Closing Bell - Closing Bell: Navigating Apple’s WWDC 2025 6/9/25

Episode Date: June 9, 2025

Can WWDC ignite Apple’s stock and change the narrative around its AI strategy? We discuss with our all-star panel of Steve Kovach, star analyst Dan Ives, tech expert Alex Kantrowitz and shareholders Jason Snipe and Malcolm Ethridge. Plus, Trivariate’s Adam Parker tells us why he is getting defensive right now. And, Tesla got hit with two downgrades as it gears up for its highly anticipated robotaxi event. We discuss what is at stake. 

The stock market still open for business and is green across the board here. We are in Apple Park today. WWDC 25 just ended about 45 minutes ago, the company's big event where some were hoping for major announcements regarding artificial intelligence, more on Apple intelligence and some of the other features that were announced here. I've got Steve Kovach, our reporter, who's been on site all day. Wedbush analyst Dan I, is here with me as well as we take into account everything that happened today

and we discuss what it means for the stock, which has dramatically underperformed some of its mag seven mates year to date. I think you could say, if you take a look at some of the performance, their Apple shares have been down about 18 or 19% year to date, while many of the other stocks have done quite well.

As this event, Steve, was unfolding, you talked about very minor AI features. That's how you described it. So what do you think the great takeaway is from this event here today? Yeah, going in, I mean, the bar was on the floor, right, Scott? They just had to not trip over it. No one really expected a ton of things.

The vibe was quite muted. Kiff Leswing, our colleague from CNBC.com, he was actually in the keynote and with the crowd, and he said he's never been to an Apple event this muted. Usually you hear a lot more cheers and things like that going on. Didn't get a lot of that this time. I think there were some cheers for the karaoke app, I guess,

but when it comes to artificial intelligence and when it comes to the AI stuff that our audience really wants to know what Apple's next step in that is, they got some minor things. Live translation, pretty cool. Nothing we haven't seen from Meta or Google or OpenAI. There's this workout buddy

that can kind of intelligently coach you as you're doing your workouts. Okay. The real question is, do you think any of that stuff is gonna sell more iPhones? Are people who are using 14 or earlier iPhone that need to upgrade to get these Apple intelligence features that are announced today,

not a lot compelling there. They did mention Siri at the very top and how they missed on that and how they need a little bit more time to get that going. That's the one everyone's waiting for and they did tease, there'll be more to share, perhaps later this year on that and how they need a little bit more time to get that going. That's the one everyone's waiting for. And they did tease, there'll be more to share, perhaps later this year on that. But until we get more details on that, I mean, this was really muted. And if you're hoping for some surprise AI announcement, you did not get that.

And now we just kind of spin it forward and wait till September for the new iPhones. Maybe they can show us something cool and innovative there on the hardware side that'll get people excited. But right now, you're not seeing a ton of excitement with this. You, Dan Ives, are, I think, by far the most bullish analyst on Wall Street as it relates to Apple. You graded this today a B. Why so? I mean, look, last year, they were in a left lane of Ferrari going 95 miles an hour with the updates.

AI, everything they're doing on Apple intelligence. This time it was 45 miles an hour in that right lane. I mean, I'd say it's B because they played it very safe to the vest. If you really look at how they navigated, not really announcing any sort of major announcements, some in terms of from an AI perspective. Scott, my view is, I think, look, they got six to nine months to figure this out. They could be forced into M&A

for coming in historically as not done acquisitions, but I do believe investors, they get it that they gotta be safe here, but they need, as a big tech player, this is their time. When it comes to that. I think what's clear too though is that Apple doesn't necessarily care what the analyst community thinks about it.

It doesn't care what the investor community necessarily thinks about it. It's on its own timeline and it's going to stick to its own timeframe over anybody else's and that was underscored if nothing else today. The one thing I'd just say is that they might not care investors, they care what developers think about it. And I think the reality is that developers, whether it's OpenAI, whether it's Microsoft, whether it's Google, you're competing. It's a game of thrones battle for developers.

So I think that is something where clocks tick in, in terms of from a developer perspective, because they control the consumer AI ecosystem. No one doubts that. But you got to give developers the actual framework when it comes to AI. I think that's the biggest thing they got. Exactly, and to piggyback on that,

there was not a lot of developer-y stuff in here to get them excited. There were some things, yes, but this idea that they can tap into the Apple LLM instead of using a different LLM, the details were a little scarce. Now this event goes on all week, Scott, so there'll be classes and sessions

that developers can get their hands on it, but I did not see anything in that keynote where they really made the case saying, use our AI tools over the other guys. They did not make a compelling argument why theirs is better, why theirs is the better version that they should be developing on. Maybe they share that later this week

with the developers in those class sessions, but they didn't show it today. Whereas last year was a New Year's Eve, Times Square, fireworks everywhere. This time, it was kind of a quiet clap. You think because Apple, if nothing else learned its lesson, didn't want to be too splashy, didn't want to be too flashy, didn't want to over promise and then not deliver

because it's seen what's happened over the course of the past 12 months? Yeah, I don't want to understand, but I mean, it's a trauma from what happened a year ago to where we are today in terms of what they basically had to pull back, in terms of a lot of the Apple intelligence, you know, in terms of those initiatives. So I do think they need to play very safe. You cannot mess this up again. But then it comes down to like for them, like you have the install base.

We are in a fourth industrial revolution. Apple now from a consumer perspective, we can't be sitting here six, nine months from now, same thing. I mean, they're gonna have to come out with meat on the bone for developers and consumers. How do you call it a trauma, what's happened over the last 12 months

when neither your rating or your target on the stock, correct me if I'm wrong, have changed at all. So how is it a trauma? It's more a trauma for Cupertino. Well, you represent what they're either delivering or not. And for me to that point, I view it as when I look at services and I look at the install base and I look at what I ultimately believe is going to be the thesis playing out in the

stock, it's not about six to nine months thesis. It's about one, two, three year. And that's been, as someone who's been bullish on Apple for decades, that's sort of my thesis. But for Apple, relative to a year ago, for a company that's been gold standard in terms of everything that they announced, for them to actually have to pull back, that is unprecedented. I mean, that would be like me there wearing a black suit and jacket, but that's why, but we don't, we remain bullish because it's our view.

They will turn this around and Cook's gonna lead that. You're of the idea that eventually this great upgrade cycle is gonna happen because whether it's Munster or Moffitt or Martin, and I'm speaking of names within the analyst community who have all talked about the fact that not enough has happened to excite the public or require is maybe a better word,

require you to upgrade your phone, to take advantage of some of these features that the company continues to roll out at events like this. And look, that's why the super cycle, we thought the super cycle that we thought was gonna happen, didn't happen. Because the reality is that you have 300 million that haven't upgraded their phone in four years.

They're not moving from Apple to Samsung or anywhere else. But what's the catalyst for the upgrades? And it all comes down to Apple intelligence is going to be the catalyst. And that's why you need to take a page out of the playbook from Redmond, from Google, and so on, in terms of Oracle and others, Apple needs to, I think, go down that path. Well, let's put AI aside for a second here, because it's clear based on what we got today,

we're not gonna get some kind of breakthrough thing like we got last year. So, what about Apple's bread and butter? Hardware. We're gonna get a hardware event this fall. We're gonna get a new iPhone event this fall. What has driven super cycles in the past? 2014, iPhone 6, right?

They just put big screens on that thing and it sold like bananas. 2020, yes, we're in the middle of the pandemic, but another big redesign. 2017, the iPhone 10, the anniversary edition with that new kind of screen and the face ID and all that kind of stuff. People get excited by cool new gadgets.

And we haven't seen that. The phone looks the same as it has for the last four to five years. So there's this rumor of that super thin phone that people keep talking about, the so-called iPhone Air. Is that something exciting enough to get people juiced? If the AI thing isn't gonna happen, what can they use all these other AI tools on?

I just go back to the fact that you have the most powerful installed base in the history of consumer products. And that as you continue to innovate, and even if it's an incremental innovation on the design of a phone, the form factor, and you have a belief that they'll eventually deliver as it relates to the AI experience

that you're gonna generate it, it just might have taken over the course of years, not many months or a year. Yeah, and they told us last year, it's gonna be less than a year. They said this is gonna happen. That's the problem. So they really did have that credibility problem

going into this event, and that's kind of why we're talking in hushed tones here, because it was so muted. And you could because it really, it was so muted. And it was, and you could feel it here in Cook, but I, but I think that was a big difference from what we saw a year ago. But the thesis remains, it's about the install base. Cook will navigate the storm. Let's talk to some shareholders. Odyssey Capital's Jason Snipe and Capital Area Planning Group's Malcolm Etheridge join me now. Guys you've heard what our experts have had to say

presumably you saw some of this today you certainly saw what the stock price did relative to what was announced here Malcolm your thoughts. Yes Scott I'm wondering as I listen to Steve talk about the muted- environment within the key note

and I listen to Dan Ives go from a- a triple plus on Apple down to a B rating. I'm wondering if taken together with the notes released from the event today, if we haven't maybe reach peak pessimism with respect to Apple and maybe it is time to start adding a few shares here as an existing shareholder who considers this a forever position because we're talking about being more than 20% off the 52 week high of 260ish and we're talking about a company that all the bad related to tariffs, the slowdown in sales related to iPhone, the delays with

Apple intelligence, we know all of that and the share price has held up pretty firmly in this range and so I'm wondering if maybe we shouldn't consider this to be where the floor is, knowing that the moment we get a splashy announcement from Apple related to a refresh of the handset itself as they were just talking about, or maybe something related to Apple Intelligence, those shares are going to go parabolic. And so maybe this is a good place to be getting ahead of that. That's interesting.

Jason Snipes, do you share the same view? I think that is a very solid view. I mean, it's almost so bad, it's good, right? There's a lot of headwinds out there in the stock. I mean, the stock is firmly below the 200 day, you know, 225 is trading around 200, it's down 20% year to date. Obviously what's going on with China, the tariff discussion,

which I think initially obviously pulled down the stock dramatically, but it has bumped a lot, almost 17% since April 9th, since the softening of the redic on tariffs. So for me, as I look forward, I think what's interesting here as it relates to AI and the arms raise, I don't think the cadence or rhythm that Apple will shift in terms of how they introduce products to the marketplace,

obviously this WWDC event, but the pressure continues to build. And I don't know if possibly that might change the strategy going forward, but to Malcolm's point, I think if there's any positive or directionally changing events coming in the fall, I think that could sizably move the stock. Dan, I mean, that's where we are now.

It's so bad, it's good. Look, I think what Malcolm and Snipes said, I mean, the New York City cab driver is bearish and apple. And it comes down to, given my view of the install base, anything positive comes from an AI perspective, any sort of incremental change in iPhone 17, an acquisition. I mean, they have a lot of levers they could pull. You think that's legit that they would make an acquisition the likes of which they've never made? Look, I believe for...

The biggest one still beats. Still beats. Three billion. But three billion. I believe they could be forced in when it comes to M&A because AI, they might be forced into an acquisition. And toss out some names there, what does that look like? Perplexity is the one everyone says, right?

Perplexity is the one, and me and Alex have talked about this, if you look at perplexity and Apple together, that's a marriage. To me, that's a no-brainer. And if you do perplexity, how different is this event if you do... Oh my God, fireworks are going off. Fireworks are going off everywhere. Yeah, it would be a totally, even if they announce, not even acquisition, even if they just announced

integration like they have with Chatchip ET, that's what I was teasing this entire time coming into. If they announce something like that, that'll get people excited. Yes, it's not their technology, but it's good technology and it fills in the holes that Apple has dug itself and they could really leverage that and get people excited. It's a great product. Gemini, search, the new AI search that they announced a couple weeks ago at their developers

event, I know we're going to talk about that with Alex, that's a good move forward and Apple doesn't have an answer to that yet. Time's ticking for them. Time's ticking and they're not going to build it themselves. No. All right. Dan Ives, I appreciate you, man, on the front side and the back end of WWDC 25. We'll see you back east.

It's Dan Ives, the Wedbush Analyst here on site helping us both preview what was potentially going to happen today and then wrap it all up. I want to talk to you about more the competitive side of the Ledger 2 with everybody else that's doing a lot. A lot of big players doing a lot of big things. Apple knows that. They don't want to be left out. How do you think about the competitive landscape getting more vicious and larger? I haven't looked at MetaShares today. Boy, that was a great event for Meta. The live translation thing, Mark Zuckerberg got on stage and gave a great demo of those Meta glasses doing live translation over voice in real time.

Apple shows us today, okay, it's gonna be like a kind of subtitle thing when you're doing a FaceTime call. Not exactly the same thing, but close. Maybe they integrate that in AirPods or something. There's a there there. But Meta's doing some amazing, they have the scale. We talked about platform scale. Meadow's a billion people using their AI every day. Apple can't say that.

That was a really good Meadow event we just watched. Same with Google. That was a really great Google event we just watched. Everything that was announced at I.O. They're gonna be shipping a lot of those really cool AI things. We saw none of that today from Apple. What about, and Alex Gantrowitz has joined us from Big Technology. He's a CNBC contributor

and you just heard Dan Ives reference him a few moments ago. You want to just give us your broad takeaway first from the event on this campus behind us today? In tech you're in two modes. You're in invention mode or you're in refinement mode or in some cases you're in reinvention mode, which is a subset of convention mode. Apple last year told us it was in reinvention mode. It realized that there's a transformative technology in artificial intelligence and it was going to reinvent its devices and our experiences to catch up with that and to get ahead of it. Today we saw refinement mode, we saw a redesigned iOS, we saw some improvements to apps, all this is very

impressive, but I would ask Apple from last year what it thinks of Apple this year. If reinvention is that important that it made an event based off of it last year, does it still believe in that? And it didn't tell us anything about that today, which to me was like the big concern.

Where was the messaging from Tim Cook saying, hey, listen, we told you last year AI is important. We're working on it. This is something that you're gonna have to have patience for like you spoke about before. Do you need them to really tell you that? I mean, don't you know that they're working as diligently as they can.

They know where the expectations are because they're always high as it relates to this company. The same time they know where the narrative's been. And they know the expectations of the public are here and the narrative has been here because of what they haven't done over the last year or so. They really need to come out and tell you all that today or as I go back to how I described it at the beginning,

they're on their own timeline, no one else's. Yeah, look, you can make the case that last year they over-promised. And so this year they're sort of cleaning that up and they're saying, listen, we're not going to over-promise, we're just going to do an iOS revamp. But again, you have to put that in context with the rest of technology. We haven't necessarily seen everybody flock to Google devices because they have Gemini

or everybody even leave traditional search. But the overall wisdom in Silicon Valley today is that's coming. You looked at ChatGPT, OpenAI today announced there, or I think there was news that they're doing a $10 billion run rate already. That's coming out of basically nothing a year ago. We see hundreds of millions of users of ChatGPT, of Gemini, of Alexa, and ultimately, you are what you do.

So maybe Tim Cook didn't have to say it, but they haven't shown us anything in the past year, really on artificial intelligence. Some nice tweaks today, but I want to see, I think everybody should be looking to see this company, which has acknowledged where the future is, that it's heading in that direction. And we might have to wait one more year again in this AI gap year, if that's what it is for Apple to get there. Malcolm, if the future of this company involves M&A, if they need to go out and make some kind

of acquisition related to AI, how would you view that? Well, I mean, the question that we as shareholders have essentially been asking Apple for the better part of a year is how will you disrupt yourself, right? You already have the wide moat, you already have the large install base, but how are you going to disrupt yourself to get into the AI conversation in a meaningful way as you guys are alluding to? And so maybe the the fact that it's taken them this long to have an answer to that question is indicative of just how hard it is to answer. And so maybe the only solution is to put that 28 billion dollars or so of cash sitting on their balance sheet to

work in an acquisition of some sort, whether it's perplexity or somebody else, just as a way to get there faster than all of the competitors that are building better products that could be something that competes against that moat. And how Malcolm are you thinking about the

competitive landscape you guys you and Jason are perfect people to have to react to what happened today both in the sense of being shareholders but also owning some of the other stocks that some might judge being further along in this race. How should you judge that, Malcolm? Yeah, I think Dan put together a perfect timeline.

Somewhere between six and 12 months is probably the right answer, where Apple has to have some sort of solution in hand. It doesn't necessarily have to be fully baked, but they have to be at least showing signs of where they're headed because of how competitive the landscape is. One, but also how many people in the development community are not convinced that the handset, the physical handset, or any other physical device is really the solution going forward. And maybe within five to 10 years, we're talking about something else that's AI enabled. And so I think that Apple just inserting itself into that conversation in a meaningful way.

Maybe it's as simple as an enhanced Siri that really can deliver on all the promises that were made at last year's WWDC that helps to quiet a lot of those questions. But they definitely are on a ticking clock. And the clock is ticking louder and louder the less they have to show for it. So I think somewhere between that six to 12 month mark really is where it matters for them. Same question to you, Jason, tonight, because you own other of these stocks too.

Yeah, I think this acquisition story is very viable. I mean, I go back to 2010 where Apple bought Siri, a small startup for $200 million way back when. So I think that absolutely could be an accelerant. I think it won't be in the way that Salesforce does it or other firms. But they need to accelerate their story. Again, as the arm race continues to heat up and the pressure builds I think this is a very viable option for them and there are tons of players out there that they could acquire.

Perplexity I mean is the one you've mused about including to us on Friday. I'm so happy that we're talking about the potential of Apple acquiring perplexity even if it's not coming from them it's coming from us. This is coming from you. This is the- Well, it's coming from you. I'm glad. No, it's good. Don't lump butts into it.

Well, maybe I seeded it a little bit with eyes outside, but I do believe that this would be the no-brainer acquisition of Apple's history. They have, first of all, a real liability coming up. There's a judge considering whether they can continue to take those $20 billion a year payments or thereabouts from Google to be the default search in Safari. Now, it's going to be a couple of years down the road before they can continue to take those $20 billion a year payments, or thereabouts from Google, to be the default search in Safari. Now, this could be a couple of years down the road before they can actually figure that out, because there might be a stay on it

as it goes through the appeals process. If those payments go away, you need a search engine. We're moving, we're moving to the moment of AI. You need a couple of years to ramp that up. Perplexity could slot in, especially as one of the things that judges have been talking about is the need to build a viable search competitor to Apple. Now, Perplexity could slot in, especially as one of the things that judges have been talking about is the need to build a viable search competitor to Apple.

Now I say acquisition, and I mean it, because what you'd need is Perplexity's engineers sitting alongside Apple's designers, because Apple loves control. We know that's the number one thing that Apple loves. It loves to control the experience, and it's been hesitant to really allow Siri to blend in with other apps for a long time because you cede control to others.

If perplexity is inside, you can work to make sure you know exactly what you're doing and you know you give up some control when you build with AI but you have a lot more when they're in-house. And then finally, we just know Apple is, they need to have a culture update when it comes to building artificial intelligence. There's just a different way to build AI than to build hardware and operating systems. You have Perplexity, which is a team that knows, that's shown it can execute,

that's shown it can integrate with other players like OpenAI. You bring them in and that might give you the cultural kick you need to really dominate here. You've left us with a lot of things to think about. You both have Alex Kantrowitz. Thanks so much, Steve. Great to be with you once again here at WWDC. Malcolm and Jason, we'll see you back East and I appreciate you being with us very much

as well. We're just getting started here in Apple Park. Up next, the US and China, as you know, holding high stakes trade talks today in London. Travariates Adam Parker standing by with his reaction to that and what he's watching in the market more than anything else. Watching closing bell on CNBC. We're about 20 minutes away from the close here. Stocks in the green, the US holding trade talks with China today in London.

A very big story. Megan Casella is following it for us from the White House and has the very latest. Megan? Hey Scott, just in the last hour or so, I got confirmation from a source familiar that talks had wrapped up for the day between the U.S. and China in London. That was, by my estimation, some seven hours of trade talks. And my source says they are set to resume again tomorrow morning London time. resume again tomorrow morning, London time. This of course comes after Kevin Hassett told CNBC earlier today he was expecting a short meeting and a strong handshake. No evidence of either of those yet, but of course talks are ongoing. And also just in the last few moments, Scott, President Trump was asked if he'd gotten any

update from his negotiating team over there. Take a listen to what he said. I think we're doing very well. They're over there now. I'm only getting good reports a little early, but they'll be calling in soon. In fact, probably when I get back, I'll have my first call from them. We want to open up China. And if we don't open up China, maybe we won't do anything, but we want to open up China. It'll be a great thing for China, a great thing for the rest of the world.

The president then went on to sidestep a question about whether he had authorized his Treasury secretary to ease up on export controls against China in these talks today. He did not directly answer that question, but that refers to a Wall Street Journal report earlier today saying Bessett had been authorized to take steps in that direction. And Scott, that just gets to what the heart of these talks this week is, is the Chinese want to see export controls eased up against things like jet engines, chip software as well. That's the kind of thing that they're looking for while the U.S. meanwhile is looking for rare earth exports to start flowing again. So both critical issues here for both sides. Nothing easy to get down on paper, but they're

looking for that handshake agreement and we know they'll get started again tomorrow morning London time. Scott. All right. Megan, thank you. Megan Casella, North Lawn of the White House for us with an update there. Now let's bring in Adam Parker. He's the founder and CEO of Trivariate Research, also a CNBC contributor. AP, it's good to have you with us.

You heard Megan's report. So we're really still waiting for substance. How are you viewing it? You know, it's funny. today I did a bunch of meetings. Not one person asked me about it yet because I think it's just we don't know anything. Even the president said he hasn't heard anything yet. So I think most people are assuming that some conversations better than nothing that we're making progress.

And so people aren't wanting to sell stocks. I wrote a note this weekend about getting defensive and a couple of people asked me, well, why would you get defensive? So I don't think people are worried about this going wrong right now. Let me be the third let me be the third if only a couple asked you what why get defensive as you as you seem to be you gave us six ideas to get defensive I don't see any ideas to think that the markets you should be playing offense from here thinking that we're gonna not only get a deal with China but we got a lot of

other good stuff coming too. You're gonna love my answer which is I try to do stuff one or two months before it happens not like three days after it happens. You know so you know what I mean so like at the end of the day like I need to tell people who run big piles of money how they should think about defensive ideas because I think you know even if you think we're headed to highs and I think that's a general sense that unless we get a really deteriorated consumer or a big backup in 10-year yields, we're probably

going to just have flows to get us to highs. I think people are still worried about the fact that there was part of a tweet last week that said, hey, we could have caused some earnings and economic damage with the policies that are already in place, and that the big companies can work their way through it, but the rest of them can't. And so to the extent that we do get disappointing economic news or corporatizing in the second half of the year, people want quality defensive names. It doesn't mean you just go buy, in the beginning you know what we say, this doesn't mean you

buy Staples and Pharma and Telcos and our father's defensives or whatever. I think you can find stuff with good momentum that makes more sense. So I think the point is that people are assuming this is going to go well or that the president will announce that it went well. And so there's not going to be any tangible evidence in the near term to sell equities. You like dividend stocks, ones that have consistent dividend growth. Just to give people an idea of where your six defensive ideas lie. Microsoft is on that list, Broadcom, Visa, Lily,

MasterCard among others. Yeah so it doesn't mean that you want to just own like exactly I'm not saying buy you know hunker down in the bunker and buy you know guns and butter and hammers. I think there are businesses that screen you're talking about which one of our six ideas was buy companies that have grown their dividend five straight years, that have 7% top line expectations, 10% bottom line, and the indicated yield is going to grow again. That includes stuff like you said, Broadcom, Microsoft, Lilly, MasterCard Visa. These are kind of staple growth names. I think there's things you can own.

When people hear the word defensive, maybe they think that I mean like I'm getting in a bunker. I am trying to position the barbell, own some good offense, own some good defense, but I do think that as we get closer to highs, back to highs in the market, people are going to kind of question where the next leg of growth comes again. I just think it's telling that people are saying why the heck would you get defensive when this very same people were really negative a few weeks ago. Yeah, I hear you. I'll see you back East. We got to run.

Had a lot of news to deal with today. Adam, thank you. Adam Parker, Trivaria joining us. Up next, OpenAI hitting a major milestone today. Details and what it could mean for the AI arms race coming up. We're live at Apple HQ today. Apple Park in Cupertino, California.

The bell's right back. We're live at Apple HQ today. Apple Park in Cupertino, California. The bell's right back. We're back. We're still monitoring that event at the White House. President Trump, in fact, making some comments just a short time ago about his feud with Elon Musk. The president saying about Musk,

that Musk and Besant did have an argument, as was widely reported to this point, but that he didn't see a lot of physicality there's been some question as to how much that argument between the two men had escalated also said I'd imagine Elon Musk would want to talk to me the president said he would not drop the Starlink service made by Elon Musk's SpaceX company calling it a good service so that story rolls on. We bring you the latest as that event at the White House

on Invest America continues to go as well. Meantime, OpenAI hitting $10 billion in annual recurring revenue today. It's a milestone that Kate Rooney tells us more about now. Hi, Kate. Hi, Scott. Yeah, so that $10 billion in annual recurring revenue, ARR, comes just two and a half years

since OpenAI's chatbot, chatGBT, hit the market. And that is the key driver we're seeing behind it. The sales numbers include that chatGBT consumer business, which now has 500 million weekly active users, and the API plus the enterprise side. It does exclude Microsoft's licensing revenue and then some one-off deals, like the one with SoftBank,

a source separately telling me that last year's revenue was around $5.5 billion. So this year's numbers, if you look at it in terms of valuation, it's about 30 times revenue, which does underline the sky-high expectations from some of the investors out there. Think of SoftBank and Microsoft,

last private valuation was around $300 billion for OpenAI. I'm also told by a source that in the next four years, OpenAI does expect $125 billion in revenue and aims to be cashflow positive. But Scott, in the meantime, this company is not profitable. I've also heard from sources the company saw about $5 billion in losses last year. No comment from OpenAI on those numbers, Scott.

Okay. Kate, thanks. Kate Rooney, still ahead. Tesla's make or break, RoboTaxi moment front and center for investors. We'll tell you what to watch for from that upcoming event. When closing bell comes back, a stock that got a couple of downgrades today, but it's up some four and a half percent. We're now the closing the market zone CNBC senior markets commentator Mike Santoli here to break down the crucial moments of the trading day. Plus big moves today for the cruise lines so far this month Contessa Brewer with that Georgia Bosa on the downgrades to test the shares today there were a couple but Contessa begin with you tell us about these cruise lines.

Okay well so first of all you might be looking at the stocks today and go eh it's kind of flattish but let me give you the backstory here. You've got Royal Caribbean hitting a fresh all-time high this morning. Norwegian saw its eighth straight positive session for the first time in a year. Now add Carnival and Viking into the mix, and they all have between 10% and 20% gains over the last month. And over the last 12 months, Royal Caribbean's up more than 75%. What's driving all this? Well, one, cruises are seen as high value, which is important when

consumer discretionary budgets are under pressure. Two, private islands are a big draw. And these cruises are global. So, you know, international travelers who don't want to come to the United States for vacation can still pick up a cruise in an overseas port. So that leads to bookings, even if it's not here, around the world, Scott. Alright, Contessa, thank you for that. Contessa Brewer, dear Jairbosa, on these two downgrades for Tesla today, those shares were up quite nicely. They are, despite those downgrades. Now, they come from Baird and Argus both pointing to the breakdown in Elon Musk's

relationship with the president as contributing factor. Argus writes Musk is a lightning rod for criticism, which is operational and political at this point. Baird calls it, quote, key man risk. Now both are also citing the fundamentals

shrinking margins. They're cautious on demand. Now those downgrades got they come just ahead of Tesla's and pending robotaxi rollout in Austin, Texas, raising the stakes for Musk to deliver not just in this first month, but he's been very ambitious with his view of how he thinks they can ramp up to.

All right, D, thanks. That's Dierdra Bosa for us. All right, Mike Santoli, about two minutes to go here. You're gonna hear the animation and you going to see it in just a minute. You know, I think it's interesting. Apple shares have rallied off whatever lows they were on the day. You know, you have to believe that a lot of whatever disappointment was in this name is already in it.

Yeah, obviously. That nothing that happened today was going to cause a big move in that stock. But how are you thinking about things from here? Yeah, not a big game changer either way. Obviously the big retreat in Apple down to the $200 level plus or minus probably did kind of wring out a lot of the anticipation of what you might hear. Today in general, I mean I see a market that's content to sit here at a three and a half month high,

but with parts of the leadership looking a little fatigued, the mega caps gave you a lot on the way up, and now it's about rotation. The momentum ETF is down four tenths of a percent today, the small cap Russell 2000 is up six tenths. A lot of the aggressive stuff is still running, it's the core weaves, it's the circle IPO. Tesla shares went up six bucks just on those comments from President Trump that you mentioned a little while ago, which was really not remarkable except for the absence of outright hostility. So you see that there's a little friskiness in this

market as we wait to see what comes out of trade. We priced in some further progress on trade. There's no doubt about it. Bond yields are tame enough today and we go in search of our of our next main catalyst here and see if more broadly fatigue sets in, or if we're close enough to those old highs within two and a half percent or so on the S&P 500, that it's almost academic that we're at least gonna reach out and try to see if you can grab it and hold.

I think that's something maybe over the coming weeks you would look for, not necessarily days, but you gotta be open minded, given how strong this move has been over two months. All right, Mike, good stuff, thank you. That's Mike Santoli. We're gonna go out green today, as you see, it's been a good fight throughout the day too,

but stocks are gonna finish across the board green. In fact, the S&P 500 looks to get 6,000 yet again above that level as well. It doesn't for us. I'll send it into overtime and John Ford