Closing Bell - Closing Bell 5/14/25

Episode Date: May 14, 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.

guys thanks so much welcome to closing bell. I'm Scott Wobbner live today from the Sone investment conference here in New York City the 30th anniversary of this great event that raises money for pediatric cancer we are so very proud to

be a longtime partner of this event and we have a great lineup of guests coming up today including David Einhorn and Jim Chanos they're going to be here with me in just a little bit I'll show you how the markets are shaping up

with 60 to go in regulation today. It's really a NASDAQ story again, about a half percent, Dow's a touch red, and there's the S&P. As I said, about 4% away from a new high, right around positive territory for the year as well. Joining me here at the SONE Conference, well, Nvidia's having a great day too.

Chips and tech, they are bouncing. And joining me now, Adam Parker, Trivariate Research, the CEO and the founder, also a CNBC contributor. It's good to have you here. Thanks for having me.

So your headline of late is that you've been growing more negative than you have been. Shouldn't it be the other way around? It should be. You're right. So what's the problem?

Normally when prices go up, you know, they predict something positive. You made a good comment there, the market's about flat year to date. And had you told me on Gen 1, we'd have this tariff situation, we'd have this volatility, I would have thought the price of four earnings would be a little bit lower. I would have thought the earnings people have now would be lower. And so it seems to me like what the market's discounting is maybe that things are going to be better in 2028 to 2033 or some medium to long term.

Why can't they just be better between now and the end of the year? Because the games changed a little bit, hasn't it? But it's clearly worse than what people thought in January. I mean, it's funny, we had that call, as you know, market will be down and volatile in the first half of the year because tariffs are on the price. I felt like I knew what I was doing on April 7th, 7th, coming on your show saying I know what I'm doing. And then I've been caught off guard by the magnitude and the speed of this rally.

I wanted to find some offense. We wrote a note about Semi saying like, I wanna buy it but it's close and I just missed it. I blew it. I just didn't think that we'd rally this fast, this hard. Because I don't think the earning season in June, guiding for October is gonna be that good. I hear you on, yes, the environment is not as good

as people thought it would be back on January 1st. Yeah, but it's better than April. But it's a lot better than, well, forget April, it's a lot better than it was last Friday. Right. Isn't it? It is, it is. It's just that the estimates that are embedded in the consensus numbers for Q3 and Q4

are above the normal second half optimism. The environment, if you listen to the corporations, you scour the transcripts, doesn't appear like things are improving. So I think what I got caught off guard a little bit, I think on your show we talked about it, during season in April was better than I thought. You know, visas numbers, the banks,

they didn't say things were deteriorating. We do have some companies that report end April in the next couple weeks. We do have some companies that report end April in the next couple weeks. We do have some frequency data coming here, so we'll see what's happened in May so far. If it holds up and we have just a blip on the radar screen, then the rally will be more merited. If we get July guidance for October, where you get more companies besides just autos and airlines saying we can't guide, then I think we'll have another five, ten percent

drawdown. Do you generally feel as though things have dramatically changed though from just last week to now? The fog obviously at least part of it has lifted right there seems to be a little bit even if it's just for 90 days today let's just take it at face value for what it is I can see more clearly over the next 90 days and I thought I could on Friday. Yeah I buy that argument a little bit in terms of like the multiple expansion we seen

clarity and certainty should have a higher multiple I don't necessarily buy that the earnings environment the fundamentals what the companies are going to see is improving and so I think that's the tension. My view is the bond market's been much more stable in the equity market.

The bond market's not acting like economic growth's going to improve. You're not seeing the 10-year back up a ton as a sign of strength. We're at four, right here, we're above 450. What do you mean? But we were back kind of talking about five when we were only a couple percent from high.

You know, I'm just saying, if you adjust mark to market where we were when the couple percent from high. You know, I'm just saying, if you adjust mark to market where we were when the market was at high. So I feel like the risk reward is skewed to the negative on corporate results and on the economy. I think the Fed, the dream scenario is probably they don't do anything. Things don't deteriorate to the point they have to cut. And you know, it's the dream scenario.

I think the best thing for equities is pause. That they do nothing. Yeah, why? Because I think the best thing for equities is pause. That they do nothing. Yeah, why? Because I think if you remember back in 2022, we got to the very end of 2022 and all of a sudden you want to cover your amazing shorts on Nvidia and Meta and get long in the beginning of 2023 because the logic was, well, they're closer to being done with the hiking cycle than the beginning.

I think it's the exact opposite right now. If they're not closest to being done cutting, it's because things then really do deteriorate. And I don't know if you want them to deteriorate that much without some multiple contracture prior. So I don't think this is as easy as, Fed cuts, I'm bullish, it's dubbish, it's amazing. And you're a don't fight the Fed guy.

Totally, and I think that's true for the first three quarters of the cycle, but not the last quarter. And that's a debate, that's a debate. But even if they're doing it from a perceived point of strength, they're not forced. I mean, the data more recently doesn't suggest that they need to do anything, but they're probably

on at least the heavier side of being more restrictive than they'd like to be in the end. So the sequence of events, I think, if you're sitting in an equity investor's shoes are, first the price action. I think your first comment we sat down is right. I should like stuff when it's up more than I used to because that usually is a positive.

OK, we'll see. The second thing is what are the corporations saying? I scoured the transcripts, the webcast presentations. The data aren't improving. We'll see. But don't you think that's obsolete? Like, whatever they said during earnings season. But each day, I'm seeing the new presentations, the new conferences that are coming up, there's

a bunch of, you know, I'm speaking at a, you know, Moffitt and Nathanson's conference tomorrow. You will get more data points from corporates this month and they'll update us on April 1 through mid-May and we'll see if they say things are stable or not. I do think you had a pull forward in demand before the announcement. I think you'll see some lag ripple from that. I don't think this is like catastrophic. I'm not saying this is like COVID. Oh, for sure.

But I just think we could hit an air pocket here on guidance that isn't in the price, given how much we've rallied from lows. I'm kind of surprised that you suggest that semis, which have rallied a lot, right? We talked about Nvidia, and if you were to put up the SMH, the Philadelphia Semiconductor Index, right? It's had a great move.

You say it's only up because they were down, not because the fundamental outlook is way better than it was four weeks ago. But how's that possible if growth prospects are better today than they were four weeks ago? I think we can say that they may be, just if we have the pause on the tariffs, and we're gonna have fewer restrictions on chip exports

than maybe we feared, how is it fundamentally better today than it was four weeks ago? I guess it depends on the horizon, right? If you go back and study the previous eight or 10 cycles over the last 25 years, the stock's bottom nine months before the fundamentals accelerate. When you go through the math on the last 25 years, the stocks bottom nine months before the fundamentals accelerate.

When you go through the math on the demand, supply, inventory, it doesn't look to me like things really are gonna accelerate to the middle of next year. My judgment was, when we wrote a big semis note three weeks ago, four weeks ago, was man, it's a little too early. Of course, this kid who works for me is 25 years old,

took my note, where I said it's too early, bought the Soxel on his PA, and has already doubled his money and is taunting me at the water cooler this morning. One of your own guys is going. Yeah, they used my research and made more money than I did. The inverse Parker trade. Yeah, yeah, just do, take my research

and then get more bullish off my own research. By the way, he did have the research himself. So, you know, I wrote that note thinking, man, I wanna get bullish. I know the market can't rally without tech participating, so I'm not surprised that tech's doing well in the rally. I just thought we won't see upward revisions, margin expansion, revenue acceleration. I usually need some of that cocktail to get excited.

I don't think you see that this year. You think we're going to take out the highs, the old highs? We're 4% away on the S&P, a place that very few people thought last week that we'd be. I don't think so, but I'm not great at these one month calls, man. I think we're going to get, I think when you talk to people right now, the technicals, everyone seems like we have some more bullishness in front of us. When I think about the news that's coming, I think it's skewed to the negative. So I probably would sell some winners, collect some profits, try to figure out what's up

too much that I can short. Are there double digit revenue expectations with high valuation to consumer? Maybe I short chipotle or something that doesn't make any sense on valuation just thinking things are probably slow That's not in the price You think we're not going to get to a good enough place with China that it's going to end up being still a Sizable weight on growth we say I think politically the administration will say we won no matter what happens I think the reality will be one of the companies tell us and I don't think that's skewed to the positive in July earnings.

All right, we'll see. Thanks for being here. Yeah, thanks. I hope they raise a ton of money for cancer. Yeah, it's Trivariate's Adam Parker here, the 30th anniversary of the Stone Conference. We'll see you soon. Hope so. Two Christina parts in Nevelis now for a closer look at NVIDIA's big comeback and it has been

one indeed. Christina? for a closer look at Nvidia's big comeback. And it has been one indeed, Christina. Yeah, you just talked about it, but it did also reclaim its position in the exclusive $3 trillion market cap club as its shares rose for the third consecutive day, turning positive for 2025. There are three key factors that are really fueling

investor optimism around the AI chip giant. So first, you talked about it, Scott, the Trump administration's revisions to China-related policies have created, let's say for now, a more favorable landscape for Nvidia. Recent changes would include more lenient tariff structures and the elimination of previous diffusion rules, the AI diffusion rules on exports though.

Keep in mind, even last night, the Commerce Department said that they do plan to create a replacement. So a replacement of those rules is in the works. Secondly, Nvidia's recently announced partnership with Saudi Arabia involving 18,000 GPUs demonstrates both the company's ability to attract deep pocketed customers and of course, the strategic importance in US trade negotiations where some would say Nvidia is used as a bargaining chip. But let's talk lastly about the final point, and that would be contract manufacturer Foxconn providing encouraging news overnight, reporting that second quarter production volume is accelerating, although they did lower their guidance.

That's overall a positive signal for Nvidia's upcoming Blackwell chip rollout. Other catalysts this month, CEO Jensen Wong's keynote overnight at Computex, which will be this Sunday, getting into Monday morning. And then you also, you have earnings on May 28th. And those are some of the drivers for the share price this month, Scott. Goodbye. All right, Christina, thank you. That's Christina Partzanevalos. Joining me now here at the Soan Conference, Jim Chanos. He's the Chanos & Company's president and founder.

It's nice to see you, it's been a while. It's been a while. So for those who don't know, you're not running a hedge fund anymore, you're advising clients and running the family office, correct? Yeah, and providing research to institutional clients. We did a partnership with my brother's firm,

and so we're still slinging research, still looking at companies. Famous of course for being a short seller. Are you still shorting stocks? We're still recommending, shorting stocks personally and recommending clients do it, but again, on a hedge basis as insurance. Is it easier to do that now that you're no longer managing outside money? It's a different business model Scott, so I mean

people still want to get a research and hear what we have to say but don't have the day-to-day, week-to- week to week, month to month pressure that my friends who you're going to interview later have. It's a little bit of a different model but it's still the team doing work on the financials, tearing apart companies, looking for something that the market isn't appreciating. Mostly when it comes to speculative behavior, right? That's your hallmark. Yeah.

Aside from what you think is potential fraud and abuse over the years, which you've obviously targeted as well, but mostly it's trying to identify anomalies of more speculative behavior in specific names than you think is worth. Right. And as I've told people, in bull markets, investors tend to put a premium on promises. In a bear market, they put a discount on reality. And right now we're getting back to that end of the dial where, at least in certain areas, certain companies,

investors are really putting a premium on promises. Okay, let's go through a couple of ideas. Bitcoin's number one, okay? It's rallied back to 100K. We can show a chart of it. And again, as you just said, representative of how you sort of do your job and have for decades you usually long the market and then short a name against it that's

that creates the natural arbitrage and the and the head hedge there's bitcoin 103 000 so your long bitcoin your short micro strategy yeah and you have been for a good while? A good while. You've gone on and off for the last couple of years. Why so? Because it's so levered to the price of Bitcoin? We've short the spread. So that's the important thing that your viewers need to understand.

I don't know where Bitcoin's going. 100,000, a million, 10,000. I don't know. I don't think anybody else knows. But what I do know is it's generally profitable to short one dollar for two and a half dollars or three dollars. And if you look at where MicroStrategy, and now more ominously, some of the copycat companies

that are now raising lots of money, are doing is they are basically selling retail investors the idea that we are going to buy Bitcoin in a corporate structure because of what MicroStrategy has done, you should value us at a similar premium and therefore earnings are created by the difference between what new investors are paying, what the net asset value is, but it's ridiculous. And so what we're doing is we're doing exactly what MicroStrategy and Michael Saylor are doing. We're selling MicroStrategy stock and buying Bitcoin and basically buying something for a dollar, selling it for two and a half dollars.

If Bitcoin continues to go up, is that the most direct impact to how your trade is going to work? No, no, no. The premium fluctuates and the premium is a really good barometer of speculation in the market. So, we're back at premiums to NAV where we were at the end of last year, December of 2024. The premium came way in five, six weeks ago when the markets were getting upset.

It's right back up. And so, this is a good barometer, not only just of the arbitrage itself, but I think of retail speculation. You're also short Coinbase, which you have been for a while as well. Yeah, I unveiled it at your show way back in 2022. Okay, so just added to the S&P 500.

There's a lot of optimism around that and what it means. Brian Armstrong, the CEO, was literally on our network earlier today and said it now means, I'm quoting, now means crypto is here to stay, will be part of everyone's 401k, and he said it makes that company quote one of the most trusted companies in America by virtue of the fact that it will now be in the S&P 500, which is it. It's sort of the good housekeeping seal of approval. So what's wrong with the story?

Nothing, except that all the things that Coinbase did as a leader and as a pioneer in this industry, others are now doing, right? You can now buy Bitcoin ETFs anywhere. You can trade Bitcoin places like Robinhood and so in effect you basically have a broker, a broker dealer in crypto and broker dealers generally trade at relatively low multiples and ultimately have very low margins. Coinbase still has extremely high margins. If you remember our thesis back in 2022, they've come in somewhat, but they're still very, very high. And so Coinbase is trading at eight times book value, something

like that, seven times book value, and a pretty healthy multiple on trailing 12-month earnings. Again, I would own Bitcoin against the short, right? So I don't want to take a view on the underlying asset or the underlying driver. But again, people earning premiums on what is now a commodity. Bitcoin, if we agree that it should be part of portfolios, as Brian Armstrong says, it's going to become like gold a commodity. And therefore, you shouldn't trade at a premium to trade the commodity. So you don't even care that the environment for crypto undoubtedly improved with the Trump administration coming into office.

SEC has taken a different view than the prior administration, obviously, and we all know what's been going on with the White House and its view around crypto. It's irrelevant to you It sounds like well, I then the flip but the flip side of the argument I think you're going to make is that we're now besides Bitcoin, which is a finite supply We're now seeing issuance of all kinds of crypto related assets equities leveraged equities So again give Wall Street a little bit of time on these things and they will create supply to meet the demand. They always do.

The other area that you're short is solar. A couple of names in particular that we'll unveil here, Sunrun and Sunova. Well, Sunova we've been covering because it's below a dollar. I mean, it has got, like almost all the other solar panel lessors, it's gotten into financial trouble. We think Sunrun is going to get into financial trouble. We've said this now publicly for a few years, and we've been short Sunrun for a while. The economics of rooftop solar just don't work, even with the tax credits.

If you look at the cash flow statement of Sunrun, it's a disaster. They're losing hundreds of millions of dollars on a gap basis, but they're burning even more than that on a free cash flow basis. And they're constantly need to raise outside capital from investors. And I think that's problematic for the existing equity holders. You've become so synonymous I guess over the years with your Tesla short. So I was a little bit surprised I have to say when I found out that you're still short Tesla. Why? Well again we have a big portfolio so we have a lot of stocks were short. I know but this is one that you've been identified with for 10 years

as long as I can remember. Yeah at least 10 years. So look I mean it's a wonderful example of what we just talked about a little earlier, which is a company whose earnings are declining, its revenues are declining, its valuation is increasing because investors are pointing to robotaxis, autonomous robots, and then I joke this morning, you know, asteroid mining by robots. I mean, you know, the stories that keep building onto this company is people put hopes and dreams on back of one company and one entrepreneur, quite frankly, are just, you know, sort of getting excessive.

And we can definitely see the profits are dropping, unit sales are dropping, margins are coming down, and yet people think that robotaxes will be amazingly profitable, and that we're all going to have a robot in our backyard doing long work, whatever. The reality is we might, but it might very much look like the car business itself today.

Lots of vendors, a lot of commodity business, buy a robot for $30,000, and the manufacturer will make $3,000 on it. He does have a pretty good head start though on much of the competition. I know that Uber has its own aspirations and obviously Waymo is what it is at this point, but he has a much greater head start. Does he not? Yeah, but I don't think running in effect effect, a taxi service is the lucrative business

the bulls think it is. I mean, people are talking about $2 a mile and his cost will be very, very low. The fact of the matter is running, actually owning the asset, which Uber and Lyft don't do, right, that's on the driver. Paying commercial insurance and all of the other costs, cleaning, whatever, downtime,

your costs get north of a dollar pretty quickly per mile. And with more supply coming in and costs relatively high, it's not an amazingly lucrative business. The entire ride-hailing business in the US, we estimate is a $50 to $75 billion business, which is dominated by Uber and Lyft and then private cabs like we have in New York. It's not a huge business. And it will expand, of course, but on the other hand, margins will come in. And right now with Tesla at, I don't know,

180 times earnings, you're beginning to price in a lot of that. What do you make of the expanded role that he took on in the government and now the fact that he's going back, whether he heard the calls for him to go back to his day job or not, the fact of the matter is since he announced that he was going back, the stock has performed a lot better and the analyst community and investors seem to be feeling a little bit better about not only what he's done but what he's going to do now.

Right. But at the same time, the analyst community has been cutting earnings estimates, including, by the way, may I add, not just 25 and 26, but 28 and 29, the out years where we're supposed to have RoboTaxis, Autonomous. The numbers have come in dramatically in the last year and a half. So for all of the hype and all of the excitement that retail has about the stock, fact of the matter is the people with sharp pencils keep cutting numbers. And that's generally, but not always,

a good sign for the bears, not the bulls. What did you make of the role that he took within the government? Look, I've been public on some of the Doge stuff. You've probably seen some of my posts. It was insane when I saw the $1 to $2 trillion cost estimate. I just knew that wasn't going to be the case. Now we're now down to $160 billion, maybe.

I think that when all is said and done, we're going to find that the cost cuts are pretty de minimis relative to tax policy and whatever. However, he was a big donor to Trump. And so to that extent, I think Trump felt that he wanted to have him close by. I think he's a little less close by for what you pointed out, Tesla shareholders demanding a little bit more of a hands on CEO. I want to finish on a topic that has obviously become the topic of the last few years, and that's AI and the tremendous amount of money that we see invested in data centers.

Are you skeptical of it? Does it feel bubble-like to you, your short digital realty trust and Equinix? Is that a pure data center play that you think too much has gone to? What's the take? Yeah, so we've been short them for a few years and it's really important to point out that our bare case is on the legacy data centers, the old ones, the ones that had traditional servers in it for cloud applications, for CNBC, Chainos and Co, what have you. And what's happening now is the hyperscalers, like Amazon and Meta and Google,

they're building brand new data centers for the new GPUs, not CPUs. And so increasingly that's making the old data centers, legacy data centers, more obsolete. They're not able to raise their rents like they used to. And in fact, it's a really capital intensive business. So they trade as REITs and they trade on a gross cash flow basis. If you look at them on a free cash flow basis, they're absurdly overpriced and in some cases

burning cash. So we just, we want to be short the old data centers, not the hyperscalers. It's good to catch up with you again. As always. Been a while. You'll be well and we'll see you soon. Yeah, thank you for having me. That's's good to catch up with you again. As always. It's been a while. You'll be well and we'll see you soon. Yeah, thank you for having me. That's Jim Chanos here on CNBC from Soan.

Let's send it now to Kate Rooney for a look at the biggest names moving into the close today. Hi Kate. Hi Scott. So let's start with nuclear power startup Oklo surging today after reporting lower than expected losses in the first quarter, research and development spending also coming in slightly below expectations of stock.

It's now up more than 70% year to date, although still well off the February all time highs. Meantime retailer PVH, which is the owner of brands like Calvin Klein and Tommy Hilfiger higher today after an upgrade over in Jeffries. That's from hold to buy expecting sales growth this year after some declines in 2024 and higher profit margins thanks to cost savings and some share buybacks as well. Jefferies upped its price target on that stock to 105 bucks from 70. Stocks trading around 86 today, Scott.

Back to you. All right, Kate. Thank you. That's Kate Rooney. We're just getting started here at Zone. Up next, we're going to run you through all of the big highlights from this conference today and coming up later Greenlight Capitals David Einhorn is going to join me right here with his best idea today and his general thoughts on the market. He's had a really really good

start to this year. We'll find out why coming up. We're back on the bell live today from the stone investment conference here in New York City Leslie Picker is here with me now with some of the big highlights from today's event we've been what did you say eight years now eight years mean you covering this conference yes the 30th anniversary as we said and we're of course so happy to be partners as a network. What'd you learn today? Yeah, so I know some of the key threads among the presentations, there were a lot of international companies, which was interesting just given kind of the dynamic that we talk about a lot with regard to American exceptionalism versus international exceptionalism. A lot of international names

mentioned at today's conference, as well as a lot of cyclical names as well. So I'll tell you some specifics that we heard. Seth Fisher, who is the founder and CIO of Oasis, they do a lot of activism in Japan. He mentioned Kyocera, which is an industrial company. They were an activist there 10 years ago, kind of back in that name, and excited about the prospects.

Lauren Taylor-Wolfe, who we talked to in Power Lunge, she is involved in an activist situation about no campaign against three directors at Wex Financial. William Hurd, the CEO of Hurd Capital, he liked Adobe, which was maybe one of the few tech names we've actually heard today. David Rosen Canal Plus, out of London. They do streaming, OTT, they have set a 27 million subscribers in Europe and Asia and they were a spin-off actually from

Vivendi. Jonathan Lennon picked National Vision, their eyeglass company and Larry Robbins chose Teva and Global Pay payments. So that was kind of interesting given you know what we've talked about with regard to generics lately but kind of two payments companies as well which. It feels like so it still has this conference does a very big value investor bent to it. maybe that's why we're talking about international stocks a lot. There is that view that there's better value to be had elsewhere after underperforming for many, many years. When I hear the name like Adobe, even though you say it's the only tech name that I heard mentioned today, I mean it fits into the category of what some would say is a value stock because it hasn't had the straight up and to the right performance that many of these other AI and tech related stocks have had. Exactly. And I think one of the interesting elements of this event is that a lot of fund managers

get up on stage and they don't want to just, you know, they don't want to present Apple or Microsoft or something that you hear about all the time. They want to kind of present these diamond in the rough type picks, things that they think are under loved or under known, under covered by the analyst community and then give a bull case for them and see what happens. And people have been very successful in doing so year after year after year. Just David Einhorn, when he got up on stage, was talking about his historical picks,

a lot of them kind of European unknown companies to pretty much anybody in the audience when he presented them but they have gone up significantly in his you know the last four years he's presented essentially. Yeah he's going to come by in just a bit and spend some time with us too. He's been a great supporter of this event. What's coming up still that you're going to be following? I'm very excited to hear from not expecting much in the way of picks necessarily but Steve Cohen of Point72 getting his perspective on the macro environment. He does not shy away from telling people what he thinks and so it'll be great to get kind of a fresh

read of his view on the economy on the macro picture on policy uncertainty and just the markets overall as well. Yeah you don't get a chance to hear from him that often as well talk some baseball shirts yes definitely that's thanks. That's Leslie Picker as we mentioned coming up my exclusive interview from right here at zone with green

light capitals David Einhorn will be back on closing bell right after this. Our next guest fund has well outperformed the S&P to start this year and he just unveiled his next top idea on the stage here at the SONE conference. Joining me now is David Einhorn. He's the president and co-founder of Greenlight Capital. It's nice to see you. Just mute that.

You never know when people are going to want to reach out. I know you're on it. They're trying to tell me what to ask you. Just mute that. You never know when people are gonna want to reach out. I know you're on there trying to tell me what to ask you. I mean, feel free. You just literally got off the stage. Yeah. Where you presented a German company called Lanxess. Yes. This is like two years in a row that you've gone to Europe I think for your best idea here. What's going on with that? Actually it's three years in a row. Is that right? Yeah, the year before was Vitesco. OK, why? Why?

Because I think the European stocks are easier to find under evaluation. Market's much, much cheaper there. There's good companies that nobody cares about. Nobody pays any attention to. But they offer really nice value, and they have good prospects. A lot of times, people would have

said they're cheap for a reason but now do you feel like that tide has turned? Well I don't know. The last two pitches have worked. You know, Vitesco was up more than 50% in six months. Salve was up 25%. So I'm hoping I can keep the streak going. Okay.

We'll follow that for sure. As I mentioned in the intro you've had a great start to the year. You're up 11.9% net of fees. Everybody knows what the S&P 500 has obviously done. What'd you get right? Just a couple of things. Most of our net long exposure's been in Europe, and I think Europe has outperformed,

or at least it was outperforming, the U.S. market earlier in the year. We kind of got much more conservative in February when we felt that the market was turning and bought a lot of index protection. And it's been a fabulous year for gold, which has been a poor holding for us for a long time. For a long time.

I mean, we've talked about gold so many times. You have, through options and physical gold. Yes. Where do you think gold's going? Higher. How much higher? I mean it's at record highs. I don't know.

I mean the thing with gold as I've said a lot of times, if gold is I don't know 31 or 3200 today, I'd be really happy if it went to 3500 or 3800. I'd be really unhappy if it went to 30,000 or 50,000. So I hope I don't wind up being too unhappy. If it goes there, or anywhere even close, what does that mean? That inflation's gotten too high? Gold is not about inflation.

Gold is about the confidence in the fiscal policy and the monetary policy. And since we bought gold in 2008 or so, it's been very clear to me that the US fiscal and monetary policies are both too aggressive and put and create a risk. So you think that's going to become an even greater issue? I mean we're here we are having a conversation in Washington about re-upping the the tax cut so we're concerned about the deficit but maybe not enough to do anything about it just

yet. Well we're not really concerned about the deficit, but maybe not enough to do anything about it just yet. Well, we're not really concerned about the deficit. There's a bipartisan agreement to do nothing about the deficit until we actually get to the next crisis. When I was here for your Delivering Alpha conference and we spoke, there was an enthusiasm. The Doge would come and cut $2 trillion. Well, a few months has gone by and it's like 150 billion maybe. Like that's enough to cover next year's defense spending increase. That's gonna get eaten up really really fast. People are thinking tariffs might

raise hundreds of billions of dollars. Now it looks like maybe like a hundred billion dollars. And meanwhile we've just brought in the best cost cutters with the most aggressive views as to how to deal with our deficit situation. And essentially, they've thrown their hands up and said, well, we can cut a few things around the edges, but structurally, we have to leave the tax code, actually with more tax cuts,

and the structural spending we have, whether it's entitlements, defense, and interest, relatively unchanged. So everybody agrees that it's a structural problem and it's not sustainable and yet there's not even the beginning of a plan to do anything about it until there's an actual crisis. You have multiple bets, if you will, that play off of your view that interest rates are going to remain high, particularly on the long end, correct? I mean, you have had swaps as protection on that and that's another reason that you've

done so well to start the year. Yes, we're about to be long the longer duration inflation swaps. I think all of these behaviors are ultimately leads inflation and and higher inflation. You referenced this earlier I don't want to gloss over it because it was in your most recent investor letter that in February I mean you are already conservative, but that you got downright bearish. What happened? Yeah, we began seeing, I thought first of all, that they began firing people in the

government and I think they began terrorizing what I would call to be Democrat voters or people who are in businesses relating to Democrat interests. Those could be nonprofit, those could be universities, there's people in the government. And I felt like there was a chill that was being put on. Like half the population was ebullient about the election, and half the population was depressed. And we were beginning to see spending slowing down

in what I would call companies where Democrats like to shop or eat. And you saw a number of them miss the first quarter results. And I began thinking that this could lead to a real slowdown. You said that you were shorting, quote, consumer companies that cater to liberal tastes. I mean, really looking as granular as that and trying to figure out what kind of businesses that liberal Democrats would go to and short those companies? It's not that hard. For example, Dick's Sporting Goods, Hunting and Fishing, Republican.

Are you belonging those names? No, but we're not short those. I'm not going to give you the names. Oh, so I thought you were going to give me a name. I'm not going to give you the names, but you could do that same exercise and say Democrat and come up with a good number of companies. Okay. So because we're talking about perceived policies from the administration, you're not a fan

in any way I can tell from reading what you've written about the trade war or the tariffs, are you? I mean, I think that the... Look, the trade deficit, I've never understood why it's even that big of a problem in the first place. The idea that if some country is selling us goods and we're getting the goods, that we're somehow being cheated for paying for those goods, I don't understand that dynamic. I mean, I go to Chipotle and I buy a burrito.

They get my money. I get the burrito. I don't claim that I was cheated because I spent more money on them than they spent money on me. I don't understand what this problem is that we're even trying to address. So when Peter Navarro, for example, says of the trade deficit, it's the sum of all cheating, you just reject that out of hand? Maybe he can explain it better, but I don't understand it.

In terms of the tariffs, you said in an interview about a month ago that they're a, quote, regressive tax. What do you make of the pivot from the administration and where you think all of this is heading now? Well, I also said in there it seemed like it was the U.S. that's going to fold. And I think that that's what's happening. I think they're building a retreat. I think, you know, they'll announce a lot of things that they claim to be victories,

and maybe there'll be a victory or two somewhere in there. We'll just have to kind of see what that does. But if I were negotiating against the United States, I don't think I would have to concede very much, because they've already said that those crazy tariffs that they threaten to put on, if they actually followed through with them, would hurt the United States more than it would hurt anybody else. And that's why they had to pull them back and give themselves 90 days to, quote, negotiate. So I don't expect much to come of this, and I'm pretty sure in a few months we'll be mostly

talking about other things. You're a pretty astute poker player. You're saying that their hands have been potentially weaker than maybe they thought going in? Look, Scott Bessent ran around saying that China has a pair of twos. Well, that's very interesting, because in poker, a pair of twos is not a bad hand. It's actually an average hand. And you know, if you're playing poker, calling out your opponent's hand is not usually a great strategy.

You said of the policies from the president, quote, these are go fast and break things people. It may turn out that going fast and breaking things is not the greatest idea when it comes to geopolitics and the global economy. You called it a very high risk strategy. You know, there are others, you know, within the high levels of the investing world who have Ken Griffin and others who have cited what they see as brand damage to the United States because of how this has transpired.

You share those views? I do. I do. I don't think that the United States is coming across as a reliable partner. You know, a lot of these trade negotiations are really trade renegotiations, where there have been previous trade situations in past that have been already agreed to, and to say, look, we're basically ripping these up

and we're gonna do our own thing starting now. What confidence do people have that if they make an agreement that that won't get ripped up in a few years? It makes it very unpredictable to deal with us and considering we need those people to lend us trillions of dollars, this seems like a very high risk strategy to treat your lenders that way.

You were well known a handful of years ago for having a so-called bubble basket of stocks, of things that you looked at and thought were just grossly overvalued. I wanna end by asking you what you think about the whole AI trade. I thought it was interesting too what you wrote in your letter. A few weeks ago we thought this letter might include observations on the massive amount of investment being poured into data centers and chips to support AI.

We wondered whether at some point Wall Street might stop rewarding and in fact punish these companies for continually raising their promises of how much they would spend on products from Nvidia and ancillary companies. Now that seems trite. You don't think the market cares anymore? Well, I wrote that a month ago. It doesn't seem trite. The market's back to being really enthusiastic about it.

Look, we don't have some big short basket of AI companies or anything like that. I'm pretty sure AI is going to be a very big thing. But I do find it very interesting that our largest tech companies, the ones that dominate the S&P 500, generally speaking, have made their fortunes in monopoly businesses that have low capital intensity and low level of competition. And now they're entering businesses with a high amount of capital intensity, where they're going to be facing competition, including with each other, and including obviously foreign competitors as well.

It's hard to see why the return on that capital is going to be attractive relative to the historical super fantastic returns that these companies have been able to generate. What about the polarizing topic? And maybe there's no one more so in terms of stocks to either own or not, or asset classes to be in or not as crypto. You're shorting leveraged crypto ETFs, correct? But you're long, you own micro strategy as a hedge to that.

We're only specifically short the micro strategy levered ETFs. Two of them. Yes. And they basically try to do twice the daily return of micro strategy. And we're hedged that by being long micro strategy at some ratio there. So we're not really making or losing as it goes down. But what happens in these double levered structures is if micro strategy goes up, they have to

buy more. And if micro strategy goes down, they have to buy more. And if MicroStrategy goes down, they have to sell. So that works against them. And second, they're not able to borrow enough money through swaps, which is the way most of these double-levelled ETFs work. They actually have to buy call options on MicroStrategy. And MicroStrategy call options are super expensive because of the high volatility. So effectively, they're financing their swaps at about 70% annualized cost,

which means it's almost impossible for them to outrun that over time. We've almost come full circle in the interview in that we spent some time talking about gold. And here we are. The irony, of course, is that the bulls on Bitcoin call it digital gold. Do you not see that? Do you not share the sentiment around crypto in general? Well, it's possible that eventually crypto will become mainstream. I wouldn't rule that out. As things stand now, gold is a central bank reserve asset. It's the asset that the world bases its money around, even though we're not on a gold standard. You know, there's a lot of talk about de-dollarization and the countries like China that are maybe in the lead of that effort are not buying crypto to back whatever their

new currency plan is. They're buying gold to back their new currency. And I think as long as that's the case, gold is gold and crypto is crypto and they're really different asset classes. We'll catch up with you again soon. Thanks so much, it's nice to see you again. And thank you for being such a great supporter of this amazing event, which you have been for the decades that it's been going on. It's a pleasure, thanks for having me.

You bet, that's David Einhorn right here at the SONE Conference, our exclusive interview. Still ahead, we run you through all the big earnings to watch for in overtime. Closing bell's coming right back. We're now in the closing bell market zone CNBC senior markets commentator Mike Santoli here to break down these crucial moments

of the trading day plus Christina parts and Neville us looking ahead to core weave in Cisco earnings out in overtime Mike I'll turn to you once again the story really centers around the NASDAQ today. Yeah for sure NASDAQ is supporting pretty much the entire market really.

If you look at the S&P 500, it really is just Nvidia and a couple of others that are lending support there. I think in general, look, we've cleared some technical hurdles. It means pullbacks from here should probably be contained, but they should be expected, I think, after we've traveled this distance

and with one eye firmly on the bond market as those yields threaten to break out again. Yeah Christine I'll send it to you speaking of NAS we're gonna get Cisco and Tech reporting after the bell at Cisco and CoreWeave. Yeah in less than 10 minutes Cisco management warning last quarter that gross margins would actually decline impacted by tariffs so given the change in policy since that last quarter, we'll see if margins get updated. The company said last quarter that second quarter AI orders exceeded 350 million. So investors will want to see more than 350 million dollars in AI orders this quarter. I'm sure we're going to hear about bullish comments about the Middle East, but keep in mind that's going to take at least

a quarter to be fleshed out and actually turn into pure dollars. Now for CoreWeave. Deutsche Bank analysts describe its sales growth as the fastest they've ever witnessed in tech, with market expectations pointing to at least 156% year-over-year growth in 2025. But much of that growth has been built on debt. Last quarter, the company had almost $8 billion in debt. This year, expectations are around $21 billion. So in its first ever earnings report, investors will be looking to see if that record sales growth continues, stays on track,

despite all of these looming debt payments and customer concentration issues. Both CEOs of Cisco and CoreWeave, of course, gonna be on CNBC tomorrow morning. Scott? Of course they are. Good stuff. Christina, thank you, gonna be on CNBC tomorrow morning. Scott? Of course they are, good stuff. Christina, thank you. Christina Parts-Navarro.

Mike, I'll send it back to you. We just had the sound effects for the two minute warning here. What's the next big hurdle for this market? We've cleared out a lot. I guess Nvidia earnings. We've cleared out the big ones. Nvidia earnings hovers out there.

Look, tomorrow we are gonna hear from Walmart, gonna get retail sales, gonna get at least a check-in on the consumer. I do think that the rollback in tariffs, the 90-day pause on China, it buys a little bit of latitude in terms of how we interpret the trailing macro data. But again, I think that's the yield story, and whether it's all being driven by the tax bill debate, the reconciliation, and whether we're having a little bit more of a slow motion tantrum in bonds or not, I do think that can challenge valuations at this level. One of the questions has been for a while,

okay, we got this great snap back rally, clearly we overshot to the downside, you've regained 75% or so of all the losses, but what can we expect in terms of rebuilding toward those peak valuations that we had in February? We're already above 21 times earnings. I'm not that big on just syncing that up tightly to bond yields, but it does matter in the moment in tactical terms exactly what you're paying for those earnings.

So I think a lot of that interplay is what we're going to be sitting with for a little while here, you know, as we do enter into a little bit of a lull, right? We got Fed speak, but no real Fed movement. We're on hold on tariffs. We're on hold on the Fed. So I do think it's going to be how the bond market interprets the fiscal situation and every incoming macro data point. Yeah, waiting for that final bill on the Hill plays right into this story as we continue

to watch for any headline we get out of DC. On that front, Mike, thank you. Thanks so much for joining us here at the Irish Zone Conference. Again, the 30th anniversary. I'll see you back at the Stock Exchange tomorrow into overtime. John Cliff.