Closing Bell - Closing Bell: Big Tech's Performance & AI Spending 02/06/25

Episode Date: February 6, 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, Kel, thanks so much. Welcome to Closing Bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This Make or Break hour begins with the run-up to Amazon earnings, one of the last mega cap tech names to report, amid questions about how the biggest companies in this market are positioning themselves, what they're spending, and maybe most of all, when they will see a return on all that cash. We will ask our panel of experts today, including super analyst Mark Mahaney, what he expects in just a few moments. In the meantime, let's show you the scorecard here with 60 to go in regulation. We were mixed, not so much anymore. We are now red across the board. S&P not a big loser, nor is the Nasdaq today, but nonetheless, we are red. Financials, one of the bright spots in this market today, and so is Meta. Wow, what a standout. Once again,

that stock going for a record 14 straight positive sessions. We will track every move into the close today. A notable decliner is Skyworks. Shares sharply lower on the earnings and the outlook. We'll watch that closely, too. Down almost 25%. It does take us to our talk of the tape. Another big moment for big tech, as Amazon reports, in just about one hour.

So let's bring in our experts. Mark Mahaney is head of internet research for Evercore ISI, and Jason Snipe owns that stock. He's with Odyssey Capital, also a CNBC contributor. Welcome both. It's good to have you. Good to be here. Mark, first and foremost, does everything come down to AWS growth? No, but most things do. So you had deceleration, sort of surprising deceleration by both Azure and Google Cloud. And so that's why Amazon's sort of underperformed the last day or two. And so, yeah, the bar got lowered.

It's kind of simple now. The street's looking for 19% revenue growth for AWS. Less than that, stock trades AWS. Less than that, stock trades off. More than that, stock trades up. Now, that's everything else being equal. You need the other things being equal would be they had really strong operating margin expansion in the retail business last quarter. Investors want to see that again. We're pretty certain that they'll see it again. They also want to see advertising revenue start maybe picking back up a little bit. Companies made a big effort and it's got a lot more inventory they've been monetizing.

So show it in the numbers. Let's see some acceleration in Amazon's advertising revenue. We think we're going to get that, too. So, Mark, you don't need a two-handle in terms of the growth estimate for AWS. And I mean 20 seems to be the number that anything, even in the high teens, is going to be viewed as a disappointment. Are you saying there was a reset lower because of both Alphabet and Microsoft? Oh, I think, yeah, I absolutely think there was a reset lower, but I don't want to be too finite about it, but I will. I think 19% is your over

under, Scott. So, you know, 20% green, 18% red and gray, that's the middle color, that's going to be 19%. So I think that's really your over-under on AWS growth. Because 20% would show you acceleration. The problem that both Azure and AWS, that Google Cloud talked about, was supply constraints. The question is whether AWS has been more capable of handling supply constraints than those other two cloud vendors. I don't know. So I think I'm

sticking with this 19 percent number. We'll find out in an hour. Yes, we will. All right, Jay, what are you looking for most? Yeah, no, I think Mark summed up the AWS piece. I think it's going to be huge. Clearly, there's no doubt about that. I think the other story that I think is going to be major for me is operating income. Operating income was up 56% year over year last quarter. We're expected 44% this year, I mean this quarter, which I think will be a phenomenal number. You know, what I kind of weaned the clock to is obviously Jassy taking the helm, you know, a couple of years ago. And obviously he's been really cleaning up the business. He's let go 27,000 employees over the last two years. So he's definitely focusing on operating income

and margin. So margin growth will also be very important to me. Obviously, we're looking for at least 10% there. So I expect this to be a strong quarter all the way around. The retail business is obviously continuing to do well, getting back some of the pandemic gains that they had, retaining those gains. So I expect retail to also be strong. So those are some of the items that I'm looking for this quarter. What about CapEx markets? The metric du jour, obviously, given what is happening with DeepSeek and what these other companies are saying they'll spend. Seventy seven billion. Is that the right number to look at for an annual spend? Oh, for this year? Yeah. But the question is whether they'll give CapEx guidance for for

twenty five. I'll make a bet with you, Scott. If they give CapEx guidance, it's only be it's going to be because it's a really large number, like 90 to 100 billion. And they want to they want to they want to get the market use to that number. And I think the stock would probably sell off on that unless there was acceleration in AWS. I do also want to make one quick point here, a wonderful historical point about Amazon tonight. Scott, I know you've been looking at Amazon for many, many years. This is going to be the first quarter in which Amazon's bigger than Walmart in terms of revenue. First time ever. I mean, it's a wild data point. I'm glad you bring that up.

Yeah, I'm glad you bring that up. And I was going to ask you about that because it is a milestone moment for this name. It obviously brings up how good the sales are going to be. Revenue growth, again, for the likes of an alphabet, revenue growth numbers were disappointing. The lowest growth rate since 23. How do we judge this versus that? Well, for both of these, you know, we've these companies have matured into their middle age, into their middle ages. You know, we're doing 10 percent retail revenue growth for Amazon and that that would be a good number. So, yeah, they need to maintain that show sort of stability in that. And then what investors are going to want to look for, they're going to look for Amazon's other bets. Just like

with Google, there's kind of new growth areas, although Waymo is still years away from being material. But at least they've got a Waymo. What's Amazon's Waymo? I think there's a couple of things that are out there that are actually very interesting, and they may start talking about them on the earnings call. One is Kuiper, the satellite broadband-based service. We should get some rocket launches that may impact the P&L, by the way, in the March quarter. So I'm looking for that. Amazon Pharmacy, I think that's a really interesting new growth area for them. And then they still haven't cracked the code on Amazon Grocery.

Maybe they never will, but that's a really interesting growth area if they can figure out how to succeed in that market. That's a very difficult thing to do. But that's what I'm looking for, and investors will, too. Where are my option plays? Yeah, I'll go back to Jason Snipe. I mean, are you looking for option plays tonight? Absolutely. I think one of the other interesting plays for me is Alexa, right? Kind of the Alexa AI intelligence that they're looking to discuss. Let's see what that looks like because they're presenting potentially a $5 to $10 membership fee. You know, there's 100 million users.

That could represent another $500 to $600 million in revenue. So I'm curious to see that. Obviously, it looks like it will be launched later this month or potentially early into Q2. But that could be another line item that could be very accretive for this company with all the multiple plays that they already have in motion and obviously generating revenue. So that would be the one that I'd be looking closely to. Do you like that idea, Mark?

Yeah, my guess is that if I were to average the number of Alexa devices in your, Jason, in my home, it's probably like three and a half. There's a lot of these devices out there. They're almost like Trojan horses. I'm exaggerating, but I think there's something very interesting in that I think these have been sort of underutilized, under-monetized assets, but they're out there. And absolutely, you gen AI those devices and create more functionality to them, people would use them more. And then you really would get people starting to use Alexa for really putting together their shopping list, like large numbers of people, and to actually do shopping. That could actually open up a new growth area.

So I'm very intrigued by it. They've always had these assets out there. They must have hundreds of millions of Alexa devices out there. I just think they're dramatically under-monetized. But that could change. Look, I don't want to get away from the CapEx number too soon. And I feel like we need to spend another minute on that. You said $90 to $100 billion. Mark, If they come out with that, the stock's going to

sell off unless you have just phenomenal growth with AWS. I mean, in your mind, what is a acceptable I'll use that word. What's an acceptable number in your mind? What really makes sense? Well, look, we got big capex spend, but there's rising return on invested capital across the net hyperscalers. And I'm talking about Google, Meta and Amazon. Their return on invested capital has risen nicely the last two years, despite all this investment. And I think there's enough data points that they're showing you that suggest that, yeah, you should invest more. My favorite data point from Amazon, I'd love to get an update this quarter, is that they're saying in their most advanced distribution centers, this is physical AI, their robotics deployments are allowing them to reduce their cost to serve by 25 percent. You roll that out across all of Amazon's distribution centers, that's massive operating margin upside from here.

So I want to hear that kind of thing. And if they got more of those kind of data points, then they should get a green light to invest more. I don't know what the right CapEx number is, but look, we're going to do 20, 25 percent, 30 percent CapEx growth. I don't think it needs to be the 75 percent that Meta is doing, but it's going to be a good chunky number like that. I got one more for you, Mark, before I let you go. Why is Meta on this tear? I mean, we're talking 14 days in a row. That obviously is a streak and that stock has just been ripping. Why? Well, you get some of the best advertising revenue sector growth out there. They're showing this nice margin expansion.

I think they give you a really good, compelling case for cost discipline. The year of efficiency turned into years of efficiency that shows up in the margin trends. I think Zuckerberg does a great job of giving you examples that show you just how they've been able to deploy AI to boost the power of ad campaigns, to make the site more engaging to users. So, you know, people have said, look, we see how it's helped your business model. I mean, who would have said three years ago that Meta would be doing 20 to 30 percent revenue growth? But that's what they've done the last year. And then very much that's because of their AI deployment. So they get a green light and the stock is still what, 24, 25 times earnings. I think for an asset like this that can get you probably sustainable

25 percent earnings growth, I think that's very reasonable. All right, Jason, we got to get through Amazon. We got to get through NVIDIA. But that's a couple of weeks away. Your biggest takeaway then thus far from the mega caps that have reported is what? It's absolutely been a mixed bag, Scott. Obviously, we've seen deceleration in all the cloud businesses, right, whether it's Google and Azure. But I always when I think about Amazon, which is the biggest tanker of all of them, owning 30% of market share, I think, again, as Mark started with, I think that's going to be the most important piece. They've doubled down on Anthropic. So I think they are catching up from an AI infrastructure perspective. But for me, the race continues. DeepSeek was good news in terms of efficiency and how to figure out how we could cut costs and still be productive.

So that's been the biggest takeaway for me thus far. All right, guys. Good stuff. We'll see what happens. Look forward to catching up with you again soon. Mark and Jason, we will see you soon. Let's bring in Adam Parker now of Trivariate Research, Stephanie Guild of Robin Hood. Adam, a CNBC contributor. It's great to have you both with us. Stephanie, I love this first line in your notes. There's more to life than the Mag 7. Oh, you stole it from me. Sometimes it, well, no, I credited you. Sometimes it just doesn't feel like it, does it?

No, I mean, if you look at the top 50 stocks by performance returns year to date, only one of them is in the Mag 7, and it's Meta, where you just talked about. I think the reason why Meta has been rallying so much is because, you know, two words, one phrase, DeepSeek. I think, you know, they're a consumer of AI and they're going to be a lot cheaper. I'm excited, though. I think there are a lot of names that are doing well. And all of it comes down to the fact that there is another, there's more of a focus on what the companies are actually doing, in my opinion. Like who the company management is, what they're making, what they're doing, and what their valuations are because of the current levels of interest rates. How are you thinking about these names in the here and now?

I've heard from most. Now, you know, Amazon tonight. And then I said, we've got to wait a little bit for NVIDIA, which is arguably the most important one of all because of, as Stephanie said, DeepSeek and the developments that have been around that name. My mind's changing a little. I mean, I've been a bit of a broken record for three years. I hear just saying, you got to be at least market weight. Don't let them hurt you. You don't really know

anything anyone else doesn't. You know, I was just listening to that conversation. I looked up, there's 79 buys and four holds on Amazon and the four holds aren't from any of the biggest 20 firms. It's hard to have a differentiated bullish view. And that's been why I wanted to at least be market weight and just don't let it hurt me. But I'm evolving a little bit more to the negative a little bit. And the reason is just, and timing it's tough, but my view is that the beta of these stocks is really high, meaning you saw on that deep seek Monday, these stocks sell off a lot and disproportionately.

And so you could say it's nothing, it's positioning, or you could say, you know what, I got incredibly high cap backs. The biggest seven companies are spending more cap backs than the biggest seven, like almost since 25 years. I've got valuations that are reasonable to high. I've got some potential disruption for some of them. And so the portfolio impact on a down day looks a little bit riskier. So I'm not saying, you know, this is terrible. I'm just saying if you were market weight, you ended up owning more than that with the bounce, with the beta. Maybe I take it down a little so that it's a little bit risk managed. I can find mid cap stuff or other stuff to participate.

So I'm kind of at the for the first time in three years just thinking I've got to be a little bit more careful just given this kind of cap backs and given the potential that AI has to disrupt parts of the business. Do you feel like, I mean, at some point the risk level goes way up as a result of what these companies are spending? Are you in your own mind starting to think more clearly and maybe more skeptically about the return on that money? I am, and I think the market is too, right? I mean, you made a comment I think was right. You know, Meta's gotten our CapEx, your innocent until proven guilty, and Google, it's your guilty until proven innocent. Like the market's already trying to say these numbers are big, and ultimately that concentration of CapEx is probably going to end up disappointing, at least in pockets.

So for now, we'll see, but I just think the risk is growing. I'm not saying, oh, these are terrible or whatever. I just think that if we're saying, hey, we're going to have this conversation once a year for the next 50 years, maybe there's only five out of the 50 that look a little bit riskier than right now, just in terms of the beta, the potential disruption from Aon business models, the valuation, the CapEx number. Like that cocktail has me a shade more cautious than any time in the last two or three years. What do you make of that? I think it's right. I have a target of 6,500 on the S&P. It's on the lower end of all the

analysts out there. But I wrote my note to you, actually. I'm thinking about lowering it simply because the MAG7 make up about 35% of the S&P. I don't know if they're going to have these huge moves this year because there is a lot of, like, digestion and figuring out what the return on invested capital will be for all the money they're spending. So they are large, and there is power in that. But I think there's just a lot of opportunity elsewhere, which means it might be hard for the S&P to rally a lot, but there is still a lot of good investments to make. How are you thinking about, Stephanie, expected policy that's going to be beneficial for the stock market? Just that baseline assumption alone is for, in large part, why this bull market is where it is and why it was able to sort of take that next leg after the reelection of President Trump.

Despite tariffs, despite a lot of noise, there is the belief that once you get past all of that, that the trend is still up because you're going to get, in one form or another, you're going to get tax cuts and you're going to get deregulation and you're going to get animal spirits in some form. I think there's an underlyingly good economy. And I think that's actually what forms the basis of this. But the tariffs were a surprise in the short term. I don't think they're over. Were they a surprise?

Well, because I think the market was thinking, like, this isn't really going to happen. It's just a negotiation tactic. But then he did put them in place. And there is some stuff starting to happen. I think they haven't even come to Europe yet. And that is probably going to come, too. So I guess I believe that there is a lot of good investments to make besides the big ones that will get pushed around by this market. Like what?

What's your best idea? Or one of them right now. A couple of names that I like. One is Maple Bear, which is ticker cart. They actually just, I think they're moving into the S&P mid-cap now. They have a couple of really good partnerships with Uber. I think they just announced one with Ulta.

I just think they're growing and doing the right things. They actually do have a lot of business in Canada, but I don't know if that actually impacts from a tariff perspective. Yeah. What about you? I think if people do trim these Mag7, they have to fill that market cap with something else. I think you're going to fill it with other large caps and some mid caps. I like healthcare a lot. It's definitely contrarian, but there's things like GE healthcare where there's some new products that could have upside earnings. There's things where productivity can be enhanced. So if you want to, you know, zig where they're zagging, I think you're going to see earnings

be better than people think. Your policy comment really resonates, because what I've concluded is the market's saying tariffs aren't going to really impact earnings for most of the market, but everything's going to hit healthcare. All of RFK's policies are going to hit healthcare. And I think the truth is in between, and I've got a sector that's really underperformed but has some productivity potential and some earnings achievability that's above average. So I like healthcare. And then we upgraded industrials at the beginning of this year. I feel like we've got some data this week that things are maybe bottoming a little bit in activity.

We have very easy comps in the second half this year for the earnings growth. So if the equity market anticipates earnings acceleration by three, six months, I think you can add to some of these industrial, which would maybe have decent risk reward in the second half of the year. So healthcare and industrials are areas I'm focusing on a little bit more here in Q1. What do you guys make of the momentum factor within the market. The MTUM ETF, for example, hits a new all-time high today, which is made up, by the way, of a lot of widely held large cap stocks. JPM, new 52-week high. Philip Morris, Walmart, we were just talking about that with Mahaney. Palantir has been a rip. Goldman Sachs, Robinhood, by the way, with a new 52-week high today in the ETF. Why is momentum, do you think, performing so well?

I think there's a lot of reasons. One is that these are the companies, they're not all the Mag7, right? And I think there is... Far from it. It's so dispersed. I mean, insurance, retail, finance. And that's what I think. There's actually still capital that can rotate into these names. And that's why the momentum has been going. I also think that there's part of the market that just that's how they invest. What's going up will continue to go up. And a lot of these names have had really good earnings and are hitting on some specific needs,

like a consumer that needs cheaper products, for example, in Walmart. Banks are probably not going to get as much regulation as they maybe once were going to expect. And then also, the spread between tens and twos are going to continue to support their businesses. What do you think about that? From the quant perspective, we've studied momentum every different way, prior, post, the volcano.

Generally, if you look at 12-month momentum, I don't know what the ETF is, if it's 12-month or 12-months, I just wonder what it is, but typically momentum oscillates in three-year cycles. The market's kind of close to an all-time high, and so it stands to reason a lot of underlying individual securities would have been well to drive that. So I don't think it's that surprising. I think the issue is that momentum is a two-sided thing,

meaning the stocks that are bad continue to be bad too, right? So otherwise it reverts. So the question is really of the stuff that's been bad, could you see fundamental evidence that gets at the bottom? Obviously, if you're recommending healthcare, you got to think there's going to be some momentum reversal on the negative side. And I think some of it is what you said, you know, since our work shows that the day Harris's probability on the polymarket peaked, you saw a huge change in the market microstructure. You start seeing, bark, low-quality junk proxy rip, right? And so I think ultimately what we're left with now is we need to see some of the policies help revenue. And if we don't, then you'll get the momentum reversal.

I'm thinking of you. That's kind of how it did. There is something I was going to say. There is something else we saw. After DeepSeek, we saw a lot of buying on the dip. But after the tariffs, we actually saw a change in the way our customers were investing. And you actually saw almost an equal amount of buys and sells. It wasn't just buying on the dip.

And I actually think that's like a signal as well, is that there's capital rotation happening underneath. The big DeepSeek day for me was, you could sit there and say, I'm an electrification industrials fan. I want electricity. I want Eaton. I think power is going to be huge. I like VST. I like semis. I like NVIDIA. And you woke up on Monday and they were all down 15% or more. And so the correlation of those growth

themes is enormous. I think it was a wake-up call for some people like, you know what, I need to like look at housing or healthcare or something. I need some ballast here because that was a lot. It was a panicky sell-down as we've seen it in some time. But that's momentum reversal. That's like a momentum reversal. That's why I said it. It's like a big deal. But when you look at momentum, as I said,

some would say, well, is it a sign of something getting a little toppy, or is it an underpinning of more strength ahead? If those types of names from that wide a swath of sectors within the market are continuing to do as well as they are, maybe that's more good than bad. I think it's more good than bad. I think we have an underlying, as I said, good economy. And I think we're in an environment where we're finally getting the breath that we have been wanting and talking about for a long time. And now that it's here, I don't want to forebode the joy of it. I think there is a lot of good... Go right on the parade. There's a lot of good stocks out there that I think will have...

I mentioned Gap. There's a lot of turnaround stories. You've got Starbucks that has a new CEO. Gap has a new CEO. I just think there's a lot of things that could be interesting for the future. The nerd side of me would say, what we're here trying to do is something called factor timing. We're trying to say, do we want to time that momentum is going to be an effective metric for the next three months? And do we want to do that based on the historical efficacy of it? That's hard to do. But I kind of, I think your explanation makes sense. Like if we believe that less regulation is going to, you know, fuel higher growth,

then the momentum that we've established will continue. If you think that, you know, there's some things that are up, maybe like investment banking, JP Morgan told you it's month, maybe that would get corroborated stuff, but maybe other stuff we don't get. So I think it's an interesting alpha long-short opportunity here because something is just not going to show you what you need to believe in the next couple of quarters. I enjoyed the conversation very much, guys. Thanks so much. Good to see you.

Good to have you here, Adam, you as well. All right. All right, let's send it to Christina now for a look at the biggest names moving into the close. What do you see? Well, Peloton, those shares are riding high, about 10% higher, as the exercise equipment maker rallied on better than expected revenue for the quarter, while the firm tells investors it has, quote, a steep hill to climb to achieve profitability.

Cost-cutting efforts are really helping this company right now. And you can see shares up almost 10.5%. Roblox earnings, though, failing to impress the pandemic darling, dropping from its yearly highs as daily active users fell for the quarter. And bookings, which is really a key metric for gaming spend right now. That missed estimates. The firm also projecting lagging revenue growth following a similar outlook from video game giant EA. Warned on slowing sales. Shares down 12.5%, Scott. All right, Christina Partsinevelos, thank you very much.

We're just getting started here on Closing Bell. Up next, Aldridge Anka Crawford is back with how she is playing the tech space right now. And she's going to give one under-the-rad radar name that she is betting on right now as well. Right after this break from right here at Post 9 from right here at the New York Stock Exchange. All right, welcome back. As we close in on those Amazon earnings tonight, many tech investors are wondering whether the recent drawdown in Alphabet, Microsoft, and NVIDIA is a sign that the AI trade is in jeopardy. Let's ask someone who owns many of the names in question,

Ankur Crawford, Alger Executive VP and Portfolio Manager. Welcome back. How would you answer that question? Have the goalposts moved? I use that a lot. But in this case, I wonder whether they really have for these names. Are you shaking your head no? No, no, they haven't moved in part because this AI trade is, first of all, AI, we're in the very, very early innings of the implementation and realization of AI. I will remind you that AI actually only burst onto the scenes of the market two years ago. And the pathway over the next five years is going to be very fast and very aggressive. So it doesn't surprise me that we're going to get very fast and very aggressive. So we are, it doesn't, it doesn't surprise me that we're going to get growth scares because things are moving so fast. Innovation is moving so fast

that it may confuse investors. I mean, I've been saying that like when software writes software, innovation becomes exponential. And that's what we're starting to see. Did you coin that? Not yet, but maybe I will. Quick, trade market. So when you get exponential growth and exponential innovation, I think

it sometimes does surprise the market and people in general because what comes out of it is surprising. But I mean, are you reassessing one of your favorite stocks, NVIDIA, at all? I mean, what if we can call you-know-what on DeepSeek, the cost, right, of what they allegedly did, what they are purported to have done? It's almost irrelevant.

What if that's just a moment that suggests it's going to become demonstrably cheaper, demonstrably cheaper to build these models? And that's going to have a transformative impact on the kinds of companies that have benefited to this point. They're just not going to make as much money as they once thought they could. Right. So I think there's a couple of things that even OpenAI, if they were to make their O3 model, I don't know how much their O3 model cost or their O1 model, it's not two orders of magnitude more expensive to make than the DeepSeek model. It may have been a few multiples higher, not orders of magnitude higher that's the first thing secondly what the total cost of of the training of deep seek and you know

the all of that infrastructure and also the fact that they were kind of trained on other models other lms open source right so because it was open sourced means that you still need that base infrastructure. Now I would remind you that CapEx numbers actually didn't come down at all. Google, Meta, maybe not Meta, but Google, OpenAI, Anthropic, they knew of all of these techniques and are using those techniques themselves. Yeah, but if the numbers, if the spend continues to go up, and we are, from what we've already learned from some of these companies that have reported, and maybe we're reminded of it again tonight, that revenue growth for a lot of these businesses is slowing. Now, it's still unbelievably rich, but it's still slowing a bit. So if revenue growth is slowing, but the spend is increasing, where's the mismatch? Yeah. So early days in the cloud transition, I think back to 2013, was that? I would argue that all of these guys, Microsoft, Amazon, were spending a lot in the cloud. However,

they didn't really have revenue to show for it. Ten years later, it was a very good investment to spend in the cloud. And so you almost have to spend forward to make the base level models, the large language models that basically will have all of this AI infrastructure or AI apps on top. You need to actually build that scaffold. And to build that scaffold, you do need billions of dollars of compute. One more thing is like one thing that has become very clear after DeepSeek is that you look at the consumption of DeepSeek, for example, as people are starting to go and use DeepSeek. It's incredible. You got a massive peak in the number of downloads for DeepSeek, how many people were using DeepSeek at your own peril. But, you know, so it tells you that as

things become more accessible, it will be used in a more aggressive fashion. The other thing we're sort of reassessing are, you know, data center businesses, power around those. You came with a stock pick for us today that is a data center play, what you call under the radar. Nebius, is that it? Yes, yes. Tell me more. Nebius, a really interesting under the radar.

I call it under the radar because it actually has almost no coverage on the street. It used to be a former, it was the management of the former Yandex, which was the Google of Russia. You know, they've basically corralled them. They've started a new company called Nebius, and Nebius is an AI data center play. In November of last year, the NASDAQ called them and said, we're going to, we're basically listing you in three days. So they actually never got the chance to do an IPO roadshow and are now kind of meeting with investors. What I love about this is that it's effectively a public core weave. There is no other way to play kind of an enterprise type data center.

They have a global footprint expanding rapidly in the U.S. with some of the best engineers in the world. Top of your head, you know what the market cap is? About eight billion. Eight billion. All right. Well, good stuff. Good to catch up with you as always. Ankur, thank you. Ankur Crawford of Alger, once again at Post 9. Coming up, CNBC Sport caught up with the Kansas City Chiefs owner ahead of Sunday's Super Bowl. We are live in New Orleans next. All right. We're back on the bell. Super Bowl 59 this Sunday, as you know. CNBC Sports' Alex Sherman in New Orleans, as you can see. And he did catch up with the owner of the Kansas City Chiefs

and joins us now with the highlights. Alex. You know, I asked the owner of the Kansas City Chiefs, Clark Hunt, if he was bored by all of this because the Chiefs are in the Super Bowl seemingly every year, five out of the last six years. He said no, he's still appreciative. But he's also the chairman of the NFL Finance Committee. And this past season, the NFL adopted a policy to allow teams to sell

up to 10% of their team ownership to private equity. So I asked Clark Hunt, would you consider selling 10% of the Chiefs to private equity? Here's what he had to say. We had two transactions that took place before year-end that included private equity. I know that there are several other teams out there exploring, potentially bringing in a private equity. I know that there are several other teams out there exploring potentially bringing in a private equity partner. We think it's a great new source of capital for the league. It'll create flexibility for owners who have a need from a liquidity standpoint or have a need from a capital investment

standpoint like a stadium. Would you ever consider selling 10%? I won't say never. It's not something our family's focused on right now. But I do think just having more options from a liquidity standpoint is beneficial to everybody, including Kansas City Chiefs. So reading between the lines, another thing we talked about was the Kansas City Chiefs stadium situation.

The Chiefs play in Arrowhead Stadium. It's one of the oldest NFL stadiums. It's, of course, beloved by Chief fans, but they're going to need a renovation at some point and or perhaps even build a new stadium. That, I think, might be the time when the Chiefs would look to sell a stake to private equity because it will be a liquidity event that the organization may need. Yeah. Theoretically, too. I mean, if any franchise was going to be able to get buy-in, so to speak, from the public

for at least a public-private partnership in a stadium, that would be one of the markets I would look to first. Yeah, absolutely. I mean, look, there's two avenues they can go. They can either refurbish Arrowhead, which I think would cost about $800 million, or they can build the new stadium, which, to your point, usually costs billions and billions of dollars. But the Chiefs, perhaps interestingly, you may not expect this, were only ranked 18th in CNBC's valuation list that came out in September. So all this winning from the Chiefs, they're still only the 18th most valuable NFL franchise. And that, of course, has a lot to do with the stadium, with an old stadium.

So there's this push-pull of, like, fans are not going to want to let go of Arrowhead because it's such a home field advantage for the Chiefs. It's one of the loudest, if not the loudest, stadium in the NFL. So fans love it. But, you know, it does keep the valuation down on the Chiefs. Now, granted, almost all of these owners are billionaires. So, you know, what's another billion here or there? But it does, in fact, weigh into considerations of do these teams decide to keep their old stadium or try to buy a new one? Yeah, good stuff. Keep bringing that to us as well. Alex, appreciate you. Thank you. Alex Sherman down in New Orleans for us. By the way, beginning today, CNBC Sport is also available as a podcast. You can follow and listen on your favorite podcast app like Apple or Spotify.

Go ahead to CNBC.com forward slash sport podcast. Coming up next, we track the biggest movers as we head into this close. We're back with Christina Parts and Nevelos now. With that, Christina. Fast food heats up as Americans chase value deals. Plus, business travelers are filling hotel rooms again, but there's one major market that's still checking out. Details next.

We're 15 from the bell. Back to Christina now for the stocks that she is watching. What's on your mind? Taco Bell. I was actually looking up Taco Bell cinnamon twist, but it looks like Americans can't get enough of those Taco Bell cravings. The Tex-Mex chain saw sales jump 5% at existing locations with those wallet-friendly value meals really bringing in the crowds. And KFC is not doing too shabby either. They're seeing chicken lovers flock to their restaurants across China and Europe. Investors are definitely feeling it because shares are up by 9% right now for Yang Brands, the parent company. And Hilton shares jumping higher on the back of strong earnings

as demand for business travel drove higher bookings for their hotel operator. However, Hilton CEO telling CNBC this morning that China demand is still flagging as competition on leisure travel just continues to heat up. You can see shares up almost 5%. All right. Christina, thank you. Christina Parton-Novello still ahead. We break down what to watch for when Expedia reports in overtime. It's not only about Amazon, believe it or not. More on The Bell after this break.

All right, here's a heads up for you. CNBC now accepting nominations for the 13th annual Disruptor 50 list of private venture-backed companies. To learn more, scan that QR code on your screen or go to cnbc.com slash disruptors. Coming up next, you know it, Amazon numbers hitting the tape at the top of the hour. We will run you once more through what to watch for from that report in the market zone next. It is time for the CBC closing the market zone CBC senior markets commentator Mike Santoli here to break down

these crucial moments of the trading day plus K Rooney on what to expect when Amazon reports. In just a little bit the contested Brewer on Expedia's earnings which are out today as well. Michael you first your observations on this day are you

know we have more of this low energy churn it's definitely not causing any damage inside the market. Very narrow ranges of. What stands out is again just the almost even split between things that are up things that are down being able

to absorb some some pretty big earnings adverse earnings reactions. Thanks up more than 1%. So on every day, it seems like the market finds a way. It's on the one hand susceptible to headlines, but on days when it's not getting any real market-relevant headlines, it's able to just kind of churn in here. I still keep pointing out that very, very heavy kind of small investor flow in the same group of stocks, or at least a few of the big ones per day. Very hard to handicap how that goes. Sometimes that's erratic volume. Sometimes that's supportive. So I think we sit here. The jobs number tomorrow, I still think we want good news. We're not looking for dove bait

here, I don't think, in the payrolls. Look, you know the market so very well. I'd love your opinion on what you think about the momentum factor and why it is performing as well as it is, if it's anything more than what some would say is the obvious. We're in a bull market. That's a lot of it is a bull market that is really willing to press its bets. And you have a bunch of sectors that are being treated as winner take most. And so I feel as if the quality factor, which has really been in vogue for a couple of years, has just fed into the momentum factor

because it seems as if you haven't been kind of punished for that orientation much. Now, when it breaks, it breaks pretty hard on a short-term basis. We've had a couple of those in the last few months, these crescendos of momentum. And then they back off, and it has to sort of rebuild. Some stocks are left behind in that. But, yeah, it's remarkable when you see things like Walmart and Costco performing every single day.

And a lot of it has to do with that nexus of quality and momentum, not really a play on the consumer. Yeah, yeah, good. Speaking of the consumer, I mean, Amazon obviously plays a big role with the consumer, Kate Rooney, but there's so much more that investors want to see tonight. Tell us what's most important. Yeah, Scott, there's so much going on with Amazon, but the number one metric I would say investors are watching is AWS. That's the cloud growth, especially considering Google and Microsoft disappointed there earlier in the week.

19% is consensus. That's the number to beat, which is flat sequentially. But then you've got to watch CapEx as well. This is going to be key. Amazon is expected to up spending by around 15 percent in Amazon. If you think about its track record of big spending, it's really been able to show that that has paid off. It's led to better operating margins in the past. And then there is their participation in this mega cap spending spree that we've seen.

That is going to be key to the AI trade. If we hear any sort of soft commentary on spending, that could suggest Amazon knows something that the rest of that group doesn't. So it could have a much bigger market impact. And then you got North American margins. That is really the e-commerce side of the business. Investors want to see expansion there. We will be listening. Speaking of e-commerce, for some commentary around tariffs and then the last couple

things to note, I would watch advertising that Kuiper satellite business and grocery. Fun fact here, Amazon is expected to top Walmart in terms of revenue for the first time, Scott. I like how you put that. You're kind of darned if you do, darned if you don't. You spend too much. You're like, why are you spending so much? You spend too little. Like, what do you see that we don't know? We will see. Kate Rooney, thank you very much for Like, why are you spending so much? You spend too little. Like, what do you see that we don't know? We will see. Kate Rooney, thank you very much for that. Contestant Brewer on Expedia. Yeah, travel certainly in focus for the weekend of Super Bowl here, Scott.

We've heard from Royal Caribbean and Hilton earnings about the growth in demand here for travel. And we're watching to see how Expedia is capturing that interest. The focus here is not just on the business it's doing directly with consumers, but also the technical services that it provides business clients here. It's a focus for CEO Ariane Gorin, who took over last year. And she comes from that B2B division. The street is looking here for a little more than $3 billion in revenue, with adjusted earnings per share of $2.04. So we'll keep an eye on that.

But shares really have taken off over the last six months or so, up, as you can see, more than 46%. Scott? Contessa, thank you very much for that. We'll see those numbers when we hit the tape. Speaking of stocks that have taken off, Meta. Yeah. Up another 1% today.

This is going to be 14 straight days that this stock is up. Obviously, a record. Yeah, it's remarkable in the sense that it's just kind of fed on itself. So there were a few things going on. Obviously, really great leverage to all the trends people want to be playing in terms of AI, consumer Internet. They sort of have it figured out. They're being given the benefit of the doubt for the CapEx they do. And then, you know, you can't ignore the fact that it did accelerate

when Zuckerberg started to become close to the incoming administration. But DeepSeek also has been an afterburner on this stock. 100%. The idea, okay, open source, cheaper AI, going to the edge of where consumers interact with it, that sounds like meta to me. So I think all those things, along with, as we were saying, just the momentum, you know, that's going to kind of work until it stops working. So bar's pretty high, I think, you know, down the road. But we've just got their numbers, and, you know, everyone's pretty happy.

Yeah, I mean, the deep-seek sell-off day, everything down, not meta. Meta was, like like the only one that was up and it has just continued to power on. It'll keep the Nasdaq green, that's the one thing. Otherwise mixed, but we have big earnings looming as the bell rings. I'll send it into overtime now with Morgan Dunn.