The Exchange (CNBC) — “Shutdown Wind-Down, Big Gains for Small Names? & a Top Tech Pick”

Date: November 11, 2025
Host: Morgan Brennan (in for Kelly Evans)

Episode Overview

In this episode, Morgan Brennan covers the day’s top business headlines with a focus on the latest government shutdown developments, the tech sector’s recent volatility, prospective opportunities in both large and small-cap stocks, and key insights into quantum computing and semiconductors. Through interviews with prominent analysts, executives, and CNBC reporters, the show explores market sentiment, the impact of government policy on consumer behavior, shifting AI megatrends, and emerging sectors to watch.

Key Discussion Points & Insights

1. Tech Sector Update & Top Picks

Guest: Mark Mahaney, Head of Internet Research, Evercore ISI

• The AI CapEx Cycle and ROI
  • Despite a recent pullback in major tech names, big players like Amazon, Google, and Meta continue to ramp up capital spending, particularly on AI (“return on AI investments”) with measurable productivity and revenue gains.
  • Quote:

    “You can see that in their revenue per employee and their operating income per employee. That’s really inflected up... one of them certainly is productivity gains from AI.”
    — Mark Mahaney, [02:21]

• Why Amazon Stands Out
  • Amazon ranks as Mahaney’s top pick thanks to AWS growth (now over 20%), strong advertising momentum, retail margin expansion, and new projects:
    • Kuiper (commercial satellite internet) positioned as a coming catalyst.
  • Quote:

    “Advertising revenue is still clicking well north of 20%. It’s wonderful for Amazon’s margins. The retail business is doing just fine... and those operating margins... I think they continue to gap up. It’s a reflection of automation, robotization...”
    — Mark Mahaney, [04:39]

• On Netflix Momentum
  • Netflix (#3 pick): poised to benefit from potential price hikes (competitors are already 50% more expensive) and likely conservative Street estimates for next year.
  • Quote:

    “They have a golden invitation to raise prices if they want... And Netflix's content slate is super strong.”
    — Mark Mahaney, [05:55]

• Names to Steer Clear Of
  • Mahaney expresses caution on chasing Snap and Lyft after recent earnings-driven rallies, arguing their business fundamentals remain behind larger competitors.

2. Meta’s AI Talent Exodus and Strategy

Reporter: Deirdre Bosa

• Key Departure: Meta’s chief AI scientist, Yann LeCun, is leaving to form his own startup, reflecting broader trends of fragmentation in the AI sector.
  • Meta has shifted focus to product-oriented leaders after losing several top AI researchers.
• Strategic Uncertainty: While Meta pursues “superintelligence,” investors appear to reward established, productized AI services (like Google) over speculative moonshot projects.
  • Quote:

    “This is really sort of a fragmentation away from these big companies like Meta and OpenAI... there’s so much money available, you see billion-dollar seed rounds...”
    — Deirdre Bosa, [10:20]

• Philosophical Divide: The American AI scene is splitting between those seeking responsible, safe AI and those aiming for ambitious AI-driven breakthroughs.

3. Government Shutdown — Progress and Impact

Reporter: Emily Wilkins (Washington)
Guest: Steve Odland, CEO, The Conference Board

• Shutdown Ending: House set to vote on reopening; paychecks for federal workers expected quickly, but key services like air traffic will take days to normalize.
  • The funding bill is temporary (through Jan 30, 2026), so risk remains for further disruptions.
  • Quote:

    “...part of this bill will only fund the government until January 30th. I think it is going to be something to watch to see if we get into a partial shutdown at that point.”
    — Emily Wilkins, [16:38]

• Consumer Impact & Holiday Spending:
  • The Conference Board finds overall holiday spending plans are lower, led by younger, financially strapped consumers, and influenced by the shutdown.
  • Most spending will occur during Black Friday in November rather than December; impact felt particularly in travel categories.
  • Quote:

    “Shutdown relief comes just in time for the Black Friday sales... younger people are going to spend in November, not in December...”
    — Steve Odland, [17:27]

  • Travel spending is subdued due to a mix of inflation and logistical hassles; some spending may rebound once travel normalizes.

4. Broadening Market Opportunities: Small and Mid Caps

Guest: Scott Kronert, U.S. Equity Strategist, Citi

• Rotation to Smaller Names:
  • As the focus shifts to 2026 earnings, small and mid-caps that “beat and raise” guidance are being rewarded more than mega-caps.
  • These stocks come off two years of earnings “recession” and are now primed for catch-up, especially as policy headwinds fade and rate cuts loom.
  • Quote:

    “As we go into the end of this year the market is increasingly paying for 2026 earnings growth expectations... The setup here begins to get more constructive as you go down cap.”
    — Scott Kronert, [26:11]

• AI Play Still Key:
  • The AI tailwind remains fundamental for major indexes, but leadership is expected to broaden across sectors.

5. Government Shutdown Fallout: Effects on Travel and Hospitality

Reporters: Phil LeBeau (Airlines), Contessa Brewer (Hotels)

• Travel:
  • Flight cancellations/delays will linger for several days after shutdown ends; air traffic won’t fully snap back until the weekend.
  • Quote:

    “You just can’t snap your fingers and everything goes back to normal...”
    — Phil LeBeau, [31:49]

• Hotels:
  • Nationally, $1.24 billion in revenue lost so far; business travel and government bookings sharply down; 37% of adults say shutdown has affected their future travel plans.
  • Las Vegas and other key cities could regain ground if pent-up demand is released post-shutdown.

6. Quantum Computing Under the Microscope

Guest: Nicolo de Masi, CEO, IonQ

• Quantum Stocks Struggle Amid AI Volatility:
  • IonQ shares, along with other quantum names, have been hit hard, but IonQ reports strong performance: Q3 revenue up 37%, year guidance raised, multiple technical breakthroughs.
  • Quote:

    “IANQ has delivered a 37% revenue beat for Q3... and we continue to set the pace for a sector that absolutely is the future of computing, networking and sensing.”
    — Nicolo de Masi, [37:36]

• Commercial Momentum & Acquisitions:
  • IonQ’s acquisition of Skyloom targets quantum networking and ground-space integration, building toward the quantum “intranet” and enhanced cybersecurity.
  • The shutdown had minimal impact due to the company's secure, domestic supply chain and strong government partnerships.

7. AMD’s AI Ambitions & Analyst Day Highlights

Reporter: Christina Partsinevelos

• New Forecasts:
  • CEO Lisa Su projects AMD’s total addressable AI market to exceed $1 trillion by 2030, including CPUs and networking, doubling previous estimates.
  • Quote:

    “She [Lisa Su] sees a clear path to over 50% growth in the server business and expects data center AI revenue to grow 80% annually just over the next five years.”
    — Christina Partsinevelos, [43:39]

• Market Reactions:
  • Stock volatile on news, partially because the TAM estimate was broader than anticipated.
  • AMD aims to move further up the data center stack to better compete with Nvidia.

Notable Quotes & Memorable Moments

• Mark Mahaney on Amazon & AI:
  “It depends… These companies are also showing what I call ROI—return on AI spend… If they can continue to show that, I think some of those stocks can continue to outperform. That's one of the reasons why Amazon's at the top of our list.” [02:21]

• Deirdre Bosa on Meta’s AI Brain Drain:
  “This is really sort of a fragmentation away from these big companies like Meta and OpenAI... because money is still so flush in the private markets.” [10:20]

• Scott Kronert on Small & Mid Caps:
  “What we’re arguing is that... the focus here is very clearly shifting to 2026 earnings growth setups. Yes, large cap is going to have that, but the catch up fundamentally actually has a bit more of a downcap bias to it.” [26:11]

• Phil LeBeau on the Government Shutdown’s Impact on Travel:
  “Let’s say theoretically, the government shutdown officially ends Wednesday night. Thursday is still going to be probably a rough day... It would likely be into the weekend before you could say, ok, we’re seeing the scheduling that we saw before the government shutdown.” [31:49]

• Nicolo de Masi on Quantum’s Promise:
  “We are the largest quantum company in history by market cap, revenue, cash balance... and we show no signs of stopping.” [39:01]

• Lisa Su’s Vision for AMD:
  “She [Lisa Su] sees a clear path to over 50% growth in the server business and expects data center AI revenue to grow 80% annually just over the next five years.” — Christina Partsinevelos, [43:39]

Timestamps for Key Segments

• [01:06] — Opening market overview; tech in focus
• [02:21] — Mark Mahaney on AI CapEx and top tech picks
• [04:39] — Amazon thesis, catalysts, and new business segments
• [05:55] — Netflix’s price power and catalysts
• [07:24] — Caution on Snap & Lyft post-earnings
• [08:28] — Deirdre Bosa on Meta’s AI strategy & Yann LeCun’s departure
• [15:00] — Emily Wilkins with shutdown latest; expected impacts and political context
• [17:27] — Steve Odland on the shutdown's impact on holiday spending; consumer confidence
• [26:11] — Scott Kronert on the broadening rally; small/mid-caps
• [31:49] — Phil LeBeau: air travel and airline recovery timeline
• [33:28] — Contessa Brewer on hotels & travel industry pain
• [37:23] — CEO Nicolo de Masi on IonQ’s progress, quantum integration
• [43:39] — Christina Partsinevelos covering AMD’s Analyst Day announcements

Conclusion

This episode provides a comprehensive snapshot of late-2025 market challenges and opportunities: from the fallout of the (almost-ended) record government shutdown, to nuanced takes on the evolving AI investment landscape, to optimism on small/mid caps and quantum computing’s real-world arrival. For investors, the key storylines are the broadening of market leadership, careful sector rotation, continued AI-driven productivity, and the accelerating integration of quantum solutions into global computing infrastructure.