Closing Bell - Closing Bell: Dow Rallies to Fresh Record 6/4/26

Episode Date: June 4, 2026

Move over Nasdaq … it is the Dow that surged to a new record high today. We drill down on that massive move with Partners Group’s Anastasia Amoroso, Solus’ Dan Greenhaus and Sofi’s Liz Thomas. Plus, SpaceX kicked off its roadshow – targeting an eye-popping $1.8T valuation. The Dean of Valuation Aswath Damodaran weighs in on this blockbuster IPO. And, we break down what to watch from Lululemon and Docusign when those names report in Overtime. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Thank you very much. Welcome to closing bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange, and this maker break hour begins with a record high for the Dow today. Tech taking a bit of a breather as money heads to other areas of the market. Is it a sign of further things to come? We'll ask our experts over this final stretch. We'll show you the scorecard here with 60 to go in regulation. You did have most sectors, but technology in the green. We've had staples go red, materials go red, albeit slug. But it's a really positive day for everything other than technology. There's health care. Industrials, comm services, doing pretty well, too. You've had a first today in shares of United Health.

Good for about 5%. That means a lot to the Dow. So does Goldman Sachs and some of the other big names around the financial space today. Pretty solid. SpaceX beginning its road show today amid questions about its valuation. And we'll have more coming up, including an interview with NYU's Dean of Valuation. Shanaaswath Demoterin. We look forward to speaking with him. We do begin with our talk of the tape. Move over, NASDAQ, it is the Dow that is surging to a new record high today. Let's welcome in

our panel to discuss partners groups. Anastasia Amoroso, Solis's Dan Greenhouse, Sophies, Liz Thomas. Welcome, everybody. Good to have you with us. Anastasia is this, as we ask, a sign of more to come, more movement into all of these other areas of this stock market. Well, that would certainly be a healthy development. And look, I think tech is absolutely due for a breather here. And you don't have to look too far to see it, whether it's the SOX index that has surged 99% since the end of March, whether it's the fact that you've got the RSI, whether it's on the NASDAQ or just on the markets broadly that's at 70 and has been there for 23 consecutive days. There's a lot of length there. But I do want to make a point, Scott, that this is not, by the way, about BROCOM earnings disappointing or the

AI or semiconductor trade disappointing. You know, when you look at the earnings of something like Broadcom, for example, they delivered 143 percent year-over-year growth in their AI semiconductor revenues. That's not actually anything to be disappointed about. Their guide was for this continued robust earnings growth there as well. So I think what this is about is the fact that a lot of good news have been priced in in tech. And there's some questions that investors are rightfully asking. And the fact that if you look at token consumption, for example, has been off the chart. the famous token maxing and has that juice, the semiconductor trade perhaps too much, I think maybe there's some of that.

So if that's the case, I do see continuous scope for rotation here. And maybe the good news, right, all the IPOs that are coming, maybe it's actually already priced in. Are we positioning, Dan, do you think, for the post-war playbook at this point? Like, we've run a lot of these tech stocks as far as maybe we could run them for a bit, like, you know, cyber, we'll have more on Crowdstrike and the semis and we'll have. have more on Broadcom, but those stocks were up so much. And maybe we're starting to think about the other side of the conflict with an economy that's still good and earning still durable.

And we need to rotate a little bit to get some more bang for our buck. I don't know. I mean, I don't have any indication that the war is ending anytime soon. Everybody saw the president talking about the straight being open by the end of the summer, which is obviously several months away. So I don't know why this would be the start of the war's ending trade any more than it might have been yesterday the day before. Is this just a one-day thing? I mean, obviously you can't make a trend out of a day. Of course. But, you know, you do have some pretty strong moves in other areas of the market.

I mean, listen, every name in the healthcare sector, I think maybe Waters isn't up, but every name in the healthcare sector is up. A lot of short covering among the smaller and medium-sized healthcare companies. The banks, as we mentioned in the intro, the KRE, the BKX, all continuing to do pretty well. So you have, I think when I left my apartment, eight sectors were up above the index today. I think it's still five or six right now. So it's a pretty good day. I just don't think you can, to your point, one day, it's really hard. I just want to make one more quick point about tech.

Anastasia hit literally all of the things I was going to say. But just to build on it, with respect to the degree of rally that we've had, I know this point's been made, but it bears repeating. If you're Broadcom for the next quarter, earnings, your revenues, your earnings are double what they were, are expected to be double what they were just a year ago. If you're micron, your earnings, your revenue were more than double than they were expected six months ago. So it's not just simple enough to look at the charts to say these are pretty parabolic

moves. There is a narrative changing fundamental shift in the earnings power of these companies that at least in the short term, knock on wood, famous last week, words justifies at least a big chunk of this moves. If Anastasia took your best stuff, do you want to bounce and get back on the subway? No, I've got some stuff left. I've got plenty more. I just took the lead stuff.

Take your boss and go home. Take your boss and go home. It's going to live for a while. All right, Liz, the one knock on the rally itself has been, oh, it's too narrow. Oh, it's too risky because it's getting too top heavy. So, I mean, at some point, people like you have even been talking about that. You want to see what we're seeing today. Yeah.

And I bet you'd like to see it continue for long. longer than just today? Absolutely. Well, health care was one of my calls this year. So selfishly, I'm very happy to see it on top today. I'd love to see it on top for the rest of the year. Financials is something that you really want to see in a market like this. You want to see them do well because it confirms some of that cyclicality. It confirms that perhaps there's less economic gross fear than we had before. But I want to caveat that with saying, even if the market is looking past the war right now, I don't think we've appreciated yet what it still looks like to work through the supply chain issues that are likely to come up in summer, even if we do have de-escalation.

This isn't something that fixes itself overnight, and I won't belabor that point because it's happened many, many times. But I do still think that there's hotter inflation to come. There's probably some hawkish messaging from the Fed that the market hasn't really digested yet. So there's likely to be a bumpy period before we hopefully find a rotation that's more durable into other sectors. Let's get a little more on Broadcom. Why that stock, for example, is down almost 13% today. Christina Parts of Nevelis is following it, as she always does, joins us now with more. What's going on today? Well, you said 13%, that's almost $300 billion in market cap just wiped out today. The numbers were strong, but they just weren't strong enough, Scott. Q3 AI chip revenue guide it's

about $16 billion up more than 200% year over year. Sounds great. Street wanted more, closer to about 17 billion. And then CEO Hock Tan chose to reiterate, not raise the fiscal 2027 AI revenue target of $100 billion. By side. A lot of investors, just one and more. On top of that, Google, Broadcom's largest custom chip customer, is now working with media tech on inference chips. That raises real questions about share. With the stock trading in a premium to Nvidia, the no incremental guidance to chase and competition creeping in at its biggest account have analysts expecting shares to stay relatively range-bound for the next few quarters. Christina, thank you. Appreciate to look there. Good or bad if the chip trade

takes a more pronounced breather. Maybe bad in your term. I mean, if you look at the S&P 5 Fund, it's driving it as max seven, but it's also semiconductor stocks that accounts for almost 50% of the market cap at this point. So I think you can't have the sector just or the market consolidated, maybe chop around.

And I think to Liz's point, you know, we have absorbed, you know, priced in so many good news, whether it's the pace of adoption of artificial intelligence, whether it's the blockbuster earning season that we just had, And then back to the straight of Hormuz, you know, we have sort of priced in a deal, peace deal in Iran, we don't have it yet.

And if it materializes, well, guess what, it's already priced in. And if it doesn't, then we do have to grapple with some of those physical challenges. So, you know, so I think the market, because of that, may consolidate and on top of that, the rotation out of tech. You could say, you know, good or bad if the chip trade takes a more prolonged breather, if other areas of the market can pick up the slack. like everybody hopes and like what's happening today. Sure.

It's not just a broadcom issue of today. I mean, yes, Nvidia is up. AMD's down, microns down. I mean, Intel's down a tiny bit. So I'm going to disagree. I think it would be unquestionably a good thing. Now, now... That's why I asked it that way,

because I felt like it could go either way. Sure. And we're, you know, I'm trying to have the confrontation here. Let's do it. No, listen, in the short term... You know, don't take your bag of pasta over there and go home. Stay now. Stay.

Stay. I think it's a good thing. And now, obviously, the semis have done phenomenally well. They've driven a big percentage of the gain in the market. They're huge. So mathematically, that's just going to be the case. However, to the point earlier, the charts are gross. They are vertical.

And if you've been in this market, if you've been a trader and investor, anything for more than 35 seconds, you know those charts and you know they're going to correct at some point. So I think to the extent my point before is valid. And it is, that's why I made it, that the fundamentals have. have improved and they've changed, you've got to get some of those charts to come down. They can't keep going like this, so it's going to happen. But how much money is tied in those charts? You know, how much money is invested there?

Wouldn't that be a bad thing if it came down? Yeah, no. In the short term, it's unquestion. But it depends when the money was in the names to begin with. I mean, if you've been riding the microns, you know, a good portion of the way up, and I have a feeling many people have been because, you know, the stocks moved up so fast, and people are probably little hesitant to get into it at the last stages of the most recent run-up, if you're taking some profits in those names and then thinking you'll

redeploy it into other areas of the market, then that would be the good, in quotes, scenario. Which, by the way, if you look at software, if you look at the earnings season, the season software actually delivered something like 19% earnings growth, and maybe that is the redeployment story that's starting to play out. Well, you could say maybe we've seen that in some of the cyber names, for example. Seema's been tracking CrowdStrike today, which had a huge run-up. into the earnings report, which probably explains the move today on the backside of the report, maybe more than anything else.

Yeah, definitely, Scott. For CrowdStrike, the scale of the beat just wasn't as big as investors were hoping, specifically that net new annual recurring revenue metric for growth, beat estimates by 2%. Crowdstrike in the four of the past five quarters has delivered a 10% beat. And while the threat of cyber hacks is only increasing with AI, Bank of America knows that inference costs that's running AI models are consuming a lot of the dollars that's being allocated to IT, spend both CrowdStrike and Paula Alta Networks over the last two days did point to a robust pipeline, a surge in deal activity, but it just didn't show up materially

in these earnings reports. The expectation, though, Scott, is that it does show up in the coming quarters. Yeah. It's a good look as well. The points you make are well made, beaten down, like beyond, like wondering if these stocks are ever going to get up off the canvas, right? If this is a fight. They got off. The question is whether, you know, it doesn't take much to put them right back down, not necessarily a big, you know, hook, but a little jab and you go down again, and we're wondering what happens with these stocks. I guess some fighting words today. But look, I do think there's some longevity, potentially to the software trade. First of all, we see that in the loan market. After the plunge in software loan prices,

they've actually recovered from the February lows. And I think it's because of the realizations that software earnings are still there. They might be slower that they were in 2021, but they're still there. software margins are also still there at about 75% gross margins. So that's a lot of capital to redeploy and adapt. And I think that's maybe what people initially underestimate about softwares. It's not like all these companies are going to sit here and do nothing. They are going to go. They're going to invest their embed agentic AI into their operations. And a partners group, that's how we approach software investing. We don't necessarily want to chase the AI startups and the AI natives of those high valuations. But if we can identify an AI re-indexempting,

invention candidate within software or somewhere else, that's an opportunity. If I thought it's more likely than not, Liz, that the conflict in the Middle East is going to run its course within the next six months or so. That'd be by the end of the year. Why wouldn't I start to position myself if I thought that the economy and earnings were going to hold up and the AI story was still going to remain incredibly durable, but I could take advantage of some of these sectors where there's more perceived value, valuations or lower, why wouldn't I start doing it now? You could start doing it now, but I think you'd have to sit through a pretty uncomfortable

period first, if it lasts another six months. The growing belief is that in summer is when a lot of the reserves are going to run out and the pain is really going to be felt. We're going to feel it across all goods in the economy that touch oil. Inflation will spike in those areas and maybe even goods being unavailable by sometime in August. So if that happens and the war is still going on when that occurs, I think there's going to be a lot of pain felt in markets. How about financials? When I was talking with John Waldron yesterday on this program, you know, exactly 24 hours ago, the president and COO of Goldman Sachs. And I mentioned capital markets, those two words, big smile. IPOs come in and obviously they have a huge role in that,

so they have reason to be more smiley than maybe others do. But M&A could be a record year, he said, between the issuance that's coming to market. Is this a moment for that group to start performing better? Because yes, they're good this week. Some have been good this month, like a Goldman, which is going to lead SpaceX. But the stocks haven't performed all that well consistently like some other areas. So that's fair. I would reiterate a point that I made last week, which is, I don't think you can look at the performance of the banks, either larger regionals, relative to the broader market because of the work that tech is doing. So let's X out tech and comm services.

And the S&P, ex those two very important sectors, but X those two sectors. The S&P is up about 1.5% this year. By that measure, the banks up called 5% as a group are having an okay year. Now, to answer your question directly, financing markets is wide open. We talk about this all the time with our portfolio companies,

trying to obtain financing, talking around the street. Easy, right? Debt markets is. As wide open as the equity markets are tight. You have the private credit issues, but those haven't metastasized in any of the way that the doomers have articulated. So generally speaking, you have a pretty comfortable market. Loans are being made, et cetera, et cetera.

And I'm surprised the banks are not up more given that backdrop. Well, the financial space in general is actually down 5% on the year. Now, there's a lot of stuff in there. Yeah. It would be a different story if you were just looking at the big banks themselves. But it's peculiar when you look at the group. down 5%, and you'd say, okay, well, what else is down on the year? Health care?

Well, okay, I mean, that sector hasn't done well. You would expect that. Discretionary is basically flat. You're like, well, okay. I mean, outside of Amazon, has there really been a consistency to that group? But the financials just stick out. Now, maybe it's an issue with rates or other concerns, but the environment feels like it's pretty good.

And that's an understatement, by the way. I think the environment is good for rates. risk appetite. But remember, we came into the year expecting two to three rate cuts, and now here we are expecting one rate hike. So if we split it the same way that Dan did into regional banks, and then you've got basically the big money center banks that are going to benefit from IPOs, M&A activity, all the capital market stuff, regional banks are going to suffer from rates staying high and rising because there's not going to be as much lending activity on the consumer side. We've got mortgages stuck in a certain level. If there's such a big part of the Russell, the Russell is

leading everything. Beating the NASDA. It's beating everything. So the Russell's up almost 19% year to date. They're probably more regional banks within the Russell than any other cohort within that group. Yes, but I think financials as a

whole, to your point, you would have expected, given the environment, that financials would be doing better. I think a few things are going on. I mentioned the rate environment. We've had a cyclical scare because of the war, and I think financials couldn't get out of the way of that. So if they were going to find upside, they lost it during that period.

and now they're trying to find their footing again, but in a less favorable rate environment. So, yes, we've got good capital markets activity coming. The other thing is there's a big question mark about what financial regulations are going to look like. And I think towards the end of last year, maybe early this year. Way better than they had been. I'll tell you that. Perhaps. But it hasn't really been.

It hasn't been a big part of conversation recently. Late last year, early this year, I think we pulled the optimism of that forward in financials. Now we need confirmation that that's actually going to happen. I don't know if that will end up being one of Kevin Warsh's main objectives. I haven't heard about it as much as I was hearing about it a few months ago. Well, maybe what you said a moment ago underscores why the group has had fits and starts, the idea of a cyclical scare. And the money's been going into tech and AI because it's been deemed more durable

and not necessarily part of any cyclical scare. Like if you throw, if you take out a big board and you got, you know, astronomically high numbers of tariffs, then you're going to have more cyclically sensitive areas of the market that are going to suffer. If you have a war, which causes interest rates to go up and oil prices to spike, then more cyclically sensitive areas of the market are the ones that are going to suffer. We need like runway of peace in the cyclical concerns. You know what I'm saying? Sure. I also think it's this important to make a larger point here, which is we've talked for two years now about the lack of breath in the market. We know about the problems in the housing market. We know

about the problems in the auto market. We know that if you X out health care and education jobs, that we've effectively lost jobs over the last couple of months and basically had no job creation for even longer. What is it the nucleus of all of that? And until this point, it's higher interest rates. So it's very difficult to look at the stock market and say, well, the Fed is going to hike rates or the rates are higher than they would otherwise be. And there's been no effect. There's been lots of effects throughout the economy. And that argument underpins why Kevin Warsh, Rick Reeder, Waller, et cetera, et cetera, myself to a much smaller degree than those people have been saying that perhaps we could use some rate reductions because you have a dampener

on the larger economy right now. Well, Ray Reader told me that the other morning at our CEO Council Summit down in D.C. made the case while, why even with concerns about inflation, you still have room to cut rates. Last and real quick. Yeah, last thing. I think the financials has been a rally interrupted because to your point, we haven't had this runway for peace. But I do think that the cyclical state of the economy is actually quite good. And I will agree with the optimism around the capital markets. We see it in our portfolios. We see it in M&A IPO activity. And we're expecting a significant distribution yield this year because of that. The exit uplift is back. So that's causing a lot of sponsors to move. That's causing a lot of corporates to move. So that should benefit financials. Perhaps that's one

that's not interrupted. All right. We'll leave it there. Anastasia, thank you. Danny, thank you. It's your bag. Don't forget it. Liz. Thanks for being here. Dow's just off its high as we do have a new record intraday high for the Dow. 51,636. I mentioned it because the Dow's back above a 930 point gain. We're almost 2% higher. We mentioned healthcare, one of the best groups today. Let's send it to the CBO. Oliver Renick is watching some options action in that space. Hi there. Hey Scott, health care stocks are indeed leading the Dow to fresh highs as Humana, Eli Lilly, and United Health all jump about 5%. UnH is the most popular options trade by volume with over 130,000 contracts,

when 130,000 of them calls after Bank of America upgraded the stock to buy and lifted its price target to $450. Both UNH and Humana are pushing to one-year highs, but it's Eli Lilly out in front for drug makers up another 5% and closing in on a fresh record. Calls out number puts three to one on two and a half times the average volume and eight times more calls bot than puts in Lilly.

And then finally, don't forget Zoetas, also in the S&P Healthcare Group, the vet business battling that pesky screw worm calls out, pace puts 10 to one there on 11 times the average volume, including one trader who spends $700,000 looking for a 5% move by mid-July, Scott. Oliver, thanks as always, Oliver Renick.

We're just getting started. Coming up next, New York Knicks winning game one of the NBA finals. We will discuss the betting side of the business when we're joined by the CEO of Flutter, right here at Post 9 after the break. New York Knicks taking game one of the NBA finals last night. The betting favorites have been on an amazing run, which means sports books, whether in Vegas or online, have been often on the short end of the stick. For more, we're joined by the Flutter CEO, Peter Jackson, our own Contessa Brewer, who covers that space. It's nice to have you, and it's great to have you here. Thank you, Scott. I mean, this is really exciting because the Knicks are on this momentous, historic run.

But I was talking to Draft Kings today, and they said, oh, this is rough for the books. We've seen more bets than we anticipated, more handle, but it's not coming in great for the house. How are things for Fandau right now with the Knicks on this winning run? I was in town last night, and it was absolutely brilliant to see all of the fans. wandering around with their jerseys on. I mean, the energy you could feel in New York off the back of this run the bid on has been terrific. I think from our perspective, you know, there are days when we have better results and days we have worse results.

I mean, the handle thing has been strong. There's a lot of people betting on the next. Look, you know, what we'd like to see is some entertaining, exciting games to come. I mean, look, I'd love a seven-game series. Yeah, but you probably don't want Jalen Brunson scoring 30 points again in the game because that costs in payouts. Fandle, your folks at Fandle told me today that they've seen a 20% active customer and bet count up 20% over last year's game one. So there's a lot of enthusiasm, but you've got Texas

where sports gambling isn't legal and New York where it is. And then prediction platforms offered in Texas, but not in New York. Which is getting the most? From a Fandrel perspective, we are now able to serve our customers wherever they are. So I was in Dallas last week. And you can only be able to serve. open the Fangio sports app and access, you know, the predict product in that state, the same if you're in somewhere like California. Clearly here in New York, you get the full features of the regulated online sports book. You know, we're there wherever our customers go now.

And you're not offering prediction platforms where you have a sports betting license. So you can't access sports on Fandual in the prediction platform, right? So we have one out now. So if our customers are in New York and open. open up their Fang Joost Sports app. They get access to the full features of the regulated online sports book here in New York. If I then travel to Texas note in the same app up,

you get access to the Predicts products in that market. And so if regulated OSB is available in the state, that's what you get. If you go to a state where it's not available, you get Predicts. A couple of things. You say you want the series to go seven games. I mean, the conventional thought is you guys and others

are in a lose-lose position. Contessa mentions all the money going towards the Knicks as the favorites. So if they win, you'll lose. And then the spurs are deemed as such long shots that if they win, you lose too. Because then you have to pay out so much more on the long shot bets. At the end of the day, the outright markets matter. But it's also about the player fandom, right? You know, you were talking about players going on a tear last night.

I think we were worried when we saw Weber, you know, Wemba looked like he could be injured in the third quarter yesterday, but he went on and scored a load of points in the fourth quarter. I think the player fandom is really important. And look, we want to provide exciting content experiences for our casks. And that's what we'll do through the series. And we've got World Cup coming up as well. And with World Cup, I was just reading a Macquarie note today that said, look, Flutter's in a great position for this because you have, as opposed to, you. to some of the other sports books here in the United States, you have global reach. You have fans in Italy and in Germany and in the UK right now. Brazil, Australia. So is this an opportunity for you to really gather some steam

and push ahead and leave the others in the dust? It's worth recognize. The World Cup happens every four years, right? And so it's a bit like the Olympics in terms of the cycle, and this is huge, right? It's a massive occasion. We think the Super Bowl's big here in America. You might have 200 million people watching it.

Last time when they World Cup finals played a kettle, 1.5 billion people watch the final. Five billion people watch the whole competition. So this is massive. You know, football, soccer is a religion in Brazil, right? And so, you know, we're there where the fans are globally, and we're going to bring a brilliant experience to America. I think we need to address the prediction market issue

slash controversy more substantially. And that the head of the CFTC was on CNBC early this week. They believe and they continue to make the case that they are the sole regulator of that business and that sports contracts are going to continue to fall under their purview, not the states. You guys obviously take issue with that part of what they do and how it infringes on what you do and how there are different rules of the road for either side. It seems as though that's here to stay and you can't do anything about it. What's going to happen? We're offering in states like

New York where regulated OSB is around, we're offering a brilliant experience to our customers with the number one player in that market. We offer a fantastic experience and people will see that with the product we have in the World Cup. What these prediction markets allow us to do is we can now go nationally, historically, we're only able to go to half of Americans who lived in states where regulated OSP was available. So we can now go into the other half of America through these events contracts and offer a very similar experience for customers from a sports perspective in those states. We don't mix the two, right? And so in states where regulated OSP is available, that's what we offer our customers. In states where it isn't, we'll make the Trinix products

available. But in terms of the market share, if you will, of the prediction markets themselves, whether it's Polly or Kalshi or whomever, don't they get a much larger percentage of the market share in their prediction markets related to sports than you would in their fledgling businesses that you and some of the others in your space are trying to do to better compete with them? Well, look, there's been very limited cannibalization in states where the regulated OSB or online sports betting market is available. So here like New York, we're seeing very limited cannibalization. I think in other markets, so, you know, you might pick California or Texas,

the predictions regulations are available for us to better offer a sports product to our customers. That's where we are competing with Kauci and other people. You know, the storyline about they're not being cannibalization, you're seeing all kinds of skepticism from investors. I mean, Flutter's share price is down by more than 50% this year. So how do you explain to those skeptical, investors about the turnaround. You've had a change of leadership. You've said that you're going to be more disciplined in the way that you're engaging customers, but there's still this big, just, I don't

know if I buy the storyline that predictions don't matter. Yeah, I mean, if you look at the market to start with, in 25 over 24, the revenues in online sports was up 20, 25%. So this is a market which is still growing strongly. You know, we're still leading in the market. We didn't have. We didn't execute as well as we should have done last year. But actually, we're now getting back onto the front foot. So we've launched our Laughty program, which we're very excited. The early indications looking very good for us. We've dealt with some of the big customer complaints around injuries with our new Becotech product. So we're going to build momentum. And don't forget, we also have our gaming business, right, which is performing incredibly strongly with the market leader there.

So, you know, I think that the market, I don't even fully appreciates how strong the market is and astrologians. Yeah, we should mention and the other sports books have been under pressure as well, so it's not just Flutter, but this is the standout company in this space. I was going to say, too, we should mention that we have a partnership with Kalshi, too, which

is important to always mention any time we do those stories. Peter, thanks. Contessa, of course, thanks to you as well. Still ahead, SpaceX kicking off its roadshow targeting an eye-popping $1.8 trillion dollar valuation. So who better to hear from than the so-called dean of valuation himself. NYU's Oswath-Demotor, and he weighs in on that IPO next.

Welcome back, SpaceX, kicking off its road show today as it starts. It starts to market its IPO to investors. Leslie Picker here with more on how this IPO will differ from listings past. Hi there. How much time do you have? I know, quite unconventional. Traditionally, it's been called a road show because executives hit the road and meet institutional investors face-to-face. To sell the world's largest ever IPO, the company and its advisers,

are supplementing with several big invite-only webcasts. Bank of America is hosting one of these events led by its co-president and SpaceX's president and CFO. They're holding launch parties across the country and streaming into all mayoral offices nationwide. About 5,000 clients are invited, I'm told. J.P. Morgan is doing the same with the fireside encompassing the same SpaceX executives alongside chairman and CEO Jamie Diamond, as well as several other JPMorgan executives. it's not like they're marketing a price range and collecting demand feedback within that as is typical for a road show. They opted instead to sell a fixed price of $135 per share, kind of a take it or leave it style, although they may still change it before the official pricing next week.

And that implies a $1.8 trillion valuation or roughly 95 times last year's sales. In the Roadshow video posted online earlier today, SpaceX gave some future projections indicating, quote, significantly higher revenue growth and much wider margin. stop. It's going to be intense interests, and we'll see late next week. Can't wait. It's to be a big day for sure. Leslie, thank you. That's Leslie Picker. A big question, maybe the biggest question is whether the expected $1.8 trillion valuation is justified. For more on that, we welcome in NYU Stern School, Professor of Finance, Oswathamot, and the so-called Dean of valuation. It's nice to have you back. I mean, if you can't answer the question, who can?

Is the value legit? What do you think? I mean, I think the question is good. ask is the pricing of $1.8 trillion justified. And the answer is absolutely because as a private company, it was already priced at $1.2 trillion a few months ago, you could have called this $1.8 trillion then. From evaluation perspective, though, you've got to ask questions about the businesses. And there are two great businesses, SpaceX assets, space launch business and the connectivity business. Great in terms of unity economics and in terms of their competitive advantages. But the wild card here is the AI business. I mean, it is a business with the most potential, but the worst unit economics,

the most competition, the most capital expenditure. So in many ways, I think an investment in space is just a loaded bet on AI and Elon Musk. And if you are okay with that, then go with the $1.8 trillion. If you're not, then you're in trouble. I thought you were going to say the real wild card is what value do you place on Musk himself, right?

He has to factor in somewhere, I would think, because he's so unique. his presence is so vital, he has to factor into whatever number you want to ascribe to that into the overall valuation somehow, some way. There's a good side and a bad side having Elon Musk as part of your story. I mean, when SpaceX was created as a company in 2001, the response people had is there's no way. You cannot do this. All the expertise is with governments or with Boeing and Northrop Grumman. And Elon Musk said, well, I'm going to show you. And, 25 years later, he's shown them. So from that perspective, Elon Musk can never be discounted in

terms of delivering on things he can do. But along the way, you have huge distractions. And that's the nature of any Musk-oriented company is get ready for a roller coaster ride. You're going to have good stuff and bad stuff coming at your hyper speed. And if you invest in SpaceX, it's not fair complaining about that. It comes as a package. But what do you do if, for example, you specifically, if you're trying to put all of this into some kind of model and come up with something, that the tam that they are putting forth is so astronomical. I'm not saying it's unreachable, but it's astronomical, pardon the pun, obviously. And then the revenue projections that we're seeing some of the Wall Street houses start to model out as well are so astronomical from what they are now. you may not have a reality for from here to, pardon the point again, from here to eternity,

I don't know, what do you do with that? The total market thing has become a game for Silicon Valley. I mean, remember with Uber, they said the total addressable market for Uber is $5.2 trillion. That's a dream. It's a fantasy. The $28 trillion that you see as a total addressable market for SpaceX is absolute fantasy. But remember, you don't need a total addressable market of $28 trillion. it just to a trillion valuation.

If the total addressable market is $4 or $5 trillion, which is reachable, especially if we think about AI's capacity to replace people, but I think any story here about what the total addressable market is going to be is going to be very much a function of how you see AI playing on. Is it going to be a tool that companies are going to use, in which case the market is much smaller, or is it actually going to replace people,

in which case you're getting the bigger numbers? but I think the $28 trillion is for sure. I mean, I don't think even the people who put that down on paper actually believe that that's a total addressable market. We'll leave it there. Professor, appreciate you. We'll talk to you soon. Thank you.

Thank you. At NYU, up next. We're heading for yet another record close on the Dow. We have an intraday high already. We will see how everything ends up in about 15 minutes or so. The market zone is next. All right, coming up next setups on Lulu and DocuSign. The number is coming out, top of the hour.

Market Zone is next. Are we now in the closing bell market zone, Mike Santoli, Ed Clissold from Ned Davis Research. They're here to break down these crucial moments and record-setting ones of this trading day. Plus two earnings reports are watching for an OT. Brandon Gomez on Lulu Lemon, Simamodi, on Docu-Sign, Michael Santoli, this broad and record-setting market, the Dow is going to get a record close. Yeah, well, I mean, you kind of had every excuse to maybe back off in a broader way today. Really isolated pullback and just the most overheated.

That means, I guess, a partial answer to that question. What happens if the most overheated group in the market cracks a little bit? Well, what happened today was buyers just went elsewhere. And in fact, even within tech. So as I mentioned to you before, I think there's a benefit in this market that Mag 7 has been a deep underperformer year to date. All of a sudden, they seem like catch-up candidates and defensive properties. So up a full percent today from Mag 7, including Nvidia. And I guess you forestall the broader reset for at least one more day.

All right, Michael, we'll see at top of the hour. Look forward to overtime. Got some key earnings reports. Brandon, tell me about one of them. Lulu. Hey, Scott. Yeah, investors bracing for a tough quarter. Wall Street expects earnings to fall roughly 35% from a year ago

as the athletezer giant grapples with slowing U.S. demand, product concerns and pressure on margins. Investors watching for any signs that international growth, especially China, can offset weakness at home. And weather management can reassure the street ahead of former Nike executive Heidi O'Neill taking over the reins at in September. And all of this, of course, comes on the heels of Lulu Settlement to appoint two board nominees by founder Chip Wilson. You see shares down about a percent and a half right now. All right. Good stuff. We'll see an OT. Look forward to that earnings support. Brandon Gomez, thank you very much. Seymom Modi on DocuSign. Tell us what matters most. Okay. Well, Scott, in recent weeks, DocuSign has launched a number of AI agents that can automate

the review and approval of contracts and can be integrated with the likes of Salesforce and Microsoft's co-pilot. The stock is still down about 25 percent this year, despite the big run-up we've seen in broader software. So investors will want another gut check from management tonight on competition from the big AI labs and how it's evolving its pricing strategy away from a seat-based model. That's been really topical this earning season. You'll see shares down about 2% ahead of its print.

I can't wait. We'll see you then. Thank you. Sima Modi. All right, Ed. Dow record close. Are we going to be saying that more and more and more? And we're going to push the NASDAQ record close

and the S&P record close. at least in the back burner for a moment or two. Well, I think that would be the bullish outcome. If we get some rotation, so what we saw coming off those March 30th lows, was most stocks went up, except where we got the energy complex going to run up in March. Then last month, it really became a narrower market.

I think the hallmark of the bull market for the last few years is that once things got too narrow, rather than the market just fall apart, you got a broadening. And so that's what I think we can look for. Now, what I'd say, though, is at some point between now and the end of September, I wouldn't be surprised if we did get somewhat of a broader pullback.

We're going to need some weakness in the market to get a resolution in the straight-informed news. We got elections coming up. These things all could work together to get a little bit more of a pullback than we have seen. But the broadening today, I'd say this is a pretty good sign. I mean, the other hallmark, now that we're looking at these charts, and I think it depicts it quite vividly. Let's throw up again, like, you know, an S&P year-to-date,

you want to back it up, NASDAQ, whatever, even further than that, V-shaped recoveries. I mean, any, any pullback has been bought, and you'd suggest that the next one would be as well, wouldn't you? It would. It's a function of supply and demand. You know, money keeps coming into the market. So that would be the,

the expectation. Now, what we saw coming off of the March lows, I call that a momentum thrust. I mean, look, the rally last two months has been spectacular, up 16%. The only time you've seen that is often major, major lows, like in 75, 82, 2020. Where we haven't seen as broad of a rally as you've seen the last 15 years. So again, we'd like to see it wrong. Brom out. Yeah, but I mean, you still think the tech trade is pretty durable. I mean, there's no matter what happened, whatever today suggests, or even if tomorrow on the next day are repeat performances of what we're seeing now, I don't see anybody thinking that the tech trade isn't durable.

Yeah, so short term really overbought. In the last two months, this is the most overbought the S&P tech sector is versus the rest of the market since 2002. But in the runoff in the late 90s, you got separate. several of these moves, it pulled back, and then they went higher. As long as the earnings growth is coming from the tech sector, and over half of the earnings growth for the S&P this year is expected to come from that sector. And it looks like just spending plans that go well into 2027. As long as that's the case, still a bull market, we would expect the tech sector to, you know,

pullbacks, not mistaken, you know, tech sector would be the leader. Yeah, I think most people are on the same side there. Ed, thank you. I'm going to let you. I'm going to let you. you go at Clistold as we march closer to the end of the trading session here and what is going to be another record setter and really the only sector taking any bit of a breather today has been technology and really only within some of the semiconductor names, some of the cyber names, for example, but many of the mega caps have been up for the better part of the day. If that's a nice buying, even if semis are down, Nvidia has been up. And the Dow has reached heights. it's never been at before. It's going to close at a new record high. You'll see the expense of

technology reflected in the NASDAQ today, but so many other sectors, financials are doing great today, and we've been following that close to the capital markets are wide open. We're going to be reminded a week from tomorrow when SpaceX shows out. That was a ringer, and I'll see you on the other side, into overtime, and those earnings with Mike and now.