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Here's today's show. Thank you very much, Scott. Great stuff. Out with the old and in. No, see, I said it wrong. Out with the new, Christina. That's the new story today. Out with the new and in with the old. That's the market moves that we're watching here this afternoon. But is it a sign of risk off or just a healthy rotation? And where are the opportunities as the narrative keeps shifting? Welcome to the Exchange. I'm Kelly Evans. First and foremost, we're off the lows. The dow is down 500 points earlier. It's down 365 at the moment. The Nasdaq though is still on pace for its worst three day drop since last April. As for today's pain points, there are plenty of them. Bitcoin well below 70,000 now, just a hair over 66 with a 10% drop today. Silver's down about that much as well. The MTM momentum ETF is also in the red after a really tough week with Palantir. Oracle, they're leading the declines. And as the momentum trade unwinds, good old staples are back in fashion. That's what we mean. Out with the old new, in with the. I'll get by later on. Coke, McDonald's and Hershey are all at 52 week highs today. Hershey up nearly 8%. But we're watching software closely here with plenty of names still getting hit. Same goes for the alt asset space exposed to that trade. Blue Owl, Ares. Those are under pressure as well today. Ares to the tune of another 10%. The AI competition continues to drive the market narrative. And it's Game of Thrones out there, not just for software, but also between the leading models themselves. Kate Rooney has more of the details. Kate, we just had some new announcements. Welcome, Kelly. We did. It feels like every five minutes there's a massive announcement. So OpenAI now improving its coding offer amid really fierce competition with rival Anthropic. They're launching what they say is their most capable coding model today, the technical name GPT 5.3 Codex. They say it advances performance and reasoning. They claim it's 25% faster. Also say it sets a new industry high on certain benchmarks. This morning though, OpenAI also made a massive push into enterprise with this platform for Fortune 500 companies to basically manage AI agents. There has been a lot of one upping this week. Kelly. Just last hour, Anthropic released its own latest model. The company, of course, behind the agents that have really been sending chills to Wall street, wiping billions off the software sector. No surprise that Anthropic claims its models are the best and they called it a step function change in its speed and capabilities. All of this, Kelly, highlights. You called the Game of Thrones. I like that. Framing maybe Real Housewives for seeing between the giants incremental updates were seen to win more lucrative enterprise customers. They have also been trading barbs publicly. Anthropic rolled out a Super bowl ad at Parodies OpenAI's move into advertising. Sam Altman really punching back on social media, calling Anthropics advertisement dishonest. Plus a lot of other criticisms about their entire business. And Kate, let's dwell on this for just a minute. When Claude introduced those plug ins earlier this week, it created a lot of selling pressure across the legal names and other kinds of professional tools. What this new announcement sounds like it's one kind of its broad lm. Is that right? And you know, just as Gemini has come up through the ranks and we learned last night has 750 million users, which exceed explains why the Gemini trade has surpassed the chatbot one lately. So is is Claude now trying to enter that race on top of the success it's had, you know, with its LLM and then with all of these other cloud code and so forth. It's a really good point on Gemini and we saw that in Alphabet results and the fact that they have gotten so much traction in enterprise. But going back to Anthropic and their sort of model release, we saw this really incremental update, I would say it was a Friday with the legal side of things that just crushed a lot of legal software companies. That was not a model update. That was almost just. You can think of it as sort of a mini plug in that made legal analysis easier. And you just saw the knee jerk reaction in some of those software names. You look at this, it is an overall step function improvement according to the company on how quickly these models operate, how much you kind of need to go back and forth. And one term that they use, you know, we've talked a little bit about Vibe coding and sort of software development. The executive I talked to over there called it Vibe working. So basically any sort of white collar work you think of sort of the financial industry, which they're focused on especially, it's replacing what an intern could do and what would probably take an intern or an analyst, you know, a week to do, it's doing in moments. So this, you know, is something software investors are really paying attention to, especially with Anthropic because they have been seen as a leader and winner in enterprise. Gemini is definitely there, but Anthropic, their core business is really B2B. All right, we'll see with Opus 4.6. Now the ball is I guess in everyone else's court. To respond, we need like a round number two. We're getting point six and point three five. When's that going to happen? Kate, thank you very much. Kate Rooney. Until recently, the chip names were not just spared from all of this sparring. In fact, they were some of the biggest beneficiaries of the AI trade. Remember, hardware is the new software until lately. Now they're suddenly having their worst week since November. They're down 8% from last week's record high. And AMD, KLA, Lam Research and AMAD are among the group's worst performers, down as much as 20% really, just in the past week or so. Christina Parts and Evolis is here on set with me to try to. I mean this one is actually probably raising even more questions. You can understand the software sell off when they introduce what Kate was talking about. Why the hardware, why the chips? Yeah, it's. We're seeing a narrowing within the tech sector and these high flyers for many of these names like the Memory, which we'll get into right now, they're just not as popular and maybe because they've been crowded for quite some time. So memory, specifically the memory shortages are definitely starting to break the tech supply chain. Why do I bring that up? Well, Qualcomm CEO said their lower guy for the quarter was 100% related to memory as AI infrastructure really just pull supply away from smartphones and towards all of those data centers where they make more money. Higher margin. So shares you can see down about 7%, almost 8%. And that warning initially dragged down. AAM also had earnings yesterday roughly 8, 9% before investors realized ARM's royalty revenues are actually growing across AI datacenter smartphones. So not necessarily the same case, but you bring up the whole sector AMD earlier in the week, you know, they had a slight beat for their guide, but it just wasn't enough for investors. They have a new product coming out. They were quite bullish on the call. Stock sold off. Qualcomm though isn't alone when we're talking about this memory crunch. Samsung says memory prices jumped over 30% last quarter. Intel CEO just on Tuesday warned there's no relief until 2028. And that's been a massive tailwind for memory makers like Micron, SK Hynix, SanDisk, Western Digital, which you brought up, which is why shares have soared just over the past several months. SK Hynix, for example, just reported record earnings with high bandwidth memory revenue more than doubling year over year. You're seeing these names start to pull back this week and today, even this morning, micron was down 9% partially on the unwind of the tech trade, partially on a Nikkei report that hp, Dell, Acer, Asus are considering Chinese memory chips now because the supply crunch is so severe. But let's keep in mind, given the administration's tough stance on sending AI chips to China, it's hard to see them actually greenlighting commodity memory to alleviate price pricing pressure. But nonetheless, the memory trade works until supply actually catches up or until desperation forces buyer to look elsewhere. So there's just. It's difficult to find that alpha right now because everybody has gotten into the optical trait, everybody's gotten into the memory trait. Broadcom, Nvidia have fallen out of favor for quite some time because there hasn't been enough of a reason for them to jump higher in the near term. Yes, we have earnings February 25th and GTC March 16th week. But I think that's the confusion right now is like it's crowded. Where are we going to make money? And that's why you're starting see that unwind in momentum and unwind in tech into other sectors. To your point, it's like once the supply shortages which drove the memory stocks higher are now kind of eating through to the rest of tech, it's going to Put them in a tough spot until it's resolved. I mean I guess it fundamentally, fundamentally good sign there's demand out there. But if they can't meet it, you know, frustrating for investors. Which is why the memory CEOs want investors to know that their sector is no longer cyclical and no longer a commodity. Why? Because demand. These customers are signing multi year contracts which means they have visibility two, three years into the future and you're not going to see this boom and bust cycle that is normally a characteristic of memory chip or even commodity. And to your point, the supply chain, there's green room, clean rooms that are feeling a crunch. Optical like there's so many parts of the data infrastructure that are starting to feel the crunch maybe which is why we're not talking about Nvidia and Broadcom as much at the moment. It's a great point but I think even the action the last few days reminds people whether it's secular or cyclical, I mean this can be a rough place for investors. So Christina, thanks. Appreciate it. The sell in software does that was more of the stalwart. That was where you didn't get these big fluctuations traditionally. But the etf, the IGV is now on pace for an eighth straight day of losses. Its longest losing streak in nearly five years. It's down 18% in this time worst eight day stretch since the start of the pandemic. Sima Modi is here with more of those details. Seem a really tough couple of days in the software ETF. Now over the last eight days Kelly has lost roughly $1 trillion in market cap. And the weakness does continue today with some exceptions. But first to the losers. Workday is down on plans to cut roughly 400 jobs. That's about 2% of its workforce. But that is raising some concerns as to the timing of this restructuring. That stock down about 5%. Applovin down again on concerns of competition from Cloud X. That stock now down about 40% this year and then Oracle down another 5% today. Analysts at Citizens cutting their price target. They think the financing plan that the company outlined earlier this week, that 50 billion in debt and equity, that's good news. But again the dependency it has on open air, they see that as a near term risk given the questions surrounding OpenAI's fundraising plans. But let's talk about some of the names that are bouncing back today as part of the software trade. Tyler Technologies, Kelly, this is a mid cap software name. It actually announced a $1 billion buyback. The market is seeing this as a sign of Confidence and investors we speak to say if other companies and software issue similar plans, that that would be a positive. And then there is those beaten down names that are actually now down again. In fact, prior to coming on air, they were up Docusign, Roper Technologies and Service Titan down just about 1% on the day. But take a look at how these stocks have performed this year. Specifically Service Titan, you'll see down about 40% as software executives are struggling to defend their businesses when the technology that they're competing against is evolving on a monthly cadence. Now the focus is going to turn once again to earnings. We have some names tonight. Atlassian, which is one of those work management software names. Fortinet, the cybersecurity player, Monday.com reporting on Monday, a work management tool. And Datadog, a name that you and I have discussed. It's seen as one of those AI beneficiaries. Kelly Sima, come on, we need to sit down, you know, hash this out. Pull up the psychologist couch. I think for some investors here, even today, like you said, we're looking like we're getting a bounce this morning. We're not getting a bounce with a lot of these names. By the afternoon after people are saying they've like this, selling has become indiscriminate. It's really interesting that we're not yet able to see these names coming back with any real kind of buyer, you know, buyer, real big buyer, demand step. Yeah, it's really interesting because there hasn't been a real catalyst too. And plus with Kate Rooney's latest reporting on these new innovations that are happening at such a fast pace, if you're the CEO of a software company from a conversation I had with an investor and it's hard for them to articulate to the buy side or the sell side that we have the technology to beat this competition when the technology itself is evolving at such a rapid pace. Now that's why I think the earnings from these companies, I'll provide an important platform for executives to gut check, give a good gut check to investors and also a proof point on where they stand on their own innovation. Again, Datadog, I think will be the important name to watch over the coming five days. Why? Because this is a company that is considered a beneficiary of AI. It works with OpenAI and it helps the LLMs, the large language models, dissect and synthesize really complex data. This should be a winner. A number of people on our show have said that's one they'd stick with. And its pricing model is different. And you said, you know, every month there's a new surprise. Like you said, it's now like every hour. So good luck to them trying to pivot and catch up with that. Right Seema? Thanks, Seema Modi. As the narratives keep shifting, where this is the big question, where are the new opportunities? Are they in consumer staples? Let's bring in Drew Pettit, he's U.S. equity strategist at Citi Jew. Are the staples up because we need to be worried about the economy? Are they up because people are just panicking about tech? What do you make of all this? It's simple, it's low beta. But when you rotate out of momentum, you rotate out of cyclical risk. The only thing left if you're staying in equities is low beta. So you're getting a low beta bid today. You see that in Staples, you see that admin fall factor action. It's really when you don't want to buy anything, you buy these things. And we're kind of talking about the professional, professional money management business or maybe more the retail crowd in and out of these day in and day out. What kind of opportunity is there here if you can take, I don't know, a three year or longer time horizon? Look, I think you differentiate in growth, you still own growth, you still own innovation during this cycle. The problem is with the sell off today and actually the sell off for the past month or so it really has been indiscriminate. Like we look at this, companies that are generating better cash flow relative to how fast are growing assets are down as much as the companies with low cash returns and higher debt. Starting point. Bingo. So, so fundamentals aren't mattering as much. So we really don't mind being upcap in some of these names with really good cash positions that can innovate quickly and respond to competitive challenges in video is definitely up there, top of the heap when we think about the return on their growth. Capex Palantir is still up there as well. I think you can own a name like Google as well, that's a compounder. But if you're trying to stay in this market for three years, be an investor, not a trader, you have to add some cyclical risk to pair with it as well. So if I asked you, do you think the action this week is a sign of the market entering a risk off period or just a rotation, which camp are you in? I would say more of a rotation. Look, when you're fully valued, any incremental news flow is going to have a lot more effect on price. There's just no margin of safety where I'm not going to say late or end of bull market, but we're definitely not in the early stages of a bull market, especially when it comes to growth. So against that backdrop, you get more idiosyncrasy, you get more volatility, and that will be two ways. And honestly what you've been alluding to leading into this we've probably had it feels like two years of news flow and news cycle in about a month. Yes. And the market action to kick off the year has been fascinating and a lot of times the way that it starts is kind of how it goes. So when I see the staples up there, you know, and yes, there's cyclicals too. And I, I think the cyclical story is easier to tell. You have ISM manufacturing breaking out. You have a lot of those names, transports included industrials at all time highs. And it sounds like you're saying it's okay to stick with that. I just can't wrap my head around why the consumer staples names are up there too. Again, it's back to when ise the problem, you rotate to what is not AI. We looked at this a couple of years ago and made this. You know I'm going to air quote this air hedge basket. What do you go long if you think it's going to break. And it's a whole bunch of consumer staples. But is is a breaking drew or is a working. The working story is like a cannibalist cannibalization of software. AI breaking is like the implosion of the AI infrastructure trade. No, I mean the trade or the perception of the trade not working. You just rotate to these. But I don't think it's structural. So back to what's the structural view here is that cyclicals can run. Innovation will happen. Productivity still a major trend in the economy at the macro and like the micro and industry level. So yeah, this, this tactical AI doesn't work trade, the non AI stuff, we don't think it sticks. And to be honest with you, when you really look at it year to date, the inflecting growth names. So the cyclical names that are showing fundamental improvement, they're up more than the defensive trades are too. So like it's, it's funny, there is fundamental differentiation in cyclicals. We do think you want to be there. That's a great way to buy risk in a risky market that's not completely priced to perfection like AI and growth is drew very well said. Succinct, to the point. Gave me a conclusion. Appreciate having you on today. Thank you, Drew. Take care. Kelly. Citigroup in the midst of all these headwinds, the economy is also grappling with the highest number of layoffs to start a year since 2009 and job openings worse since 20. Is it possible that the sell off is not just about tech, but also about a slowing economy? We'll dig more into that. And while AI is hitting some industries hard, it's also creating a slew of new ones. AI infrastructure company forgent going public today around an $8 billion valuation. They help clients like Metta, Google and Tesla build out data centers. What does its debut tell us? We'll keep an eye on the open and ask the CEO ahead on the Exchange. This is the exchange on cnbc. 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What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts, we've been talking about the rotation in tech. Things have also been shifting in the broader economy, like jobless claims rising more than expected. Last week, announced layoffs jumped by more than 100,000 in January, the most since 2009. Job openings fell in December, with the economy shedding nearly a million jobs last year. And workforce analytics company Revelia reporting a loss of 13,000 jobs by its metric last month. Joining us with more is Evan Sohn. He's managing director at Revelio Labs, along with CNBC econ reporter Steve Liesman. Welcome to both of you. Steve, if I may, Evan, start with the results. What did you find? Because we don't get the jobs report tomorrow. Yeah, thanks. And thanks for having me back, Kelly. Good to see you, Steve. We're showing at Revelio a net loss of 13,000 jobs. So we shed jobs in January. The decliners included public administration, leisure, hospitality and retail, specifically decliners Starbucks, TJ Maxx and US Government. But we did see some increases in education, health and finance led by Arizona State University, bank of America and adp. So that's sort of the top line or bottom line number, if you will. Arizona State University, bank of America, those that's who's hiring. That's where we should all send resumes. That's who's hiring, that's who's hiring as opposed to the people declining. And we're showing a net result of a loss in January of 13,000 jobs. Okay, the Steve Liesman, do you think that we are likely to hear something similar on Wednesday? Is it from the official data, I think that the reveal number is within a range that we can say is probably plausible. And that range could run from probably minus 50 to plus 50 and it wouldn't be a surprise or really out of out of the bounds. I brought on a different chart. Would you even go so far as to say it wouldn't change the narrative? Meaning this is an economy? No, the narrative is the narrative. Can we even pinpoint with any accuracy whether we added 20,000 or got rid of 12 that I mean, in the whole U.S. economy, very difficult to do. And guys, of all the charts that I brought put up that one that says unemployed versus job openings. And that's really, I think something the market's keyed on. I have a problem. I think the market puts too much faith. Look how good they are on the back there. It's amazing what you find there, folks, if you're on the radio is the largest gap between the number of job openings that unemployed have we seen since 2021. That's a big factor, guys. Next I'd like to look at the fed funds rate. That's up and it's up. By the way, we're starting to toy a little bit, just a little bit with maybe an April cut that if we do get this weakness. I'd like to remind folks that Michelle Bowman, the governor said we get two employment reports and two inflation boards before the March report, which is accurate. There's those probabilities. More confident in June, toying a little bit with April and yet the ESM was at 52 on Monday. Strongest in like also a couple of years, right? Yeah. And the cyclical stocks, the transports are at all time highs. So should the Fed be reacting that much to the labor market? Well, I would, I would like to remind you because I think I did that story here which was that there was a big asterisk in the ISM manufacturing, which was the reordering and the tariff pull forward. So I would get a little more excited about manufacturing, which is the employment's been in the dumpster. If we could put a couple months together. Manufacturing and the data as well. But I'm not there yet. Evan. Hey, Steve. I'll give you one other number we actually saw. Good, because I need more numbers. I don't have enough. It's unbelievable, the number of numbers I have. More data, More data. You know, we saw declines across all sectors and job postings. All sectors. Wow. There was some hiring going on in education and financial services and information. So what does that mean? That means that companies are actually hiring without actually putting up a job post. They're not going through the process of putting up a job and getting thousands of resumes and going through them. Maybe it's because they have a smaller workforce now to deal with those. And it's all A postings are AI the people hiring. It's all, It's AI talking to each other. It's AI talking AI. Evan, can I. I think what that really means is that you can't just go to a job post to get a job. Quick, last one. Can I see your number and raise your number? Guys, I want to look at the one that says three month average of payroll growth. This is bank of America Institute. They're doing something cool. They're looking at their bank accounts. This is all anonymous, folks. Don't worry about bank of America. And they're saying they're looking at your account. Did you get something that looks like a paycheck or are you getting something looks like unemployment? And they can see that now these are raw numbers, not seasonally adjusted. You can see a tick up there. So this is the one piece of positive news. I didn't want to leave this segment without putting a little balance in it. I agree with Evan. The numbers and the data are weak in General. But this one number here from bank of America Institute suggests there could be some positive aspects to the job, to the job market right now. Although wages. I'll give you one more, Stephen. Go for it. Yeah, let's do it. We actually reported. We actually reported. It's available on our website. We saw an average salary for job posting increase by 2 1/2 percent. Wow. Between December and January. That's a very significant uptick. Now that means that I got a smaller workforce. I'm not hiring a lot. But if I'm going to hire, I'm going to pay them slightly more money. And again, with a low quit rate like we saw last month, we don't know what those are. With a very low quit rate. With the jolt from the jolt numbers, I got to be paying a little bit more money to get those talented workers to come. And that's really a question. We got to go. But 15 seconds. Just bottom line it for me here. Are you saying this job market is weak, strong, neutral? Give me a, give me a word. There's weak. And yet I think the Fed. I want to see more. We need to see more hiring. We're spending money on infrastructure that's not actually driving jobs there. We're spending money on data centers. It's not hiring people. We've got to get to a point where we're either. There's an incentive to go hire individuals. Full employment for Elon Musk's robots, then that's coming to. Gentlemen, thanks. And look, the cap ex bulls say it's going to lead to hiring. And I think this is the show me year. It has to. Otherwise we're going to be back in the cutting camp. Evan, thanks. Really appreciate it. Everyone talking about the Revelio data today. Evan Stone and Steve Liesman appreciate it as well. Coming up, if tech and the economy weren't enough, there's also bitcoin today which broke below 66,000 now to its lowest level since October of 24. It's weighing on the crypto treasury, names like Strategy, which is down almost 15% today. And it's going to close at the lowest level in two years. If it's around here, it's at 110. We're going to take a closer look at the impact on their bottom line ahead. Hey, Fidelity. Can I get a second opinion on stocks in the Fidelity app? With Fidelity, it's easy to get an outside opinion from independent experts in a single score. And then when you're ready, trade US stocks and ETFs with no commissions. That's right. I am always right. Investing involves risk, including risk of loss. Online US equity trades and ETFs and retail fidelity accounts Sell order, assessment fee not included some account types and securities excluded. Details@fidelity.com commissions Fidelity Brokerage Services, LLC member NY There's a fire inside you you can't ignore. Stand still. Not a chance. You're a lifelong learner who's come this far. Now we are here to help you keep going Further Capella University what can't you do? Visit capella.edu to learn more. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women Changing the Game One of my favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to the Exchange. I'm Kate Rogers with your CNBC News Update. A team working for Director of National Intelligence Tulsi Gabbard reportedly led a probe into voting machines in Puerto Rico last spring, sources telling Reuters that the goal was to investigate claims that Venezuela had hacked voting machines there as part of the effort to support unless unproven allegations of election fraud during the 2020 election. But Gabbard's office disputed that assertion, saying it was focused on software vulnerabilities in electronic voting machines. Ukrainian President Volodymyr Zelensky said in an interview on French TV today roughly 55,000 Ukrainian soldiers have been killed fighting Russian troops. He also said a large number of people are considered missing. Russia does not announce numbers, but recent estimates put the data death toll at roughly 350,000. And the FDA is making it easier for companies to claim their products contain no artificial colors. Under the changes announced today, companies can label their foods as dye free if the products do not contain petroleum based colors. Previously that was only allowed when products had no added color whatsoever. Kelly, back over to you. All right, thank you very much Kate. Coming up, crypto getting walloped again. Bitcoin shedding nearly 11% today. It's down about half from its 52 week high back in October while ether has fallen 61%. This has the crypto related names under pressure with strategy on pace for its worst day since March of last year and down more than 25% so far this week. Coinbase Bitminer and Robinhood all seeing similar declines. We'll explore when the bleeding could stop next. Welcome back. A big pressure point on the markets is bitcoin, which broke below 66,000, is on pace for its worst week in more than three years. It's dragging down strategy and the rest of the crypto treasury names. Strategy is down almost 15% today and down 75% from its highs last July. And strategy's bitcoin hoard of more than 713,000 is underwater, having paid an average price of a little more than $76,000 per coin. So again, we're $10,000 below that level right now. Here to discuss is Emily partner, senior strategic advisor at Coincheck and Cosmo Jiang, portfolio manager at Pantera Capital. Welcome to both of you. Emily, I just wanted to start with this point that Yardeni Research has made and they say, and this makes sense with the strategy's peak, that it was the genius act that destroyed bitcoin. My words, not theirs. Once it became the case that stablecoins were enshrined as part of the financial system, the use case for bitcoin intermediary case disappeared. Now that this genius act was passed last July, strategy's all time high was last July. So what happens to bitcoin now? Yeah, I don't think it was the genius act that messed up bitcoin. I think some of it was actually the surge in gold because the surge in gold kind of undermined bitcoin's whole narrative as being digital gold. Because gold has outperformed bitcoin in the sense that it's been acting more as a hedge against global instability. You know, it's, it also has limited supply. And I think that's been more what's undermined the bitcoin's narrative. As for what's happening in Washington, I mean, we've discussed this a lot on the show. I mean, Washington has, you know, they're still waiting for the Clarity act to pass. It hasn't passed. I don't think that's what's going on right now. I think bitcoin is very much a narrative driven asset and we've kind of lost the narrative. And I think that's what's causing the panic. Cosmo, what revives the narrative. And you know, it's gotten bad when people are starting to ask whether companies like strategy are systemically important. Totally. Look, when, when things are down, sort of all the barricades thrown against the wall and it's very easy to forget the bigger picture, which is that clearly, yes, prices are down, but at the same time, you know, fundamental adoption has been increasing and the industry has been proving this out. You know, eventually, as I say, price does follow fundamentals, and that's the opportunity. Right now, people aren't seeing that, but, you know, every day we hear of new financial companies getting into digital assets, whether that's, Whether that's JP Morgan launching their tokenized tokenized deposit, whether that's Robinhood doing tokenized stocks, whether that's Western Union doing stablecoin payments. Right. And so we're pretty excited about the longer term view, but undoubtedly people are a little scared right now. But we shouldn't sort of lump this all together. You know, what JP Morgan's doing has nothing to do with the price of Bitcoin and in fact goes back to the argument that as Bitcoin went mainstream, Bitcoin lost its, its narrative. So where do you see that the price of Bitcoin has any intrinsic value that could help people get a sense other than, I mean, if you want to sell it on flows, that's fine, but even the flows that you're describing are not flows into Bitcoin. They seem to be flows around tokenization. Yeah, that's such a good point. I just want to jump in there. First of all, the tokenization narrative is much more about Etherium. It's not really about Bitcoin. I mean, there's something like 100, over 163 billion billion of stablecoins that are running on a theory I'm or circulating on Etherium. So if anything, that should be driving up a theorem's price, it's not. As for the Bitcoin use cases, I mean, even if there are fundamental use cases out there, as you just said, if nobody's seeing them, do they exist? Right. And I think, Kelly, what you just said is so right about these fundamental narratives that have been undermined. You know, bitcoin in theory, it came into the world to be an alternative to Wall street, to be an alternative to government. And then so much of what's been pushing up the narrative of Bitcoin over the past couple of years has been either, you know, oh, the US government supports it, or it's ETFs, which is, you know, fundamentally an intermediary, or it's institutional investment, which is Wall Street. And so I think now that those things are not pushing up Bitcoin's price, there is sort of this crisis of confidence, which is like, what is the narrative now? And I really think that's the core issue here. Cosmo, you want to jump in here? Look, I do think there's a really important distinction. There's. There is. When we think about digital assets, everyone kind of lumps them into. Lumps crypto into. When they think of crypto, they think of bitcoin. But we as an investment firm, we do think of as, as there's bitcoin, which is digital gold, and then there's everything else which is blockchain and technology. And you know, all the tailwinds really are in blockchain technology. When it comes to bitcoin, I do feel strongly that, you know, it goes through these cycles from time to time and eventually people will realize that, you know, bitcoin is an amazing sensor to resistance store value. It just. That's getting lost right now. What we're seeing this, this incredible run by gold and going in the other direction. Yeah, I think Cosmo, it's also an open story. You know, if bitcoin went up to 126,000 and stayed there, more of the institutional players would feel comfortable putting their money there. Now that it's fallen by half, that story's changing and it's hard to see an adoption story that's going to be more bullish than the one we saw over the past year. I mean, I'd argue in a way the industry got used. Right? Like they were told, oh, you know, yes, you're going to get everything you wanted. And it turns out getting everything that they wanted resulted in the exact opposite outcome. For the price of bitcoin, not for the infrastructure tools, stablecoins, all, you know, full speed ahead. Tokenization, full speed ahead. Price of bitcoin dropping. Yeah, and I think that's part of why. Sorry. I think that's part of why real world asset tokenization, as Cosmo just said, is kind of booming right now. Because it's a real world thing. It's more. It has more of a tangible use case. I mean, we talk about use cases. I mean, I don't think this is what's driving up gold's price, but you can use gold for things. You can wear it, you can put it, make it into a necklace and a bracelet and earrings. And I think like at this point there are very few people that know anyone who is paying with bitcoin and who can point to tangible use cases. And I really think that is part of the issue here, that when the price starts to fall and you can't just keep saying, well, institutions are buying and the government is supporting it, it's like what do you point to as the reason for Bitcoin's existence? Quick final last word to you, Cosmo. Look, I think it really is that it's very easy to point out all the barricades of bitcoin when relative strength is 17, it's more extreme, more extreme weakness than it has been in many years, even including the 2022 sell off. You know, a lot of people are pointing to technical levels and in the, in the high 50s as the next major level. But if you put this all in context, actually this isn't happening in isolation. Right. A lot of people like to blame or like to point out bitcoin going down because of various very large asset that elicits strong feelings. But really it's kind of trading in line with a lot of risk assets this year. If you look at the IGV, the software index, it's down 21%. A lot of software stocks down 30, 40%. And so Bitcoin is kind of in line with that year to date. Naturally they all have idiosyncratic drivers. But just like it feels like some things are getting oversold in other parts of the market, it does appear that at least locally, bitcoin feels oversold. RSI of 17 that is in frigidly cold territory. Thank you both very much for the time today. Really appreciate it. Cosmo and Emily, thank you. Coming up, Fortune making its public debut today. We have an IPO and it's an AI name. It's one of the key companies to the AI buildout. And we'll chat with the CEO in a first on CNBC interview next. Big tech is spending more than ever on AI. The big four Alphabet, Microsoft, Meta and Amazon are expected to spend a combined $600 billion in CapEx this year alone. This changes the whole business model. Deirdre Bosa has more than today's tech check. Hi, Deirdre. Yeah, Kelly, you're right. It changes everything. And it really kind of means that big tech are becoming the new utilities that ultimately changes what you should pay for them. Every company that wants to use AI, whether that is a bank running fraud detection or hospital reading scans, they're not building it themselves. They're going to be renting it from big tech. So Microsoft, Amazon, Matt, Google, what they're really doing is building an intelligence grid like electricity. Once you're on it, you're tied to it. But what happens when you become an asset heavy utility versus an asset light one is that the economic shift multiples compress, capex crowds out buybacks the metric shifts from revenue growth to return on invested capital. So rather than how fast are you growing it's was that 100 billion or $600 billion worth it? Look, these companies, they have far better margins than traditional utilities and that could soften the blow, but the direction is clearer. And when you own the infrastructure that everyone is going to depend on regulators, you can bet that they're going to pay even closer attention. Now the cloud build out followed similar logic and investors, they were actually rewarded with multiple expansion. That could happen but back then customers were already lining up, they were already paying. This time the hyperscalers and matter, they're spending ahead of demand, betting on AI use cases that don't fully exist yet. So that is a very different risk risk profile and it's why the market may start thinking about valuing them differently. Kelly. Yeah, and I think, you know, it makes sense of a business model that was beautiful for each one of them individually it was, is now look, I can't fault them and this is why it's going to be fascinating to see what investors and public market valuation does When Gemini hits 750 million users a few months after launching. We've all talked about how chatbots adoption was maybe the fastest of all time. I think Gemini's might it looks even faster. Gemini is a consumer product though, right? Not all of them are paying for it like all the enterprises that signed up for Google Cloud Orb. Kelly certainly there's different profiles here, right? Like you have a matter that is spending like crazy, that doesn't have a hyperscaler business and it's, you know, reducing its free cash flow in a very significant way. Right now Google looks untouchable, right? It is just, just a cash cow machine. So that's very different. But without a doubt these numbers that they're spending in Capex are just incredible. It's a fourfold more than fourfold increase since 2023. They're becoming asset heavy companies. They are changes the framework. If it's a permanent change, I understand why some investors are like, you know, this is, this is enough to make them want to different company. Yeah, exactly. Step back and reevaluate but still try to find this growth. 48% growth in the cloud. Come on. Wild. I know, I agree. I'm saying. All right, we got to go. Deirdre. Thanks. Deirdre Bosa. Coming up, Fortune opening for trading at $26 a share after pricing at the midpoint of the range of 27. We will get the CEOs take on the ape I build out. We were just discussing. That's next. AI has been hitting a number of industries lately. It's also creating some new ecosystems. Electrical equipment maker Forgent making its debut on the New York Stock Exchange just moments ago. Shares are trading around 2660, just around their opening price of 26. They also priced the IPO at 27 last night, midpoint of the range. Now the company provides services to some of the biggest hyperscaler and energy names in the world, including Metta, Tesla, Cor Weave, Duke Energy and Oracle. They just reported an 84% jump in year on year revenue for Q1. Let's bring in the CEO Gary Niederpoom, live from the New York Stock Exchange. Gary, congrats. It's great to have you here. Welcome. Yeah, I appreciate it, Kelly. Super happy and pumped to be with you today. If you'd only done this a week ago, Right. The market's got a little choppy the last four or five days. So we're super happy that we had a very successful outcome. As you said, we price in the midpoint of the range. It's a big industrial deal. So we're just thrilled to be here. You know, everyone kept saying to us, you know, we don't, we don't care about these private equity IPO now. We don't. We want the AI names. Well, now they've gotten one right? Where do you fall? Tell us what your company does. Yeah, so, Kelly, we do, essentially what we do is design, manufacture, electrical distribution products. So what that means is every time you're going to move power from point A to point B, you need our gear. It is highly mission critical. It's essential, it must work, it must be safe. And that's what we do. We move power from one point to another. We do that in three primary end markets. About 50% of our business, business is in the data center space. About 30% of our business is in the grid and utility sector. And the other 20% is in the industrial and other categories. So we are right in the middle of this. You came from Vertiv, is that right? And Vertiv was a spec. I mean, not that that's coming, maybe neither here nor there, but it's become one of the hottest names in the market, I would imagine. You see your growth. What is the difference between kind of where you fall versus where they fall and what kind of growth do you foresee? What's the demand look like? What is the next, you know, 12 to 18 months of business? What should we expect? Yeah, for sure. So I did, I spent 25 years almost between Emerson, Invertive. They're a great company. I love those folks. You know where we play those, we are laser focused. In the electrical distribution segment we have those three end markets, which makes us different because typically when you think about the rapid acceleration in revenue, most of the time that comes from either one customer or one end market. We have three, which gives us a diversified way to grow faster. To your point, we grew almost north of 80% in revenue in our last fiscal quarter. And in the second quarter of our fiscal year, which is the fourth calendar quarter, our backlog grew, accelerated north of 45%. So we're just seeing wonderful trade winds on all three of the end markets we participate in. So you have a backlog that you consider to be pretty significant. Are there bottlenecks, effects on kind of the AI buildout, including things like memory chips, things like power, Literally just kind of trying to get these things up and running. And how do you think that that is just something that's inherent to an industry that has come on the scene very quickly, or is it a real constraint that needs more solutions so that the build out can move ahead more quickly? Yeah, super good question. So let me unpack a couple of different ways. So one is of this one and a half billion dollars of backlog we have, the vast majority of that is going to ship in calendar year 26. There's a little bit out in 1H27, but the vast majority will, will turn into revenue in calendar year 26. So that's one part. The other part is, you know, a lot of the backlog we have is actually for cloud growth in the data center. The AI piece just recently has sort of been like icing on the cake. We do see some constraints on the utility side of things, but what we are seeing more and more is customers are starting to take that into their own hands by building their own substations and building natural gas power plants behind the meter. So that's, that's a great trend for us. Whether the utility builds it, whether the end customer builds it, the more substations, the more data centers, whether it's for cloud or AI, all of that is just wonderful tailwinds for us. One more real quickly, why now and what are you going to do with the proceeds? Yeah, let me take those in reverse order. The proceeds are all set secondary, so we're not paying down debt. We're levered less than two and a half times, which for a sponsored backed company obviously is very low. So all of the proceeds will be in the secondary market. And why now look at we've put the businesses together, we're operating at a very hot rate and we just can't wait to stay in the public markets and execute well for our customers. Gary, thank you for making the time. Hope to check back in soon. Appreciate it. Nice to meet you, Kelly. Gary Niederprom likewise. Joining us from Forgent, which just opened on the New York Stock Exchange. And there is another big public debut today as well, not so much an AI play, but a favorite around here, Bob's Discount Furniture. It's up about 1 1/2% opening where it priced at $17 a share. CEO Bill Barton will join us on Power Lunch next hour. We're looking forward to that. And Speaking of which, AI giants like OpenAI and Anthropic, they're not just competing when it comes to agents and models. They're reportedly also racing each other to market. Elon Musk making his move, planning to combine XAI with Space X, what could be the biggest IPO ever. Let's talk to our next guest about this. He says the window for IPOs is wide open, but it can slam shut quickly as the next few months determine the market for the rest of the year. Axios, Dan Primack is back. Dan, what do you make of Fortune's opening? It's not surprising. Tough day to go out, right? And this is kind of is a tough week and this is maybe the busiest week back to 2021, I think there's supposed to be eight IPOs and US exchanges this week, 100 million or more. Again, that's a four year high. But it's a tough market to be going into today. You mentioned Bob's. I would be stunned if the CEO of Bob's doesn't in some way mention I I don't care they're selling cheap couches. He will mention maybe tariffs will come up as well. You say the market though can is open and ready to digest bigger offerings. It is. I mean the key here really is we spend a lot of time talking about, you know, where a company prices and then what it does on the first day, whether it's a policy top or whether it's flat. What's really important to watch, I think for the offerings that have come out this week and over the last couple of weeks is where they go in the aftermarket over the next couple of months because unfortunately what we've seen it was a relatively slow IPO market last year. But what we've seen is really poor performance. If you go back one year, six months, three months, the average large US IPO is not only underperforming the S&P 500, it's actually negative from its IPO price. And if so right now it's wide open and market and traders do want new issues. But if they start to really get a sense that these things are going to be cheaper in two months than they are today, that's how the IPO market slams shut again. And finally we get an AI name today. Although he mentioned it sponsor backed and it is a tough tape but I thought that was what the market wanted. They don't want, you know, no offense, but they don't want to Bob. So they want the AI, the stuff that can scale and grow, you know. And yet, you know, kind of muted reaction. Yeah, it's interesting. I mean it's only been out for a little while. We'll see where it goes. It feels to me and I'm not buying or selling this thing, it seems to me that that's more a reaction to what's happening in the broader markets and it coming out then there are a lot of new issues at the same time. But look, look what's happened to a bunch of the tech names today and yesterday. I'm thinking it's more reaction to that. But we'll see how fortune ultimately plays. You you concerned about the sort of the private industry, the, the alt world private equity, private credit? I mean I'm not concerned about it. I think, I think it depends where you are. Right. I think for firms that are all in on enterprise software and there are some of those firms, I think that's probably concerning. But most of those are closely held. For the handful of big firms that have struggled over the last couple of days, I think that the markets are a little bit overstating their exposure specifically to some of these software names and I think that'll play itself back out. All right, Dan, great to have you to wrap things up here. Dan Primac with Activity. Really appreciate it. And that's it for us here on the Exchange. I will go join Brian Sullivan for Power Lunch. We've got some more coming up right after this quick break. You've been listening to the Exchange. Make sure you're subscribed to get each episode every day, same time, same place. Introducing Fidelity Trader Plus. With customizable tools and charts you can access across all your devices, try our most powerful trading platform yet@fidelity.com trader investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSE, SIPC.