.
- [48:02]
Jeff Bridges
Grayscale has been educating investors on crypto for over a decade. Grayscale invest in your share of the future.
- [48:08]
Mike Santoli
Investing involves risk and possible loss of principal. Visit grayscale.com for more information.