Closing Bell - Closing Bell: 4/22/26

Episode Date: April 22, 2026

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 Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to closing bell. I'm Leslie Picker in for Scott Waffner. Today we're live from post nine at the New York Stock Exchange. This make or break hour begins with new highs. Investors focusing on upbeat earnings, lifting sentiment while President Trump says he's extending the U.S. ceasefire with Iran. Here's your score with 90 to go in regulation. You can see the Dow of about 0.4%. The S&P at 0.8%. The NASDAQ, the clear standout here, up about 1.3%. Of course, all in the green today. With the NASDAQ getting a fresh all-time intraday high, and close to session highs on all of the major indexes. The mega caps getting a nice boost as well, really leading the day here. Apple up more than 2% Amazon up about 2 as well, and Alphabet popping up 1.7% after unveiling chips for AI training. It's the latest shot in NVIDIA,

as that space becomes increasingly crowded and competitive. Software names also getting another boost today, Service now of about 3% Adobe of 3.5% as the IGV goes for eight straight days of gains. What a turnaround we've seen there. Tesla, another bright spot of about

a third of a percent today as it prepares to report results after the bell, a short period of time about an hour and a half from now. We'll speak with a star analyst and a shareholder in just a few moments. And that, of course, takes us to our talk of the tape and it is this record rally and

whether or not it's here to stay. Let's ask our Channel Trivariet researchers Adam Parker, Capital Area Planning's Malcolm Etheridge and cities. Scott Croner are all here today. Adam and Malcolm are CNBC contributors. Adam, let's start with you because you are here on set with me today. Quite a rally today. Large cap tech leading the way, momentum back in focus. Not so much in the way of breadth. It's kind of evenly split today. What do you make of the moves? Well, when I talk to institutional investors, I feel like one of the things that hurts the most of them, hurts most of them is if these great eight stocks, you know, the MAG 7 plus Broadcom, outperform, right?

Either because they have 525 rules or, you know, risk management that was built before stocks got this big, they're just sort of structurally underweight. And so, you know, if you take that view of sometimes, maybe it's a cynical view, but sometimes what unfolds actually hurts the most people in active management. You know, I'm not surprised to see the grade A outperform. You know, I think they're growing faster. The gross profits are growing faster. And I think a lot of people, you know, preferred if they lag.

But you upgraded tech recently to outperform. Yeah. We just think the absolute growth rates so high. Sure, Mike Ron and Nvidia are driving a massive percentage of it. But, you know, tech's supposed to grow 43% this year, 20%. another 25% and 27. Even those numbers are way too high, let's say they're 30 and 15 or something,

if the tech stocks don't go up in absolute terms, particularly some of the fast growers, the sector is going to be 30, 40% cheaper in a year. Like, that just seems very unlikely. So I think you've got to own semis still. That's been our North Star for a long time, semis over software. Probably more of a fader of the software rally that we're getting.

I think that makes a lot less sense to me. But this inflection, you just recently, made that change. What was it Monday? Yeah, we were recommending market weight in tech with a preference of semis over software for the first kind of three and a half months of the year. And I think, you know, with some of the,

you know, just absolute growth rate still looking pretty solid. I thought it was time to get a little more aggressive. Scott, I want to ask you because, you know, we've seen kind of this return to the AI trade recently. How would you characterize that? Do you feel like it has more legs? Yeah, I mean, we think it has a lot of legs from here.

And the way we would characterize it is a little bit different in the way Adam described it. You know, we've been on board with semis for, gosh, well over a year now, and going into this year, we've been underweight software, but we have to acknowledge that with software, you've had a pretty stiff valuation reset that we think has been pressure on terminal multiples, but you still allow from a lower valuation starting point these companies to demonstrate that they do have an AI playbook in many cases at hand.

And then with hardware, you know, you're led with Apple, but there too, you're getting this picks and shovels play. So the way we're talking about it is that we've got semis as your tech leadership, software poise for, let's call it a bit of evaluation rebound. And then with the hyperscalers in general, we think that the AI playbook is unfolding here where there's increased visibility on longer-term growth drivers that should come back and support the return on investment case there.

And Malcolm, it feels like this is actually happening alongside software. whereas, you know, for a while now, it's been kind of zero-sum game. Do you expect that to continue, or do you feel like eight straight days of gains and the IGV is getting a bit stretched and, you know, making some investors nervous at these levels? Yeah, so interestingly enough, that is the feedback we're now getting from clients, which is you've been bullish on software through this whole sell-off that started back in October. We're now seeing just a week, I think, where the IGV, for example, is up more, or for the month, it's up more than 10% and we're looking and saying, have we gone far enough?

Is it maybe I missed the trade? And I'm looking at this and saying this 2026 has finally become the stock pickers market that we've been promising to clients and market participants for years now. We're finally in it. And I think it's a mistake to look at just the broader indexes and say everything has moved up too fast. The Mag 7 has moved up too fast. And so I shouldn't participate now. I think really there are still bargains and opportunities buried underneath the surface.

that investors should still be looking to take advantage of. Okay, I want to talk more about that. Everyone stay with me as we're talking about, you've got the software trade higher again today. Sima Modi is here with more. Sima. Well, Leslie, as you just pointed out, the eighth straight day of gains for the IGV is pretty significant,

and it comes as we await for service now earnings. This SaaS company will need to prove that its AI monetization strategy is gaining traction from enterprise clients as both OpenAI and Anthropic, have been increasingly going after that customer. One vote of confidence for the sector is buybacks, Adobe out with a $25 billion buyback last night. That represents a quarter of the company's market cap, and it does follow similar announcements from Salesforce and Intuit, although some analysts have been pushing back on whether software companies

should be allocating more capital towards research and development, given the broader AI displacement fears, although one company trouncing those fears is Twilio, Bank of America, out with a double upgrade. analysts there believe this company is playing a key role in the AI-driven voice and messaging space would also point to Palantir securing a $300 million contract with the U.S. Agriculture Department to modernize farmland. That's one of the biggest moves, Leslie, today in software, up 4%. Yeah, it's certainly an idiosyncratic market there. Seema, thanks so much. Adam, you were kind of nodding your head over here.

Well, you know, I think about like the tech bubble when it imploded March 2000 to October 2002, the NASDAQ was down 77%. Even during that 77% decline, there were still 10 rallies of 15% or more, right? I can't help but thinking that the software rally is just like that. Like, we are not done. There isn't an all-clear moment. I think it's actually the opposite, which is, you know, a lot of these business models are going to be impaired.

The probability software outperformance on a multi-year view is low, in my opinion, as an industry, the equal-weight one. And there will be some winners, there will be dispersion. So I'm not saying, I agree with Malcolm's point, there should be a good opportunity for stock selection. But I think what's clear is whenever multiples can track like this, what ultimately happens is they miss on earnings. And why do I think that's going to happen, 12, 18 months from now? It may not be tonight with now. But the reason is because the analyst estimates embed the same gross margin and the same net margin going forward for every business.

Somehow they're supposed to attach all these AI tools that prevent them from ever getting fired by their customers without any OPEX or CAPEX. moreover, somehow they're supposed to keep the same pricing power, even though their vendors know what their margins are. I think that's an incredibly unlike equation in a couple years. So I think what's going on is the analysts do what they always do. They call the CTOs of the customers. They say it's fine. We're not firing them. They call the IR guy.

They crying each other's beer. But the market's trading more on fundamentals than people think. It's not some sort of, oh, this is illogical. It's second derivative of more moves. No, it's trading on a distribution of outcomes for 2030, and that distribution of outcomes got structurally skewed to the negative. So I feel like I'm seeing the ball clearly. Sure, if you're good enough to trade. you know, seven or eight out of these 10 rallies that happen on the downtrend for the next three to five years,

God bless America. I'm not good enough to do that, so I'm going to stay structurally more cautious when I know I know what's coming, which is earnings miss and then sales miss. It's just going to be one, two, and three or four years in the future. It's not going to be necessarily this week. Semis are different. They're much harder to replace. And so that's the North Star semis over software. One of the data points on the software side, I see on the tape Reuters, reporting that Toma Bravo is close to an agreement in transferring ownership of medallia to its lenders. This has been a pretty troubled software name for Toma Bravo.

And according to a person familiar with the matter, Reuters is saying that that will result in $5.1 billion in equity losses for Toma Bravo. And you've got a bunch of these asset managers that own the debt there. So Malcolm, maybe we turn it back to you just to talk about just the dispersion of outcomes among these software names and how investors can really assess which ones have moats,

which ones are able to transition in the AI era, and which ones are going to see a fate similar to that of medallia here? Yeah, I think Adam was making a great point in the sense that if we're looking just at the whole, we shouldn't be looking at software as something that this trend, this rebound that we're seeing is going to stay this strong for the next one year, two year, three year periods, just because it doesn't really make sense that it would because we don't have all the data yet to know who's going to truly be disrupted by AI,

who's going to be enhanced by AI, and who's just going to kind of middle along the way for the next three to five years. But I do think when you look at a company like ServiceNow, you mentioned as an example. It is more likely than not that Service Now will make it out of this period that we're in. There are a lot of companies

that are going to have to change the way that they bill their clients, their customers. They can't just be on a person. seat basis anymore. It's going to be have to be based on consumption. And so the faster companies can get to that model, the faster they can get out of this valley of death they've been in. And so I think that it's really important that investors have a little bit of patience if they do want to play in this space. I think that it's also important that they don't necessarily try and

just buy the index as their way to get exposure, thinking that buying the dip the way that it has on like the NASDAQ, for example, has worked out for the last five or six years. Right. And Scott, as they change their business model, I can't help. but think and wonder whether that kind of going from a per seat model to a usage-based model where it's based on time and consumption, whether that would be deflationary, whether what you're seeing with AI would be deflationary. I mean, how are you thinking about these various trends in the transitions in tech and what it means for the overall inflation picture? Yes, I think it always comes down to timeframes. And I think in terms of how you're thinking of your investment horizon,

and the choices you get within that. So no doubt within soft, where the SaaS companies are probably most at risk, but you're paying in many cases bid teams PEs for these companies. You can turn around and go by a cyber play for 40 to 60 times earnings. So again, this expectation for future longer term growth becomes relevant, but then how do you trade them over a one quarter, two quarter time frame? How do I think about that in the context of our year-end S&P 500 price target? I need all the tech working to kind of get to our 7,700 level. So I think the setup in here is that you hit most of the software companies, particularly around the SaaS component earlier this year. These companies aren't going to sit still.

They're going to come back and they're going to demonstrate how they're going to respond and how they can turn this into something. But to your initial point, no doubt in our mind that the longer-term impact of AI probably does have a deflationary component to it, software is going to be part of that. Corporates are going to have choices and how they spend their precious tech-related budgets on this. And I think that that deflationary component is something that we have to keep an eye on, particularly as we weigh that against other measures in the market, whether it be energy and other inflationary metrics that the Fed needs to contend with. Yeah, I mean, a couple of things. First of all, if you study, like, I'm pretty confident that if you're going to buy any

individual software name, you want to buy one that's fast-growing and is expensive. You don't want to buy cheap software for sure. The data is really compelling on that. So the reason you don't want to is the ones that are cheap have just a higher probability of being disrupted and impaired. The market's not stupid. On average, it gets that right. So I think if you're going to dip your toll, you want to pay more money,

you want to buy security or maybe it's cadence or synopsis or something that can grow faster. The market trades stocks at 35 times earnings for a reason relative to ones at 15 times. So I wouldn't use valuation for security selecting at all in software. And then the other thing is like when you look at the index, You always got to be careful. I don't know the components of the IGV, but in the SP500, Microsoft is a massive portion

of the software performance. So I think it makes sense, you know, the same way tech might look cheap because micron is cheap on earnings and is growing much faster, so then your book looks different than micro. So the devil's always in the details how you parse this stuff,

but I'm pretty confident that of two things. One, the equal-weight software underperforms over the medium long term and probably meaningfully, and two, you want to buy fast-growing, expensive ones, not cheap and slow-growing ones. Do you feel like there's any threat to whether it is software or some of the incumbent, not native AI companies, but companies, hyperscalers and so forth that are in the market when we do start to see some of these mega

IPOs come and hit the tapes, SpaceX being among the first reportedly in June. Look, I'm getting that question a lot of investors. Like, how do I think about the supply demand for it? As you know, like not everyone's going to get an allocation and a lot of people have risk rules that they've got to be tight tracking to that. So I think there'll be a lot of buying power for that one. But I don't think it's a zero. zero some game. Meaning, if I buy $10,000 worth of a 50 million market cap company in my PA, the company could be worth 70 million at the close. My 10,000 doesn't equal to 20 million, right? It's the same thing. It's not like it's a dollar for dollar demand story. So there'll be a lot of

buying power, if it's $75 billion, or whatever they float for SpaceX. But it's not like Tesla has to come down the same market cap that SpaceX goes up. Like that, that math doesn't make sense. So I think people will buy it and buy a lot of it. But I think SpaceX is a little bit one-of-one, and it's a little bit different than, you know, Anthropic and Open AI. Yeah. Sounds like there's still some decent amount of cash on the sidelines as I'll to put to work there if need be, if that allocation is given.

Thank you so much, Adam, Nelson, and Scott. Really appreciate it. Now let's turn to the big report out in overtime. It is Tesla, Philabo here, with a look at what to watch, Phil. Leslie, the numbers are not going to get a whole lot of attention in part because it's always the conference call that drives the most interest with Tesla. earnings day. That said, there are some things we'll be looking for, at least with the initial

earnings report, and then on the conference call. Let's start first off with what I would call the traditional business, the manufacturing business. And when you look at that business, a couple of things stand out. Cybercab semi-truck production. What kind of updates do we get about ramping that production? FSD, full self-driving penetration rate, does it continue to grow? And then there's the Optimus Robot update. Remember, they are planning on building that Optimist Robot, the humanoid robot at their facility out in Fremont, California. Where to things stand in that regard? In terms of deliveries of Tesla vehicles, remember, two straight years, deliveries declined, and in the first quarter, they were down another

14 percent compared to the fourth quarter. Again, you're not going to see the S and the X. They're both going away. It'll just be the Model 3, Model Y, the cyber truck. That's going to be the vehicles, really the second half of this year and then going forward. in terms of the robotaxies and the robotaxy network, the stock got a bit of a pop yesterday, or maybe not a pop, but a bump higher after they posted this video, Tesla posted this video, showing a robo-taxie driverless, nobody in the car, driving in Houston and driving in Dallas, saying, hey, it's now running in three cities along with Austin. What about expansion beyond that?

And by the way, this is one video. How many cars are out there in service with the Robotaxy Network? Analysts are going to be looking for specific numbers. As you take a look at shares of Tesla a year today, keep in mind the conference call, which starts at 530, this is really when people hear from Elon Musk, it will drive the most attention. One last thing to keep in mind, Leslie, on these calls, and I've been listening to them for years. You get two types of commentary usually from Elon Musk. One is very measured, very thoughtful, like in terms of this is where the company is going.

Those tend to be the ones that move the stock. then there are the sort of wild predictions. Those are the ones that you can almost tell the analysts are like, okay, we're not going to put a whole lot of stock in that. Like in 2019, when he said, we're going to have a million robotaxies on the road next year. I mean, there was nobody who thought that was possible or going to happen, and it did not happen.

So those are the two types of comments you tend to get from Elon Musk on these conference calls with analysts. So I guess investors, or at least the Bulls here, are hoping for a more measured Elon Musk. this evening. We know you'll be all over. We appreciate it. Philibault. For more, let's bring in Wedbush's Dan Ives along with CNBC contributor, Requisite Capitals, Bryn-Tockington. Dan, we'll start with you. You agree? Investors, do they care about these numbers at all? Do they care about earnings, or is today more about energy storage or autonomous driving or AI chips or robotics?

Look, you care because ultimately you need to see stabilization of demand. I think they've seen that in spots. If you look China, Europe, I mean, that is important in terms of the core story. But the reality, going forward, this is an AI company. It's about autonomous. It's about robo-taxies. When you start to see the city ramp, by Houston, Dallas, when you see another five come on. You know, ultimately, what does volume production look like when you talk about from a time respective cyber cabs, optimist? Look, to get the incremental trillion dollars evaluation, trillion a half, it's going to be an AI. It's. going to be really what I view. This is much more of an AI company, disruptive tech, than a car

company. Brand, you say that the report today will be a credibility test for a company in transition, which speaks to those themes as well. What do you need to see in terms of checking the box for that credibility test? I think when Phil and Dan obviously set it up. We want to hear about margins, first of all. Our margins are going to be sub 17, 18 is great, sub 17. probably gets a pinch. We want to hear about CAPEX. Is CAPEX for cars or is CAPEX, which we haven't talked about yet, for the TerraFAB facility, which is going to be very exciting. And so I think where this company is in transition is that it's clearly not just a car company. This car is an AI company. This is a physical AI company with Optim, with CyberCab. And I think that so many investors

talk about, you know, the other OEMs getting the Nvidia chips that can self-drive. The reality is, just gives them the software. Tesla has the millions and millions and billions of miles driven. So to me, we're looking for multiple things, but you want to have metrics of success. I think most people are going to focus on optimist margins and robo-taxies from an earnings call perspective. Dan, your $600 price target implies more than 50% upside for the stock. It's down 13% this year. What do you think really turns it around and gives it that bolster to get to that $600 price? price. Yeah, look, for physical AI, the two best physical AI plays in the market today, it's

Nvidia and Tesla. But it's really, right now, it's the path to actually start to see the ramp into the second half of the year. This is a very important conference call from must to outline realistically. I mean, Phil always says, you know, with a grain of salt, what it's going to look like in terms of production? What should we actually see in terms of cities on the road? That is extremely important.

I mean, if you look, it's been slower than expected. But I think that's also been carefully because the last thing they want to do is ultimately have some issue. So you're seeing city by city them ramping. And then it comes down to over the next year, you're owning this for the autonomous robotics piece. And they need to prove and show what the timeline is there, as well as the stabilization in demand that you're also starting to see in terms on delivery. Is it cities on the road? Or do you think it's more about the network? Is it one car in Houston, one car in Dallas, or do you need to see more of a broader

rollout at this point in time? You need to see a broader rollout, but cities are important. Because ultimately, that is the start of what's going to be the network, where you're going to have 30, 40, 50, 50 cities. In my opinion, they're going to own 80% of the autonomous market in the world. But as Bryn talked about, it does all start with rolling it out, showing the physical AI play. It's been underperformer this year.

I believe we sit here three, six months now. is actually significantly outperform. And Bryn, you think the stock has a ceiling of about $450 per share. I believe you sold your calls at, what was it, 420 per share, which is a nice Elon Musk number. Over what time frame do you think that ceiling exists? And do you agree with Dan here that, you know, in months' time, we could start to see some real traction and what that would mean for the stock? If we see real traction, the stock will be well about $420.

I think it's going to take longer. Elon and his team do really hard things, right? And so that's where technically, I'm very bullish on the stock long term, but just technically the stock is in a downtrend. And so I think, you know, 400, by the way, is also resistance. But I sold my May, they'll expire, you know, May, like May 21st at 420. I don't think they get called away. I think it's going to be a few more quarters. But this company has so much call premium. So I'm more than happy just to be very pay but sell calls on my positions that I own and collect a really nice premium along the way. Yeah, look, it's great thoughts there. I would also just say, when you think about SpaceX, you know, coming in June terms of the IPO,

it's RV2 in the next year, Tesla eventually merges with SpaceX. And this is just an important dynamic as it plays out. I think that's sort of part of the golden goose for Musk as investors start to play this broader trend. That would be big. I know they invested, what was it, $2 billion? XAI and XAI is now owned by SpaceX and SpaceX going public, but that would be a big regulatory question mark, I think. No doubt. I think that ultimately is where I think it's, I think a year from now, Tesla and SpaceX have already merged. All right. We will see. Dan and Bryn. Thank you so much.

Looking forward to that print after the close today. We are just getting started. Up next, Google upping the ante in the big AI arms race, the details and what it could mean for the stock coming up. We're live in the New York Stock Exchange. You're watching closing bell. on CNBC. Welcome back. Let's send it over to Christina Parts in Avalis for a look at the biggest names moving into the close today. Christina. Well, Leslie, let's start with Avis Budget Group, because those shares are sinking 35% right now, which is actually a rare down day following the recent short squeeze on the stock. Shares have actually surged over 400% just in the past month as two hedge funds, really have amassed these huge positions amounting to more than 70% of Avis shares. Today is actually

the only third down day for Avis in the last 22 sessions, although quite quite. it baked down 35%. GE Renova is the S&P 500's top gainer, shares of the energy equipment firm pop in about 12%. As the company raised its annual revenue forecast orders also surge 71% year-over-year. The stock trading at all-time highs back to its spinoff from GE back in April 2024,

so not too long ago. Last but not least, Best Buy shares dropping roughly 4% after the retailer said its CEO will depart at the end of October. A 27-year-year company veteran will take over leadership. transition comes amid a turnaround effort as sales have just pretty much lagged over the past four years, the stock having its worst day since October, Leslie. All right, Christina, thank you.

We are also keeping an eye on shares of alphabet. Mackenzie Sagallo is here with what's behind that big move in an increasingly competitive space, Mack. It really is, Leslie. Those shares up around more than 2% now after Google rolled out new enterprise AI tools, including a broader agent push that competes more directly with offerings. from rivals like Anthropic. But mostly today is about leading into one of its clearest AI advantages. It's in-house silicon.

The big headline out of Google Cloud Next is its new TPUs. Notably, Google is switching up its strategy here. There's now one built for training AI models and then a separate chip that is built for inference. That's what it takes to run LLMs. Now that's where a lot of the next wave of demand is headed thanks to the rise of agents. This is very much Alphabet competing in a race

among the hyperscalers. Meta, Microsoft, and Amazon are all pushing deeper into custom silicon because NVIDIA's chips are expensive, supply has been tight, and everyone wants more control over cost and performance. It was just last week that Meta expanded its Broadcom deal. But Google got there first, 15 years ago, and demand has been ramping fast, anthropic, meta, even Citadel securities, all using TPUs.

Wall Street is bullish too. DA Davidson thinks the T-Divis PPU business, together with DeepMind, could be a $900 billion opportunity for Alphabet. Morgan Stanley says that for every 500,000 Google chips sold into a third-party data center. That could add about 40 cents to earnings per share. Certainly something that investors are thinking about going into earnings next week. Leslie? Mack, as we think about how competitive this space has become, what ultimately prevails with customers?

Is it price? Is it quality of the chips? Is it just partnerships and legacy relationships that ultimately wins the day? It seems like the flywheel effect is winning. So Google isn't just promising you cheaper compute because it's in-house chips, cost less than Nvidia. They're also saying, come to us to give us your cloud business. You're already using Google Workspace. We've got Gemini models that can undercut rivals on price.

Anthropic is at the higher end of the spectrum when you think about those enterprise workflows. And that's a big part of today. It's about how do we win the enterprise consumer back, from Anthropic because Google's been on the back foot for so much of the time in the generative AI race. They've had a real comeback over the last year. And so Google Cloud is a distant third compared to Microsoft and Amazon. But next week, we're expecting a pretty big boost because last thing, Leslie, Thomas Curry and the Google Cloud Chiefs told us in a small briefing that in the last year,

they signed more billion-dollar-plus customers to Google Cloud than they have in the last three years combined. So something is really working about their strategy. So it's kind of like the grocery store approach. You want to go and you want to pick up all your items at one specific place. You don't want to mix and match there. Exactly. Make sense to the grocery shoppers among us, Mac. Thanks so much.

Still ahead. It's not just Tesla earnings out in overtime. Southwest among the big names reporting in less than an hour. We'll hear from an analyst with what he's expecting. Closing Bell will be right back. Welcome back. All eyes are on airlines as we await more earnings after the bell from Southwest, followed by American tomorrow morning.

Here to tell us what to watch and how to play this space as TD Cowan's airline analyst, Tom Fitzgerald. Tom, it really feels like an important time for these airlines, just given what's going on with energy prices and ticket prices. I'm just curious, given what you're seeing right now, how inelastic is air travel demand?

And what do you expect to hear from the executives on these conference calls? It's a great question, Leslie. I think right now what we're seeing is corporate demand is still very strong, and so is premium demand. So I think as long as the economy and equity markets are hanging in, you'll see those segments continue to help perform. I would imagine all those equal that you would see more elasticity among price sensitive, maybe lower income cohorts. So we should get maybe more of a better barometer of that tonight after the bell with Southwest

and then tomorrow as well with American Airlines. Which airline you think is the most defensive amid all the macro and commodity headwinds that are out there? I would say Delta, airlines, they have the strongest balance sheet among the U.S. carriers. They also have most diverse revenue set, at least reliant on main ticket revenues. They own the refinery, which is likely going to provide around a 25 cent offset on their fuel bill this quarter. They are scaling up a third-party MRO business, which is very steady, you know, very high quality, low volatile revenue. So I think they're probably more than all-weather airline to the extent there can be one. What about the least? You think it is Southwest and some of the more price-ins?

names? You know, in terms of, I think Southwest is an interesting one. We're going to gauge of how their initiatives are performing. They came into the year with a lot of momentum. And I think prior to the war, they were hoping this could be a real banner year and a real bounce back there for their bounce back year for their business. I think investors were looking to see some low factor improvement. And then when we get the 10-Q gauge, the performance versus of cash ancillary sales versus

some of the benefit revenues that's under the hood. that's under the hood. What other changes can airlines make? I mean, we've seen them raise ticket prices. We've seen them cut additional capacity, that we've seen them charge more for checking bags. Are there other levers? Or are those kind of the key ones that you expect them to continue to really push on if fuel prices remain high? Those are the big ones. I think pulling additional levers beyond that will come down to how the economy hangs in and whether there's any more material cracks in demand. At that point, you could maybe look to retire aircraft, defer aircraft orders, take more substantial methods. But I think those are the big ones. I mean, they're

to raise fares. The bag fees are nice because those tend to be a little bit stickier, as we saw in 2008. After 2018, those don't tend to come back down, like the base fares, which tend to track more with fuel prices. Are you getting a lot of questions these days about potential mergers in the airline industry and whether, you know, the reports around United and American ultimately transpire or, if not them, then perhaps other tie-ups? It's been a big topic. Even prior to some of the headlines over the last few weeks, it had come up among investor conversations, just given the view that there was maybe a more favorable regulatory environment, especially ahead of the midterms.

Look, it's a scale business. I think that helps, especially for the loyalty programs. get more ballast. I think it's harder to be a tiny airline in the post-COVID environment for a lot of reasons, the cost conversion theme, needing to have revenue diversification. So I would look for weaker players to continue to be considered in strategic transactions. And in terms of the United American, yeah, a lot of investors, I think there's a skepticism that the deal can actually get through, but there's a lot of, you know, I think a lot of people are impressed with what that combined business could be like if a deal was able to get through. Yeah, it would be, fascinating if it ultimately took place. I know you will be watching it, Tom.

Thanks for joining us today. Thanks for having me. Up next, we are tracking the biggest movers as we head into the close. Christina Parsonableness standing by with that, Christina. We have a massive stock buyback, a rear double upgrade and a better than expected loss sending one down aim higher. Those movers are going to be next. About 14 minutes until the closing bell. Let's get back to Christina for a look at the key stocks to watch, Christina. Let's start with Adobe shares because they're rising about 3% after.

the company's board approved a $25 billion stock buyback through April 2030. Separately, InVDivio, Jensen Wong, spoke positively about Adobe at Adobe's annual summit this week. Call it the Midas Touch of Jensen, but Adobe's shares have actually struggled lately along with other software companies. They're down about 20% year-to-date. Twilio shares are up about 2% after Bank of America double upgraded the stock to buy from underperform, which is a two-notch jump. The company helps developers build voice, messaging, video, and email. directly into applications, and analysts argue Twilio's core technology is largely protected from AI replacement risk. And Boeing shares gaining roughly 5% after the company reported a better

than expected loss in the first quarter. Boeing said the company expects to ramp up production of its 737 max aircraft this summer to reduce losses. Boeing is actually the best performing stock in the Dow today. Was it? All right, Christina, thank you. Up next, your big earnings setup. What to watch from all the key names reporting in overtime. The market zone. We are now in the closing bell market zone. Mike Santoli and Wilmington trust Megan Schuer here to break down these crucial moments of the trading day. Plus, we're setting you up for earnings. And overtime, Frank Holland watching CSX, John Ford covering IBM and Bill LeBoe standing by with a quick last look at Tesla. Mike, what are you watching for today? Yeah, Leslie, actually a pretty kind of kinetic market under

the hood. Obviously, it's a good thing if the S&P 500 is going to make a new closing all-time high. It looks pretty likely, although we're very close at this point. However, it's about a 50-50 split in terms of New York Stock Exchange stocks up and down. We have narrowed back out. The equal-weighted S&P is flat on the day. So essentially, with oil up a little bit, just a little bit of hesitation around the path of the Iran negotiations and the market just piles into things that really have not as much to do with the real economy, frankly, and that's what's going on, both speculative stuff and AI-related tech. So we'll see if that re-narrowing of the market makes it kind of more in gear or a little bit more fragile as time goes on.

It feels like the retail investor is back. Is that fair to say? Well, I think it is fair to say that there's an absolute chase on in the last week or two in particular. So I think this is as distinct from this notion, that somehow the retail investor magically buys every dip. Actually, as a group, retail traders kind of got shaken out near the lows. Flows did turn negative. That's normal. That's what happens in corrections.

That's what corrections end. People sell, and then they find themselves under-exposed as the market comes back. So, yes, I do think there's been a re-risking, and retail has been part of that. I don't know that we're at the kind of outer fringe of where that's healthy or not. I think we're still okay for now, but there's no doubt about it that that's evident in the market these days. steam stocks somewhat at bay these days. Mike, what do you have coming up in overtime? Well, it's going to be the earnings storm, as you know. So Tesla, IBM, Service Now, Texas instruments. We're going to have obviously the numbers and also breaking analysis around all of it.

I can't wait. Mike Santoli, thank you. Speaking of earnings, let's send it over to Frank Holland for a look at what to watch from CSX's report. Hey there, Leslie. CSX shares are up 20% since last earnings in this quarter. The company's forecast to see revenues grow by 2% in APS grow by more than 14%. Two areas to watch, intermodal or container shipping and coal. The rapid rise in oil prices has pushed more shippers to intermodal, which is more

cost efficient. And CSX saw a big boost to its coal transportation business following the oil shock from the Ukraine war back in 22, 23. Both segments are forecast to increase, but the full impact for the quarter and how it could impact guidance, those are key questions. One other area of focus, AI, and how

it impacts efficiency. The company's partnered with Microsoft and InfoSysist, integrate AI, to improve operations. JPMorgan out with a recent note saying in part, CSX is running solidly above 2024, 2025 productivity levels on a carload per employee basis. Leslie, back over to you. Good little nugget there. We will be looking forward to that. Thank you so much, Frank. Now let's bring in John Ford for a look at IBM, another big mover today. Yeah, Leslie, the question with IBM is whether the results meet some recently ramped expectations.

And similarly, how the stock reacts, even if the results are solid, And for a long time, the knock on IBM was that the top line wasn't growing. Now it has been partly thanks to a strong mainframe cycle. But software has also managed to grow nicely, even without relying as heavily on Red Hat, which for a long time was IBM's entire software growth story. So investors are going to be watching whether that diversified balance continues. Yeah, very important there, John. Thanks so much.

Let's get back to Phil LeBoe for a last look at Tesla before that report. Leslie, let me give you three things that people are going to be focused on when Tesla reports its numbers in just a few minutes and then on the conference call a little later. Autonomous and robotics, what's happening in terms of those developments of those products. AI investments increasingly, as you've heard Dan and I's talk about, this is an AI focused company. And specific production targets, whether it's with vehicles, whether it's with humanoid robots, whatever it might be. Analyst wants something concrete that they can hang their hat on. Elon Musk, the conference call coming up at 5.30. this is usually what moves the stock.

Is it a call where you get something you can really dig into with Elon Musk, or is it a call where not a lot is said and you can come away afterwards going not entirely sure exactly where Tesla is at? As you take a look at shares of Tesla, remember the number to focus on in terms of when the earnings report comes out, 37 cents a share. That's what the street is expecting Tesla to earn. Leslie? Very much looking forward to that, and especially that conference call.

We know you'll be all over it. Thank you, Phil. Appreciate it. As we head toward the bells, let's bring in Wilmington Trust's Megan's shoe. Megan, it's kind of a momentum day as Mike laid out for us. Or technicals pointed into signs that this rally has room to run at this point? Yeah, thank you, Leslie. I think we definitely have some positive momentum and have had that for the past couple of weeks.

I think short term it's possible that we are getting a little bit overextended, but longer term when you couple the momentum we've seen, making new highs, along with some really important improvements in the fundamentals, whether that's concerns about AI disruption, private credit, earnings, even the labor market, all of that, to us, points to a market that could and should be higher a year from now. Yeah, how much of it just really depends on where the market is focused at any point in time? You know, obviously it's earnings season now, so it feels like earnings are front and center and macro and geopolitics put, you know, in the back burner at least a little bit?

I think that's an excellent point because had earnings season been a couple weeks earlier, we probably would have been still so focused on the Iran war, and it's not to say that we're not, but we've definitely seen an improvement in the headlines there, an improvement in the intentions to have talks, to de-escalate. And that has occurred at the exact time. the earnings season has kicked up and really given us some constructive earnings growth, constructive commentary. There's a lot of uncertainty out there, but what we're seeing is the companies are managing it well, they're managing supply chains, and they're still finding ways to be profitable.

You still, though, think that GDP growth will be pretty sluggish this year. I see 1.1% is your expectation for 2026. You think the Fed will cut three times as a result of that? Yeah, our economists are a little bit more complex. on the outlook. A lot of that comes from some very sluggish labor force growth, some very sluggish job growth, as well as caution around the consumer and spending, having to dip in savings, extending spending beyond income growth at this time. All of that points to a little bit of a sluggish economy. But on the positive side, we see disinflation continuing, and that's

not a bad backdrop. If we have moderate growth and we have a Fed that can cut, not into a recession, and that can be very positive. And I think the earnings, outlook, CAPEX spend on AI, all of that paints a constructive picture for the market going for it. Yeah, that sounds like a backdrop where you'd want to maybe be fully invested in equities, if you believe it. And that is what you are urging investors to do to be fully invested in equities. Overweight staples, discretionary communication services and financials.

Why are those the ones to prosper in that backdrop? Yeah, I think diversification is key here. I mean, you're pointing out some of the sectors that we're interested in. Some of that is finding companies that are really well positioned for a more discerning consumer, but also benefiting from other companies that are benefiting from the secular growth story behind the CAPEX build out of AI. We do continue to favor the West over international, but I really think it's difficult because of the headline driven market, have to stay diversified and stakeholder investors as well.

Yeah, absolutely. Many of those are leading the tape today. We appreciate your time, Megan, with about 20 seconds left to go in this closing bell. As I mentor, an information text really leading the way up about 2.5, followed by communication services in that same bucket. I'm talking about mega tech really leading today's rally. That does it for closing bell. Now let's put it over to overtime.