Closing Bell - Closing Bell 10/3/25

Episode Date: October 3, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Tom, thanks. Welcome to Closing Bell. I'm Scott Wobner live from Post 9 here at the New York Stock Exchange. This make-a-breakout begins with stocks on the March, more records falling, and investors asking a very simple question. How long can it last? We'll ask our experts over this final stretch. Let's show you the scorecard with 60 to go in regulation. Neither the government shutdown nor the lack of a jobs report, doing much to disrupt the major averages today. We're green on the Dow and the S&P. Nasdaq's got a little bit of work to do. We did have the 31st record high of the year today. We'll follow that Apple is close to its own new closing high. It's first in nearly a year, and that's despite a downgrade for that stock today.

More questions about a potential AI bubble with more notable names weighing in. We'll tell you who in just a bit. It takes us to our talk of the tape, this rally, and how far it can run with earnings, not that far away. Let's first get the very latest from D.C. are Emily Wilkins on the Hill as a key vote taking place as we speak. Gab? Hey, Scott, well, yeah, right now, senators are voting. Once again, for the fourth time on that stopgap measure that would reopen the government, keep it funded through November. However, while the gavel has not fallen, which means the total is not official, we are not seeing the 60 votes needed to get this over the finish line. At least 41 senators have voted against, which means

unless some of them change their votes, we are once again headed into a failed vote. And the shutdown is then set to continue throughout the weekend. and into Monday. Now, we're watching to see if any Democrats are going to join with Republicans. We're seeing the same three that we've seen previously, which suggests that Democrats are holding firm trying to get some sort of a deal here

with Republicans likely on that Affordable Care Act premiums, the tax credits that help a lot of Americans access those for a lower cost. That's something that impacts blue states as well as red states. And so that is one of the main things. We know there are bipartisan negotiations, but as Speaker of the House,

Mike Johnson pointed out today, those could take weeks or months to complete. So trying to find a faster way forward on that. Obviously, as you noted, jobs numbers missed today. The pressure is only set to increase as the shutdown continues. A couple weeks from now, we're going to have potentially missed CPI numbers, missed PPI numbers, and very critically, a missed paycheck for a lot of government employees as well as members of the military. So they will be back next week. We will see what, if any, progress is made then. But right now, it is very much feeling like a Dale made up here on Capitol Hill. Scott? The latest, Emily, thank you. Emily Wilkins. Now let's welcome in Solis Alternative Asset Management's Dan Greenhouse. He's here with us

at Post-9. Good to see you. The market obviously doesn't care much yet. Neither do I. About what's happening in D.C. How do you see things progressing from me? I don't think this matter. We was on the other day with Carl, and I said, I refuse to play this game. We've done it. You've been around as long as I have. We've been playing this for 10 years now, 15 years now. And obviously, shutdowns haven't happened every time that the shutdown fight has arisen, but nonetheless, I refuse to believe that this is a meaningful impact. Anything that happens in the short term will be reversed in the medium term. Missed paychecks will be paid in arrears, et cetera, et cetera. So in terms of the government shutdown, I just, I refuse to care.

Okay. So what do you care about right now in the market? Well, I mean, I care about fundamentals. I care about inflation. I care about the Federal Reserve. I care about earnings. Yeah, you're going to care about earnings really soon, right? Banks are going to kick things off Not too long from now. Quarters ended. We're now turn our attention to what ultimately matters. I think earnings will be fine. There continues to be this concern about the consumer.

It's sort of like the worry that never goes away. But all the companies that recently reported, Dix, et cetera, et cetera, that have reported in the last month have all said some version of the same thing, which is that the consumer's fine. You pretty much just stay with what's been working then? Yeah, for some time, that's been my argument. The theme is so dominant. I think the better conversation, and I don't mean that disrespectfully about everybody focusing on AI,

but I think the better conversation is, okay, we've exhausted Tier 1, NVIDIA, Broadcom, et cetera. Everyone knows about that. And to a large degree, you've exhausted Tier 2, the derivative plays, the Vistras, the Vertives, the Eatans, the Train Technologies, et cetera. What's the Tier 3 that you should be looking at? It's probably in the power space. names that are not yet seeing the type of investor attention that's being paid to certainly the tier one, if not the tier two names as well. That's probably a better conversation, not is this theme still in play?

Because I think it is. I know we're going to talk about it. Yeah, well, it's not only is the theme in play, is the theme getting a little out of hand, right? I mean, that has been a serious point of conversation. The question whether this craze has hit bubble territory, I want you to listen to Goldman's CEO, David Solomon. He was in Italy today, and you'll hear what he had. to say, let's play it.

I'm not going to use the word bubble because I don't know. I don't know what the path will be, but I do know people are out on the risk curve because they're excited. And when they're excited, they tend to think about the good things that can go right and they diminish the things you should be skeptical about that can go wrong. We're in one of those environments where people out on the risk curve. And there'll be a reset. There'll be a check at some point.

There'll be a drawdown. David Solomon, what do you think about that? No disrespect to David Solomon. I mean, that's the incredibly safe and correct thing to say. This is going to get out of hand. I've made this point 100 times. I'm not alone. Everyone has told you, Satya, Zuck, et cetera,

has said the risk is underinvesting instead of overinvesting. And Zuckerberg even went a step further a couple of quarters ago, saying the amount of overinvestment that I could possibly do, I being meta, is de minimis in a larger context of a multi-trillion. company. So they're telling you they're going to overbuild. The only question to David Solomon's point is when, and to that effect, nobody knows. Well, I mean, Lisa Shallott, Morgan Stanley weighed in on that. She said, what inning are we in? When it comes to a market discounting scenarios, we believe we're closer to the seventh than the first. And we're starting to see

cracks. She was talking about the CAPEX. Yes. She's like the first one that I know of, or in a very small cohort who's come out and said, we're further along here than many people want to say. I hear like second inning, third inning, first inning. She says, we're in the seventh. What do you think? I've never met Lisa, and I hope this comes out right. In the story I saw, she references cracks. I didn't see any detail about what cracks she's seeing. From my vantage point, all I see are KAPX commitments continuing to be large.

Obviously, there's concern about companies investing in each other and whether they're using that revenue to buy products, a la some of the stuff that was going on in the 90s. But I haven't seen any cracks yet, and I'm certainly not. I don't think I'm alone. No, but if she's saying, look, we've thrown around some really large numbers. Yeah. And we're probably further to the end of the big investment than closer to the beginning. And then the other side of that is people saying, look, this rally is really on the

legs of the CapEx spend. So if she's right, then the rally will be shorter to live than some people would like to believe. I have no idea what ending we're in. I don't know there's any real way to quantify it. I'm on the lookout for something that's going to tell me it's going to end. I don't know whether we're in the first inning or the ninth inning. What are the things that are going to tell me that this is going to be over well. CapEx is going to start coming. Profit warnings are going to start coming. Companies are going to cease doing some of the things that they're doing now, like providing financing, et cetera. I have no evidence any of that's happening right now. So. By the time that that happens, though, it's going to be too late. Oh, that's not true.

I disagree. The first whiff of somebody saying, you know what, we're going to spend less, we're a little concerned about the ROI and all this stuff. Mark, it's going to make a move. Sure. Listen, if you, if we, we've been using the 90s era as, the blueprint, if you will. When the warning started coming in in early 2000, let me say two things. A, it is fair to say the Yahoo's of the world, the high flyers of the day, sold off very hard by the summer, and we're down, in some cases, 50%. So without a doubt, what you're saying is accurate. For the broader market, which I think to some degree a lot of investors care about beyond the AI trade, in September of 2000, you were almost as high as you were in March of 2000.

market. Now, again, the Microsoft's, Yahoo's, apples of the day were down considerably, and that's a fair observation to make that you're going to have to be very quick and nimble here. Well, because there were some people refused to see the writing on the wall back then. Let me stop you there and say, do you think people, after everything that we've been through so far and presumably will go through over the next, I don't know, year, two years, three years, whatever it is, do you think they're going to be quick to see the end then? No, which is why, if I even said to you now, I can guarantee you this is going to end badly, would you change your investment behavior today and people would say hell no but i agree and i think

on the halftime show you guys talked about this for a minute um everyone agrees it's good well i shouldn't say everyone a lot of people agree this is going to end badly you can't invest this much this rapidly in a new technology and not have some form of overinvestment malinvestment etc in that sense it's going to end badly but again the seeds of the entire world that we know today aka the internet were sewn during that telecom overbuilding phase. And there was a lot of, I think the stat was by 2002, 85% of the fiber cables that had been laid were still unused by 2002, 85%. I don't know if that's 100% accurate, but that is a number that gets tossed around.

Do I think all of the data centers that we're building and all of the power provisions that we're building right now are going to be used five or seven years from now? Probably not. But the question becomes, what do you do with all of this? And I'll end with this, and I'm sure we're going to broaden out the conversation. If you think about the invention of refrigeration, you could have invested in GE or whoever's making the refrigerator. But thereafter, in the years after the invention of refrigeration, you know

who did very well? Ben and Jerry's. I understand. But you know, some are going to say you do what they've said to do in the past. You dance until the music stops. We've talked about this before, yes. But for investors... I'm not saying that, but that's what you hear time to time, because people are so enthusiastic about what's happening in the market. They don't even want to see what could happen on the other side. You ride it, you ride it, you ride it. And the thing tips over at the end. You're like, well, should have saw it coming. Didn't. Well, listen, hindsight's 2020. And I'll just end with this. It's a bull market when you're invested. It's a bubble when your neighbor is. All right. Ben, there's credit. The alt managers are getting hit this week on concerns about another

area of the market in particular. Our Leslie Picker following that money for us joins us now. Hey, Les. Hey, Scott. Yeah, it's the private credit side of the business that has seen a real sentiment shift. Apollo, Aries, Blue Owl, and KKR, seeing significant declines a week to date, while those more exposed to private equity. Think TPG and Carlisle, they've held up okay. Two high-profile bankruptcies in the auto finance space leading to a broad-based sell-off in the publicly traded alternatives firms. Tricolor and First Brands bankruptcies, each within the last few weeks, have shed a new light on the risks of over-leverage and subprime borrowers. Hedge fund manager Jim Chano slamming private credit in an interview with The Financial Times saying, quote, I suspect we're going

to see more of these things. like First Brands and others when the cycle ultimately reverses. He said the $2 trillion private credit sector is akin to the packaging of subprime mortgages during the 2008 crisis because of the, quote, layers of people in between the source of money and the use of money. Typical direct lenders sit toward the top of the capital stack, meaning they would get paid back before equity and other layers of debt in a bankruptcy, Scott. All right, Leslie, Leslie Picker, setting that up for us.

Let's bring in now, J.P. Morgan, Stephanie Ali, and CNBC contributor capital area planning groups. Malcolm Etheridge, Dan Greenhouse, of course, is still with us. It's nice to have you here on set, Steph. What do you think about what you've heard so far? I was waiting to chime in when it comes to the AI spending boom, so I'm really excited here. Okay, go ahead.

Let's just look underneath the hood of these big numbers because they're starting to feel a little hyperbolic. Okay, hundreds of billions of dollars being spent, maybe a trillion dollars being spent, or a few in a few years. Underneath the hood, though, we've had a significant shift in the paradigm for computers. Today, compute is becoming one of the world's most critical resources. Now, as models are getting more useful and we're using more and more of them, the reasoning

models that we're using require a lot more compute. In fact, NVIDIA estimates that giving a really challenging question to a reasoning inference model will require a hundred times more compute than traditional single shot inference models. Adoption is scaling rapidly, 10% of firms now adopt AI, that's expected to grow. 10% of the world's population now uses chat TBT weekly. This is, we're in the very early innings here, and companies are realizing, these cloud providers are realizing their ability to even be in the market when it comes to AI demand over the next decade is going to be really reliant to their ability to get a hold of the resources they need.

Not only on the inference, but also training. All right. Hang on two seconds. Sorry. Malcolm, hang on for me just a moment. I do have some news on auto tariffs. Phil LeBoe has that for us. Hi, Phil. Hey, Scott, there's a report from Reuters, say, quoting the Ohio Senator Bernie Marino saying that the Trump administration is close to approving or at least advancing the idea of an offset for those vehicles assembled in the United States of basically 3.25% of the cost for those vehicles, for 2026 vehicles, assembled in the United States.

Now, this hasn't been finalized. This is not coming from the Trump. administration. This is from Senator Marino and essentially saying this would be a way of saying to the companies that manufacture in the United States, you deserve some kind of an offset on your costs. Therefore, this is what we would be proposing. And that's the reason that you see shares of the domestic automakers, if you will, spiking higher. How much this would move further production into the United States? That's a long ways off, Scott. You can report this much since these tariffs were put into effect, generally speaking, while there have been plans announced to shift production and to make up more production here in the United States, we haven't seen

a major auto plant, auto assembly plant, a supplier plant. Nothing's been announced for the United States. So this is one more way that the Republicans on Capitol Hill are saying we need to do more to reward production coming from here in the U.S. when it comes to the auto industry. Sure. I mean, some are going to say you could have saved a lot of the headache around this had you just done this at the beginning for the companies who, in fact, were manufacturing their vehicles here in the U.S. Great point. Look, the bottom line is this. We know the cost difference between a vehicle manufactured in Mexico and manufactured here in the United States. Even with a 25% tariff for a vehicle coming from Mexico, it's still a profit maker for the automakers. It's not like they're all of a sudden going, oh, we can't sell that here. Would they like to have the lower costs and not have to pay a tariff?

Absolutely they would. But it's not going to stop them. And that certainly has been the case here. Phil, thanks. Appreciate the update. Stocks are on the move, as you can clearly see. We'll follow them for the remainder of this program. Malcolm, I go to you on the market.

Concerns about either an AI bubble or a private credit issue that is yet to show its face. I am far more concerned about a private credit bubble than I am in AI bubble and I think maybe we're thinking about the wrong side of it. I think that Dan made a really strong case for the fact that we're

way earlier in this baseball game to keep the analogy going than some analysts seem to believe that we are. And the reason I say that is if you just consider that a lot of the tools using AI and building AI right now are solely in the workplace. We still haven't seen much creep over

into the world of the consumer, where that really tends to be that shift. If you think about the 90s shift that happened with the Internet, a lot of the bubble that happened was all around consumer websites and folks trying to bring things to the consumer a lot faster, a lot cheaper using the Internet. And so we're still completely in the enterprise, or at least almost completely in the enterprise. And so I think that alone tells us that we're so far away from this being a bubble that a lot of the CEOs we're talking about are right, that they're way more in danger of underbuilding than they are over.

And Dan brought up Mark Zuckerberg earlier, so I'll bring up another one of the CEOs who's in this conversation. Saty and Adela told us way back in January, I believe it was, he's good for the $80 billion he's on the hook for as far as CAPEX is concerned, and they anticipate increasing that going forward. So I'm inclined to believe him. I want to get your take, by the way, on the idea of a private credit issue somewhere down the road, today, tomorrow, who knows when it is.

You do have Solis Alternative Asset Management in the name of your firm. How are you thinking about this? So I think this conversation is not as holistic as I think it should be. And with the caveat that we don't do a ton of private credit, so I'm certainly not. Solace is not Ares, et cetera, et cetera. I come down on the more favorable side of this conversation. I don't doubt that there's lending being done that's probably incorrect, for lack of a better word. And the quote before was from Jim Chanos, who's the best, was, you know, when the downturn comes, we're going to see some more problems.

Of that, I have no doubt. But the key part of that. Jamie Diamonds talked about the same thing, by the way. Listen, when the down current, but the key part of all these sentences is when the down curtain comes. Good luck predicting that. But about private credit. I mean, listen, the idea is you're providing a loan to a company. You're doing single manager, single borrower, a level of due diligence.

You have a relationship with them. These are all well-known talking points, but you have a relationship with the borrower that you don't have in what we call the BSL market of the broadly syndicated loan market, and you can more appropriately work with the borrower if issues arise. And so we keep talking about some of these, some of the defaults that arise, and everyone's going, oh, there's a faulty loan to this company. The default rate in the bond in the loan market is in the low single digits. There has been no widespread defaults either on the private credit side of things. Granted, there's a marked-to-market issue. Of course, there hasn't. But the whole point is that people look at what's taken place with these two companies and say, if you get a deeper economic slowdown, you could have a lot more at a time when many people have been pushed into these assets in the first place who never had exposure to them to begin with. Well, listen, someone was making the loans. They were in the traditional loan market. They were in the bond market. Now they're being done by the private credit companies, Ares, Carlyle, etc. And the better question is, should I, I, whichever investor we're talking about, have exposure to these, for lack of a better word,

highly illiquid, highly specific products. That's a good question to have. I just reject the wholesale conversation about all this is being done by idiots, two idiots, and there's going to be losses all over the place. You mentioned before, when there's a downturn, there's going to be losses. There's going to be losses in private credit. There's going to be losses in loans. There's going to be losses in the equity market as well. I don't think anybody's saying, buy idiots, two idiots. I don't know where you're Well, what I mean is, people, sometimes we're on panels with people here on the network, and they talk about private credit as if loans are being issued willy-nilly, and due diligence is not

being done. These are highly, the people running Aries and Blue Owl. No, they're just saying that the area itself has exploded in growth. You're talking like $2 trillion in assets now. The high-ield bond market, for instance, and we were just talking about this the other day with someone, is $1.4 trillion in size. The listed index eligible bond market is $1.4 trillion in size. It was $1.4 trillion in size almost 10 years ago. The bond market has not grown in a meaningful way. The loan market is a little bit larger.

It's been trending up for 15 or 20 years. But my point that I made before, which I'll reiterate, is a lot of those loans were in the regular way bond and loan market, and they're not now. They're just being done by Ares, by Blue Owl, to the same people just through a different mechanism. Okay, back to the equity market. Stephanie, been a pretty nice and broad month.

All right, you look across the board, NASDAQ up 6%. The S&P up 4 and a quarter. The Russell 2000's up better than five, and the Dow up near three and a half. What does that tell you about what's in store for the next few months? Yeah, and if we even broaden that scope, you have international equities, you know, year-to-date outperforming U.S. equities by a thousand basis points. You know, what we think is so important for investors to really hone in on right now is diversification has worked really well for investors this year, particularly given dollar weakness.

We think moving forward, that is going to remain a key course of action here. You have valuations in U.S. equity markets at their highest since they've been in the 1990s. Now, that's not flashing red. There's very good reasons for elevated valuations in U.S. stock markets, but it does mean that you take the medium or long-term perspective, your expectation of returns in U.S. equities should be more moderate. So we think looking internationally makes a lot of sense, hedge some of that currency exposure,

and then look at diversifying your diversifiers in alternatives, making sure that you're, of course, leaning in on high-quality managers to help with some of these more riskier parts of the alternatives markets. But we do think there are really good ways for investors to both boost income and portfolios and help diversify portfolios against pretty concentrated public equity markets. Malcolm, the broadening over the last month.

Does it continue? I think it could continue short term, but I think realistically, all the chips push right back into those NASDAQ stocks, the chip stocks, anything hyperscaler that's right now building out AI capabilities, the metas of the world, the Microsoft's. Apple, surprisingly, has been at leading

the pack the last quarter. I'd expect for Apple to continue to push because they're showing a commitment to figuring out a way to get in front of the next thing. We've heard so much from smart minds that the AI conversation is going to change the way we interact with our devices. Maybe we don't even need a device anymore to interact with AI going forward. And I think Apple is showing that it's committed to getting in front of that conversation now. And so I think that realistically it's going to be the usual suspects that carry us through the remainder of the year. Guys, we'll leave it there. Malcolm, thanks, step. Thank you. Dan Greenhouse, we'll see you soon.

All right, coming up, let's send it to Christina Parts of Nevelos for a look at the biggest names moving into the close. What do you see? There's a wind resorts. Down about 6% with that stock pacing for its worst day since April. Shares of Las Vegas Sands, also down about 7%. And those drops are really on news of extreme weather coming from to Macau, a special administrative region in China.

The storm could actually disrupt the region's golden week, during which it welcomes thousands of visitors. So, Jaguars, healthcare stocks also on the rise today, I should say also in the opposite direction, led by Humana. Early data released just yesterday showed that Humana has 20% of its members enrolled in Medicare Advantage plans with four stars or above for 2026. And that news sent the stock calling higher, 4% higher yesterday, as the government pays higher rebates for plans with higher star ratings.

So more people on, means more money. The stock, you can see popping on this strength about 10%. Other health companies, including Centine and United Health, also higher today. Scott. All right. Christina, thank you, Pristina Ports and Nelblos. We're just getting started here up next. More on the AI boom and debate over whether we are, in fact, in a bubble. Flexo Capital is low, Tony. He's here next. He'll weigh in. We're live at the New York Stock Exchange.

You're watching Closing Bell on CNBC. investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas and so that's also probably happening today but it doesn't mean that anything that's happening isn't real like AI is real and it is going to change every industry that was amazon founder jeff bezos of course he was in italy today speaking on whether there's a bubble forming an a i let's welcome in low tony he's plexo capital founder and managing partner with me here on sets good to see you good to see you you make it what bezos said i think what he said is spot on i truly do believe that this is a boom time for AI but the question becomes and we talked about this

with your colleague John on overtime, what's the analogy here? Is this, you know, more of a build out of the dark fiber that unfortunately the world comes of the world were not able to benefit from because they went bankrupt before and then Verizon picked up those assets and that became the backbone that drove growth in the Internet for 20 years, right? We're still benefiting from that. So that's the real question. The revenues are real, right? When you think about the dot com companies, this is not a pets.com 2.0. We've got over 20 billion in revenue. just from anthropic and open AI alone. And then the question just becomes,

how far ahead of the demand are they building out that capacity? So it's real, right? Everybody agrees it, it's real. But the other point that he made, I thought, was interesting, hard to distinguish between the good ideas and the bad ideas. That's right. Just because it's real doesn't mean that all this money going towards every idea is going to pay off.

Yeah. And it's really hard to distinguish as an investor, which will be the best bet. the best bets and the ones that aren't are going to lose, and they may lose big. And they may lose big. And I think David Solomon made a similar point earlier, the CEO of Goldman Sachs, because when you have these types of platform shifts and this amount of real that generates a lot of enthusiasm, you have a lot of folks trying to hitch their wagon onto that bandwagon or on that ship, right? And so what you have are a lot of companies trying to add in

AI. And so what you're going to find is that there'll be a lot of losers as well. There will be massive winners and I think we're going to see one of the greatest accumulations of capital generation within our lifetime over the next 48 months potentially. The challenge is going to be, to your point, how do you tell what's real? Well, you have an interesting perspective on trying to make those determinations because you're at the earliest, maybe not the very earliest stages, but close enough of deploying capital in this area. I mean, how are you as a venture capital guys? trying to figure out what's real and what's not, or what's good and what's bad.

The good news here is that we have the ability to see revenues ramping incredibly in a short period of time. If you think about Anthropic, one of our portfolio companies, it went from zero to a hundred million in 2023 and 24. It went from 100 million to a billion. And at the midpoint of this year, it was already about four and a half or five billion. That could be extraordinary if they hit 10 billion this year. That would be a 10x in the first three years, which is unheard of once you hit the law of large numbers. Another company where we're an indirect investor through one of our LP investments into a venture capital firm

is a company called Cursor. And they are really unique in that they are able to generate computer code through their platform. Cursor has been reported to have been the fastest from zero to 100 in ARR. I mean, they were able to do that in a little less than 12 months. And it's reported now that their revenue is about 500 million. So, you know, that's an incredible ramp over just a couple of years. So I think that's what's different is that we're able to see these rapid ramps very quickly.

And for those companies like Cursor, you know, they're really sitting on the application layer. So they're benefiting from all of the infrastructure that has been built out by the Anthropics and the infrastructure providers like the hyperscalers and, of course, Invidia. You look at the Anthropics and the Open AIs. I mean, Open AIs is a, you know, a half a trillion dollar post. to money valuation at this point and that's only likely to get larger. If someone says to you, hey, lo, is there a bubble in the private market? Forget about the public markets. How do you answer that? So what I would say is, again, I think we do have a boom that's happening. However, there are things that look like a bubble aside from the companies that are hitching onto that

bandwagon. You also have a little bit of a circular loop in some of these deals, right? So you've got some vendors. People are bringing that up too. That's right. That's right. Is that a a big concern to you? It depends on how you want to frame it. And again, I would frame it with looking at the demand and how far ahead of that demand we're building out the capacity. Now, if you want to look at Invidia specifically and make that analogy back to WorldCom,

what you would look to is that, well, WorldCom unfortunately, had all of these startups that weren't really providing real revenue to be able to fund the bills. They were funding those bills with venture dollars, right? And so that's what we need to take a look at. We talk about Cursor, right? We can look at Cursor.

Now, they're on a nice revenue ramp, so a lot of that's being funded through API usage for OpenAI and Anthropic from revenue dollars. And so what we want to be a little bit concerned about is looking at are there real dollars? And look, the beauty of a company like Nvidia, unlike WorldCom, Nvidia will be around even if that capacity is being built out slightly ahead of the demand. Some people are going to have a hard time getting around the idea of putting Jensen Wong and Bernie Evers in the same sentence. I mean, for obvious reasons. That's right. That's right. All right.

We'll see you soon. Thanks. Appreciate it. Hello, Tony. Coming up, E.V. Sales in America hitting an all-time high. So why are investors slamming the brakes on Tesla today? We're digging ahead. Closing Bell back after this break.

Welcome back, 150 of the best high school basketball players in the country in Las Vegas this weekend for the Wooten-150 camp. But aside from crafting their on-court skills, athletes will be. getting the playbook on financial literacy. Mark Doman is managing director with creative planning. He's live with us today from Las Vegas. I appreciate you coming on. Welcome. My pleasure, Scott.

Thank you for having me. Happy Friday. Yes, you as well. How did this all come about? When I saw the name Wooten 150, I mean, I'm from Maryland. I immediately thought of Morgan Wooten, the legendary high school basketball coach. Is that what this is about? That's exactly right.

I'm actually also, I'm from Rockville, Maryland myself. So those of us who know Morgan Wooten's name know that he's. He's synonymous with high school basketball in this country. His family has continued the legacy of helping really build up these high school players onto college and hopefully the professional ranks. And I was thrilled to be invited out to teach these young men some financial literacy. What exactly are you teaching? It's so interesting that we have guests from time to time,

primarily speaking about trying to, you know, impart financial literacy on professional athletes or college athletes now with NIL. but I guess you have to start even younger because the promises of big dollars can start even earlier. That's exactly right. I manage approximately 100 professional athletes and their finances at creative planning in the NFL, NBA, Major League Baseball. And since NIL came to be in the last few years, the reality is that this is a major windfall for these collegiate athletes. Because if you look the statistics of guys actually making it to the NBA or making it to a professional sports league. To give an example, there's over 538,000 high school basketball players. Only 0.3% were

invited to the wound in 150. And the other statistic is that of the Division 1 college basketball players, only 0.3% make it to the NBA. So with these players making 6 and 7 figures in college with no student loans, no overhead for housing. This is a once in life I am opportunity to get them to save in case they don't become the next superstar in the NBA. How are the messages being received by these high school athletes? You know, I was very pleasantly surprised today, Scott. After speaking for about a half an hour, there was a line of these young men who wanted to come up and say, listen, I want to understand my money. I don't want to just trust anybody with it. And what resources can I have to do that, which is why we actually offer an internship to all of our professional athletes during their off-seasons.

We expect them to come to New York City and study their portfolios and study their money. And now it looks like we're starting to roll that out a little more for the college ranks. Are high school players at this point getting any form of NIL? State by state, it really depends. The reality is the landscape of NIL is the Wild West right now. You have to think about the other implications. If they're in high school, they're probably not over the age of 18, which means that they can't really file a tax return. And now it's income that goes to the parents.

So there's a lot of tax planning involved as well. How much do you find these kids know the basics of financial literacy, maybe more than we think they do? What have you found? They know a lot more than I did when I was their age. I told them the only thing I knew about money at 18 was that I didn't have any, and I was hoping to get to earn some at some point, right? Yeah, join the club. Yeah, and I'm telling these guys, you have unlimited resources

because you have a supercomputer in your pocket, which is actually a double-edged sword, because while they have access to infinitely more information than you or I had growing up, Scott, there's also a lot of bad information online, particularly on social media. So I try to sift through the stuff they're learning. Some of it is good. And some of it, you know, is not the advice that we'd be giving. So many of these players will end up in the McDonald's All-America game, right?

Which is sort of the mountain top of high school basketball exposure. At least it was when, you know, we were younger. Now there are so many different places that high school basketball players can get noticed. That's right. This is the feeder game into the McDonald's, All-American. There's only a fraction of the players that were at the Wooten 150 that ultimately be invited to the McDonald's game, but it's not necessarily the indicator about whether they're going to make it as a pro. I believe that now, with the advent of some of these other leagues

that take players out of high school, if they choose not to go to the path of college, some choose to play professionally overseas for a year. The reality is these players are more like pro athletes that I've ever seen out of high school or college students. The game is much more sophisticated. These young people are much more mature about money and about the business of sports than you and I were growing up. Yeah. Well, it's appropriately named. I'll tell you that because Morgan Wooten, he cared about these kids not only on the court, but what they did in the classroom, too. That's why he's such a legend from DeMatha High School. Mark, appreciate your time very much. Take care. You as well. Thank you so much. All right. You can get all the latest,

by the way, on the intersection between sports and the business world by signing up for the CNBC Sport newsletter. Head to cnbc.com slash sport. Coming up next, the biggest movers as we head into this Friday close. Christina is standing by with that. What do you see? We have a defense tech stock under pressure

and of course much more, but I'll tell you that right after the break. We're 10 from the bell back to Christina now for the stocks that she's watching. Tell us. Well, I want to start with shares of Palantier because they're down about 7%. after a report found security problems in Palantir's battlefield communication systems,

which could give adversaries undetectable access. Palantir has since told Bloomberg in a statement that the issues have already been addressed. Rumble's shares soaring after the video sharing site announced it was partnering with perplexity. The deal will integrate perplexity's AI-powered search engine into its platform, and that's why you're seeing the shares up, but on a year-to-date basis, rum still down 35%. And last but not least, shares of quantum, computing popping right now, about 23%, along with huge gains this week from other quantum

companies, following a wave of positive news in the space and increased risk appetite from retail traders. Scott. Christina, thank you very much. Coming up, a booming week for crypto. We'll tell you what's behind it inside the market zone next. We're now on the closing bell market zone. CNBC senior markets commentator Mike Santoli here to break down these crucial moments of the

day. Plus, Philibault on why Tesla shares are falling today. And McKenzie Segalos, breaking down the big week for crypto. Michael, begin with you. More records falling. Yes, doing just enough again, Scott, to keep the indexes moving in that direction. You know, today, after we got that relatively weak, ISM services number, it looked like the market wanted to execute kind of the Fed getting easy playbook, right? You had Russell 2,000 up a percent and a half, mega-caps selling off. Bomb market didn't really take it that way.

And some of that has faded. I just wonder if we're seeing, you know, this very strong trend. In the absence of new decisive government data, the market is going to default to the prevailing trend, which is higher and the preexisting assumptions, which is, you know, benign Fed rate cuts and an AI boom. I do think you're seeing signs of fatigue, though. Palantir, Tesla, downside pressure points today, wild stuff in quantum and other really speculative stuff.

So I think you have to at least be aware of the possibility of some erratic for agility that might emerge as the month goes on. All right. Like, I'll come back to you in a little bit. Tell me about Tesla, Phil. Well, look, they ran up for what? The last several months? We've talked about this, Scott.

It's only natural that you were going to see a bit of the sell on the news, which is what happened yesterday. Much better than expected numbers were reported. And yet, the stock dropped yesterday. It's under pressure again today. Their market share is 43.1% here in the U.S. So why might investors be pulling back a little bit? Well, now they're focused on what happens on October 22nd.

When the financials come out and we hear from Elon Musk, three key questions, operating margins. How much have they been impacted by the tariffs, especially with things like energy storage deployments, robotaxy growth? Will we get legitimate numbers or will we get more of Elon Musk saying it's going to be huge? And then finally, there are the AI investments. Any more detail in terms of AI investments from Tesla? As you take a look at shares a year today, keep in mind that their deliveries in the third quarter, Scott, We're up 7% compared to the third quarter of last year. Scott, back to you.

All right, Phil, thank you, Phil LeBow. All right, McKenzie, Crypto's had a big week. Coinbase has, too, watching Robin Hood, the whole thing. Yeah, so Bitcoin and Ether both up more than 11% over the past week. All coins, they saw even bigger gains, with Solana surging 15%. Now, this rally comes as the U.S. government officially shut down, a moment that has, in the past, boosted Bitcoin by shaking confidence in the dollar. Institutions have also been piling in.

close to $2.3 billion in spot Bitcoin ETF inflows this week, adding fuel to the move. There was also bullish infrastructure news. The CME announcing plans for 24-7 Bitcoin and Ether futures trading by 2026, and Swift is working with 30 banks on a blockchain-based payments ledger built on Ethereum tech. Now, in terms of crypto-pegged equities, Coinbase log its best week since June, Robin Hood, up almost 20% this week after CEO Vlad Tenev called tokenization a freight train that will eat the financial system. And I am keeping an eye on Bitcoin. It is within striking distance of a new all-time high, Scott.

All right, McKenzie. Thank you. McKenzie Segalis. We go back to Mike Santoli. Got about two minutes left. The only thing really to look forward to besides an end to the shutdown so that we can get some economic data is earnings. And we still got to wait a little bit for those. Yeah. So we are in this mode where you're not going to get the, the, kind of strong stimuli that the market might feed off of. You know, earnings are going to come, I think, soon enough, and people are going to posture for it. What's remarkable is that the market is already acting as if all these different stocks and sectors are sort of going their own way, a tremendous amount of volatility below the surface that's kind of offsetting. You saw the massive

moves to the upside in health care that's super beaten down area. Last week, it was energy, actually getting a massive lift and, you know, sort of allowing the market to rotate around, letting some stuff cool off. Well, that's usually the kind of action you see around earning season, right? Which you just, it's not really market-wide moves. It's more about individual names. So we'll see how that does develop. Everyone is very much leaning on this idea that because the market's been so strong in the first

nine months, you usually get a fourth quarter chase. That's sort of true about 80% of the time. And the market does still trade as if professional money maybe feels it's not quite fully invested. So I'm aware of that. Strategists still have lots of headroom to raise their targets and all that business. But I do think we might be getting into a point of excessive certainty about, hey, the government shutdown doesn't matter, the Fed's going to be cutting for the right reasons, earnings are going to hold up, and there's no quit to the AI boom. All those things pretty much have to get confirmation along the way for us to keep on this path. I don't think there's any problem if we pull back a little bit. We haven't had a 3% pullback in a long time. And until that happens, you have to give the tape the benefit of the doubt.

But I do think it's getting that point of kind of saying how much more can we feed off of the same things we've known about for a while. All right, good stuff. Good weekend. You know, Mike. Thank you, as always. That's Mike Santoli, our senior markets commentator. You're going to hear the bell ring in just a moment, and it's going to ring in yet another record high for the Dow Jones Industrial Average. Anything positive will be it for the S&P.

You've got to settle out, and we could very well get there. We'll see how we finish. I'll see you on the other side of that into OT.