Transcripts For CNBC Squawk 20240703

Bearish strategist has finally capitulated. It is nvidias week. Four analysts upping their targets ahead of results on wednesday. And apple reportedly edly slash iphone prices to count huawei. A historic week for stocks, jim. We got to 40k, we hosted 11 on the vix, but just barely, but we did. People are stalki talking ab stock market. For the long time, they talked about my tomatoes. And then say, wow, what is that about . People who have not been in. People who are thinking, is it too late . I try to present a constructive view. But its gotten in peoples minds, carl, and also numbers from gallop last week who said 62 of the people are back. Someone in their house owns stocks. Thats up from 52. Which was interesting. 52 was the low, which is just when the dow got back to where it was before 2007. So, you had 2007, people got back to even and they left. And now genz, gen x back. Millennials back. Boomers i think just blown out and dont rely. And its quite encouraging, because if we can get people in stocks as opposed to more radical things that people by, the options, double etfs, single stock options. I think we might find the next selloff which of course, there will be one, well have new buyers, its dequite surprising. Adding to the population of buyers, marginal for prices. Right, as long as you have the buybacks above last year, well talk about jpmorgan in terms of being conservative. You may have a situation, im not talking about the meltup. I know people talk about that but a virtue of circles, people come back and Companies Buy back, and with that source of supply, the equequilibrium, you have to go higher. So i think its really quite amazing, carl. We have people who are back and people who have never been who are in. And its making them money. So, we have to be a little more buoyant about our outlook. Meantime, we mentioned some of the commentary. A lot of it circles around that reflation scare being over. Yes. Upside for earnings, deutsch goes to 258 today. I know. And of course, mike rosen is all over the tape on his its a little weird, its not a yearend, its a 12month, but hes no longer calling for that decline by the yearend. I said to my colleagues, they actually put up for that, i feel bad for them, we forgot how great he was. We forget how he got us out. Sometimes, you have to get back in. And not that i tell you when to get out, ill tell you when to get in. Ill tell you when tell gets too negative. He didnt understand that the market had pivoted. For what mostly because of the fed. I think its a great, unfortunate, learning lesson in that there were so many things that were negative that it should have gone down. Ive been going over this with a lot of people. Okay, ukraine, why doesnt it go down . Israel, gaza, why doesnt it go down . Election, why doesnt it go down . Rates, why doesnt it go down . The answer is, the assets come back to life. We dont talk about it enough. The asset which had been so condition credited by the 2000 dot bomb, by the 2007 spike, and then declined by the 2016 scare, but those are now in the rear view mirror. Even the covid decline seems to now look like all one giant buying opportunity. And its a rational view. Because think about it. Were at 40,000. When i got in, we were right down to it, down 1000. All i heard, we were going to 500. I think its important to recognize that the mike wilsons of the world are not a new phenomenon, theyre an old phenomenon. Its funny, there was a game on twitter the other day. Look up the price of the dow on your first day of business. 1,081. I kept thinking, you know, all the naysayers could be wrong. I am going to buy texas. I bought texas instruments. I bought motorola. I bought companies that just were going i hate to say this but had momentum. And its been momentum ever since. Because momentum is not momentum is part of the equation. And just like those failures that i mentioned, the fear factor. People dont trust momentum. And get momentum is animal spirits, the greatest of our markets, they are a factor. And do we celebrate them . I think we all feel that ever since 2000, if we celebrate anything, remember the dow 40,000 had that i got, i didnt take it out from here. I didnt take it out because i thought it might be a jinx. I just dont want to be part of a jinx. And im afraid myself to say anything that sounds like cheerleading. We all remember when we cheerleading in 2007, its disastrous. Theres something between cheerleading and about da gauge. Its rational. We have a market, historically, when you have the fed about to the fed switches from being your enemy to your friend. Thats when you buy. You dont just buy, buy, buy. You wait until youve got thing that indicates that the fed has pivoted. Thats when you do do it. We saw it 1998, the fed pivoted with longterm capital. We know that the fed pivoted in 2002 too long. We know that the fed pivoted under bernanke. When they try to increase rates, its a good time to buy. When do we get back to worry about growth . What if we see cracks in the labor market in the next coming months. I notice target, prices on 5,000 common everyday items. Theyve got earnings tomorrow. Right, right, which is interesting, you wouldnt cut unless you think you have too much inventory. But the inventory of walmart is very neat. When we talked about yesterday, a black box target here. We know home depot was not good, but then we know it didnt even get hurt. Everyone using endless buying opportunities. Lets go back to the labor thing. There are 600 red lobsters and there is a chance that the endless shrimp deal that was not a long it was meant to be limited time, but got long term. And didnt really hurt the company. Youre aware of this, at the beginning, im waiting for the rite aids to drop, my rite aid has no inventory. You see these things, thats a big change, too. Those are signs of the fed, if you didnt are cracks youll never get what you want. It will be a foot race between what the fed does and the layoffs. And right now, i think the fed is in pole position. But then if they dont, its like a precondition, its not going to get it its sustained. Morgan stanley note, still looking for three cuts this year, argues that the population supply shock that we got, made the economy bigger and also allows the fed to cut industry. I think they would do well to not do that kind of stuff. If im running that strategy, why would they say that rate cuts are a possibility . Why do we draw a line in the sand. Mike wilson drew a line in the sand. I know we dont want wish she wash she analysts but i sure wish he had. I wish he said if these things happen, i need to be more constructive, but he never did. And the things that needed to be more constructive didnt occur. And the fact that he didnt leave himself with that, the fact that theyre going with three rate cuts, ive been doing this 40 years. The one thing you never want to say, let me tell you whats going to happen no, let me tell you factors that could happen. When i was in the industry, i was make the declaring things on cnbc, like this is going to happen. I learned my lesson because when it doesnt happen you get mike wilson. Its a tough business. It is. We have got nvidia due out later in the week, Barclays Baird and stiefel raised their targets over the took. Up almost 90 for the year. B its at 1200. This is the beginning of when you get the nvidia platform. What theyre going to be doing is bringing out the new chip that can take video. It means basically, this when blackwell comes out, anything you can do, a robot can do better. I showed to you. And i do think, if you base it on this quarter, then i think youre going to be faced with last year, this time, we got the fabled may, greatest myths ever, he told my wife lisa. Greatest myths ever. Its on the upside. You do have a transition but unlike the transition from, say, the 386 to 486 to pentium with intel, theyre not obviating their curt iteration, its just that theyre adding it more and cant add it fast enough. I want everyone to understand that there an overwhelming sense that the chips that google is making, and chips that microsoft is making and chips from amazon are somehow made to compete no, theyre meant to complement. Thats not the achilles heel of ined any virginia. It would be if amd would develop a chip that can also be trained but they dont have it. I really respect what theyre doing. But theres no doubt about it, its a step function from what jensen long is doing. Dont judge him by this quarter. Meantime, we do have a microsoft event in redmond. Dell got upgraded at bernstein. Right. And hp yeah, hp has it, now, i could be i could be wrong about this, because i might be early. But this is the biggest pc refresh untiin history. The trust by best buy, knowing that you have to get through this quarter. But i didnt want to own it i didnt want to wait until somebody said now that the bad quarter is over, lets buy it. Im probably early on the club. Best buy . Best buy. You got to refresh like no other. Your pc is no good. Because you had to talk to your pc its part of a. I. Microsoft is there. Hp is presenting itself as a winner. Dell is the actual winner because michael dell was in the front row of the fabled gcc conference where he became the de facto for nvidia, nvidia is not a chip company, at plate form company. Its so gassed its a supercompute. So your pc is going to be no good. Right. Would you say the same thing about the a phone, iphone . I think the iphone next generation has to incorporate far more a. I. Than itdoes. You snow what, tim cook would say that. Tim cook was cackling when i said i need my iphone to have what android has. Hes like okay. Thats good enough for me. Theres a piece, bloomberg has got a piece today how they need to drift off from the a. I. Age . Well, i think over and over again, we have said that apple was not doing something right. Meantime, they were doing it. By the way, the story about the price cuts in china, we said february was bad, march was worse. Turned out march was better. Almost every report has been wrong. Really, jim mentions, said to be making a move, conduct prices to some argue new lows on the huawei competition, jim but youre just not willing to no, and then we see, the cities, its doing better. The desire to knock back apple by everybody is extraordinary. And ive got to try, i tried to say i was tool tough on tony seguinnetti. He came out in the quarter, he was presenting it as a multiyear opportunity, not a quarteryear opportunity. Sometimes, im too tough on tony. Its a great call. Hes got other calls that you disagree with. You snow what, i remember from the old days, hes just such a nice guy. I was way tool tough on him, hes a cerebral fellow who is very complete until things. Were going to talk apple and financials as jpmorgan has the investor day. So far, so good. Hes part of the problem. See, i want to be positive. Then i listen to him and i just want to walk it back a little no dow, 40,000, if you walked it back, you didnt get it. And its on goal that its presented as an option. Taking a look at the premarket, speaking of, which we will get a number of retail numbers, target and lowes, tjx, top pick lists, theres a look at the futures, not far from the flat line, as the dow puts together five straight winning weeks. B back in a moment. In real time. jen so we partner with verizon. Their solution for us . A private 5g network. ella we now get more control of production, efficiencies, and greater agility. marquis with a custom private 5g network. Our customers get what they want, when they want it. jen now were even smarter and ready for whats next. vo achieve enterprise intelligence. Its your vision, its your verizon. Something amazing is happening here. Climate researchers are weathering a data storm. Thats because cdw transformed their devices and infrastructure with Lenovo Thinkpads and powerful edge to cloud solutions, delivering faster insights and increased performance, giving them the scale to stay ready for whatevers next. Make amazing happen. Lenovo and cdw. iconic brands speak for themselves. We are so excited to welcome you to our community. Today is all about you. take a look at s p gainers, nclhal at the top there with a 4 gain. You got him tonight on mad. Analysts takeaway there. As we look tour trends for travel. In mad money. Opening bell in ten minutes. [crowd chanting] they ignored your potential, and mocked your ambition. But its not the critic who counts. With every swing and block, your game plan never changed. Some still call it luck. Let them. Because you know what its always been. Inevitable. Time for cramers mad dash to the countdown to the bell today. Market never lacks for excitement. This morning, Elliott Partners which i think the world of took a 1 billion stake in Johnson Controls. I think it looks at sense when you look back, first of all, it hasnt gotten back to 2022. It hasnt kept pace with carrier and train. I think this is as far as im concerned, these things tend to start friendly . Nope, here are things, ideas that they do. We dont know if you started buying and moved up but when you cooperate, when you cooperate, they have a fountain of ideas. They do incredible work. And when you dont cooperate, it becomes difficult. Theres no reason it has to be difficult, because they do come in as people might not realize constructively. Its only the management itself that defeatsthe constructive attitude. Its not the way elliott works and i think its going to be a good one. Right. Now, the story has been a lot about streamlining, selling h back or selling ldt and trying, right . Well, one thing that has hurt them, if you look at antitrust and you wanted to be bought by honeywell or by train, this administration will not let you do that. No, arguably, i would tell you, maybe it shouldnt, it should have a lot of competition. But these guys have kept a lot of their customers. I will warn people, its up on a spike because of elliott. I dont expect any takeover. I dont expect any sort of movement. But i do think that the company will be under pressure for some time because its been such an underperformer. Right. By the way, i would say myself, maybe the ceo Leadership Team needs scrutiny here. Do you think its the most interesting activist story since disney . Yes, i do. How many others there have been, really. Yes, one of the reasons, this is one of the hottest. They have data center hvac. Anything data center is so hot, some like it hot, but i do wait, again, hey, that movie ended so well. Nobodys perfect. Nobody is perfect. What i would say about Johnson Controls is nobodys perfect. Im a man. Well get to the opening bell in about six minutes. Dont forget, you can catch us anytime, anywhere. Listen to and follow squawk on the street opening bell podcast. Every day, more dog people are deciding its time for a fresh approach to pet food. Developed with vets. Made from real meat and veggies. Portioned for your dog. And delivered right to your door. Its smarter, healthier pet food. Gamestop moving lower in the premarket after last weeks wild ride with meme names. Jim, we talked about the split in fundamentals and market prices. Well, and i was thinking about what brought a lot of genzers back was this, a belief that you could beat wall street. It was never wall street you were trying to beat. It was you were investing in a company with shaky fundamentals, take two, its a very hard business, when they get the game right, its got to be perfect. But you dont buy it there. You download it on your xbox. But the fundamentals, what they seem to not understand, the people who are buying it, is its a company. Its a company thats very challenged. Its a company with very little information. Its a company thats kind of a ceo who doesnt really care for explaining what he does. Right. He doesnt have short positioning. Theres so many other spots they could have gone after it they should just let is alone and resist. I feel badly. Theres no short to beat up on. Theres no short thats flailing that you have to cover. Now youre investing in a company thats a secondrate company. Do you think the companies themselves are now nimble enough to say, look, if youre going to present this opportunity, were going to meet you at the market . I was very surprised. Why didnt gamestop have that in place. He completely gaffed everybody, he was such a good ceo. I would have thought that gamestop had some program that was ready. You as had to preannounce, apparently at the same time, you couldnt issue a program, apparently and not tell people how poorly you were doing. You could have quarter ago got in. Gamestop, they just didnt do it fast enough. And they dont have a bad Balance Sheet. I dont want to portray that they needed to cash this, certainly. But if youre going to continue in the way theyre doing, where you have a declining business, you need all the cash you can get. They needed to reinvent the money. So i was trying to figure out what they could be doing. I did come back to they have too many stores. There are must be some stores that are profitable. You have to close the ones that are not. That would have saved a lot of the company. And encore could have been saved by closing the nonperformers but they seem paralyzed. And people are investing in a paralyzed situation and theyre doing it at the market which i hate. That means you cant move it up. Theyll always be there. Well keep an eye on it, its certainly been an interesting week or so, given the meme dynamic. The big board, clothing company, contour brands celebrating its anniversary. And the nas dak candymaker so good, celebrating a recent ipo. By the way, contraband, i interviewed them this morning. Its a remarkable company, a spinoff from the fcorp. As the company has been aiting, scott baxter, the ceo, youve got the country singers all aligned with them. And it is a look, when they did this at t look, challenged levis. But an athleisure look that is challenging. This week, jim, were getting tjx, rl, pbh and among others. Its challenged. He used to be at Procter Gamble tjx recommended all over the place. I dont know, ralph lauren had such an amazing quarter. And it took so long for the street to react. The stock is now up appreciably from when it had its last quarter. And theyre doing a remarkable job. And the pvh corp i can tell you of all of those, i think ralph lauren is going to put up the best numbers. Right because patrice is just a remark only unsung ceo along with ulta, lulu, berle and. Bh, jim. Yeah, lulu down, and a lot of people gunning for them. If you look at the pseudo athleisure aspect of what kontoor is doing, just one challenger from gap stores although they havent emphasized it yet this is where lulu does a good number i dont know if people care. I dont know geez, the multiple has shrunk there. Yeah. Its shrunk, because everybody wants that business. Pretty cheap, wow, i didnt know it was down that much. Hasbro did get out of Morgan Stanleys top pick list, jim, along with progressive i wonder in the consumer front, toys well, chris cox has reinvented hasbro. Hes done a lot of tough things to get things right there that needed to be done. I think thats one that i really do like of the of the you know, for a while, but the upgrades seem very positive and justifying meantime, nclh is leading the s p. What are you going to talk about tonight . We know from endless data which it be from mastercard which put out a fantastic piece last week, this is still the best bargain people love to cruise. Norwegian cruise has lagged the group. Frank del rio used to run the company, no longer, harry som m mer, we had the viking idea. Carnival is up on this people love to cruise, carl. I had a cruise booked for the last week of february. You obviously couldnt go no it got a cold yeah. Thats what i hear yeah that was a bummer. Thats a nice game for those watching travel trends speaking of calls, jim we got initiations on rubric today. Everybody loved it, barclays, overweight, evercore. Rubric, i said that, we looked at each other and said, you know what, enterprise software, cloud data management. Security, regulatory compliance. In other words, buy it it is, i guess, its incredible. Kind of like its kind of like, well, i dont know about you, but it sounds like system spunk lets buy rubrik. These are companies that try to be the next salesforce, the next palo alto or crowdstrike what will they ought to be is themselves now pall palo alto reports tonight. Well see. Hes got the hot hand but george kherson of crowdstrike, the guy never misses but those are what these companies are meant to e they want to be the next soandso. The next soandso i dont like that. I want to be the one that is, not the one thats next. Right to be sure, theres theres that taken, right, ibm that was interesting, youre right. Youre absolutely right. I just feel, im betting on the cash down 60 points. And hes a proud man and has delivered over time. I cant wait to hear what he has to say jim, the oil market was not really shaken by the now confirmed death of the iranian president. Wow, what was the oil marked. The economist has a piece that suggests foul play i know, when you see what happened, it just doesnt seem that way but we know that we still have theres a sense that we repeat in it for now, you could jack up oil, but its not happening. And some people are saying, you know what, when you see the preponderance of what is in china, the phenomenal demand the marginal demand from china may be out right but that may be data center yeah, climate tech and all of that but kcopper to date, 35 . Remember in housing and stealing it . Oh, my god, i went to a Waste Management yard and people are like, dont throw in any copper. Its no longer chinese housing, its data center what an incredible story, weve written off copper so many times and its obviously wrong i know that coppers a great byproduct of gold i was thinking of looking at gold miners. We mentioned jpmorgan a few moments ago, our leslie picker is there and overseas trying to quantify the a. I. Use cases they are the onces, just for the record that spent the most time in nvidia theyre the times trying to figure out exactly how well to integrate it theres no doubt about it that theyve always been a remarkable machine. Giving some other highranking officials some more responsibility well, that could be interesting, because even in fabulous Series Succession yes at some point, jamie will do it. Obviously, jamie dimon is a much much loved ceo by investors, and i think that as long as hes there, people want own the stock. Of course, jpmorgan, goldman, and theyve been putting in high after high the last couple of weeks lets Pay Attention to wells fargo. We have Morgan Stanley but this is charlie sharp and charlie is getting hes picking up all of these different 55 and 65yearold guys that didnt become ceo at hes banks and its amazing, one of the things that you learn, you have to retire at a certain point because youre going to lose all of the people 53 to 57 they recognize that they dont have enough time to be a tenured ceo, so now i think that charlie sharp, hes worked at jpmorgan, but visa, all right, ill take it hes why let building up a Real Investment powerhouse. Watch charlie. I think hes got it. Hes got momentum behind him that were not his fault. Right all new board, all new team confident, Share Buyback remarkable man, by the way youre talking about a real evolution in the Mortgage Business now a thing of the past yeah, i think that they want Investment Banking and if charlie wants that, if they want m a, theyll get it because hes a very respected businessman. And business person. And i do think look, like i said, i happen to favor wells because charlies back those of us who remember sharpe from the days when he was he isnt the teddy bear that he is now. Exactly jim, micron gets an upgrade today over Morgan Stanley to go overweight pop i wonder how that fits in. Joe morris said he belatedly game in. He remained negative for too long micron was a mistake, saying negative i like that. I would have liked that if he would have been positive but at least theres some humility. This is the stock, when you get it right, when you get it stock, you have to have it when people really hate it but i have to tell you if you parse what sanjay morose said, you would have gotten it, because sanjay said, listen, the inventories are lean on that first base on the way to everest, that first base camp is when he said inventories are lean following of microns realize you cant wait until its better and morris waited until it was better it can wait three years and go back down. They have a less cyclical business related to data centers and high bandwidth memory has been fantastic notice, by the way, they make things in america, and sanjay, i love what the commerce secretary i love it but sanjay is his own commerce secretary. In terms of making it he spent a lot of time with intel which is great i would check that Balance Sheet at intel but i do think micron can do it alone or with someone. But sanjay is the king of american chips interesting yes and by the way, a quiet man, not a braggadocio. Just goes about making chips theres only a couple of companies and the stock really dominant thats why that stock can go higher speaking of things in this country, this out of mercedes were you surprised y,es, i was. When i look at what ford had to give and gm had do give and people are basically voting for status quo and if you look at the deals they got in detroit, wow, they were great im sure there are people like my wife saying, jimmy, soandsos ceo is making 2 billion why shouldnt he but i was surprised. Meanwhile, reuters has a piece on tesla about the company trying to assuage complaints from fleet managers in europe. And then kind of takes to you l us to what elon musk said on the most recent Earnings Calls whether or not youre buying tesla as a car company or autonomy player. Heres what he said. If you value tesla as an auto company its the wrong game work if someone believes tesla is going to solve the company, i think they should not be an investor in the company. And we will. And we are thats from a group advocating for the pay package vote well, look, the pay package, what do you want to say, its a deal its a contract, he should get the money. But wherequizzical, he wants to value that company, nvidia, 25 timings the future earnings and his is selling 68 if i want the tech company that he relies on, ill buy the stock of nvidia. Ill wait until after wednesday so i dont have to pay that rush he is right that one day that tech will be a driving force but right now, its not. I guess, so your advice then is nvidia over tesla oh, yeah. Nvidia may be the beginning of the new Industrial Revolution. Tesla has not been able to make the chips in nvidia. I know there was a time, elon musk had to come back to the fold look, it is its a 550 billion company. It is clearly not being valued as an auto company because fords 48 billion you have to say youre kind of in no mans land i wish tesla well. Obviously, he deserves the money because he got the contract. But it doesnt mean i want to buy the stock. Id rather buy companies that are betting in the revolution. A dell, a servicenow i see kendra this morning making a deal with nvidia you have to get with jensen. I did a lecture about getting with jensen. You have to get with him because its the Industrial Revolution nothing that you have will be the same after the gpus become more broad theyre not broad right now. Right the times has a piece on paramount with sony apollo signing some ndas. Right they do backup favors last week cooling on the idea of all cash yeah, david has been wright on that, i talk to david, and paramount, kenny paramount, every single week, but hes correct. Thats even more fraught than my position on disney for my travel trust. Thank heavens we sold a lot. Did you really . Oh, my god. And it was just discipline when peltz left. I know that peltzs name, there are people who say peltz would not be good. The stock did go higher. Im interested in the stock im not interested in whether goofy and pluto are unionized but goofy and pluto, yes, mercedes no thats right. I dont know. The seven, how did the seven go . Im looking at dow component year to date, jim and where disney ranks oh, geez. Yeah, we talked the the other day about its lack of contribution to dell, 40k in the last weeks well, ive done enough to say negative things about bob iger my travel trust is in. Hugh johnson bought bob iger well figure something out we go back again and again what a bad business anything linear tv is. The cord nevers are now the cord nevers are so prevalent that you feel like, you take the bundle i mean, i think, when i meet with young people, im trying to get them to watch me they watch me on this 20minute this tenminute thing i do, people know that they say, man, ill tell you, youve got this big program, im thinking mad money. No, the meeting no, the mad money, the squawk on the street no, no, the meeting oh, my, how did that happen. Thats interesting. Not to mention, jim, a lot of interest out of cannes, including talking about the box office being down year on year, that streaming audience she argues may get out of the habit of going to the movies i think those of us who still go to the movies feel i look around, i say, wow, theres a lot of old people there. My wife says, huh. Theres not as many cinemas. I went to see the fall guy i thought it was fantastic i thought, movies are back oppenheimer the big screen the costco big screen, the ability to stop it whenever you want your couch is dinah m dynamite. I paid 7 for a box of good and plenty the popcorn was it was a 100 outing and no sitter right, no sitter, thank heavens gs because the kids thats the saving grace. You cant go to the movies without spending so much money 2. 50 it was fantastic and then red lobster. When youre arguably giving up is that communal experience amc, im taking a look as well ive got communal experience with my couch and my dog my dog is somewhat interested. Hes been in one of those learning kennels the last two weeks. Do you think a dog its kind of how michael went to college to get stupid in godfather ii. Hes going to kennel to get stupid thats a good deep track as well decent track this week, dow up as well. And bosley, waller, and tonight at 7 00. A continuous swoop. As we work our way towards fed minutes. 4. 44 stay with us so this is pickleball . Pickle ah, these guys are intense. With e trade from Morgan Stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Watch hims hers today. The digital pharmacy startup is introducing access to the glp1 weight loss injections low price too. The ceo told cnbc the company is confident consumers will be able to get access to a consistent supply of the medications. Nice gain there on a market thats opening not too far from alltime highs about 5 points shy othn e s p. Dont go away. You founded your Kayak Company because you love the ocean not spreadsheets. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire a slow network is no network for business. Matc thats why more chooseon. Comcast business. And now were introducing ultimate speed for business, our fastest plans yet. Were up to 12 times faster than verizon, at t, and tmobile. And existing customers could even get up to triple the speeds at no additional cost. From the company with 99. 9 Network Reliability and advanced Cyber Security, its ultimate speed for ultimate business. And its all from comcast business. Its time for jim and stop trading. A disturbing piece out, one of my favorite stocks, elf, elf beauty, declining market share i dont know about the declining market share, because theyre good but there is a slow down in u. S. Mass beauty sales the likes of which ive never seen. And its including amazon, costco, ulta i dont know what to say this is a group that had been very, very strong for very long time, and its just cracks theres cracks everywhere. I thought it was just that when sephora got in they could really create a huge competition because they moved aggressively at kohls. Im holding by that, but i dont know i mean, people retail is tough. Tjx, there were three firms that told you to buy it the stock down 1. Retail is very, very tough i cant wait to see what target does people are saying, wait a second, the discount says look out. Im rooting for brian. Yeah. Im just rooting for him. I did notice ulta and dash expanding their delivery partnership. Remember your instagram trade. Yes. That was a long time ago. Selfie best yeah. The one look look, walmart and costco may be walmart, costco and amazon, sorry, are the three great retailers of our time. I sometimes order things on amazon in the morning just to see if theyre back there in the afternoon. I dare you to the guy, i always feel bad for the cfo i ordered a case of gatorade and its there when i get home gatorade g the one that has no raymone, i like your norwegian we have nikesh arora from palo alto the story is a remarkable story, wrangler and lee, whether country, denim, management, its their time and terrific stuff. Look forward to tonight, jim. Thank you very much. Great show. Mad money 6 00 p. M. Eastern time as the s p tries to take aim at fresh allmeti highs 5321 stay with us a pillow with a speaker in it thats right craig. A team thats highly competent. Im just here for the internets. At t its superfast. Reliable. You locked us out . arrggghh ahhhh solutionoriented. [jenna screams] and most importantly. Is the internet out . Dont worry, we have at t internet backup. The next level network. I sold a pillow this is our future, ma. Godaddy airo. Creates a logo, website, even social posts. In minutes how . A. I. impressed ay i like it who wants to come see the future . get your Business Online in minutes with godaddy airo your shipping manager left to find themself. leaving you lost. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire Municipal Bonds dont usually get the Media Coverage the stock market does. In fact, most people dont find them all that exciting. But, if youre looking for the potential for consistent income thats federally taxfree. Now is an excellent time to consider Municipal Bonds from hennion walsh. If you have at least 10,000 to invest, call and talk with one of our bond specialists at 18003764376. Well send you our exclusive bond guide, free with details about how bonds can be an important part of your portfolio. Hennion walsh has specialized in fixed income and Growth Solutions for 30 years, and offers highquality Municipal Bonds from across the country. They provide the potential for regular income are federally taxfree and have historically low risk. Call today to request your free bond guide. 18003764376. Thats 18003764376. Good monday morning. Welcome to another hour of squawk on the street. Im sara eisen with Carl Quintanilla, live at post nine of the New York Stock Exchange david has the morning off. Takea look at stocks higher fo the s p here in the early action up 0. 3 building on last weeks gains. Nasdaq leading up 0. 7 a lot of tech catalysts with meetings and nvidia earnings the treasury picture right now yields are little bit firmer but well off the highs the 10year note yield 4. 435 amid a flood of fed speak. 30 minutes into the trading session here are three movers were watching Johnson Controls one of the top gainers in the s p on the back of that report that activist investor Elliott Management has built a more than billion dollar stake in the name. Shares have lagged its industrial peers norwegian raising its guidance for the full year the companys ceo saying its continued to see, quote, very Strong Demand and rohrbachings and then nvidia a big stock to watch, the company set to report earnings getting price target hikes ahead of the results coming off four straight weeks of gains up more than 20 in the past one month alone and up another 2. 6 this morning. Carl, thats where we begin the week ahead not a lot of macro data. That was last week until we get really the pce report next friday, but as far as this week goes its going to be more earnings on the retail space, names like macys out there after a big surge in walmart last week and, of course, the nvidia earnings, the Microsoft Developers conference tomorrow, i mean were watching for the fed minutes on wednesday. I think the key question on the minutes because remember, this is the notes from the last meeting, its a little bit stale, but the big headline at the last meeting when powell said its unlikely the next move would be a rate hike, was there dissent, other fed members disi gre with that stance i would add any concern about the softening in the labor Market Trends . Since then we did get a cooling jobs market a little bit and that reset the tone and the narrative around, okay, maybe the feds got a point when its iching to cut rates because the job market is finally starting to deteriorate a little bit. Bowman was a little hawkish on friday. Interesting to hear bostic, not uncharacteristically this morning, saying that Pricing Power has waned and you couple that with what target is doing on the price cuts ahead of earnings tomorrow it will be interesting to see whether goods can continue this disinflationary snoofts while Services Remain strong and Services Inflation and Services Spending starting to cool . Because thats really the worrisome part of the market there was a good bank of america consumer note over the weekend wondering why are Retail Stocks acting so miserably when Services Spending is strong, the macro data on the consumer hasnt been that bad and one of the takeaways a lot of these stocks are more exposed to goods spending than Services Spending which has been a weaker part of the economy. Looking forward to the target number later as far as inflation, as we try to monitor postcpi which thankfully for the fed and market came in a little bit, you know, inline to weaker than expected finally for the month of april, a good chart of how many inflation mentions there have been in earnings and that is coming down so another sort of anecdotal piece for the fed and markets to consider from the highs. Number of companies citing inflation, its on a downward slope. Lowest since i think its q2 of 21 three years. Well take it. If it was the opposite we would have mentioned it. For sure. Its still elevated and still a problem, but its coming down so thats a i guess a good data point as we wonder whether the inflationary trend look, the m. O. Right to this morning in the bond note arguing weve seen the peak on yields an thats a key question right now it was, what, above 4. 7 on the 10year yield at the end of april . And with the weaker job report that we got and now weaker cpi, weaker retail sales, the fed saying a hike is unlikely that threads together a narrative and not boosting auction sizes anymore. We know about what the treasury is doing when it comes to sales. Does that argue for the top end yields and going to be helpful for stocks goldman did a piece last week about residual seasonality in the cpippi components brookings, robin brooks takes a look at whether or not the u. S. And europe have an issue with measuring early in the year price hikes, did they get worse during covid could the tracker sort of normalize that into their models maybe we get a little maybe were on the other side of the hill. A little relief covid has thrown a wrench in the data and made it consues fusing and the geopolitical backdrop. Gold is higher today you could make the argument that this would would bode well for bonds as well. The flight to safety we got the news over the weekend or today that irans president and foreign minister were dead in this Helicopter Crash site. Unclear what that necessarily means for the middle east, for markets, not a direct correlation, but we watch it because iran is a major oil producer, because of the war thats going on in gaza. When we talked last week to Prime Minister netanyahu and one of the key questions i asked him was, iran. Like youre fighting hamas, but its just this neverending war until you confront iran which is funding hezbollah and hamas and heres how he answered that question. This is not merely our battle its also your battle. Because if they were to achieve, if they could knock out israel, they got the middle east if they gotthe middle east, theyre going to be going right after you. They say it. They chant death to israel and death to america they want to develop not only conquering the middle east which were preventsing them from doing, but also developing Intercontinental Ballistic Missiles tipped with Nuclear Warheads that could hold any city in the United States hostage. I dont think you want that. So confronting iran, rolling back irans aggression, preventing it from Getting Nuclear Weapons is not merely israels interest, its americas interest. That was one of his main points in the entire interview speaking to us here on cnbc, an american audience, our fight is your fight, especially when it comes to iran. So now we wait to see for the elections there and what happens. Unclear if theres going to be any kind of change in the regime or not to the geopolitical backdrop which investors are watching. Weve been taking note of the oil markets response, which oil is higher today, but not a dramatic response to that news meanwhile, stocks coming off their fourth consecutive week of gains. Tech and com Services Lead the charge ahead of nvidia later in the week mike santoli is here, our senior markets commentator talking about the road ahead we mentioned all morning long, mike, the positive tone out of Morgan Stanley. Yeah. Jpmorgan. Yardeni today. Theres an acknowledgement that the trend has been strong and resilient and i do think that you have the street a little bit luke warm and get their eyes grow too big in terms of potential forward terms i think its worth reiterating when the market makes a record high its more something to embrace than worry about they tend to persist a little bit longer the trend is positive in earnings, in, obviously, the market itself, in yields if they are tamed at this point, as sara was saying, and credit has been strong all thats kind of tough to fight even if you have really maybe unattractive valuations and sentiment is at risk we go up a little more from here were going to be over bought again. The market over loved again and we have to decide if we need to cool off i dont think were right there. The interesting piece to me, though, is the makeup of this latest rally were up 7 almost in the s p in four weeks thats a pretty good move. It has been somewhat more defensive or eclectic and really captures that sort of fatigue on the consumer stocks side, consumer cyclicals, some defensive stuff working, and then global reflation trade thats running through foreign markets, commodities and to some degree u. S. Markets. Were not really linked up in terms of where we are in the cycle and the market saying thats a good thing. What we want in the u. S. Is decelerate into a soft landing and what we want for the rest of the world is for them to pick up the growth slack so far so good i continue to say the 5 pullback in april was helpful, but didnt necessarily get you to a point where you say oh, Everyone Needs to rush to rebuild exposure because we panicked out in april. Mike wilson, Morgan Stanley, getting a lot of attention he always does he was right in 2023 but a lot are wondering if its a contrarian or counter now that hes turned bullish. He was right in 22 to be negative. Right. Last year right 22 23 wrong. In late july of last year we were wrong to be so negative, and just kind of marked his target to market he didnt really say buy them all. And that was right before the big correction that he sort of capitulated. I think that its something if you see it really build towards strategists like this is an unstoppable market, then you start to say, sentiment doesnt really isnt your friend anymore. In this case, what wilson is saying is, you know, were no longer having negative target, we think in a year well be flatish in the s p, and earnings have been too strong i think thats something that he would basically say. If earnings are going to meet what we now think they can do, its tough for the market to get into too much difficulty. Right on a day where deutsch goes to 258 from 250 and although the spread ween wilsons bear and bull case is, a couple thousand points. Its sort of a reminder even the people who do it for a living, say handicapping and predicting the market is essentially impossible so what you want to do is stay in tune with the trend and when you get too far away from the trend you have to, you know, kind of more or less confess that youre out of step and get back in line. Thanks. One more step forward. We continue to look for pockets of opportunity for investors look to names like microsoft, tony well and tjx. Senior Portfolio Manager joins us here on set great to have you. Welcome. Thank you so much, carl. Mentioning those three names at least, talk about the thread that you see running through them what do they share sure. I think growth is the main commonalty across all three. I think you still want to have that growth across stocks in your portfolio valuation is a concern clearly we all talk about that as market hits new highs however, i think you want to have stocks grow for you. We just talked about some of the s p earnings targets are you getting the feeling that earnings will fill some of that gap where you dont have to fret so much about multiples . Absolutely. I think weve seen with earnings season that there are companies out there who are growing. Inflation is helping them out from a pricing perspective and revenue perspective. But, you know, i think overall, its positive for companies in the s p 500. What is the strategy around consumer stocks right now with worries building around resilience in the consumer, growth and jobs . Absolutely great question i think for us we believe, you know, having exposure to quality names is really important. As walmart talked about last week, you know, having exposure to be sort of trade down in that higher end consumer, those consumers who are looking for value, looking for bar begins, i think nameslike tjx fit that bill. Tjx has been a winner. Do you revise growth targets at this point right now given what youve heard in terms of Earnings Growth for individual stocks . Based on what were learning about consumer i think for us we think the gdp growth is moderating we continue to think thats going to be what occurs throughout the rest of 2024. But, you know, i think its not going to come down so much where its going to be problematic. Meantime, i wonder, are we starting to talk about are investors calling about questions with regard to tariffs or what that will do to inflation in the case of a change of administration what happens after november . Yes were getting questions does investing in an Election Year and what that means for investors overall. You know, a lot of concerns over, you know, what type of impacts well have from tariffs and whether or not thats going to be inflationary again i think, you know, theres a lot to sort of play out still for the rest of the year but were still positive as mike talked about in terms of new highs, you know, leading to new highs. How much exposure do you guys have to tech i feel like everyone has wanted it to broaden out, and it still leads this marng sure. Were continuing to stay overweight tech. Tech in the long term is where you want to be to achieve that growth that i talked about we want to balance it out with names that have some value towards them as well, cyclical names that, you know, can participate when the economy continues to grow. And then still favor u. S. Over asia pack or europe we do like a u. S. Centric approach however, we did see from the most region Earnings Report that a lot more positive commentary about europe, europe in terms of the consumer and the economy, has started to pick up a little bit. Well get, you know, potential cuts out of the central bank in europe, so that could be a positive catalyst. June, still a live topic of discussion. I dont know. Are we going to get two cuts is that back on the table . For the fed yes. It is back on the table as far as the inflation keeps coming in below expectations yeah. Try to do a repeat of what we got last week. Well see. Thank you. Thank you appreciate it. As we head to break our road map for the rest of the hour jpmorgan meeting with investors as financial stocks hit new highs. Well head live to the meeting and discuss how to play the big banks from here. If 2023 was the year of ai hype, 2024 is the year of disillusionment. The thought of one top leader in the space. He will join us later to discuss. Another Company Getting in on the glp1 weight loss action and that stock rallying double digits right now well name names when we come back squawk on the street just getting started. Dont go anywhere. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Welcome back to squawk on the street. The journal reporting Bank Regulators appear to be nearing an agreement that would sharply reduce a nearly 20 mandated increase in capital for big u. S. Banks required increases could be about half as much as originally floated on average. Bank ceos are criticized the proposed requirements saying they would drive up costs and crimp lending, journal naming jamie dimon as a key figure in negotiations and powell fielded at least one question about exactly this in the last meeting, last presser. When they will change the rules. Speaking of dimon, jpmorgan kicking off their annual investor day today shares an outperformer on the year to leslie picker with the latest on what weve heard. Leslie hey, good morning, sara yeah, jpmorgan cfo jeremy barn hamm addressing the reports about capital regulation this morning. We dont have any information about the regulatory deliberations that you dont also have. And despite the recent press coverage, we think it would be naive to predict the outcome with any confidence. Now barn hamm noted the firm has about 78 billion in excess capital under current rules and believes even in the worse Case Scenario the firm has room to increase buybacks a bit. Fed vice chairman michael barr speaking at the same time at an event in florida reiterating he expects regulators will make, quote, raw material changes to the proposal but not finished going through the, quote, substantial of the multitude of comments they have received. Of course, guys, any rollback could serve as a tailwind for jpmorgans stock these shares are down a little bit today, but still near record high and nearly two times book expectations coming into todays investor day did seem quite lofty, but jpmorgans new targets raising net income interest guidance and expense guidance did little to quell the excitement todays agenda featuring those who jpmorgan sees as its next generation of leaders and investors will be sizing up the speakers after a january reshuffling gave more responsibilities to many of them the half day of presentations will conclude with q a and remarks from chairman and ceo jamie dimon, which almost always provides a plethora of headlines to choose from. Okay. Thank you, leslie. Well look forward to hearing it from you as soon as it happens leslie picker. For more on the big rally in the banks, and jpmorgan senior equity researcher Erica Najarian live from the jpmorgan investor day. What do you want to hear from management yeah. I want to hear when we can tap into that excess capital so, you know, just to extend on leslies point, what they really said was look, were looking for a few clarifications on basel iii endgame as well as a stress test coming up in june now that journal report from yesterday indicated that basel iii endgame will likely not be final until the end of the year and jpmorgan being conservative i dont think theyre going to, you know, really accelerate buybacks until we hear a little bit more. With that said, i think well get more clarity in june on what that stress capital buffer will be, and i would like to hear what that ramp will look like in the second half of the year. To your point, you know, they havent changed much in terms of their medium term targets and the stock is near alltime highs, so i think for a long only investors to get nor excited about the stock, we need to hear how they will distribute this embarrassment of riches in terms of excess capital. Beyond that, are there still questions about the outlook for Net Interest Income, given the changing rate environment and outlook by the day look, at the end of the day, i think of all the money center banks, jpmorgan is best positioned to weather higher for longer and best positioned to weather even a shift in the current mindset. I think at the end of the day, what, you know, increasing the Net Interest Income guide did for the stock is while as leslie mentioned expectations may have been robust coming in, it put the notion of beat and raise back on the table in terms of perhaps this is not going to be the end point for Net Interest Income to the upside for 2024, which would clearly set up 2025 even better. Marion lake sans delinquencies chargeoffs have normalized last week Morgan Stanley argued were past what they called peak deterioration in delinquencies on credit cards. Do you think thats possible does the picture get better from here look, i mean, i think at the end of the day, delinquencies are the ultimate sixmonth ahead predictor of losses, and if we really truly are going to underwrite the soft landing and if Pretty Healthy consumer as the base case, yes, i think its possible i mean its always about the Unemployment Rate, and thus, i think that i believe that from marry ann as long as we dont have further deterioration of the Unemployment Rate from here. How about what appears to be the development of empowering some officials under dimon were going to be fielding the conversation, whether we like it or not, about whether hes setting the tone for his departure one day . Look, i think, you know, its pretty clear jpmorgan has simply done the best job out of all the money centers, head and shoulders above its peers in terms of communicating its succession plan, and while, you know, its hard for us to predict who the successors will eventually be, its clear to us and other investors that jennifer piecesack and marry ann lake are part of the top of the running of all of those photos you showed on the screen. And how do investors feel about that do they feel fine with it . Is this is there any indication that this could happen soon . So look, i think jamie is under contract until 2026. I dont think hes going anywhere soon. But jennifer has been rotated out of the Consumer Bank to cohead the Corporate Investment bank mary ann cfo sole head of the Consumer Bank. The Investor Feedback has been uniformly positive on both women, so i think investors will be very, very happy with those two women, albeit those are tough shoes to fill i would said. As we zoom out, erica, as investors try to figure out if banks are a good bet right now, where are we in the cycle . Because its been a we havent really seen the downturn were wondering if thats whats happening now with the rate outlook changing how do you answer that question . What do you tell investors to do with banks, given where we are great question. Banks look optically cheap p e is only 53 of the s p p e what weve been telling investors is while, you know, the picture for banks looks, you know, pretty good under a soft landing, you know, keep in mind that theyre currently the sector that is a prove it sector for Portfolio Managers, so a soft landing for Portfolio Managers as it translates to banks, is usually seen as a delayed recession. So i think what were thinking about in terms of, you know, how to position is, you know, continue to focus on highquality at a reasonable price. Jpmorgan is a stalwart in portfolio but i would say wells fargo would fall under that bucket, truist would fall under that bucket. As we start thinking about election returns and if we have softening in congratregulation the hartland deal is a true indication of m a coming back, i would tell investors be brave to dip auto your toes into high quality regional banks as well. Thats a segment for another day. Yes. A buy on jpm, 219 target. As we go to break look at gainers. Clh leads the way, not just the best s per but the fourth most active today this is the best day for that name since february and its up already 12 for the month on mad money tonight. Stay with us welcome back to squawk on the street. Bitcoin continues to climb higher today coming off the best week since march the crypto currency up double digits since the beginning of the month and new data out of pitch book revealing strong investor appetite in crypto so far this year according to the data provider crypto startup funding for a Second Straight Quarter 2. 4 billion in the first three months of 24 and funding across 500 deals and rose by 40 from the previous quarter. Its time for a news you update to pippa stevens. Good morning, carl. The chief prosecutor of the International Criminal court said this morning that he will seek arrest warrants for israeli Prime Minister Benjamin Netanyahu and hamas leader sinwar the prosecutor said both bear responsibility for war crimes amid the israelhamas war in gaza israeli and palestinian officials are facing warrants. Donald trumps forminger fixer Michael Cohen is back on the stand today facing more crossexamination from the defense. He is in the prosecutions final witness in the trial over whether trump falsified Business Records related to payments to adult film actress stormy daniels. Unclear if the defense will call witness joss a lie court in london ruled wikileaks founder Julian Assange has a right to appeal judges were not convinced by u. S. Assurances assange would be allowed to rely on his First Amendment rights in trial. He faces 175 years in prison sara pippa, thank you. Pippa stevens. Still ahead if 2023 was the year of ai hype, 2024 is the year of disillusionment, according to our next guest. Check out the mystery chart. The stock rallying double digits more than doubled this year and what is driving the move when we come back on squawk on the streetwi th the dow positive by a few points [crowd chanting] they ignored your potential, dissed your achievements, and mocked your ambition. But its not the critic who counts, and you know that. From the beginning, you couldnt be stopped. Breaking resistance with every swing and block. Your game plan never changed. So enjoy this moment. The one they said youd never live to see. Some would still call it luck. Let them. Because you know what its always been. Inevitable. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. Microsoft expected to unveil its vision for ai pcs at this years build conference. To steve covax in redmond, washington, with more ahead of the kickoff. Good morning what we can expect. Yeah, good morning. Like you said, sara, this is about ai pcs and i know thats kind of confusing so let me explain what that means. It means were going to hear a lot about whats called npus these are the chips that let computers do ai tasks without necessarily an Internet Connection or just a lot faster than normal. Were expecting qualcomm to be a really big part of this event today with the first pcs featuring qualcomms new chip and might hear from microsofts surface pcs, and hp dell and the like these chips are meant to compete with apples chips its been shipping in the mac books for the several years now, the mseries chips theres also just a ton of talk about ai hardware recently, but its still unclear what those kind of hardware and gadgets can do on the software side. They need to explain that and microsoft and apple frankly in order to get themselves out of this pc slump after covid weve been seeing so far were expecting even more, though, sara on the softer side tomorrow when build officially kicks off. A big keynote with Satya Nadella and his top executives as well steve what do you make of ai pcs . This is going to drive a new cycle of all of us needing to buy a pc what is the catalyst for them and the potential of the size of the market here . Yeah. Thats the hope, right, sara, that this kind of idea of even if were Just Marketing them as ai pcs, people are going to run out there and want to upgrade because of that. But like i said, they really have to prove a use case, why is an ai computer, what can this computer do i couldnt do with a computer i bought last year . Thats the sales pitch they need to clarify and explain because right now, its just very limited we know, for example, a lot of ai stuff weve been using, chatgpt and anthropic, perplexity, happens on the internet you dont need special hardware to do that the question becomes, what are they going to have in the operating system side that can convince people to buy it . Carl perfect segue for our next say if 23 was the year of ai hype, 24 may be the year of disillusionment. Joining us jerry marcus an ai expert and book of taming Silicon Valley we can ensure ai works for us. Good to see you. Thanks for having me back. Youve consistently offered gut checks about hallucinations, lack of progress, the way in which this is not the pipe dream that some envisioned have any of the recent product introductions changed your mind . No. I mean, were still basically working with the same technology its still designed in the same way. It takes a lot of statistics from words and tries to predict what happens next. As soon as these things come out people Start Playing with them on twitter and so forth and you see a lot of examples where theyre still making the same boneheaded mistakes as before. Nobody has solved hallucinations, and i dont think we can with Large Language Models we need genuine innovation we have a trap right now where people propose things like the humane ai event, imagining ai is solid and put it in the world and its not solid im afraid it hasnt happened yet. I do think eventually we will solve ai we will have ai that can fulfill all the promises that have been made lately, but i think were a decade away. Are you going so far to argue the wave of investments that companies are making is misplaced . I think people are putting in too much money too fast. I think its premature sam altman talked about raising 7 trillion. Thats like series h money or Something Like that when you establish your Business Model and so forth and that hasnt happened here. Ive publicly predicted openai might turn out to be the wework of ai. People might scratch their heads and say this is a solution in search of a problem. We havent found the problem Something Like 50 billion last year made 3 billion in revenue. That is not sustainable in the long term. Either they have to make it better, which is proven difficult, or find a killer use case which they havent really because the performance is unreliable my guess is a lot of investors are going to be left back. A lot of companies we interview, lot of investors we talk to would disagree with you. Theyre excited about the promise of this technology. Ive seen this before they were excited about Driverless Cars. I said in 2016 this is not going to work with Current Technology. What is the risk youre worried about . The risk, you said . The risk . Theres lots of kinds of risks. On the financial side the stuff is not really going to sustain itself because it doesnt work very well. There are risks on the global stage, so these things can be used for misinformation because people who generate misinformation dont care about accuracy and truth which are the achilles heels of the systems. So were starting to see it used for elections and scams and so forth. In the longer term because we dont really control the ai very well, its black box ai where you put in inputs and get outputs and dont understand whats going on. You cant make guarantees around it. People compare it to the steam engine and electricity and to other the internet other major they dont want to mention the jet pack, right . Weve had lots of ideas. I think dur jables are the best analyses until the hindenburg this scales fast and make it bigger and it will be awesome. It turns out they were not the right way and instead we made airplanes. I think were in early version of ai. Well get to a better version. Just assuming that thing we have right now in hand is the right one, i think is a mistake. Were seeing that over and over again. You know, the ai pin was a bomb. The Company Called ghost that tried to use Large Language Models to make Driverless Cars failed stability is having trouble. Were already seeing some signs that things may not be working out. Also a lot of people are leaving openai some of it is around safety. Its quite a lot of people leaving really close to agi. Im not sure those people will be do you think thats why when we press corporates for examples of use cases at the moment they keep saying its around the bend do you think there will be a moment of reckoning where they say this is not panning out as we thought theyre already privately scaling back expectations according to some reporting ive seen theyre saying, i know you think this stuff is amazing, but lets be realistic here. Theyre starting to tell the clients. The fact is, the stuff the systems Large Language Models makes stuff up and they make, you know, absolutely head scratching errors. So if you have a Mission Critical application and you cant afford to do that. It might work for Customer Service most of the time and then Say Something ridiculous that gets you in rouble. Its hard to trust these machines theyre fine for things like brainstorming where theres a human in the loop but im not sure thats a trillion dollar application. People will use it and make some money off of it. Its not theres zero money to be made. Whether you look at the Capital Investments of 50 billion this year and min another 50 last year, another 50 this year, so forth, like you have to have something huge to justify that and that has to be stable and reliable and the technology isnt yet. Is there a solution youre proposing from a regulatory standpoint where they can put guardrails on it i think we actually need new technology here. I think that the field is obsessed with Current Technology of large language model and they just dont work very well. We have 90 of Research Investments going through one thing. I call it an intel lec taout mono culture only one idea. Take yourself back to the age of alchemy. Everybody wanted to make alchemy work but it didnt mean it would work we needed to discover the periodic table in chemistry. We need some new thinking here i think and not just a lot of bandaids. People have put guardrails and theyre still easy to break. It was in the newspaper yesterday showing five different Large Language Models were subject to jail braex and they all failed its easy to get earn the limitations and easy to get around the patches theyve built. The technology isnt there yet, which is why i think people are going to be disillusioned and starting to be disillusioned the beginning of 2023, a year ago, everybody was wild about language models. Every company said go, every ceo said put this in our product line, and i think the results speak for themselves some people are using it, and a lot of people are like its not really ready for prime time. Were going to see over time the degree to which youre right, gary, and of course well watch to see how prices adjust, if that is the case. Appreciate the gut check good to talk to you. Thank you for having me. Cyber stocks hovering at fresh highs ahead of palo alto results in a few hours well get you ready and talk some top picks with an analyst when we come back. Uhuh. Bill uhhuh. Hiphop limping mmhmm medical bills uhhuh pancakes cash who pays you cash when you have medical bills . Grrr no idea. [tapping] gap the gap left by Health Insurance . Who pays cash to help close that gap . Aflac oh, aflac get help with expenses Health Insurance doesnt cover at aflac. Com pictionary . outpacing the s p this month with palo alto reporting after the bell the next move for the cyber space. Joining you is analyst andrew newwinski, buy rating on the stock. What we hear from the companies, andrew, theres so much demand rising tide lifts all boats, companies are spending more and needing to spend more on Cyber Security what are the nuances youre going to be looking for in the report because as we found out in the last couple months, its not a oneway ticket higher for these stocks like palo alto. Yeah. Thanks for having me, sara yes, the Cyber Security space has been under pressure year to date i think theres only a couple stocks one of them as an outperformer relative to the nasdaq palo alto has had some issues. Theyve missed billings expectations for three consecutive quarters now, and i would say the stock is it is recovering its dropped about 28 at the last Earnings Call last quarter, but got a lot of it back so far. Things were looking for tonight i would say, are number one, billings theyve got a 3 guide for billings growth this quarter coming off a 26 comp the same comp last quarter when they grew 16 . We think they can do 5 billings growth, 20 million above the high end of guidance roll that into the guide for next quarter and the july quarter, puts you at about 10 growth in billings we would love to see us getting back to the high teens, maybe 20 next year at this time but theyve got a number of positive things that have happened this quarter that gets them upside on the quarter in billings number one, the thunderdome deal they pulled out of guidance. Theyre rolling that thats starting to roll out to 60 locations now. Second, they had a really Strong Quarter with the fed they had a Big Department of energy deal that adds to upside. Third, you have the big United Health care group cyberattack, thats probably the most the worst cyberattack weve seen in u. S. History we know that they helped clean up that breach and we think they got a big deal out of that following that breach. Lastly, they took their guidance down ultimately because of these go to market changes that theyre making pitching their platform play. We talked to about 15 out of 33 different resellers said they had positive reaction to those new promotions that palo alto put in place its having a positive impact, not a negative impact, so really, we think they could putl that through next quarter onputl guide and get growth back to that high teens, 20 growth rate next year. It sounds like youre thinking the execution story might have been contained. None of your survey work really hints at a secular shift in demand to the downside, is that fair its certainly not a secular shift. The stocks havent performed well that would suggest a slowdown in spending the hackers dont care if the economy is high or bad and the inflation goes up. They just continue attacking weve seen hackers using more a. I. Than the defenders are using. Theyre using it for deep fake purposes they can write malware with it theyre doing a really good job leveraging a. I. Where the defenders are just starting to integrate it i think youll see it continue spending throughout the year in the Cyber Security space the best ways to play this are crowdstrike and palo alto. Andrew, thank you for the commentary helping us pregame those palo alto numbers tonight on mad money, jim will interview the ceo of palo alto on the back of those numbers. Still to come, the Biden Administration doubling the tariff rate on chinese solar panels whats next for the market and the consumer here in the u. S. . Well talk about it with t cheeo of first solar in a minute ons with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo the frenzy for weight loss drugs helping telehealth players himself hers lets get the update with brandon gomez. Shares surging, soaring more than 30 as of this announcement starting at 199 a month you can get a glp1 injection. Thats an 80 discount from branded like ozempic and wegovy, but even before todays news, himself projected it would bring in 100 million in revenue by 2025 they tell me that does not reflect this mornings news and offering we reported on supply constraints in recent months for glp1s this opened up an fda door, allowing compound drugs, aka generic products, to enter the markets. Theres still some skepticism around compound drugs. They dont undergo fda clinical twrilz they say they should not use compounded if the brand name is available. Himself tells us they have no problem with the generic in the long haul. He says, we have the confidence at this point to say we have the consistent supply from one of the largest generic manufacturers in the country that has fda oversight clinicians say this could be positive with appropriate patient counseling long term himself is not the first in the space. Similar Services Like rowe have entered the market. Isnt this the guy that said he wants to hire antiisrael protesters on College Campuses yes there was a die Investment Movement against the stock as well the ceo came on earlier in the year talking with squawk box about those statements and comments and you see shares yeartodate recovering up 112 . Do firms like lilly or novo have a comment on the compound element . Its all under fda discretion. Fda is really pushing that folks turn to these drugs. When you look at it from sort of the clinicians perspective, too, they see it as an opportunity where companies are consumers can get more access to these drugs. Again, it all comes down to making sure its done in a safe and viable way that long term does not have a negative impact on those users, whether it be their health or their wallets. Pretty fascinating, interesting gain for hims hers. We continue to flirt with alltime highs the dow 46 points above that 40k level. Money movers srtinusa up ominutes. T powered by ameritrade, unlocking the power of thinkorswim, the awardwinning trading platforms. Bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. Tailor the platforms to your unique needs with nearly endless customization. And track Market Trends with uptotheminute news and insights. Trade brilliantly with schwab. You know whats brilliant . Boring. Think about it. Boring is the unsung catalyst for bold. What straps bold to a rocket and hurtles it into space . Boring does. Boring makes vacations happen, early retirements possible, and startups start up. Because its smart, dependable, and steady. All words you want from your bank. For nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled. Which is pretty unboring if you think about it. I cant believe you corporate types are still calling each other rock stars. Youre a rock star. Were all rock stars. Oooo look look at my data driven insights, im a rock star. Great job putting finance and hr on one platform with workday. Thank you guys, can you keep it down. Im working. You people are guitar noises . Hand over the air guitar. Ive got another one. Good monday morning. Welcome to money movers. Im sara eisen with Carl Quintanilla on the floor of the New York Stock Exchange. Dan niles with us on how to play the boom in a. I. As nvidia conference is on deck. Nat gas prices at their highest since late january now. Later, well speak to the ceo of first solar as the Biden Administration does take action to boost the industry here in the u. S. First up, though, in the markets, dows recovered from some Early Morning losses. S p is up about a third of 1 . Nasdaq leading the charge, up 0. 6 its a split in terms of where youre seeing the strength as far as sectors tech is clearly leading once again. Lets bring in cnbc senior markets commentator mike santoli, as the rally continues. Youve been looking at whether it has more room to run. You know, volatility has also