Closing Bell - Closing Bell 12/19/25

Episode Date: December 19, 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.

All right, Cal, thanks so much. Welcome, closing bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This maker break hour begins with the road ahead for stocks, which, though, higher today, have been sputtering a bit as the year winds to a close. We'll ask our experts over this final stretch, what 2026 might hold. Let's show you the scorecard here with 60 to go in regulation, green arrows. As you see across the board today, Bitcoin's bouncing. That's been a positive sign for risk sentiment today.

So is tech. It's higher. most of the mega caps are rising. So overall, you have definitely more of a risk on tone today. Nike, though, a big drag following its earnings. Caterpillar, it's topping the Dow this year and getting another price target raised today. That stock's up another 2%. And how about Draft Kings, the latest to join the prediction markets crazes?

You were just hearing on Power Lunch, yet another company in the ring. And the stock's on the move. It does take us to our talk of the tape where the biggest money in the market is positioning for 2020. 26, let's ask Tony Pascarillo. He is head of hedge fund client coverage of Goldman Sachs. He's back with us at Post 9. It's good to see you. Welcome back.

Thanks to catch up with you before we get out of here for 2025. You know, there's something to be said for seeing a durable trend, not making things too complicated, and staying with the story for a considerable period of time. I just described you because your point of view and your perspective on this market from the notes that I have read consistently and mentioned many on the air, it hasn't changed. And you are, as you say, responsibly bullish, and that hasn't changed. Is that fair? I'll take it. I think you just set me up for a giant jinks, maybe a sell-off. But I'll kindly take it. I would say this. I think the big dynamics in the game are still favorable for risk.

We think the Fed will continue to provision more liquidity as we have this cyclical upswing in the economy. We've got S&P earnings up 12% next year, following plus 11% this year. And so I do think, that interplay between the Fed and the trajectory of the economy alongside this earnings growth is affirmative of a bull market and a primary trend that's still higher. You haven't been tempted, I guess is the word to use, by the broadening story, peeling you away from what's gotten you to the dance this far. And it doesn't sound to me from looking at your notes and your outlook that you expect anything different in the new year. Stay big, Don't get caught up on the idea that small caps are going to have some epiphany in the new year

and have a tremendous year at the expense of what's going to happen with the large cap stocks. Fair? Still a believer U.S. Mega Cap Tech will do as well or better than any other part of the market. I think some of the recent broader you've seen where some of the burden of leadership has shifted from the AI names and Mega Cap Tech to large cap cyclicals, I think that's a good thing. And it's consistent, again, consistent with our view that the economy is going to pick up a bit of speed. So that's durable then, potentially. I think that is durable.

So, again, 2.5% GDP growth, moving up from 2% this year. So you've got to go from trend to a little bit above trend. And again, what I think is so compelling about the view, if it's correct, is that S&P earnings growth now, in our view, starts to embed some of the AI productivity being delivered to large-cap corporate. So I'd still rather make my bones with large-cap than I would with small-cap. What about the idea that, okay, we know about the large cap story, know about all the capbacks and everything else? And then now it's time to really lean into the beneficiaries of all of the AI being put into effect, so to speak, from all of these other companies. And that's where you're going to make your real money in 26. I think that would be a very tidy outcome for the market.

And I do think, again, that is what we are baking into our equation when we say SIP earnings will be up again, double digits next year. About 1.5 percentage points of that 12, is it attributable to the full index harvesting those productivity gains? So it's in the doing, of course, but I think that is the nature of the bet we're making when we're so positive on growth. You sound kind of skeptical to that, though, when you use words like very tidy in suggesting perhaps that maybe it's a little messier than that. Yeah, well, I think this gets into some of the local narrative around tech, which is the market's asking more demanding questions around valuation. around financing, around returns, around the growth rate of CAP-X. And so I would say, I'm still a believer you want to be open-minded about where all this leads, but the public market, as it does, as it imposes that discipline, is asking these questions.

Whereas in the three years here to four, Scott, there was just a total simplicity to it, which is this is being funded out of free cash flow, don't overthink it. NVIDIA stocks up 10-fold in three years because its earnings are up 10-fold in three years. That is simple. I think it's getting a little bit more complex as we move forward. Okay. I think I know what you're alluding to. I mean, if it's getting more complex because it was funded by free cash flow, you make comments like that. I'm thinking, well, maybe he's alluding to now some of it's being funded by the debt market. And maybe that's making some people a little nervous and maybe not, maybe that's the wrong word to use. It clearly is making some people nervous around a select number of names. Let's think about it just in the context of the Magnificent Seven, 2023, 24, monolithic freight train, everything firing in the same direction.

This year, you've seen a higher degree of dispersion. I think that dispersion will be more of a feature going forward within the tech story, within the AI story. Okay. So the Mag Sevens are not going to, I mean, and they really haven't anyway, traded as a monolith. I mean, you look at Amazon's barely done anything this year, whereas other names obviously have had, most have had pretty good years, but you've already seen dispersion, and you're suggesting that that's just going to continue to be the story as this, you know, arms raise, the whole

buildout just continues to go further. I think that's right. Again, to be clear that, within what is still, I think, a bullish context and a positive context writ large, I would say one thing about the Mag 7, which is I do think you start to feel a little bit this way, this year, the weight of the law of large numbers. And so I wrote this down because it can't possibly remember it all just got. Okay, Mag 7 performance in 2020. of 76% added 5.1 trillion of market cap. Last year, up 48% added 5.6 trillion of market cap. This year, up 19% added 3.2 trillion of market cap.

Now, any other country on planet Earth would kill for 3.2 trillion of incremental market cap from some part of its stock market. But all I'm saying is the yards are getting a little bit harder for that trade going forward. How much Fed risk is in what you're thinking about? Because I mean, I know, you know, obviously the Fed's easier, and the likelihood is that they're going to cut rates at least one time in 26. Is there a lot of Fed risk in how you're thinking about things in the new year, what inflation does, what the job market does, and how they react? So to level set our view, and I think Jan Hatzius was on with you yesterday, we think they do go again in March. They do go again in June.

That takes you to basically a 3% terminal rate, which is effectively where the bottom. market is. So I think, again, that is part of, I think, the nice balance that S&P enjoys cutting into a cyclical upswing. I don't think you can ever divorce the Fed from the equation. And I will try to do this math off the top of my head. But I had put this out on a recent note, which is if you go all the way back to 1997, Greenspan in 1997, where in a way this kind of more proactive policy approach began, if you look at any given year and you just take up the eight Fed days, eight, and then you take out the one day before. So now all you've done is you take 16 days at a given year, which from 1997 to today, it's only like 7% of all days.

The S&P is not trading at 6,800-something. It's trading at 3,000. It's down 56% from where it is today. So I think you always want to keep a very close eye on the Fed Dynamics. What's the biggest risk in 26 do you think? I think it is probably the back end of global bond markets. I think it is a reintroduction of this question around debt sustainability. that is not kind of in the four of the U.S. interest rate market today, but I would keep a

close eye on the back end of the Japanese rate market, which has been under a bit of an upward trend, a bit of more term premium. My guess is, again, as ever, that kind of washes in and out of market focus. I would imagine at some point next year we're talking about it. At what point, my last question, I'm going to just play off the words again of yours, responsibly bullish, right? What makes the market get to a place where it's irresponsibly bullish in your mind? What happens? Valuations go crazy in mega caps even. What is it?

Yeah. So my expectation would be we are still too conservative in our estimate for AI CapEx spending. So again, I'll look at my cheat sheet. Hyperskiller CapEx spending of 54% last year, of 68% this year. Consensus is up 37%. percent next year. Consensus has consistently underestimated the magnitude of the second derivative of the rate of growth. If we're pushing 68% or 54% next year, I think that would reignite the animal spirits of the market. All right, we'll leave it there. It's been fun getting your views

this year. Tony, I appreciate for spending time with us. I look forward to it next year as well. Thanks, Scott. That's Tony Pascarillo of Goldman Sachs. For more on where rates are heading in 2026 and the person who might be driving them in that direction. We're joined now by our senior economic supporter. Steve Leastman's been doing a lot of reporting over the last 24 hours over where this is progressing, Steve. Yeah, it's interesting. Senior administration official Scott telling CNBC the Fed Governor Chris Waldo had a strong

interview with President Trump in which the two discussed the labor market in depth and had a jumpstart job creation. The interview took place in the president's residence concluded shortly before the president and address the nation on the economy this past Wednesday night. Charger Secretary Scott Best and Chief of Staff, Susie Weil, Chief of Staff, Deputy Chief of Staff Dan is giving all the ten of the interview. Sign Waller's candidacy is being taken pretty seriously, though officials didn't say he's the frontrunner or where he stood in the whole pecking order there.

We also learned Black Rock's Rick Reeder. He's going to be interviewed at Mar-a-Lago for the Fed Chair job in the last week of the year. Officials said that leaves four candidates. That includes obviously Kevin Hassett, NECD director, the favorite and the job prediction. market in the prediction markets, and former Fed Governor Kevin Warsh, who had previously been interviewed by the president. But the official said Fed governor and vice chair of bank supervision Michelle Bowman, she is no longer being considered for the job. On a lighter note, Scott, we are told the president was very seriously impressed when informed that Waller could deadlift

350 pounds. I don't know if that gets him the job, but the president was impressed. All right. I mean, I'm sure, Reader. Rick Reeder can probably deadlift a bunch of too. Big man. All right. We'll see where that goes. Let me ask you this. Okay. Next week, you're going to take a deeper look at, I guess, the 30th anniversary of Greenspan's Irrational Exuberance call. And I have asked you more than one time, I think, this week alone, on the idea of why people are as bullish on the market as they are for 2026. the idea that the Fed's going to be willing to run it hot, right? You haven't necessarily agreed with me when I have brought that up.

I bring it up now to tease ahead your coverage of next week because what you're going to tell us is in part that Greenspan did make a decision to run it hot because he understood the benefits that would be coming to productivity from the Internet age. the same types of things that we are thinking about today in the AI age. Am I making any sense with that? No, you're just revealing my entire story for next Monday, Scott.

I couldn't help myself. I was really interested in it. We can talk about this. Look, what is fascinating to me, and Scott, I've been reporting this for several weeks now, including, by the way, when I asked Fed Chair Powell about this very question, at the press conference yesterday with Waller, Wednesday with Waller, and today with Williams. Alan Greenspan in the mid-90s made one of the great calls of central banking when he

looked at what companies were doing with all of this investment spending on tech. And he said, wait a second, why are they spending all this money? And inflation was a little bit hot, but growth was even higher. And he said, you know what? This productivity, these spending is going to have a problem. profound effect and let the economy run hotter without the Fed having to cut it off or take away the punch pole. This is the very self-same question that Powell faces now and the next Fed chair will face.

So I'm going to look at some of the similarities, Scott, but also some of the differences that might raise the risk of such a policy and then asking the question, the extent to which your previous guest and other investors, do you have this built in? Because it could mean the Fed can go below that nutrient and let it run there. or it might mean a risk that the Fed stokes inflation. All right. I look forward to it. I do.

So you write a good pitch. I read the pitch. I'm like, I like it. I got to ask him about something related to it now and tee up for next week. It is true, Scott, it's true. You have been on this story about can the Fed let it run hot. I just want to put it into something of a systematic way of looking at it and start thinking about what does that mean?

Is that 25? Is it 50? Is it 100 basis points? Have a great weekend, Scott. I'll see you on Monday. talk about it yeah we can all right good stuff steve thanks man that's steve leesman we're getting some breaking news out of washington emily wilkins has that for us i am hey scott well yes president donald trump has just announced agreements with nine drug makers to lower their

prices this of course is part of that much larger push from the white house they sent letters to 17 of the drug makers they now have agreements with 14 of them medicines that are include include blood thinners, include HIV treatments, and includes inhalers. And that wasn't the only news to come out of this meeting. Near the end of the presentation, Trump said that he would actually also like to sit down with insurance companies and begin to talk to them about ways that they can lower their prices for Americans. He said he would hope that that meeting could actually take place in the next week or so.

And you can see from these charts, we are seeing the markets go ahead and respond to it, a drop, of course, for the stock prices of a number of those health insurers. This, of course, comes as there is a giant debate right now in D.C. over affordability, particularly when it comes to health care and health care premiums, as Congress has debated the future of those Affordable Care Act tax credits. It would be very interesting to see exactly what kind of deal Trump is looking to cut, and exactly if you're going to see the same response from the insurance companies, as you've now seen from the pharmaceutical companies.

All right, interesting news. Emily, thank you. That's Emily Wilkins. Another story we're following this hour, Open AI, looking to raise more money, which could push its valuation. to $830 billion. Mackenzie Sagalos here with more behind that big number, Mack. Hey, Scott. So opening eyes valuation, getting marked higher across back-to-back reports,

roughly an $80 billion spread over 24 hours. The journal now says opening eyes next round could raise as much as $100 billion at an $830 billion valuation. That would be good for cap table names like SoftBank, which recently liquidated its entire NVIDIA stake to go all in on OpenAI. Amazon. It's the biggest new investor name in the mix, but those talks between OpenAI and Amazon are as much about a commercial partnership as they are about equity, and any check of that scale would likely start at least $10 billion. But OpenAI, at least at this point, not confirming

the valuation number, saying they are still too early in talks, and they don't imminently need the cash. OpenAI is getting another $22.5 billion from that soft bank led round by the end of the year, and most of its compute bills don't start to come due until the back half of 2026. runway that buys them time. And shifting gears here, while these financing talks play out, Open AI making headlines this afternoon with some compute news. Michigan regulators just cleared Oracle and Open AI to power a new 1.4 gigawatt data center campus, which is a key piece of OpenAI Stargate expansion across the U.S. Scott? All right. Good stuff, Mack. Thank you, McKenzie Segalis. I should note also, by the way,

speaking of Oracle, I mean, Oracle shares are up today sharply, about 7.5%. Guys, let's show CoreWeave, too. 24%. That stock has been under some serious pressure almost every day. Corweave has. If you take a look, back that out for like a week, a couple weeks even, and you can get a really good look. Because as these stocks have gone in many respects, the tech trade has gone as well. So that's a much-needed rally in both of those names.

For more on all of that, let's bring in Schwab's Kevin Gordon and Invesco's Brian Levin. Guys, it's good to have you here. Scott, how are you? First. So where are we as well? We're winding this year down, and we're thinking about what next year is going to bring. You heard, Tony Pascarillo here. He's responsibly bullish.

The trend is largely intact, in part because AI is going to continue to deliver. Yeah, and I think, you know, AI delivering and what that looks like and what that means probably starts to take more of a shift or change its shape as we go into 26. Not that everything changes when you flip the calendar. But, you know, to the points around, I think the market becoming more exposed or more sectors in the market becoming exposed to the AI trade, not just hyperscalers and big tech and communication services but really you know it's spreading out through the rest of the sectors I think you know we think that's going to be a relatively big

theme in this in this stage of the build out and I think one of the ways to see that more clearly is the fact that you have estimates and expectations that all 11 sectors in the SMP are supposed to see earnings growth next year different backdrop than 2025 and there's really only three as of right now that are expected to see growth rates that are slower in 26 relative to 25 so I think that the fact that number one you've seen more of this healthier rotation and digestive process over the past couple of months, but number two, that's being backed up and confirmed by relatively solid earnings estimates for the rest of the

market. That seems to us to be a pretty constructive story. For you sat here when Tony was speaking. You heard everything that he said. You agree with it? I do agree with it. And I think the one thing that we may differ on is whether or not you can actually perform well in lower capitalization names, more value-oriented names. But in terms of the broader macro backdrop, an environment where the economy's coming out of a bit of a slowdown, lower interest rates, yeah, I mean, that's a good backdrop for risk assets. Now, the question around the sustainability of a rally in lower capitalization names or value names is really about where we're heading in growth, and I don't think we're going to a new, higher, sustained level of

growth, but we've got some ability to get rid of some of this logjam that we see in housing, or that we see in manufacturing. There's an opportunity for things to pick up. So you could have a six-month period at the start of the year where you could get nice returns out of other parts of the market. But it doesn't sound like you think it would be

that durable beyond that. When you say you disagree, when Tony obviously makes the point stay high in the cap space, you're suggesting that, well, maybe you don't have to stay quite as high as he suggests. But it also doesn't sound like

you have that much conviction over the long term about it. Ultimately, you would need to see a breakout in growth. We know we're not getting that on the demographics side. Could you get it on the productivity side? Sure. Isn't that more likely? Does it really remain to be seen?

I mean, aren't we on the precipice of something dramatic when it comes to productivity? It seems like it. I mean, it's going to be a question of timing. It certainly seems like it. I know that I'm more productive in what I'm doing on a daily basis. The question is how quickly does it start to move its way through the economy? I think you will get there. But whether that's a back half of 2026 story remains to be seen.

What about the Fed? Does the Fed help or hurt the market's more in 26? I mean, I think that path is a little bit clearer for the first few months of the year. To me, a lot really hinges on what happens with the Lisa Cook case and how much that has the potential to change the fabric of the Fed. You still thinking about that? Well, yeah, I mean, I think the institutional risk from the standpoint of if she does get fired, And then you have a complete changing of how the Fed operates in terms of, you know, who can get fired and for what reason in terms of a, from a governor's standpoint, and who the next chair is, that has more of potential to change.

You think like Fed independence is a larger risk to the equity market than maybe some people would want to believe it is. Yes, I think Fed independence, if it is going to be chipped away at, I think that's a bigger risk than the Fed cutting a couple of times next year. Is it healthier and more, does it accrue to the benefit of the rotation trade in terms of small caps, doing well and the rest of the cyclical parts of the market, yes. But I also think we've learned over the past few years that when you go through these breakout periods of small caps or cyclicals, rates are not the only component to that. There's also the earnings perspective. And I think even for the Russell, you know, I mentioned expectations around the S&P 500 for next year. For the Russell, only one sector is expected to see negative earnings next year. So you're still seeing

relative health and relative strength, you know, across not just the large cap space, but also in the small cap space. And that, you know, that matter. matters in terms of better or worse, mattering more than good or bad, is the earnings trajectory getting a little bit better for small caps? I think it can make the argument. But at the same time, you're also dealing with an index being the Russell 2000 that is terribly unprofitable in a certain sense. How about the Fed?

People say don't fight the Fed. I mean, the Fed seems to be fighting itself in many respects. It's pretty divided, right? It is a little bit divided, but I would say, you know, people talk about the Fed coming in and being overly accommodative. I mean, I think they're restrictive right now sitting with a flat yield curve or a relatively flat yield curve. So start to bring interest rates down. I'm not overly concerned about the, I mean, obviously, if the independence of the Fed is chipped away, that's a challenge. The market,

it's not overly concerned about this. Inflation expectations were actually falling pretty significantly yesterday. My message to investors would be not all that different than what you saw six days after Liberation Day. If the market starts to move, if interest rates start to move as a result of concerns about Fed independence, there would be a little. an adjustment similar to what there was six days after Liberation Day. All right. Good weekend. Do you both?

Thank you for being here. We'll see you soon. Let's send it now to Christina Parsonevolo for a look at the biggest names moving into the close today. Hi there. Hi, Scott. Well, let's start with Nike shares dropping roughly 11% with investors focused on ongoing weakness in the greater China market, despite an earnings and revenues beat.

Its quarterly results showed as 17% drop in China sales. And CEO Elliott Hill said, improvements in China are, quote, quote, not happening at the level or pace we need. French fry maker Lamb Weston sinking today, despite a top and bottom line beat. Sales volume did jump 8%, but lower prices ate into that gain. The company's reporting flat sales growth overall and left its full year guidance unchanged.

Investors clearly wanted more on the plate. The stock is pacing for its worst day since July, Scott. All right, Christina, thank you. Christina Ports of Nevelos. We're just getting started. Up next star analyst, Dan Ives. He maps out his top top. 10 tech predictions for the new year.

He'll join us right here post-9 next. Welcome back. 2026 will be an inflection point in the AI revolution. That's just one of the predictions what Bush's Dan Ives is making as he looks ahead to the new year. joins us now. As you see, it's good to see you. Yeah, great to be here. What does that mean, an inflection point? I think it's about the monetization of the AI revolution, specifically on the software side. You know, I think obviously Palantir, we've seen that front and center, but you look at MongoDB

Snowflake, the use cases, I think really the infrastructure build out. I mean, this is really going to be a key period to show the next stage of the AI revolution from a software, cybersecurity, and infrastructure perspective. So the headline here is that you think tech stocks are going to be up over 20% in 2026. When you say you're talking as a sector, the sector is going to be up 20%. I think sector is going to be up 20%. I actually think large cap tech in terms of like some of the Mag 7 names can even be up more. I think like a Microsoft could be up 30, 40%.

I look at names like Google. I look at what ultimately, in my opinion, you have $3 to $4 trillion that's going to be spent next three to four years. You're just starting now this next phase. I've talked about third inning in terms of those nine inning game, but now the second, third, fourth derivative is play out across software, across infrastructure, across cybersecurity. And that's why I just, anytime you talk about AI bubble, I mean, I was just in Asia right for three weeks. I mean, demand of supply is 12 to one. And U.S. for the first time in 30 years ahead of China. What isn't known about the Microsoft story at this point? And why is the stock underperformed relative to some others? Why could it

possibly be up 40% next year. Yeah, I think to some examples of you, like, okay, it's not just Microsoft. It's what Google's done. They've had a lot of success on cloud. It's obviously AWS, and what Jassy's done is, you know, is impressive. But I think when investors are underestimating is we've seen deals accelerate 30% from Azure, from our checks. So I think as Microsoft comes out in late January, as you start, see the numbers play out.

I mean, I think it could be conservative, 30% or 40%. I mean, in my view, like Microsoft's a name where when I look at large cap, the table pounders here, Apple, and we could talk about that, Microsoft, and I've said, I think Oracle, the selloff here, way, way overdone that, like I think it could be a $250 stock. Why are you so sure the selloff is overdone in Oracle? Because I view it as like when you think about the AI revolution, the stack, and their install base, and all the checks that we do, I'm not saying there's not going to be bumps in the road in terms of the data center buildout. Isn't that where we're witnessing sort of right now, how the street is viewing the financing behind the buildout that the very buildout you're talking about? Yeah, I think the street is basically giving it little to no credit for the $500 billion they're essentially going to have in terms of, you know, in the future, in terms of not just open AI, but building out the stock over the coming years. You're going to have growth accelerating from 17% to 30% to 45%. I think investors are basically putting a massive discount saying like, okay, I'll call that and you're not going to ultimately be able to hit that.

And I think that's why Oracle right here, I continue. you view as a huge prove-me moment that they're going to show success. You don't have any concerns about the balance sheet at all? Look, I view it as like if you could take on some debt to get to really transformation for them to really become a hyperscalor and you look at that Open AI revenue, and I think anyone associated with Open AI right now, you've seen those stocks trade a lot lower and I disagree because in my view, like Open AI is going to be the epicenter of this stage of the AI revolution, and we've talked about it. It's like you're still in the early days

of the modernization. I think it's going to prove out that this is a huge buying opportunity in Microsoft, in Oracle, in a lot of these names, you know, Nvidia included that have sold off. All right. So you mentioned Apple. You think that Apple, one of your predictions number three, Apple and Google will announce a formal AI partnership around Gemini that will finally cement a real AI strategy for Cupertino. Expand on that. Well, I think, you know, part of the issue, and we've been at WWDC the last few years, back-to-future-type moments, you know, where really they've been on a treadmill of 2.5 speed on AI. Now, finally, you have new leadership from the outside.

I think you have a lot of changes happening that are setting the stage for the Gemini Partnership. They couldn't do that before the DOJ win. Now Google and Apple, and I think that cements in March and April, and it sets up for Cupertino finally coming to the AI party, That's worth, I think, $75 to $100 per share. That's probably the number one large-cap name that you don't hear. Okay, so you said, I mean, you're obviously bullish on Nvidia, no surprise. You're obviously bullish on Palantir, as you said, no surprise, respectively.

You lay out the cases for that. Tesla, you say, is going to successfully launch robo-taxies in over 30 cities in 2026. Tell me more. Yeah, I mean, I think, you know, if you look at this year, it's obviously been a challenging year, but now Musk is wartime CEO because the autonomous and robotics chapter is going to be the most important year, I think, in Tesla's history. And when I look at the robotoxy launch in Austin, the expansion,

just happening. I mean, this is just now happening. Just happening, but I think the geo-fence... Testing. Testing, but I think what we're going to see is, by the summer we're going to have 30 cities in terms of robot taxi launch. And I think the autonomous and robotics piece,

And that's 80 to 90% of the future value of Tesla, which is why I think bull case, $3 trillion market cap for Tesla by the end of 2026, as they prove as a physical AI play, along with Nvidia, those are the two best, Tesla and Nvidia. What causes it to hit your base case of 600? Because that's a pretty wide range. Yeah, I think base case is that they show success on Robotaxi if they push out what I'll call volume production of cybercabs. have some success second half of the year, that would be $600.

If they hit the targets and Optimus comes out and stabilization, what we see in deliveries, it's a get the popcorn out, moment, pop the champagne, $7 to $800 stock. All right. Well, you put out predictions, then we get to test you on them throughout the year. I look forward to that, Dan, thanks. Thank you. That's Dan Ives. Still ahead, the big money in college sports.

CNBC unveiling today its official college sports valuations list of 2025. We talk to the man behind it coming up next. Welcome back. College sports valuations are surging. The top 75 athletic programs now worth a total of $51.2 billion up 13% from 2024. That according to CNBC's official college valuations list, which is out today. Joining us now, the man behind it, CNBC's senior sports reporter Michael Ozanian. It's good to see you. Great to be with this, Scott.

Okay, so number one on the list, let's get right to it, is the University of Texas, which was number two last year. Ohio State was number one last year. They win the national championship, and they drop? What is this, the Arch Manning effect? This is simple. It's University of Texas had by far the most revenue of any college athletic program, and to be fair to Ohio State, for fiscal 2024, they had two fewer home football games the preceding year. So that sort of depressed their revenue a little bit. But the big thing for the University of Texas got, tremendous surge in donor revenue.

They've redone their entire stadium, and they're renovating the locker rooms right now for the football team. I mean, that's obviously one of the key metrics that goes into this, right, along with what else? We're looking at media rights, the revenue from there, conference distributions, apparel, merchandise, all sources of revenue that flow to the athletic programs. Got to be in a big conference. five SEC schools out of the top 10, four Big Ten and one ACC with an asterisk, really, because it's Notre Dame. Right, right. They got their own TV deal, new one, $50 million a year. Yeah, they're learning what happens when you're not in, you know, like the whole complex.

A little bias there to not get into playoffs. Yeah. You know what? It's so funny. So last year was the first year you did this. Right. Which in and of itself speaks to how these things have become really big businesses, treated almost like a pro-sports business, correct?

Absolutely, and we just see CNBC reported a few days ago how University of Utah is going to be the first school to take private equity money. They've worked something out. Other private equity deals are looking at maybe doing media rights for entire conferences. Floodgates on that. I mean, we've been talking about that

and thinking about that for a while. Private equity getting involved here. That's right. And how are you not going to, as you see, these players get these name, image, and likeness deals? Coaches now jumping schools for, you know, $10, $15 million year coaching deals. Of course, this is all being fueled by TV money. Look at the playoff money.

You now have 12 teams. They signed a new deal for the playoffs with ESPN over a billion dollars. They'll probably expand the 16 teams before too long, Scott. All right. I love it. Mike, thank you. Thanks for being here. It's Mike Ozanian.

Coming up, by the way, on Fast Money, 5 o'clock Eastern. We go in-depth on CNBC's official college sports valuations. as Paul of the big money with sports attorney Jason Belzer, athletic director, U Publisher. That's coming up on fast money. CnBC.com forward slash sport for the entire list. We're back after this. All right, with less than 15 from the bell.

Let's get back now to Christina for the stocks that she is watching. Tell us what is on your list. I want to start with Rivian shares because they're hired by roughly 10% after Wedbush raised its Price target to $25, that's among the highest level on the street, according to FACSET. Wedbush writing that 2026 is an inflection year for the EV maker. Its Bullish View rests on Rivian's launch of its lower cost R2 SUV models in the first half of this year. Carnival Cruise Line giving the rest of the cruise stocks and needed boost after its Q4 profits and full year 2026 guidance beat the street's expectations.

Carnival CEO said the company achieved record booking volume. for both 2026 and 27, just over the past three months. And last but not least, KB Home, falling roughly 8.5% after it delivered fewer homes and narrowed its profit in the fourth quarter. The CEO saying

housing market conditions just remain challenging due to lower consumer confidence, the stock looking at its worst day since 2021. You can see on your screen sending other home builders lower in tandem. Scott. All right. Christina, thank you. Christina Parts of Nevelos. We have some exciting news

to share with all of you. We have a new member of the Closing Bell family, Theodore Paul Leif Presser, born to our producer, Karris, and her partner, Steve. Our congrats to them, and there's Big Brother Jacob. Look at him. He's loving that. They're doing great, and we're happy for them. Up next, the final holiday rush is on. We'll tell you the retail names benefiting from the last minute spend. Plus, Newberger, Berman, Shenzhena, she will join us for the final moments of this trading week. We're now in the closing bell market zone, CNBC, senior markets commentator, Mike Santoli, and New Burger Berman's Shannon Sacocia here to break down these crucial moments of the trading day. Plus, Julia Borsden, on the TikTok U.S. joint venture and Courtney Reagan watching retail in the final holiday rush.

Michael, I'll send it to you as we close the week out. What's the story going to be told as? Yeah, I think you'd have to, Scott, say that there was progress made the last couple of days. It's definitely still kind of a selective, low momentum market, but the reassertion of the AI trade on this Open AI fundraising news, you have the NASDAQ 100 poking back above its 50-day moving average. So some things, you know, kind of holding to form. I think that's probably a net positive. It still is not the most vociferous or emphatic rally. So you wonder if we're going to end this year.

It's been a very strong year, you know, with a yawn and a shrug or if we're going to get the holiday levitation or not. I would also note one other thing today, which is a feature of the trading in an otherwise quiet tape, which is the revival of the memes. The meme stock ETF is up 10%. All the adjacent kind of long-shot energy plays, AI-related, are flying again. That's after the DJT deal with this, you know, coal fusion company. So I'm not sure if you want to see that at this phase. It's not necessarily hurting the rest of the market as we have a flat performance for the S&P. But I just think it's worth keeping an eye on that as people have some time on their hands and maybe we'll

want to trade. All right. I'm glad you pointed that out. Michael, good weekend to you. Thank you very much. Mike Santoli, of course. Julia Borsden, tell us more about TikTok. Well, shares of Oracle are up nearly 8% today on news that it is becoming TikTok's trusted security partner and its cloud provider and Oracle owned 15% along with Silver Lake and Abu Dhabi based MGX. Now, we are currently awaiting details on the new company's leadership. We're expecting them in the next month. But the company's already working on the new entity taking over US data, content moderation, and retraining TikTok's algorithms. Ad industry analyst Brian Weiser warns, quote, the main risk is not ownership, but execution. The transition could introduce friction

across the consumer experience, advertiser infrastructure, and algorithmic performance. So how TikTok manages this transition will impact whether it can grow its market share. 4% this year, a fraction of meta's 23% and Google's 25%. Potentially at risk if the new TikTok thrives is snap. It's stock down today. Scott? All right. Julia, thank you. Courtney, the final stretch of retail. Here we are.

Where else you think you're going to find me? Then at a store, of course. I'm at this target in Jersey City. You've got last minute shoppers. They're picking up some items they ordered online at the desk behind me. Target stock, though, on track. today to snap a record-tying 12-day win streak dating back to 1994, though up about 13% a month, quadruple the S&P 500. That's pretty much the story across retail. Retail stocks underperforming

the broader indexes this week with less than week to go until Christmas, though it's been a strong month if you look at the group. For the week, specialty retailers among the biggest retail winners and losers. Abercrombie, American Eagle, up each about 8% while Nike PVAH contour brands are among the big losers. Scott, I hope you're checking. second off your list. Back over to you. All right. Yep, yep. Court, thank you. That's Courtney Reagan. All right, San, let's chat this out as we count down to the end of this year. How's this market feel to you? I think Mike really said this best. It feels like we're getting some ebbs and flows. I'm actually happy to see a little life in the AI trade on this Friday.

We think that volume's likely to come way down sort of post Wednesday. So Monday and Tuesday, if we can continue a little bit of life on the AI side, I think that would complement some of the rotation that we've seen. Oracle leading the way today, I think is particularly impactful just with all the questions. But I think Courtney made a great point. It's going to be about kind of coming into the first couple of weeks of January. Is the U.S. consumer still engaged? How did the holiday season work? Today's the last day, really, to get Christmas shipping out. So it's going to be interesting to see how it plays out, given some of the puts and takes that we've heard from the consumer retailers so far. What do you think the most durable investing theme is going to be in

26. We still continue to think that AI is going to be a tailwind, Scott, but I think we're just going to have to see that CAPEX coming from other companies outside of technology, whether it's industrials or financials. I think the drug deal today with, you know, a number of companies agreeing to price cuts on the health care side could also be a tailwind, but we're really looking at this for companies to put the rubber where it meets the road in terms of being able to commit to AI CAPEX and justify the spending that the hyper-scalers have done in some of those valuations.

You want to stay large-cap for the most part? We like small-cap coming into this year. I mean, we've seen a nice rally, but it's been primarily in low-quality small-caps, a lot of lower no-earners, economic momentum in terms of stronger economic growth next year, lower rates, and this infusion of liquidity in April and May around tax time. We think that actually points to continuation of small-small-cap, strong small cap performance in the first half of 26th. So are you saying you think that rates are going to continue to go lower?

We think that there's at least going to be another cut in the first quarter. And then it's a wait and see in terms of what happens with the Fed in the second half of the year. I think that right now economically with jobs softer but not deteriorating rapidly and the potential for inflation to continue to come down despite the fact that we think that CPI print from yesterday is going to be revised up, there is fodder for the you know, the Fed to get softer or easier in the second half of next year. But we're really just looking at maybe one more cut in the first quarter. But still the transmission of the cuts we've already had so far.

What about U.S. versus other places? Yeah, I mean, U.S. in terms of there continues to be meaningful strength. I would say we're optimistic on Japan, and so we like developed XUS as a big Japanese component to that. Europe is a bit of a mixed bag, and so trying to be very thoughtful. But EM's looking more attractive, Scott. Even with some of the concerns about the Chinese consumer and that real estate overhang, EM's starting to look more constructive. We're more constructive on EM as we go into 26.

Looks like you like Korea when you talk about emerging markets. Is that right? Yeah, I think if you look at kind of the next phase of the AI trade, I think that we see some opportunities in Korea. And so being able to have a diversified basket in EM, don't think just China when you're thinking about your EM exposes. Shannon, have a good one. Great weekend.

I'll talk to you soon. They're going to rain the bells. We'll go green as they do that to finish this week. I'll look forward to seeing you next week in the overtime with Morgan and John.