Closing Bell - Closing Bell 5/5/26

Episode Date: May 5, 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 names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi, guys. Thanks so much. Welcome to closing bell. I'm Scott Wobner, live from Post 9, here at the New York Stock Exchange. This maker-break hour begins with memory mania as Micron and some of those other chip names. They just go wild. Again, 12%. Look at Intel today, up 14%. That trades help the NASDAQ to new highs. Well, also raising concerns about a potential bubble in that part of the market. We'll ask our experts what it all means in just a moment. Take a look at the scorecard here with 60 to go in regulation. We have been green all day. Powered by. more strong earnings reports. We're green across the board. As you see, Russell's actually leaning with the NASDAQ not too far behind because you have new highs today for both Alphabet and Amazon. Well, how about Palantir? Those shares are lower. The guidance failing to meet very high expectations.

Stock down more than 7%. Elsewhere, a pretty good day for the banks. We're watching all of that. And how about materials? They're one of the top groups today. There is the bank picture. We'll show you materials in just a moment, which takes us to our talk of the tape. This incredible run in the chips.

And whether it is a warning sign of too much froth, let's bring in Christina Parts of Nevelos on Micron's magical run, making a lot of people, though nervous, some people queasy. But if you're in these names, it's Caching. I was going to say that. It's making some people really rich, too. So what the market is really starting to wake up to is that names like Micron as well as Sandus, too, aren't just cyclical chip stocks anymore. They're becoming core infrastructure of players for AI. And right now, supply is extremely tight. So you're seeing that show up in the price action.

You said, Micron, up, I went over almost 12% today on track for a record close and now has over $700 billion in market cap, which is bigger than Visa, bigger than AMD, bigger than Oracle. And for the first time, the stock has actually been on an absolute tear up over 90% just since April 1st and more than doubling year to date. And it's not just Micron. The whole memory and storage complex is moving sand at Sea Gate, Western and Digital, all sharply hires. AI demand really drives a shift in how investors think about this entire space.

And that's the key for this momentum. For years, memory was treated as a boom and bust. But with AI, the argument now is that demand is more structural. And that's why you're seeing new money chase these stocks almost daily. Momentum is building. And in this part of the market, momentum tends to feed off itself. And so the big argument is that these guys have contracts that last, you know, beyond one to two years, making the cycle a lot longer than just a boom and bust.

No, it is incredible. We'll come back in a little bit. Christina, thanks, Christina Parts and Neveless. Now to our panel, New Edge Wells, Cameron Dawson, Trivariates Adam Parker, true is Keith Lerner. Adam is a CNBC contributor and a former semiconductor analyst, so I'm going to begin with you. Have you ever seen anything like this?

You know, not often, but I will say, listening, Christina, the memory cycle is cyclical. It's just the magnitude and duration. I haven't really seen. The reason I know it's cyclical as soon as production and consumption get closer aligning, the stocks will get killed.

And so people just don't know if it's 2028, 2029, or when that'll happen, but they sort of know they're overerting. I mean, it's not just this name. Almost any chart that I would put up right now, Cameron, looks the same as Micron, more or less. Lamb Research, live materials,

which showed you Intel, which many people, investors, had kind of left for dead. And now that stock's market cap has roared back and the charts like straight up into the right. Like virtually everything else in the chip space, they make you nervous at all or not? Look, we know that they're overbought, and they could get even more overbought.

We're now trading at about 50% above the 200-day moving average, but you go back to the last time that they were as overbought, you go back to March of 2000, where they got to nearly 100% above their 200-day moving average. And the caveat there is that it took them 18 years after that high in 2000 to make a new high. And so I think the really big question is can this earnings momentum continue? And the market has been fairly rational in pricing in that it thinks that there still is cyclicality. Look at micron trading at about six and a half times.

Invidia down to 22 times. The socks overall 23 times. We would be a lot more concerned about this trade ending immediately if we saw the socks, for example, trading back up to its prior high valuation. of 32 times. So there is some rationality here. It's just a question of how long this earnings momentum can continue. Well, that's the difference, if anything, between now and 99 is in 99, a lot of stocks were trading it like 6 million times no earnings. And here, you know, as you just said, the multiples actually are coming down because the earnings are going so far up. Yeah, we've been

arguing that the bubble is not necessarily in the valuations. There's potential. a bubble in the future with earnings, meaning, as Adam mentioned, that some of these companies could very well likely be over-earning. Now, it's not to say that there hasn't been speculative behavior in this market. You look at one of the best-performing cohort since the April low is the Goldman Sachs Unprofitable Tech Basket. So that does show you that there still is that risk appetite. Goldman also published a chart that showed flows into risky assets over safe assets is at its highest since 2021. So there is ravenous risk appetite in the market. this market doesn't mean it necessarily ends in the near term. But by over-earning, that's basically

the same way as saying pulling forward, right? They're doing so much business now that there's no way that whatever the market is betting on for the future can live up to that hype. There is a cyclical dynamic to these businesses. You can't escape that. Now, we happen to be in the greatest super cycle probably we have ever seen. But the reality is that companies are in an arms race in order to build out compute capacity. And typically when you're in an arms race, you're spending money to grow revenues, not necessarily to make the best margin decisions.

So it's likely that there's overordering, double ordering, pulling forward of demand. And to Adam's earlier point, is the question of does that come home to Roost this year, 27, or sometime further in the future? I mean, Keith, you put a note out today with the headline, the bull still deserves the benefit of the doubt, in part as you went through all the fundamental reasons,

Why earnings, valuations, economic conditions continue to underpin this rally? Yeah, that's right. I mean, there's obviously concerns. It doesn't mean it's going to be a linear path forward. We're all talking about earnings today, and we're looking at forward earning estimates for this year since the beginning of this year. It's been one of the strongest progressions we've seen over the last couple of decades. We're up 11% in forward earning estimates since the beginning of this year. For comparison, there's been only two years that have been stronger than that.

that. And that was 2010 coming in after the financial crisis. And in 2021, which is after COVID, what's unique about this period is this period is coming after we had strong earnings last year. Those earning progressions or upside surprises came from a very depressed expectations after a turn in the overall market. So I do think the bull market deserves the benefit of the doubt. I do share some of the concerns that, you know, the roadband is getting pretty stressed in some of these semiconductors on a short-term basis. But the last point, point on that conversation, which is when we look back since October when Tech Peak, you know, semiconductors are up about 50% since then, but earnings are up over 100%. So maybe they are over

earning. But again, the question is, is that an issue for the next year? Are we going to see some type of change on the margin, you know, a couple years from now? Adams, it's just going to be AI and everything else for the foreseeable future. I mean, it's driving the train both in price and in earnings. Yeah, I think that's right. I mean, the question is just, can the earnings grow fast enough to offset the multiple contraction? You guys are talking about 2000 camera dimension. I mean, I remember I was covering Micron, and they earned $1 in one quarter. People said, well, let's annualize it pretend it's $4. Let's pay 25 times that.

That's my $100 micron target. Now they're going to earn $100 next year, and it trades at $600 and change. And I think people think the real number is $120 or $140. So it trades it five times the whole year number, not 25 times, four times one quarter. So the valuation argument is completely different. I just think they'll grow fast enough to offset the multiple contraction. But look, you're spot on. The entire SP 500 is something like two-thirds in AI semi-ETF at this point.

And so I think you've got to find things that are working fundamentally that aren't highly correlated to it just to create some diversification. You look, Cameron, at the fact that earnings obviously continue to deliver earnest and astound people. The growth rate is incredible relative to where expectations are. But you come with a couple of caveats. on that today. Yeah, big caveats. The first one being that if you look at the upside to the first quarter number, earnings are coming in at 27% growth rate. That's versus the 12.6% that was expected coming in. But if you remove some one-time items from a couple of the hyperscalers,

that drops down to 16%. So there has been some non-operating things boosting earnings. The other side of things is that a lot of people will say, well, look how strong the 493 are. You've actually seen 493 earnings come in at 16% versus the expect. 10% coming into the quarter. The caveat with that, though, 493 earnings, the biggest contributors are Broadcom, Sandisk, and Micron. So to Adam's point, this still is all one big AI trade. So yes, the earnings are great, but we're all leveraged to the same thing. Stay with me for a second. I mean, it has been a tech-led market, quite obviously. That's not to say, though, there hasn't been any broadening at all. There has, if you know where

to look. Our next guest right there does. In fact, Jonathan Kronskiy of BTIG. He's the chief in there. You say SPX for show, R-T-Y for Doe. Explain to our viewers what you mean. Hey, Scott. Well, I know you're a golfer. It's a golfing analogy, but I think what we're saying is that the S&P is clearly, as you've been talking about, driven by a slim part of the market. It doesn't mean there's a lot of stocks going down, but just for perspective, there's only been one sector ETF that's made a new high in the month of May. That's obviously technology. the only other sector that's made a new high since the March Lowe's has been reeds, so it reits in technology. But when you look at the Russell 2000, the breadth has actually been much better.

So we have more names above the 200-day moving average in the Russell. Also, if you look at the S&P 600, it's more robust. So I think the durability in the Russell lends itself to maybe a more steady up trend. And the vulnerability that we see in parts like semis, if that would, or to unwind, I think you have less risk in small caps. I mean, you, you looked at, let's just take memory, for example, before we get back to the small caps. I think it was the day that there was the memory ETF that was announced. You called, in essence, a top, or thought that that was one of those moments where we might look back on and say, oh, that was it, that was it. And here

we are. I mean, what do you make of this run? It's like every day for Micron. Yeah. just about. Yeah, I mean, clearly the strength there has been just phenomenal. I think that, you know, when you look historically at parabolic advances, again, what we've been saying is that they don't end by moving sideways. And so, yes, it's been much stronger than we anticipated. Could it go even higher from here? Of course, when you're getting, you know, names moving up 10, 15% every day, it doesn't

take much to, you know, to continue that upside momentum. But typically when the momentum runs out, you give back. back all of those games in short order. And I think we've anecdotally, we've seen a lot of talk about the memory names that people don't understand, that the re-rating going on the market. Well, I think, you know, Mike runs up 100% in a month,

Sandex up multiples of that. I think the market has started to figure it out at this point. And so the question is, again, yes, what do we do from here? You're seeing, you know, that ETF, you mentioned, the DRAM ETF, it's had record volume in the last two days. The 3X stocks ETF,

which gives you 3x exposure to the semis, was the third highest notional value traded in the ETF state behind spy and QQQ. So you're starting to see more evidence of that kind of chasing emotional behavior. Again, it doesn't mean we can't go higher. We've obviously been wrong of late, but I think you'll see a swift and opposite reaction on the other side.

I mean, are you looking for chart analogs to 99 into 2000? Are you at that stage yet within this bull market or no? Well, look, if you look at, But there's several different metrics to look at, you know, how things go parabolic. You mentioned the socks relative to the 200-de-moving average, and yes, it got much wider at the 2000 peak. On the other hand, if you look at something like a 25-day rate of change, so how much has the socks gone up in the last 25 days? We're at about 55 percent. That is, you know, pretty much pushing the upper echelons of the very, very peak of anything we saw in the tech bubble.

So it is, in some cases, pushing that. Now, I get the fundamental story might be different. the emotional aspect to the trading certainly does rhyme with some of those peak periods. Interesting to watch. We'll talk to you again soon. Thanks for coming on. Jonathan Krenski. I'll send it back to you, Adam Parker, for your reaction to that conversation. Yeah, I mean, the trading characteristics are what they are. If I think about what causes tops, it's usually hubris and debt. And that sork and quick interview yesterday, we might look back and think that that was the side of the top when you just run the GameStop math.

So that one, that interview I bookmarked, you know, as sort of a behavior to watch out for. But, yeah, I think that flows argument on the Soxel is probably a good point. You know, people are chasing. But I think the big difference is just the fundamentals are so much different, you know, in the current regime than they were, as I pointed out with Mike Runs numbers in the past. We're trying to time and timestamp a lot of different things, whether for you it's what happened yesterday morning on Squackbox, all birds, you know, pivoting to a data center play. I mean, we'll mark these things in our heads. Whether it amounts to anything remains to be seen.

But what do you make of what Jonathan Krenski had to say? Because you look at the charts too. You're a student of all this as well. Yeah, Bob Farrell is the legendary Merrill analyst who coined the term that parabolic moves go further. and last longer than you think, but they don't correct by going sideways. And we are in the go further and last longer portion of that. And I think it is anybody's guess what ends up being the thing that causes us

to have that symmetrical move lower, which is what we typically see, which just means that the further we go higher, likely the riskier these positions become. And what about Keith the small caps? It's really unbelievable to look at, and it just doesn't get as much conversation as the mega caps do. The chips obviously are stealing thunder from everybody and oxygen.

But year to date, the Russell's up 15%. It's been an incredible run. It's the NASDAX up 15 over the last month. But what's behind this? And you heard Krenzke suggests it could continue based on what the charts are saying. Do you agree? Yeah, well, we talked last week, Scott, and we said what's impressed us is small caps. But I will tell you, it is also part of the AI theme in some ways.

What we look more at the S&P 600, what people may not realize is the S&P small-cap technology sector is up 36% this year. 36%. That's about quadruple what large caps are. And then the other big sector within that market is energy. Energy is up about 50%. So we just looked at the underlying revision trends in the small-cap sector, half or up, half a down. The ones that are strong are the ones I mentioned, tech and energy. So in some ways, if AI gets hit, I think small caps will get hit because the semiconductors in there, many of them, which I bet you a lot of viewers aren't that familiar with because they're not headline numbers are up 100, 150, 200%. So again, we think small caps still work, but if you're concerned about the AI trade, I don't know that small caps are going to be immune from that either. Well, please, I mean, Cameron, if AI gets it, everything's getting hit.

Yeah, certainly. Look, Keith has a really important point because if you look at the 13% upside that's come from the smid cap index this year, half of that has come from just five names all related to AI. So if you start to lose confidence in the AI trade, it's not just large caps getting hit, it's small caps. And remember, emerging markets, almost 30% of that index is in SK Hynix, Taiwan Semiconductor, as well as Samsung.

So this is a global phenomenon that we are in the up cycle. But of course, when the eventual down cycle comes, it will be painful. Adam, began with you. I'm going to end with you. This idea of losing confidence in the AI trade just doesn't seem to be happening anytime soon. You still have people on the street who watch this for a living raising their hyper-scaler CAP-X numbers into 27 and beyond. And as long as that continues to be the case, then it just prolongs whatever runway you think exists. not to say that there can't be bumps along the road, because we've seen that too. And there are

periodic pullbacks that happen and you just deal with it. But in the bigger picture, as long as people are spending like they are, and there's no indication they're willing to stop, as Andy Jassy reiterated again last night to Jim Kramer in the conversation that they have, and continuing to say that investors are going to be the beneficiaries, should we think otherwise? guys? We're going higher. Semis over software and find some diversifiers from semis. That's the play. Well, all right. Mike drop. We'll see you soon. Thanks, everybody. Adam Parker. All right, Keith Lerner, Cameron Doss. We'll see you soon. All right, let's get back to Christina now for a look at some of the movers into the close today. What do you see? I'm going to pick up that mic and just talk about

Intel because their shares are jumping 14%. You talked about it. On pace for a record close off this Bloomberg report that Apple has been in early talks with Intel. and Samsung about potentially making some of its chips. It's still very preliminary, so there's no actual orders yet, but it's enough to actually move the stock because investors have really just been waiting for Intel to land a major external customer like Apple. It has been a rumor for quite some time. The key issue here, though, is capacity. TSMC, Taiwan Semi's advanced nodes are effectively sold out, largely because AI chips are just taking priority. So Apple is looking for more supply. If Intel can take even a small slice of that,

likely starting with Apple's Mac chips, it would be major credibility boost for Intel's foundry business. And for TSMC, it's not necessarily bad news. Apple is a massive customer, but one of the lowest margin at scale. So if Apple shifts even a small portion of volume elsewhere, TSM can then redirect that constraint capacity towards higher-paying AI customers, which is where demand and pricing are strongest right now. Unless TSM down. All right. See it a bit. Thank you. We're just getting started. Up next, top biotech plays for your portfolio. Stempoints, Michelle Ross is back.

So tell us where she sees the most momentum in that sector right now. joins us right here on set after the break. All right, welcome back. It's been a slow start to the year for the healthcare sector as a whole. But within that universe, some of the smaller biotech and biopharma names have started to show some momentum as the market has rallied from the March lows. Michelle Ross is the CIO of Stempoint Capital. It's a fund that invest exclusively in.

in those spaces. She's here with us back at Postnight. It's nice to see you. Very nice to see you too. So health care, not so much. Your wheelhouse, the Smid biotech stocks are doing pretty well. Yeah. Is it like, are we on to something here? I think so. I think there's some great themes that we've been very excited about that are really playing out. First and foremost, we've had some great clinical data and some real success that is showing how strong this group can be with the momentum behind great innovation, you can really propel some of these stocks, especially when it's first and best in class. And second, which is probably the biggest theme that most people are talking about in biotech this

year, it's the M&A tail win. And there is a real need for a lot of the pharmaceutical companies to fill their pipelines again, going into some of the big patent cliff. And what we're seeing is one of the strongest starts to the year on the MNA trade that we've seen in nearly a decade. So the patent cliff, as you call it, patents coming up for expiration is going to force M&A, as the companies need to extend their pipelines out even further. Exactly. So over the next five years, there's about $2 to $300 billion worth of branded revenue that is going off patent. And what you can typically expect in that case is anywhere from 80 to 90 percent price cuts. So the companies then need to fill up that top line with new

drugs, with new drugs that have covered patents. We look at their pipelines. We can identify and see what we think is going to make that cut and be on the market. And there is a gap. And that gap typically means that there's external innovation that is brought in-house to fill that. If we go out a decade, there's more like $400 plus billion of revenue that needs to be filled. And that's the beauty of this mid-cap innovative sector. When you see de-risk assets, pharma's coming to look a lot of the time. I ask you about interest rates, I think every time we have a conversation. And this is all happening for the area that you look at and make your living in despite the fact that we've had a backup in rates.

Yes. Do higher rates not matter as much as they used to? I think two things have happened over the last period of four to five years. We are considered one of the longest duration assets. It costs an exceptional amount of money to create drugs. And the failure rate is so high that as interest rates went up and as people looked at that cycle, biotech was the natural area where I think, I think people were short in the market. They said this is just not going to pan out. Yeah, because the cost of capital is just going up at a clip that's just not healthy for these names.

And the failure rates are still quite high, I have to say, that there was a lot of companies that came to the market in the 2020 to period that were almost like science projects. They required the most amount of time and money to be able to come to market with higher failure rates. As that rolled off, and as biotech almost went through a freezing period of a few years, where it was hard to go to the market for that capital. you saw some of the best companies actually survive. So I like to say you kind of called a period or a piece of the biotech market and the strongest have really survived. And many of those companies are now launching and have seen and shown successful launch that they don't have to go to the markets at the same degree.

They're cash flow positive. Do you think the smaller companies are going to continue to outperform the larger ones for the reasons we already talked about? I do. I think that last year you saw flight to safety, even prior years flight to safety in this long duration area where you really were worried about interest rates. People were moving to cash flow positive companies. What happened this year is the actually inverse has occurred where some of the names that had been so strong really in 2025 have been a little bit weaker to start the year,

and you're seeing a really nice flow of SmidCat biotech innovation to really start the year in a strong way. We've talked about ABVX in the past, ABVACS. That's one of your largest positions. Yes, it is. Talked about Scholarock, S-R-R-R-K, another one of your larger positions. You still know, I assume. Yep, I am. I own both. You've come with some new names.

Now, maybe we've talked about these before. RevMed, R-V-M-D. Tell me about it. So we've owned RevMed for a little while now. I'm really happy to share, and I think it's been, you know, promoted, I guess, in the news flow, in the news cycle, that this company just released survival data in their drug for pancreatic cancer. Oh, yeah. You've seen this.

Ben Sass has was in the clinical trial. and he's been discussing this. It really is exceptional data. It is something that will change the trajectory for patients with pancreatic cancer. And the hope is this would work in colorectal cancer and non-small cell lung cancer as well. New class of drug, very exciting.

And we think that that market size is $20 billion or above. So we're very excited. Can you take me into the, I suppose, the psychology of an investor in a space like this where you buy it well before the trial results come out. You're so hopeful that you're going to get an outcome like we did with RevMed. And then you

actually realize it. And then the thought process, the stock goes up a ton. And then how you, how do you think about all of that? Because I mean, obviously investors, there are many investors on the same ride as you. Yes. And they see a big boon in the stock. And they're like, okay, now what do I do? So the understanding is, one, the size of the market. What do we ultimately believe is going to be the size of this market. Do we think that a patient with pancreatic cancer is really going to stay on this drug for a prolonged period of time versus the existing current standard of care for pancreatic cancer risk may just be a few months in a very far progressed patient? So the better the drug is, the longer the patient can actually be on that drug. And then the secondary derivative of this

is the other indications. I'm going to liken this to a very well-known drug called Ketruda from Merck. And when we were introducing the idea of immunoancology, it started in melanoma. And if you look at the total metrics of these drugs, that is one of the lower, I guess, in the list of indications in which total sales are coming from. So the goal here is that you can move this into additional indications and the market size and duration that a patient's on it. I mean, you just want to see these patients live as long as possible. And that at the end game is really what we're looking for here. Giving hope to a lot of people for just a hideous form of people. cancer. Royvent is another one, ROIV. Tell me about that one. Oh, I've owned Royvant for about

three years now. It's a very unique company that is looking at specialized areas of rare forms of autoimmune conditions. And they have basically taken drugs that may not have been perceived as the ideal candidate for a large condition and almost repurpose them for areas where they found the exact type of patients that this drug would be appropriate for. They had day read out late last year in an indication called dermatomyocitis. Small but not too small, not uber rare. They've done a phenomenal job of pushing forward on their innovative programming. They have a handful of additional indications reading out this year with not just that drug, but additional drugs in their pipeline. They are fully funded. They have a lot of cash on balance sheet

and a phenomenal management team that we think are some of the best in the industry. So we've been very, very happy with how Roy Vant has been achieving their successes. Always so interesting to chat with you. Thanks for coming by. Absolutely, my pleasure. Michelle Ross with STEM points. He's the CIO. Still ahead. We get set up for AMD and Occidental Petroleum Strategy as well in overtime. Those reports are coming. We'll be right back. All right, welcome back to the bill. Over the last few years, most of private equity has returned less capital than it's deployed on new investments.

But there is one firm that is bucking that trend. Leslie Picker here with those details following the money, as always, Leslie. Hey, Scott, yeah, that's the so-called distribution drought. It's stemmed from a muted exit environment for IPOs and sales. And as you mentioned, one firm that's bucking the trend is Warburg-Pinkus. It says it's distributed $54 billion across its active funds since 2020 while deploying about $34 billion in new investments over that period. A similar metric for the broader industry showed negative net cash flows for most of that time frame

with a few years around break-even, most notably a 2025 time period, according to Bain. For the latest edition of Inside Alts, we spoke with Warburg-Pinkist CEO Jeffrey Perlman, who said the distribution drought stemmed from a lack of diversification, whether it's by vintage, sector, or geography. On the deployment side, Pearlman said they're cautiously investing. We continue to remain active, but at the same time, I think in this environment, you have to be prepared to underwrite, you know, potential, you know, recession in your base case underwriting. You know, not a severe recession, but something more a moderate recession.

The public markets continued to look through all this noise, right? I think, you know, the FT recently, you know, coined, you know, yet another adjustment, right? Earnings before Iran tariffs and dubious announcements, right? And at some point the public markets may reverse, but they've had tremendous outperformance. He said that when that outperformance reverses, private markets will look increasingly attractive relative to the public ones. To see the full interview with Perlman, subscribe to our Insight Alt's newsletter, which comes out tomorrow morning using that QR code you see on your screen there, Scott. All right, Leslie, thank you. That's Leslie Bicker. Coming up next, we check the biggest movers into this close today. Christina is back with that. Tell us morning.

We have won a social platform surging after a surprise pop would beat another payments diamond under pressure from weaker guidance. and an e-commerce player headed for its worst day in over a year. What's driving the action? Next. 15 from the bell. Back to Christina now for the stocks that she is watching. Hi there. Hi, Scott.

Pinterest. Shares are jumping right now. After reporting a first quarter beat driven by strong revenue per user number, shares, you can see are up almost 8%. The social media platform also beat current quarter guidance expectations. Switching to another company, PayPal, profit guidance, is weighing heavily on PayPal shares, as management said that profit would be pressured by investments in customer loyalty in the second quarter.

Analysts at Cantor Fitzgerald pointed out that expectations had actually been lowered into the print, meaning focus, which shifted more towards PayPal guidance, the bar was low, made even worse. That's why shares down 8%. And last but not least, Shopify's on Facebook's worst day in more than a year as the e-commerce platform sees revenue growth slowing in the current quarter. Wall Street didn't seem too phase, though. Mizzouroated the stock at a buy, highlighting the growth in total transaction. on the platform and said the sell-off, quote, creates a compelling entry. The entry is 16% lower.

Scott? All right. Thank you very much. See in a little bit. Christina Portsnavlos. Coming up next to StarChip analyst, Stacey Raskon. He joins us ahead of A&D's report in OT. That'll be in the market zone, which is next.

All right, developing story, getting some news now in the blockbuster courtroom fight between Sam Altman and Elon Musk. Kate Rooney has that for us. What are we learning? Hey, Scott, so we're learning a bit from Greg Brockman. he was the president of Open Eye or is the president of Open Eye now. He was the co-founder wrapping up his testimony this afternoon over in Oakland. It's week two of this Elon Musk versus Open AI tribal trial. We did get news that OpenAI plans to spend $50 billion in compute,

at least for the rest of this year. That was one big headline. Brockman, as I mentioned, co-founder the company. He answered a lot of questions about his personal financial ambition. So he has what he described as a $30 billion stake in this company at this point. He kept a journal to document professional events in his life, personal events. That has been a big highlight and a big piece of evidence in this trial. Musk's personality and leadership style also came up in Brockman's testimony. Musk has claimed that he is responsible for helping recruit some of the key players at Open AI and therefore deserves a lot of credit and has talked about that in his own testimony.

Brockman talked about his reputation of being extremely hard driving and that certain candidates were very attracted by that, but others didn't like it as much. And it actually wasn't as big of a deal in terms of recruiting. So that just was a big topic of conversation. Overall, he did also talk a bit about overall Musk's just leadership style. We did get a moment that he talked about

of Musk tearing a painting of a Tesla off the wall. Scott, but that's the latest. He's wrapping up that testimony, and we are expecting to get Chavon Zillis, who's a close, close executive of Musk, also the mother of his children. The backdrop here, of course, Musk has sued Open AI, Sam Altman, Greg Brockman, alleging that they essentially, as Musk put

it, stole a charity. But this lawsuit is expected to play out over the next couple of weeks. Kate, thank you for the update. That's Kate Rooney. We're now in the closing about market zone. Mike Santoli here to break down these crucial moments of the trading day. Plus Oliver Renick is watching the options action and strategy from CBOE global markets in Chicago. Mipa Stevens with a preview of Occidental, those results in OT. Christina Parts of Nebulos is covering AMD, and the star analyst Stacey Raskon is standing by for what he'll be watching as well. Michael, do you first? Yeah, so obviously you're going to cover the main story, which continues to be the vertical move in semiconductors

and feeding off of all of this atmospheric's about spent. But I think there's another piece of the market action today, which is that this market seems to treat developments from the Middle East as either neutral or positive and almost never negative, as long as oil prices stay where they are. Because there was not much to move the story along today except the White House going out of its way to characterize these skirmishes as really not a big deal and the ceasefire is still on.

Oil comes in and then you have a little bit of a bid in the rest of the market and banks going up 1% things like that. So that's what we are. I mean, the index is making new highs. I always say it's a positive. There's no way to say that's bearish. It's just a matter of whether the leadership profile

in particular here is getting a little. little bit overheated. What do you have coming up top of the hour on OT? Well, obviously, AMD's results. We're going to dig into those pretty deeply. Also have Lori Capucina here from RBC who's kind of staying the bullish course toward a target, you know, 10% up from here or so. All right, good stuff. We'll see you then. Look forward to that. Oliver from the CBO. Tell us more. Yeah, we'll see if the animal spirits that have been going off in chip stock, Scott, will cross over into what's traditionally been the wildest corner of risk appetite. I'm talking In crypto, of course, Michael Saylor's strategy reports after the bell, and with Bitcoin at the highest price since January,

traders stormed into MSTR options today to the tune of just under $800 million of premium, including six of the day's biggest options trades by dollar amount. Check this one out. A trader spent $200 million on a call-buying spree and master, scooping up a total 47,000 contracts of the 180 strike and $1,000. 30 strikes expiring June 18th of this year. As of reporting, the 141 million they spent on the 130 strikes alone was the biggest option trade in the entire market today. But there is one other notable item ahead of the earnings. The implied move right now for MSTR is just 5%. And that's despite a monster, 26% bounce after its February earnings. Perhaps that's because despite an 80% rally

off the February lows. The stock is still down 66% from all-time highs. Oliver, good stuff. Appreciate that. Thank you. Pippa, how about Oxy? Well, Scott, Keywood production is expected to come in on the lighter side, thanks to the war's impact on the company's Gulf assets in the UAE in Qatar. Oxy has a 30-year joint venture partnership with Adnock for Al-Husin gas, which remains offline after an Iranian drone strike. Now, key on the call will be production plans given Auxie is the second largest player in the Permian, Diamondback, somewhat bucking the trend when it said last night that it is planning to increase production by 3% thanks to the

current oil price environment. Super majors, though, like Exxon and Chevron, keeping their production steady. Now, Occidental also announcing last week that longtime CEO Vicki Hallub will step down next month, so the call will no doubt feature questions about the company's strategy looking forward. Hallup did double down on hydrocarbon production during her tenure while also executing key acquisitions including Anna Darko and more recently Crown Rock. Scott? All right, Pippa thank you. That's Pippa, Stephen. Give us one last look now, Christina, at AMD before those numbers hit. Yeah, three areas of focus on server CPUs.

Expectations are pretty strong, especially after Intel's print. But Intel's server units were actually down year over years, so the beat was just about pricing, not necessarily share gains. Investors will want to see how AMD is positioned now that Intel is no longer necessarily falling behind on manufacturing. On the AI front, the focus is on demand for AMD's current AI chips against rising competition from Nvidia and the custom chip players. plus updates on the next generation Helios Rack rollout, and any constraints with memory as well as any constraints with capacity at TSM, which really could cap upside no matter how strong demand looks.

Lastly, on margins, consensus is looking for 55.2% in the quarter, a little bit more than that next quarter. So watch for any commentary on server pricings and AI mix that could move those numbers in either direction. Scott. All right, Christina, thanks for everything this hour. Christina Parts of Nevertheless. Casey Raskon, he, of course, the star analyst with Bernstein.

Comment on AMD before I switch you to this mania in Micron and others. But what are your expectations after Christina set us up pretty well? Yeah, I mean, those are the things that were that everybody's looking for. And look, I think the numbers should be pretty good, especially given after Intel's report and what we're seeing in the market around server CPUs in particular. I think the big question is really going to be around capacity. does A&D actually have enough capacity secure at their founding partners to drive material upside to numbers that are already fairly aggressive, at least in the neutral-on servers. The other thing we'll be watching is the trajectory of the AI business, especially the MI-450, a ramp into the end of the year.

My own opinion is at least on the sell side, the consensus numbers do not really seem to have incorporated meta all that much. And so my suspicion is that numbers at least into 27 probably do have upside. I think the buy side is there. and clearly just given the run the stocks had a last couple of weeks, I mean, those expectations are going up. So that's what we'll be watching. Okay. Now to kind of the story in the market, really,

what do you make of what's happened with Micron and some of these other DRAM names, and it's sort of spread far and wide now with parabolic charts? You know, it's not just the memory names, right? So what we've actually seen is that AI demand has been dragging everything else around it, one at a time, different end markets and semis have sort of been hitting their capacity. And we went from the accelerators as the supply constraint, you know, a year, year and a half ago, and then we went to memory, and then semi-cap, and then optical, and then power semiconductors, and now CPUs, right?

And so I think investors have been looking for all sorts of ways to play those constraints. And, like, you can look at the names like Nvidia and Broadcom that have been relatively lackluster over the last, you know, several months as these names that have been constrained and as such have had material on the revisions, they've just all been ripping. And it opens up this really interesting dichotomy, like, is the constraint names have been running and the compute names have not, like, one of them has to be wrong, right? So I actually do think there is a catch-up probably on the compute names at some point. But at this point, like, everything that is constrained has been getting bought.

And frankly, everything in semiconductors right now seems to be, um, one of those constraints. I mean, you say you can almost own anything, it seems, given the overall trade is, in your words, going bananas. I mean, until it's not, until you slip on the banana peel. Yeah. Sure, right? I guess nothing goes up into the right forever.

However, at this point, I mean, it all comes down to AI demand. As long as AI demand is timing, like, we're probably good, because, again, these, most of these end markets are kind of at the limit of what they can supply right now. actually prevents you maybe from like overdoing it as much as maybe the market would want to do otherwise. At some point I guess that won't be the case. But I'll be honest, like if AI demand like slips or rolls over, we're all screwed anyways at that point, right? And right now all the signs seem to point that AI demand is still getting stronger, not weak, and it really is dragging everything along with it right now.

We'll be getting in that space shuttle over your left shoulder and getting the heck out of here because we're all. all doomed. We'll talk more. I know that. We got in video on May 20th, so we'll see you soon. Stacey, thank you. You're going to ring the bell any second here. It's going to ring out green.