Closing Bell - Closing Bell: 6/25/25

Episode Date: June 25, 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.

All right guys thanks so much. Welcome to Closing Bell. Scott Wapner live from Post9 here at the New York Stock Exchange. This make or break hour begins with Nvidia's new high. That stock hitting that mark within the past 90 minutes and we'll track every move of it over this final stretch and discuss how high it can really go with Goldman's co-head of public tech investing, Sung Cho. Can't wait for that. Outside of that name, not a lot going on for the majors today. They've traded within a pretty tight range. Tesla let's talk about some individual names giving all of its robo taxi gains back. There it is stocks down almost 5 percent some of the airline names lower as well today.

How about Robin Hood hitting a fresh all time high. We'll continue to watch that it's a fractional mover but look at that chart tells a story year to date 121 percent. How about yields? They're fairly muted as the Fed chair was back on the hill today delivering a similar message to the Senate as he did the House on Tuesday. No rush to cut rates. We will debate whether that's the right move just a bit. It takes us to our talk of the tape. The tech surge. It's carried the sector to new highs and the market to within earshot of its own record. Let's start there. Nvidia's record run. It's been astounding. Christina Parts

and Neville is tracking it for us today. Christina. Yeah, an all time high, the best performer in the mag seven today, higher market cap than Microsoft. This rally really comes after CEO Jensen Wong said in May that the $50 billion China market is effectively closed to US industry. But China export control is clearly not deterring investors. NVIDIA also hosting an annual stockholder meeting just a few hours ago where Jensen Wong reiterated the next big wave is physical AI, basically robots that can interact with the real world. And it will be, quote, the next multi-trillion dollar industry.

And Wall Street analysts are clearly buying into the longevity of this AI hype. Loop Capital increased their price target for Nvidia from 175 to 250. Their key point is that hyperscalers are planning to shift from about 15% GPU compute today to about 50 to 60% of the entire infrastructure by 2028, which could create $900 billion in demand. Bank of America also had a note saying AI could drive $1 trillion in spending by 2030 with data center systems taking a much larger share of IT budgets. And that shows NVIDIA's competitive advantage really continue to expand, helping drive this stock's momentum, one of them being the NVLink there that helps GPUs talk to each other, another selling point for

this name. Scott? Yeah, there is a lot of momentum as you know. Christina, thank you. Christina Partsanevalos joining me now, Goldman's co-head of public tech investing, Sung Cho. It's good to see you. Welcome back. What a day to have you. No China, no problem? I mean is that what the market is saying here? Look, I think you have to take a little bit of a broader picture of what's been going on with the AI trade, right? And it singularly has to do with the perception around AI CapEx. Just a couple of months ago, when all of these stocks were on their lows, there was this

perception that AI CapEx was in the later innings. And now I think we've squarely gone to the point where now the market believes that AI CapEx is in the middle innings. Let's talk a little bit about why that's happened and why that shift in perception has happened. One is competition around frontier models is not slowing down. So we saw Meta, right? They took a little bit of a step back with Lama 4, but how are they reacting to it? They're reacting to it by investing a lot in AI scientists. They took

a stake in scale AI and they're not going to slow down until they win this race. And so that's one. Secondly, the shift that's happened very, very quickly over the last three to six months is that compute is not only being used for training infrastructure, but it's increasingly being used for inference. Open AI's revenues have gone from $3 billion to $10 billion very, very quickly, right? And then the last piece of it is just the Trump administration policies is opening up

access to NVIDIA GPUs to a wider, broader set of countries like Saudi Arabia with the deal. And so you're seeing everything that was, oh no, AI CapEx is coming to an end. All signs over the last three months have pointed to AI CapEx accelerating, not actually decelerating. I think that's what's happening with the trade right now. You think we've answered all of the questions about DeepSeek and the initial fears.

You mentioned compute. We were thinking that day, well, maybe you need less compute and it's going to be cheaper. And it turns out as people were saying then and you're saying now and which seems to be correct like now more compute and that plays right into Nvidia's hand. Absolutely and I think the last time I was on your show was during the Deep Seek so it's a lot nicer to be here during the rally moments. Have we put that to bed? So we have I do think we have and I do think the market is interpreting that as an iteration and an evolution

not a revolution and Remember what's been happening though with the frontier models. There was this perception back then that frontier models were commoditizing Because companies like deep seek take a lot of the things that llama and open AI have built because of the open source nature of llama in particular that they they could extract that inference layer and create an inference model associated with it. But what's happening now is these model, the frontier model developers are actually starting to realize, you know what, we can't give away all the goods.

We have to start closing parts of our ecosystem. So the foundational model players are actually saying, look, we need to close certain elements of what we're, and protect our IP, because we're investing $50 billion plus a year on this, and we want to be more vertically integrated going forward. And so I think that's going to lead to more differentiation versus commoditization. And that's an important nuance for companies like Metta that are investing a lot right now. You're suggesting when you say middle innings that the game's going to go on for a long time and Nvidia is going to continue to win it.

I certainly think so. Now there's going to be other silicon companies that win as well, right? So we have ASIC companies like Broadcom, Marvell, memory players like Micron. So there's a whole host of semiconductor companies. It's not just going to be an Nvidia dominated game, but every dollar of CapEx right now, 60 cents is being spent on an Nvidia GPU. And so, we know who's winning right now. So you look at your other holdings, that's one of your top holdings, Nvidia obviously is.

Microsoft's hitting a new high today, we'll talk to Dan Ives more about that coming up. You have any concerns about some of the commentary between what's going on with Microsoft and OpenAI and that what was a seemingly great relationship is showing some signs of fracture? I don't really think so. Look, I think Microsoft is taking a little bit more

of an asset light approach increasingly, saying that we don't want to necessarily be all in on frontier model development only. They certainly have secure capacity for OpenAI for the next five years. So I don't think that business model is much at risk at all if anything. They're trying to innovate more on the application side, which is historically where they've won, right? And so OpenAI has secured funding from other places, right?

You saw Project Stargate. Some of these other backers are starting to fund them, fund their development. But you know, certainly there's going to be friction points with any relationship, but I don't really, I'm not really too concerned about it. A few months ago, when you were last here, you declared it quote harsh to say that Apple had dropped the ball on AI. Have you rethought that at all? And what do you make of what they did at the most recent WWDC?

And the trajectory that this company has been on, the market clearly believes that at some level, they're not meeting the moment like the others are. Look, I think, you know, the great thing about the public markets is that you can change your mind at any time on a daily basis. And certainly, you know,

I think you were more correct to perceive, and I think the market was more correct to perceive, that they are falling a little bit behind on AI. Now we do remain optimistic that things like the App Store and things like that, where consumer innovation and AI innovation, they will eventually benefit from it because they own the consumer footprint currently. And so, but we are a little bit less excited

about Apple than we were back then. So you like Snowflake, which you own, currently. And so, but we are a little bit less excited about Apple than we were back then. So you like Snowflake, which you own, and we are beginning to talk about more extensively, not just generative AI, but agentic AI. And that's placed right into that story. Yeah. No, look, agentic AI was just really a concept just three to six months ago. And now it's finding some really profound use cases. We saw coding. We saw there was an ad for, during the NBA finals

where Gemini had a full built agentic commercial for the first time. And so agents are, you know, agentic AI is really starting to take off. The question is who wins inside of agentic AI and how do you invest in it? And I think the first layer of that investment is really all about going after the data providers, right?

Data is gonna be king and it's gonna be the source of differentiation, that's why Salesforce bought Informatica, that's why Meta is investing in Scale AI, which is a data labeler, right? Understand and recognize that the only differentiation that you have over the long term is data gravity. And so there's gonna be this race towards trying to figure out ways to be able to ingest more AI data,

and Snowflake is at the center of a lot of that. How do you view Alphabet currently? We obviously have had concerns about market share and search being disrupted by the large language models that others have. I thought it was noteworthy, and I'm assuming you saw this as well, that when CO2 management led by Philippe LaFont out on the West Coast put out there, I think it was like the 40 companies that are going to transform the future.

That's my interpretation. That's not the exact wording of what their title was. It wasn't on it. Everything else was. That's a statement. Look, certainly, everybody's concerned right now around the deceleration that everybody's seeing on the search side, right?

But let's talk about Google a little bit, and in terms of what the strengths of their platform are. One is, they are one of the three or four leading frontier models. And what we talked about before, that frontier models are gonna provide increasingly more differentiation. So they are in the game.

As long as they can execute, certainly, you could provide a lot of value because they're one of the few players there. Waymo is also getting a lot of traction. YouTube is still a great platform. And so there's still a lot of things to like about Google. You, I mean, your holdings, your fund must be crushing it. I mean, because you're in all the right stocks, or certainly most of them,

where some are not performing, the rest are. And let's end on Netflix. That stock's been incredible. Yeah. It's played itself as the most arguably defensive and yet offensive name out of the entire NASDAQ in this current environment. Can it just continue to go up? Yeah, well thank you for saying

that we've had great performance. Look, we've been trying to beat the Qs by, you know, we've tried to beat the Qs by roughly 500 basis points a year, and we've beaten the Qs by roughly 500 basis points on average over the last three years. But going back to Netflix, look, I think Netflix, the vision around our investment in Netflix

is that you want to invest in platforms, right? And Netflix is a true platform. And as a result of that, they also have tremendous amount of pricing power. And they're really trying to flex the pricing power for the first time. And we thought that, hey, like, there might be a little bit of demand elasticity to price,

but demand is remaining inelastic to price, even with some of their pricing increases. And so we think that they continue to have a lot of envelope to be able to raise prices without a lot of elasticity. Well, and then you get the ad tier, which if there's even a trade, now you have the ability to trade down. Yeah, that's why platforms are so important.

So you don't even get the churn that you might have in the past. You just get a potential drop down, but you still keep the customer. Yep. And it's a great customer acquisition platform as well, right? To be able to have that act here. All right.

It's good to see you. Thanks for being here. Great to see you as well. All right. That's Sonso joining us from Goldman Sachs Asset Management. Well, Fed Chair Powell, he was on the Hill yet again today, this time before the Senate Banking Committee. He took some fire from a Republican member who wants him to cut rates now.

Inflation in America is down. We got elected by millions of voters. You got elected by one person who doesn't want you to be in that job. And you are costing this government $400 billion a year by refusing to lower interest rates. Joining us now, CNBC senior economics reporter Steve Leesman. Let's just play this game for the sake of playing it. Why is he wrong? Why is Senator Moreno wrong? Why shouldn't Fed Chair Powell cut rates now if the only reason he's not is because of

the potential for tariff caused inflation that might never arrive. I mean that's sort of your answer to your question, Scott, right? You have across the board at least a 10% increase of tariffs that are three times the current rate and you don't know how it plays out. You don't know how much goes down to the consumer. More importantly, Scott, when you look around the economy right now, you tell me which part of this economy screams out a need to cut interest rates.

And it's really sort of hard to find that right now. And the Fed chair did say, if you get weakness in the employment market, that's very obvious that that would be a big factor. It's not like there's this theoretical price increase coming, Scott. It's an actual price increase. What we just don't know is how much is going to be borne

by the consumer and how much show up in the CPI and what effect it'll have on inflation expectations. I think we can listen to not the president here. Let's listen to the way that Fed Chair Powell essentially answered Scott's question. One of the reasons why it's so challenging is that there really isn't a modern precedent. And I think we have to be humble about our estimates.

And we are very open to the possibility that transmission through into inflation will be less than we think, or maybe more than we think, which is why we're in a position of wanting to take our time and make a smart decision as we see how this unfolds. What's interesting is the market is kind of with Powell and kind of on the other side of that cut rates now trade. If you look at the Fed probabilities, what you see is that July trading with just a 25% probability

with much more confidence in 25 base point cuts coming in September and December. That's where the market is priced. Scott, I'd offer this to you as well for you to chew on and respond, which is, hey, the market's done just fine with this July priced out of the market. Doesn't seem to be screaming for a need and the market's come back to 22%. Maybe we shouldn't even be looking at the market and its expectations and and what it views. Let me answer your question as you started this whole thing out. There is no reason for the economy yelling to you to cut rates at all. No reason whatsoever. Obviously it's strong.

However, by the chair's own admission this week, they're not at neutral. They're still restrictive. No. He even, he said as much. So why do they need to be restrictive still? I don't think there's a reason to be restrictive except for, back to the beginning, tariffs.

That's exactly why you would be restrictive. Scott, one of the things that the Fed chair has said, even Kevin Warsh, the former Fed governor who's a potential candidate for Fed chair, has said is that it's the Fed's responsibility that a one-time price increase in tariffs does not become broader inflation. How do you do that? You talk tough right now and you try to control inflation expectations. You tell the market, you tell the American people, we're on top of this. Anything that, if it's going to bleed over, we're going to stop it.

We're aware of this and we're paying attention to it. Look, I think the Fed does cut, and I think the argument you and I are having, Scott, is July or September. And honestly, if the fate of the union rests on that, I think we're in bigger trouble than all this. I also think it's important, what's happened here politically is, if there is a downdraft in the economy,

if there is a downdraft in the job market, Trump has set it up to have the blame lie squarely with the Fed here. Yeah, it'll be fun to game out. I'm glad we had this exercise. Steve, thanks. That's Steve Leesman, our senior economics correspondent. Let's bring in Solace Alternative Asset Management's Dan Greenhouse now. Good to see you. To cut or not to cut? That is the question. What's the answer? Listen, my personal view is, well listen, as a general view, I think people agree if not for tariffs,

they might have cut at the last meeting and probably would be cutting at the next meeting. Probably, the Fed chair himself said it. Yeah, well listen, I don't think he's articulated as clearly perhaps as he did yesterday and today, but I think absent that tariff debate, they'd probably be, again, if not cutting, on the verge of cutting.

My own personal view is they should probably do it anyway or have done it already. Maybe the last meeting was a bit premature. You mean preemptively. I don't want to call it preemptively. I think you mentioned before, like, the economy's doing fine, unbalanced. That's true. Although you are starting to see some weakening in the labor market. Yeah, jobless claims are elevated.

Jobless claims are going up. Continuing claims are a little more than going up. So I think absent that tariff debate, you could probably say, okay, we're in restrictive territory. Maybe we get 25 or 50 basis points less restrictive. Again, that's what the market's pricing anyway, and that might come in September and December. I think the argument right now is a little more,

I don't wanna say idiotic, but a little more, like a month or two early would that make that big of a difference? Probably not, but it would address the issue. I mean, how do you view the market in the context of what they might or might not do? We're basically at a new high. I mean, we're less than 1% from that. Yeah, I'm in the camp that generally thinks much like too much market results are ascribed

to presidential policy, probably too much market results are ascribed to presidential policy, probably too much market results are ascribed to monetary policy outside the extremes. Obviously you've got, let's use March 09, where the Fed can buy up everything, that's gonna send risk assets higher. And obviously on the other hand, the things if you start tightening up liquidity, that can have deleterious effects.

But for most of that, you can make the same argument for multiples as well. In that middle range where we are, I don't really know that 25 or 50 basis points in one direction or the other really matters. Well, it's not gonna be 25 or 50 basis points. They're gonna cut more than 25 or 50 over a stretch of time. Sure, but- You're talking about an initial move

of many that are expected. Well, I don't know that the economy needs many, and you again articulated just before that it doesn't. I think there is a political component here. I think we have, obviously Steve just touched on it, I think we have JD Vance's tweet from last night we can throw up on the screen. There is a political component here to sort of address some of the political issues that are certainly bubbling around the Federal Reserve in terms of people observing, well they cut 50 basis points, here we go. JD Vance, I'd love to hear an argument for why Powell

cut 50 basis points right before the election, but can't do it now with inflation lower. There is, that is not just a political- Well, I mean, because there were no, there was no Trump trade war, no Trump tariffs before the election. Yes, there are some answers to that. However, undeniably, inflation is lower.

And again, to the extent that we aren't positive how inflation manifests itself And there's a chart floating around on the interwebs right now from Goldman Sachs I believe showing Japanese car export prices which are down call it 10 percentage points meaning as I've been talking about on the show with You not all of the tariffs are going to be absorbed by consumers some of its going to be absorbed by the exporting company So there is as Jay Powell articulated today a lot of uncertainty over how much inflation is actually gonna materialize here in the United States. And I'm sorry to interrupt, real quick,

let's also remember tariffs are not inflation, they're a tax. And there's a whole separate conversation around that as well. Right. So then tech sectors that are high, let's bring it full circle to where we started this whole program.

What do you make of the move, which has been pretty remarkable, this resurgence in that trade and whether you should stay with that? I mean, I would mind you too that industrials have been doing very well. Financials have been doing very well. This market is about a lot more than just tech. It's just the biggest names are always in the marquee lights. Listen, I've mentioned this a couple of times this year. Mathematically, they're going to do the heavy lifting, they're the biggest companies. But on the other hand, you've got

Ralph Lauren at a high. You mentioned the financials, people hear financials, they think the banks, and yes, JP Morgan, yes, Wells Fargo, but also Visa and MasterCard, which are now in the financials. And so you've got a breadth of companies that are doing quite well this year, all of which in tot financials. And so you've got a breadth of companies that are doing quite well this year, all of which in totality does not suggest there's any. No, private equity is doing better. I mean, the IPO market looks better. Where's the negative story?

What is it, that we're too complacent about tariffs still, or what? Well, listen, we were, my, it's so. I'm not suggesting there isn't any, but what is it? Well, internally we were talking, this is a good example, we were talking about the cruise lines this morning and Royal Caribbean, Carnival, etc., etc., the stocks of which are doing phenomenally well.

Because the Carnival yesterday had a great outlook. And so what we were saying is we're sitting here looking at these stocks quarter after quarter, this is not just obviously, as you observed, the most recent quarter, quarter after quarter they've done phenomenally well. They aren't maybe guiding as strongly as you would think quarter, they've done phenomenally well. They aren't maybe guiding as strongly as you would think, but they've done phenomenally well. Consumer doing well, strong demand, birthdays, there's a whole lot of stuff going on in the sector

that's just doing phenomenally well. And, but each quarter is met with, yeah, but this might be the consumer, yeah, but demand for, and they consistently prove otherwise. And you could say the same thing about the card companies that continuously go higher. There is an overhang of skepticism in the market. So when could say the same thing about the card companies that continuously go higher. There is an overhang of skepticism in the market. So when you say where's the negative,

I mean, the skepticism is the negative, but the labor market is the one area to which I think you could point. Obviously you've got looming tariffs and that remains to be seen. But the labor market is the one demonstrable happening on the ground item to which you can point and be like, well, there's clearly weakening.

All right, we'll talk to you again soon. Thanks for being soon thanks for being here Dan Greenhouse. Let's send it now to Christina Partsenevales again for a look at the biggest names moving into the close. Hey there. Hi Scott well we're looking at a pair of earnings movers this afternoon. General Mills in the red after the company reported a mixed Q4 with annual profit guidance just coming in below estimates. The CEO citing uncertainty from tariffs leading to a consumer pullback weighing on results and that's why shares are down over 4%. Paychex is getting hammered also today becoming one of the S&P's worst performers after their earnings report. They hit their fourth quarter numbers but operating income and full year guidance both disappointed analysts.

The company did close its pay core acquisition which helped boost their management solutions business but that wasn't enough to offset concerns about their outlook and that's why the stock is having its worst day since march 2020 clearly investors just aren't buying that story right now shares down almost 10% Scott. All right Christina thank you we're just getting started here coming up next we debate what can drive this market even higher than it is now. With New York Life's Lauren Goodwin and Payne Capital's Courtney Garcia, we're back on the bell in New York Stock Exchange right after this. We're back with some news on the housing front.

We'll go to Washington. Diane Olek has that for us. Hey, Diane. Hey, Scott. Yeah, this is from the FHFA director, Bill Pulte. He is the conservator of Fannie Mae and Freddie Mac. He just posted on X, after significant studying and in keeping with President Trump's vision to make the United States the crypto capital of the world.

Today I ordered the great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage. Interesting in the note he then has a release from the FHFA, whereas cryptocurrency is an emerging asset class that may offer an opportunity to build wealth outside of the stock market and bond markets. Cryptocurrency has not typically been considered in the mortgage risk assessment process for the mortgage from mortgage loans delivered to the enterprises without converting that cryptocurrency into dollars. So he is now, this is not happening immediately, but he is directing Fannie Mae and Freddie

Mack to prepare proposals for consideration of crypto as an asset for reserves in their respective single-family mortgage loan risk assessments. So that means that your crypto can back your mortgages. Now this is an interesting play because there is actually another startup company called Milo which already does this and it's been slowly moving into the mortgage market in that way. Some people buy and sell in crypto on their own, but for Fannie and Freddie to use crypto as a backstop for their mortgages, that's going to be interesting going forward as we know how volatile crypto can be.

No doubt, big debate around that too. And we'll continue to have it. Diana, thank you. That's really interesting. Diana, we'll look down at DC for stocks meantime, continue to inch towards new highs, even as many potential risks remain unresolved. Joining us now to debate the markets Lauren Goodwin of New York Life Investments, Courtney Garcia of Payne Capital, for it's also a CNBC contributor. It's great to have you both. Lauren, you say in your notes today that a period of relatively sanguine market activity is just the calm before the market storm.

Is that a don't get too comfortable with these levels in the S&P? What does that mean? I think that's right. And before I go into my explanation, I want to be clear that we're fully invested. So I'm not necessarily an aggressively bearish investor, but one of the dynamics that we see reflected, not only in aggregate market pricing, but also in options pricing, is not a whole lot of expectations for much of anything over the next several weeks. And that's an environment, especially with tariff deadlines coming up here in the next couple of weeks, a budget bill that's moving through Congress, and general uncertainty

related to the geopolitical environment. It's not a balance of market risk that we're particularly comfortable with. And so we're using this as an opportunity to take some gains in equity and make sure that we're deploying capital effectively and just, let's say, remain vigilant in terms of what that overall allocation looks like. Agree or disagree? I'd actually disagree with that, and I think when you look at a lot of the data

on the economy, I'm not seeing that we're going into some sort of recession. When you look at GDP estimates for this quarter, it's like 3.4%, which is above the historical average. You're still seeing we have a tight labor market. I'm actually seeing earnings revisions have not gone negative any longer, which means a lot of your analysts

think that a lot of these tariffs are probably behind us at this point. So I do think there is somewhat of a concern that we have a really narrow market. It's a lot of these big tech firms that are leading the gains right now, and I don't know if you wanna fall into that trap. I know that's ending in the near future,

but I do think you wanna broaden out your exposure. But I was just saying earlier, I mean, haven't we already done that? And it's not getting enough play. The fact that industrials are at a high, financials are at like one percent and other sectors have done quite well. It's just, yes, the top heavy stocks are carrying the bulk of the load. So what? And it's not even just in different capitalizations, right?

Because you're seeing different types of companies. Your large cap is a small, but also look at international, right? I mean the US markets, the S&P is up 3% now this year. If you look at your developed markets, they're up what 16% or so since the beginning of the year. So this is not just in your big tech. I think you want to broaden out over the entire world. The idea that, you know, we've we just pushed off all of the good feeling that people thought was gonna, gonna come post-election. So we had to deal with the tariffs. We're still dealing with it, but it feels like maybe the worst is, is behind us. We've hit peak tariff fear, right? You're

closer to a tax bill than you, you were before. You're way closer to deregulation than you were before. The IPO market has now woken up. You'll probably get more deals. Just feels like how can you be negative the market in the face of that at this point? So I don't think that you should necessarily be negative, but I would say that some of the sources of, let's say, overall economic activity on the downside are also still ahead of us. And I think it makes that balance more even. So we do see meaningful weakening in the labor market. I agree that we don't have a recessionary problem,

but we are starting to see the labor market start to taper off. And I actually perceive, let's call them more moderate tariffs, higher than they were six months ago, but certainly not the liberation day challenges that we're seeing, that actually might be on the margin, more inflationary scenario because you have an environment

where companies and supply chains can muddle through and work things out, but they still have some higher costs to manage on the margin. And so that might be in an environment where this sort of nebulous zone that the markets and the Fed are in, in terms of navigating upside and downside risk, just remains muddily. What if the tariffs don't end up being as bad as feared? Because the president also knows that if they're not, Jay Powell's already said it publicly, they'll cut rates.

So he gets his rate cuts, he still gets his tariffs, he doesn't need them as high, so he gets the tariffs done, he gets the rate cuts done, he gets the tax bill done, and he gets an economy that still looks pretty darn good. Well, all those things would inevitably be bullish for the stock markets, and I think especially if rates start to come down here, the Fed affects short-term rates. So when you look at money market funds a year ago today, we're paying like 5.3%, they're now paying about 4%. And if that starts to go down, those trillions of dollars that are sitting in cash are going to start to make their way back in

the markets. That really has not been happening as much as people assumed it would, but the more rates come down, I think the more risk of that happening, which again is positive for the markets, is likely going to happen. Yeah, I mean that's a good point. I mean, hedge funds, institutions, they're not all in. There's been a still a bit of negative sentiment around this. Some of them call it calling it the most hated V-shaped recovery of all time. Yeah, I think that's right.

I don't want to be pigeonholed into the negative Nancy position here because I'm really not but just to but just to play that that devil's advocate I do see that you know one of the one of the conversations that we were having offline is that one of the biggest challenges we still have with retail and institutional clients alike is if this even if we have some of these let's say near-term risks clear there are a lot of structural uncertainties that remain. So a little bit off of the top of the Fed funds rate, does that spur massive amounts of optimism? Maybe not.

Right? And so I think for an investor, especially considering some of the global capital rules that may come along with the tax bill, it's really about, as I've ever, where do you place your bets, right? Where do you expect to get the incremental best money for your capital? And I'm not sure that sort of a blink at risk on in the U.S. equity market is the number one best placed at these valuations.

Last and quick, you agree with that? I think you want to be invested. You definitely need that international exposure. You also want things like your energy play, is an AI play, I think long-term Do you agree with that? International, a lot of people like it still. You definitely need that international exposure. You also want things like your energy play is an AI play. I think long-term, that's absolutely gonna be an opportunity, so stay invested. All right, we'll see you soon.

Lauren and Court, thanks so much. Thank you. Up next, shares of Microsoft, as we said, hitting an all-time high today after being on the receiving end of two bullish calls. We'll hear from one of those analysts, Wed Bush Dan Ives, he's here after the break. Microsoft hitting an all-time high today the fourth session in a row that the stock has

done just that our next guest getting even more bullish on the name. Joining me now, Post9, Wedbush Analyst, Dan Ives. Welcome back. Great to be here. You say that you have incrementally bullish from your recent AI customer checks. What does that mean? What'd you call it?

Nvidia? And say, is Microsoft still spending money and you decided to add to the price target? What are the customer checks? That's a great question. I mean 40 to 50 customers, partners, you know what I really view as some of their bigger customers out there in terms of and what we're really focused on Scott is trying to understand the trajectory of the AI stack, commercial cloud. I believe right now I mean this is trending

anywhere from 5 to 7 percent ahead of expectations and I think the most important thing is this could be an incremental $25 billion if the street's not factoring in to next year's number. That's why I believe not just $4 trillion, potentially we could be looking at a $5 trillion mark cap in the next 18 months. I mean, OK, the stock's at $491.5, so I can see how 515 might have felt a little in question that the stock was gonna blow past there. 600 doesn't feel too lofty in the kind of environment

we're in, how much has to go right for that to happen? I think 600 is probably conservative, and I'm thinking about the next 18 months. I mean, in terms of next year, I think this is one I could definitely see that numbers are gonna come up significantly in terms of all of our checks. But the most important thing in terms of cloud, in terms of AI adoption, we believe for every $100

that a Microsoft customer has spent, there's an incremental now $50 of AI spend on the table. So essentially what you're creating, you're almost creating another sort of mini Microsoft within Redmond, and I think no one understands what's happening better than, of course, Jensen from Nvidia, but if you look what Nadella's doing,

Nadella understands on the cloud side better than any of the competitors. You say that you view Microsoft as, quote, the clear front runner on the enterprise hyperscale AI front. I mean, AWS, Amazon, the people over there may have something to say about that, wouldn't they? And look, we're bullish on Amazon, obviously bullish on Google as well.

I believe that they're narrowing the gap. But when it comes to core enterprise, comes to core stack, Microsoft, I mean, they're playing another game relative to AI. And what's essentially happening now is on the commercial cloud piece, the execution is continuing to increase. And that's why I think this is one,

me and you have talked about it over the years, it was really in a treadmill for a year, didn't do anything. I think what's happened now is we go into the software phase of AI, that's where Nadella and Redmond, they are playing chess and others are playing checkers. Yeah, but okay, so they're playing this game and they might have had the best looking team

in the game with OpenAI. Microsoft and OpenAI together, formidable foe, against anybody, right? Well, what happens if that team falls apart? What happens if there's a disgruntled teammate and the team gets broken up? Does your view change? I view that at the time, I view this more,

those are training wheels in terms of AI from Microsoft. So my view of open AI relative to, you know, if I go back to early 2023 is totally different. So this is not one where it's all relying on Almond, OpenAI, how the negotiations going. When I look at the AI engineers, the software developers, the stack, and also it comes down to these customers,

it's in their backyard. And I still believe, as I always say, like the haters, they can't say, what do you mean the haters? Why do you always bring up the haters? How many haters are there? The stock speaks for itself. Well, who are the haters? I do you always bring up the haters? How many haters are there? The stock speaks for itself. Who are the haters?

I think I could tell you institutionally on this name, even today, many institutional investors are saying, how could, what more can go right here? The stocks, it's already had its run. And to my point there, I believe there's an incremental hundred, $150 upside as they prove out this software phase of the AI revolution. All right his outlook as bright as his jacket. Dan Ives thank you so much we'll see you soon. Up next we track the biggest movers as we head into the close. Christina's back with that what do you see? What I'm seeing is a

major battery breakthrough sending one stock actually soaring right now while a defense contractors massive backlog growth has some investors pretty excited. Love those stories. Next. 14 minutes from the bell. Let's get back to Christina now for the stock she's watching. Tell us what you see now. Scott, we've got QuantumScape surging right now after announcing it successfully integrated its latest battery separator technology. They're calling it Cobra into baseline cell production.

QuantumScape focuses on solid state batteries for automobiles and is one of several companies really racing to commercialize next-generation batteries for EVs and other uses. Shares up 30% right now. AeroVirament also surging. The drone maker and defense contractor beat on both revenue and profits, plus gave an upbeat guidance. Their funded backlog nearly doubled compared to last year, which is really just huge for future revenue. They also wrapped up buying defense company Blue Halo during the quarter. Shares are up over 22%, Scott. All right. Thank you, Christina. Parts of Novela still ahead. The banks one step closer to getting one of the biggest regulatory rollbacks since 2008. We'll explain next.

We're now the closing bell market zone. CNBC senior markets commentator Mike Santoli here to break down the crucial moments of this trading day. Plus a change to the big banks capital requirements. Leslie Bicker following that. And Christina Parsonova, those is back again to look ahead to micron those earnings coming in OT Nvidia the big story of the day Kyle was kind of a nothing burger on the hill You know he got beat up a little bit as was expected But the markets kind of just like chugging along here market mostly is

Reacting to the fact that it was just up a bit You know and actually was sort of a little bit tired up at these levels right below the record highs. The majority of stocks have been down all day. You know, the equated S&P's been weak. You've had Nvidia and the other mega cap growth stocks kind of mostly supporting the index. I think on days like this, when you're near the highs,

you'd say, is sentiment getting crazy? I would say no. So that's one thing that you would say, most likely the trend is okay. Keep an eye on the cyclical stuff. Consumer's not trading strong today, but it's only one day. Yeah.

Financial's doing quite well too, Les. And the news you have here certainly can't hurt. Oh yeah. This would be a significant rollback in capital requirements for the banks. The Fed voting today to decrease what's called the Supplementary Leverage Ratio, or SLR. This figure requires banks to hold a certain amount

of capital against their balance sheet regardless of risk, which the banks have said discourages them to serve as intermediaries in the treasury markets during times of stress. Fed Chair Jerome Powell saying in a release that the bank regulatory agencies, quote, work together to propose a method for adjusting the leverage ratios calibration while still ensuring the resiliency of the system and not disincentivizing low risk activities.

Governors Michael Barr and Adriana Kugler each oppose the changes, saying they pose greater systemic risk there, Scott. Okay, Leslie, thank you very much for that. We go back to Christina Partzanovalos once again because Micron reports an overtime. What do we need to pay attention to? Well, we have to think first, Micron is considered a commoditized memory chip maker,

but the stock has really rallied 35% this past month because investors believe in the longevity of this AI build out. When you build out AI infrastructure, you need really advanced memory capabilities, high bandwidth memory. That's where Micron comes into play. And it's already sold out of its high bandwidth memory in 2025 analysts are expecting Q3 revenue around 8.8 billion. But Morgan Stanley says,

Microns AI exposure is going to double by year end, calling it quote a tailwind to revenue margins and earnings with the high bandwidth memory market projected to hit $35 billion in 2025 alone. And Micron is targeting 25% of that pie Wednesdays or today's results could prove this isn't just another memory upturn. It's a big shift towards high margin products that break this boom and bus cycle we often see with memory. A quick programming note, I should say the CEO of Micron will sit down with the Squawk on the Street team tomorrow at

9 a.m. Eastern for a CNBC exclusive following their results. The stock, though, has run up quite a bit into earnings. Scott? Yeah, many have, especially in tech. Christina, thanks. Christina, parts of Novolos. We should start there. I mean, the tech run's been pretty extraordinary here. It has, yeah. You know, they led the market down. Remember, that group cracked more like February and March, not waiting for the Liberation Day tariff pressure

to kick in. Did bottom, they've been carrying the load right here. NASDAQ 100 pretty much at a high equal weighted S&P 4% below. So I don't point that out to say, oh no, it's an unsustainably narrow rally, but to say that the big picture themes have remained in place. And that means faith in the AI spending theme. You know, Nvidia is going to have a quarter of a trillion dollars in revenue next year,

and they're going to earn more than 50% drop to the bottom line. So once you get assurance that you think that's likely, it's hard to get too negative on the broader group. That said, the stuff that's been running really hot, cooling off fast today. Core Weave, Circle, even Tesla down a few percent. So you have to watch that as the sort of risk appetite tell to see if the leading edge of the kind of greed chase

is maybe getting a little bit tired in here. As we do, price in again, some pretty benign set of conditions into midsummer I go back to you know just when you talk about narrow industrials yeah high Financials as we discussed with Leslie Barely off of their own new high so I hear you obviously but there is more than tech that's been working in this market No, there's no doubt about it. It's not about tech versus everything else but it is large-cap quality and when there have been reliable themes and I think the

themes that are running through industrial is if you look at what's really been dragging them higher it's power related which is AI related and it's been defense and aerospace which maybe is taking a breather here. So there's no doubt that you know most of what the market is doing is an endorsement of the bull trend. But I again go back to this point of like, listen, we're back at this level where things have to start to break right,

and that includes all the way going through the jobs number next week. The market likes that the Fed is probably gonna be cutting in the next three months or so, and obviously we're gonna be getting earnings before too long here. We'll see you tomorrow. Good stuff, Mike. Thank you. As Mike said, a big story of this day, of course, is NVIDIA hitting a new record high. NAS is green. S&P is barely green.

We'll go out with a bell. Red. Rutgers will be red as well. Thank you for watching. That's the end of the Overtime now. I'm Morgan Brennan.