Closing Bell - Closing Bell: Navigating the Tech Sell-Off 6/5/26

Episode Date: June 5, 2026

What does today’s weakness in tech say about the market’s potential next move? We discuss with Hightower’s Stephanie Link, Fundstrat’s Tom Lee and Wharton School Professor Jeremy Siegel. Plus, we break down what to watch from Apple’s upcoming Worldwide Developers Conference with Alex Kantrowitz from Big Technology and Wedbush’s Dan Ives. And, we tell you what’s behind crypto’s ugly week. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, guys, thanks so much. Welcome to closing bell. I'm Scott Wapner, live from Post 9, here at the New York Stock Exchange. This maker breakout begins with what else, the tech selloff and what it might say about the market's potential next move. We'll ask our experts over this final stretch, including the Wharton schools, Jeremy Siegel, Fund Strats, Tom Lee, High Towers, Stephanie Link, all joining me momentarily. There's the scorecard with 60 to go now in regulation. Big selling in chips again has led the NASDAQ. to its worst day since last October, all of the big recent winners, they are down substantially, especially from the chip space.

AMD's down more than 10 percent, microns down nearly 12. Broadcom has been a big loser on the backside of its earnings. Did it start this whole thing? We'll investigate further elsewhere. Well, there's green in the most defensive areas of the market today, like health care and staples and utilities. But let's get right after this market, this late-day slide, especially for meta. That's new news. at least a report that it too is considering now an equity raise to fund its AI ambitions.

Take a look at the stock. It's come off its worst levels. But nonetheless, it is a new story and a negative one, at least for the price action in this market related to tech. Let's bring in High Tower, Stephanie Link. She owns the stock. FundStraughts Tom Lee is with us as well. Both are CNBC contributors. Steph.

It's great to have you here. Thanks. We were walking to the set. And you stopped me and said, I just sold some of my meta. What are they thinking? Right. They're tone deaf. Tell me more.

They're tone deaf. They're already going to spend more than people wanted them to spend at $125 to $135 billion this year. It's up from $74 billion last year. I get why they're doing it. It's okay. But the shareholder base at meta, they don't want them to continue to spend like drunken sailors. And so this is a company, Scott. that has spent $82 billion since 2021 on reality labs with $80 billion in operating losses.

And now they want to spend all of this cash, go through their free cash flow. Operating margins are under pressure. So I just felt like enough. Now, I still own it because I still think they're doing the right thing for the long term. And they are seeing some monetization in terms of time spent. We talked about that in price. They're getting some good pricing on their ads. But this is just enough.

Well, how do you want them to fund what you continue to believe is the good long-term story? I mean, if you're just running down your free cash flow, you need to look at alternative sources of capital, which is what Alphabet announced this week. Right. And now this report suggests that Mehta's looking to do the same. Right. Well, I don't want them to have negative free cash flow. That's the same thing with Amazon. I don't want them to have negative free cash flow, but they do.

Same with Oracle. I have to be consistent. I don't need to be investing in these names while they're in this heavy investment mode because you're not going to get the operating leverage. You know, I talk about that all the time. When you get done with the spend cycle and you have the revenues and then you have the margin expansion, that's when you really do want to buy. Now, the stock is not expensive, but I just think it's probably stuck here for a while. And into this sell-off in tech, I want to be adding to positions in tech. We'll talk about that in a minute. Meta's out with a statement, by, the way, calling this, quote, pure speculation. We've been clear, they say, that huge opportunities lie ahead in AI and will continue focusing on raising capital in the most flexible ways to support that. Raising capital. So they're going to go either to the debt market or the equity market. What other options do they have? Well, they'll go to the private markets, obviously. So, I mean, there's a lot of options for them. And that's fine. But I just don't want to continue to see them spending more and more and more. They're already spending a lot. But I mean, these companies have already kind of made the point that they're willing to put their thumb in the eye of investors

if need be to pursue these ambitions which they think they have no choice but to pursue pursue. 100%. And I will point you to the shareholder letter from Andy Chassee, the CEO of Amazon. I thought he did a very good job explaining exactly why he's spending so much. They aren't going to see the returns this year, but they believe they're going to see massive returns as a result of the spend and that we haven't seen this kind of investment and this kind of technology in our lifetime. So I understand all of that. But I have a choice as to what I can own and where I see earnings estimates going higher. And for bringing it back to meta, I mean, the numbers actually did go higher on the revenue line, but the operating margin numbers are going in the wrong direction. And then people are not

going to spend on, or they're not going to invest in companies where earnings are going down or at least stagnant. Hey, Tom, what do you think of this news? Certainly in light of the alphabet news earlier this week. Is this a good sign or a worrisome one? Scott, I think Meta's move isn't surprising because Google had a lot of success raising $45 billion in a very short underwriting period. And I think it's a reminder that these AI companies are building basically, you know, huge real estate infrastructures that aren't fully funded today. And that's why not only will SpaceX

need to raise more money beyond its IPO and OpenAI and Anthropic and of course, Meta and Google, but I do think they're showing a lot of promise in their investment today because there's been, you know, significant breakthrough.

So I think investors are going to give them grace, but you're right. I think Stephanie's right. This is not a meta's sort of financial profile is changing. It's changing from a free cash harvest. from their prior businesses to one where they're building land that could end up being beachfront property. What's a sell-off about today, Tom? Is it, did Broadcom spook the market?

Did they start this? Is it positioning ahead of SpaceX and the biggest IPO we've ever seen? Is it something else? What do you think? Scott, I think a lot of this, I mean, for instance, summary stocks are down, but they're back to where they were eight days ago. I think the market did have a parabolic lift in the last month. And now I think there's some sobering taking place because expectations are higher. But I also think that SpaceX, $75 billion is a lot to ask the public to fund. So I think it is a big lift in terms of how you're going to fund that purchase. And so I think now when the stocks wobbled a little bit, I think people are raising cash.

I don't think that this is the start of a broader correction yet. But as you know, we do think that later this year, there's going to be something that feels like a bare market. Today is not fun, though. But spoke, Steph, put something out tongue and cheek, obviously, I think on social media a little while ago that said, did the Knicks wreck the Q's? 10,000 bucks just to get in the door at MSG on Monday night. That's very funny. Got to raise capital from somewhere to afford those tickets at the highest part of the rafters over at MSG. But in all seriousness, like Michael Hartnett today, B of A, said the risks of a June swoon have been rising anyway.

And that his, you know, his bull bear indicator numbers continue to rise. The third week of cell signals, Mark Newton, who does technician work for, with Tom, over at Fundstraat says it's time to shift from growth to value. Is that what's happening now? Are these the earliest stages of a violent shift? Well, I think if you believe the economy is stronger than expected, which it is, and today's jobs report posted that, then you don't necessarily want to own long duration assets, which technology is as interest rates rise and interest rates have been rising. Now, I'd say interest rates are rising for the right reason because growth is better than expected. But also with that comes a little bit more inflation. It is definitely a rotation. It is definitely a

rotation. You can see it today. You saw it yesterday. I also think that there's opportunity, though, within tech. We'll get to that later. But what makes me bullish long term is that what I just said about meta spending so much, Google spending so much, and the four big player spending almost $800 billion this year on AI CapEx and it going to $1.6 trillion next year, that is great for the food chain. That is great for this data center makers and the data center companies that puts the stuff inside the data centers, and then also the grid and power. And the backlogs we talked about,

they're so amazing. So maybe we see a pullback. That's totally natural, but I think you want to make your shopping list for sure. I just don't necessarily want to own, in a broad way, the big four that are spending so much. Well, I mean, those big four, you know, firms have been speculating, Tom, and maybe you alluded to it already.

The idea that the source of funds for a special, SpaceX and whatever else is coming down the pike needs to be funded from somewhere. Now, there's a ton of money sitting in money markets, as John Waldron of Goldman Sachs pointed out on this very program, some 48 or so hours ago. A lot of capital all over the world that wants a piece of these IPOs as well. Jeffries today says that the Mag 7 are the most likely source of funds as we look towards these big events. Do you buy that? I do. I mean, one of the things that's happening is, you know, the order book is being built for SpaceX. And as you know, institutions want to get a good allocation. So they're going to put in large orders bigger than what they expect to get because I'm sure we'll have a three times or 10 times oversubscribed IPO. And so funds, I think, do want to raise some cash in case they do get a big allocation. I think that is correct that people are trying to raise some cash. And of course, there's $7 trillion. on the sideline.

So, I mean, there still is a lot of firepower. But I think one of the things we have to keep mind is that, you know, as SpaceX gets held and people own it, and then they start to think about Elon Musk is telling them about the future of data centers in space and power, I think it's actually going to be very good for SpaceX stock and this whole AI trade. So I think in some ways, I think there's a mechanical selling today, and it's not surprising, but I don't think that this is the story.

start of a bigger correction yet. I don't know. I mean, it sounds a little, frankly, contradictory from you only in the sense that you've been predicting a big swoon in the market to begin with. So why are you reticent now to suggest that this might be it initiated by parabolic moves that are reversing in a more violent way? Yeah. Scott, I mean, part of it is when we looked at the largest IPOs in the U.S., the 10 largest since 1935, only AT&T wireless mark the top. And every other big IPO was actually mid-cycle, meaning markets didn't sell off on that. I think the bigger test will be when the lockup expirations happen, which in SpaceX's case are phased over the next, you know, three to six months, depending on how it accelerates.

And then, you know, later in the summer is when the market tests the new Fed and the market has to deal with the shortages that are coming in petroleum products, etc. So I think that the cadence of news is still going to be good enough that, you know, the next couple weeks, Marcus should be fine. Yeah, NASDAQ is now down more than 4%. Almost an 1,100 point decline semis. They are the epicenter of what's taking place within the tech universe today. Christina Parts in Nevelos joins us now. as you watch what's happening here, it says dramatic. You know, you know, they say like, you know, escalator up, elevator down.

So we'll see whether this is, you know, the beginning of something bigger, but it's pretty jarring to see some of the declines anyway on a single day basis. Yeah, the elevator down is, I guess, two straight days of good down, specifically for chips, broadcom, broadcom earning stretch valuations, memory concerns, all just doing the damage. when we speak specifically about the SOX ETF, it closed Wednesday, roughly 75% above its 200-day moving average. That's the most extended the index has been since the early 2000. So we're coming from a high point on that elevator.

Then Broadcom delivered disappointing revenue guidance. The SOC fell roughly 13% yesterday. You can see extending losses almost 8% today. Mizuho is saying they're not seeing, quote, meaningful buyers step into Broadcom just today. Maybe that'll change next week. AMD, TSMC, Intel, all lower supermic. among the worst performing component of the S&P 500 right now. And it's been a rough overnight tape in Asia as well,

dragging down SK.K. Heinex and Samsung memory makers. And that weakness combined with concerns that maybe, maybe, Nvidia may reduce certain memory content in its Verra Rubin chips, the latest iteration, it's weighing on micro. And those are some of the reasons. And we just mentioned Nvidia, not spare to either. Over the past three months, the SOX ETF is up more than 60%. InVIDIA, just up about 12% in that stretch.

So it's the second worst performer in that particular ETF, Scott. Christina, thank you very much. Man, I was just looking at, you know, we're looking at the board. Show S.K. Heinex again. Because as, you know, what Micron has been doing here, S.K. Hynex in Korea has been doing there. That market's going to open on Monday morning in a pretty nasty looking place. mean the memory chip space is really where we've been focused over these last, gosh, feels like now two months of parabolic moves almost, you know, if not every day, every other day.

I'm wondering people look at that and like, where are my buyers at, right? But I've got one of them, not for memory, but chips in general, I've got one next to me, Broadcom, which seems to have started this or at least made people think about something that they wanted to do in this space? Yeah. You bought more today? I did, and I actually trimmed Marvell because it became a huge position, and I'm up 240% in the name, but I still honed.

Another parabolic mover, craziness in the price action, and that is similar to what we've seen elsewhere. Right. And, and, but I would say that Marvell really did deliver and they exceeded expectations on guidance and they could do $10 a share in earnings power by 2029, but the stock has had a heck of a run, so I just took some money out of that, put it into Broadcom, because, I thought Broadcom's quarter was great. And anybody that knows this management team, they have always been conservative. You're going to sell something that by fiscal 27,

they're going to do $100 billion in AI. They just didn't raise that number. That's up 100% year over year. And the whisper number is like 150. Okay, Hocktown is going to wait, especially given supply chain issues. He'll wait. He doesn't have to give higher numbers than 100% growth. And oh, by the way, earnings grew 54%, revenues 47%, semi-total revenues in the quarter, 78%, and AI semi-total revenues was 143% growth, and they guided to 200%. Software, they're guiding to 31%. So they gave you a lot here. This is a great company, and now the stock is only up 13% on the year. The valuation has come in. I'm probably not going to get the bottom, Scott, but I will be buying and taking the meta-money and just continue to buy on debts. Well, what has been, at least, you know, for most of the day, two-thirds of the trading day-to-day, a primarily tech-led sell-off is obviously a little bit wider now when you have a, you know, the Dow's down 740.

So, you know, you're getting to the point where you have a lot of the big names and market cap, the larger ones within the market that are down, you know, quite a bit. You got a lot of the infrastructure plays around the AI story down, too. Let's bring in the Wharton School's Jeremy Siegel, Professor of Finance. It's good to add you to this conversation, Professor. What do you make of what you're watching? Well, you stole my thunder because one of the oldest sayings in Wall Street is up the staircase down the elevator. And that's exactly what happened.

When you would have these super moves like we've seen in the chip stops, the memory stops, the trend followers, the momentum players, they're just on that. They have, you know, stops. Whenever it goes off the trend, they're out because they're just riding that train. And that's what we see today. Don, that's rarely the top. It could be the top, but usually it's a very short-term top, goes down, and then tries to build up. And that's the point where you kind of look. Can it break the previous high? If it doesn't, then that could be a start of a more meet your downturn. But this is a very, very common reaction to what, as Tom said, we all saw the parable move. Yeah. I mean, some would look at the mere concentration around the, let's just

say, the 10 most influential AI-related names, Professor, how much they've accounted for the S&P 500 gains. And you're in the 40% range. As, you know, Jeffrey Gunlock was sending me an early earlier and I spoke about on half time, when you start to get into the 40% concentration ballpark, you start retracing certain other periods of time that have had bubble-like activity. Not all of them have necessarily ended badly, and there's not yet a evidence that this one will. A couple days doesn't make anything other than a pullback, right? But I'm wondering what you make of that. The fact that we were just simply ripe for something like this. Well, I remember bubble proportions of the S&P 500 back in 1980 in energy when we know what

Apple and OPEC restricted the price and the price of oil sword, you know, that disappeared quickly. And then, of course, the other one where technology went way up was, of course, the internet bubble of 1999, 2000. Now again, we all emphasize that this is a very different situation. And this AI revolution and the Mag 7 is a situation we just never have seen before. On the cusp of potential technological changes in productivity growth, that, you know, we may have to go back to the early stages of the Industrial Revolution to say. So, you know, when you go back two or three times and say, oh, yeah, when something reaches 20, 25, 30 percent, that's a time to sell. There's many ways that you can say, well, we're in a different sort of period now.

So I'm not going to say that this is over. I would like to say the following. You know, the argument is, oh, P.E's haven't gone up on these chips because they double their earnings. They can double their price. Remember, you can only double your price of your earnings stay up, doubled forever. If this is a three or four year burst and then they go back down, you way overplayed your hands here in these chip stocks. So that's what's happening.

Be careful about temporary surges in profitability, which chips historically have cyclicality and saying, oh, hey, they're not any more expensive than they would. were six or eight months ago. Do you look at in any way announcements like we got from Alphabet this week about the equity offering and now a new report about the potential of meta doing the same? Can you retrace that sort of behavior back to anything in prior cycles when you go from, let's say, you know, you're spending a large portion of your free cash flow, it morphs into something else? Is that a worrisome signal or just the cost literally of doing business in what you yourself suggest is this technological revolution? Yeah, well, no, there is actually

precedent here, Scott. And I wrote a chapter in my book, Future for Investors, called Capital Pace. And if you take a look at those firms that have spent the most on capital expansion, their returns risk adjusted have been the worst. So, you know, it's not usually a good sign that you've got to spend a lot on capital. Not always bad. I mean, we know about data centers. We know about that particular demand. But, yeah, the capital spending factor in all historical, you know, U.S. data research on Pharma,

rents and a research of security price has shown that that has a negative factor in terms of future returns. So I understand Stephanie saying, hey, I'm stepping back here. And yes, there is history that that's not a good on. Professor, stay with me. We're obviously looking ahead to the big event one week from today being SpaceX and the public offering at the NASDAQ. Retail is going to get a big slice of that. It's going to come at an interesting time, especially if you have a pullback of some degree even more so into that, brokerages that offer shares are doing so with some significant restrictions related to retail.

Sima Modi joins us now with that story. And it's a big story that people need to be aware of. I think so, Scott. SpaceX's unprecedented 30% allocation to retail investors is expected to open the door to many first-time traders who have not participated in IPOs in the past. And that's why brokerages are reinforcing their anti-flipping policy. for Fidelity, Charles Schwab.

There are some consequences if you attempt to sell in the first 15 trading days that could result in being banned from participating in future IPOs at SoFi and Robin Hood. They're sticking to 30 days. The question is, does this policy actually help instill more stability in SpaceX shares after it goes public? Or does it put some smaller everyday investors at a disadvantage? It's worth noting Fidelity is also lowering the minimum amount of money required in an account to participate in this deal from $100,000 to just $2,000, Scott. All right, Seema, thank you. I mean, there's news on multiple fronts as we look towards this big event. Demand's going to be a key question around that IPO.

But a move by the S&P not to include SpaceX, at least on a fast track, into its index, could have far-reaching implications. Leslie Picker has just sat down at Post 9 for that part of the story. It says it's like a lot of moving parts as we lead up to this event. Yeah, there are a lot of puts and takes here that everybody's trying to kind of wrap their head around. The price is the price. But what is going to do. make the stock go up and what's going to make the stock go down. Everyone's trying to figure this out. Now, that move was a surprise after the NASDAQ and Futsi opted to change the respective rules ahead of the SpaceX IPO and other mega listings that are in the pipeline. But in a statement last night, SMP Global said that based on the committee's review of the markets and after

consideration of responses received from a wide range of market participants, no changes will be made to the eligibility criteria for the S&P 500, among other indexes of theirs. SMP, S&P said that companies with large market caps will need to wait a year after going public to be considered for inclusion. And if by, say, June of 2027, SpaceX is not sustainably profitable, it still won't be granted inclusion. Now, SpaceX will have a relatively small waiting in the NASDAQ 100 at first, but as it increases the float once its slew of lockups expire, it will garner more influence and more for spires, Scott, theoretically. You, Steph, had said on, I think it was during half,

halftime last week when we were going around talking about engaging demand from just our little, you know, unofficial survey, if you will. You said you would buy this in a second. You still feel that way? 100%. There's a lot of ways you can win with this name. It's space, AI, connectivity. If they get one right, that's great.

If they get two right or three right, that's amazing. You have the smartest man in the world running this thing with a great bench, a really smart bench. And that's very important. So it's going to be volatile. And I would just really emphasize, I'm talking like a 2% position, buy it, set it, forget it, don't even pay attention to it. And I think you're going to enjoy the ride, pun intended. I mean, Leslie's been doing reporting right on, on this IPO in particular, maybe the most difficult one of all time to value. Yes. Figure out, like, what is real. And Tam is massive, they say. The revenue projections that you've started to get out of some of the biggest shops on the street are massive.

The growth rates are unbelievable. Can they be reached? Who knows? Yeah. How does that factor into this when people like Steph are trying to make these decisions? No, I think you're right. And using traditional valuation methods, I think you can kind of throw that out the window for this. I think a lot of people have thrown it out the window looking at just the numbers that you see in the prospectus.

I mean, last night when Elon Musk was speaking at that JP Morgan event, he was talking about. He was talking about heating Mars so that it becomes a place that you have water and can travel to and have hotels on Mars. I mean, these are things that you can't even conceive of from a balance sheet standpoint, from an income statement standpoint. This is so far out, though, Scott. This is 10, 20 years out. And I also talk about building data centers up in space. Talk to Dave Cody, advertive. That is not going to happen in the short term at all.

Oh, Bezos said the same thing. Yeah. He thinks it's going to happen. Yeah. But he's like, say three years if you really mean six. Yeah. Because it's going to take a while. You have word of another coming IPO, right? I think people will find interesting in and of itself, right?

Yeah. So I just heard from a few sources familiar with the matter that a company called Bending Spoons, which owns a bunch of digital brands you have heard of like AOL and Vimeo, Eventbrite, Evernote. That's planning to flip its IPO prospectus as soon as Monday morning. This is an Italian company and it's poised to raise an IPO in the U.S. in the billions and is aiming for a $20 billion valuation, I'm told. Now, they're working with Goldman Sachs and J.P. Morgan on it. The company is interesting. They've done about 50 acquisitions using debt, but it's not a private equity firm per se. They'll never sell these companies as they tend to strip these businesses down to the studs, then rebuild them from the ground up, and then they integrate everything together on the back end. The company did decline to comment on its IPO. plans, but the IPO parade marches on. Theoretically, the parade marches on. I just to some degree wonder what this kind of market activity, whether it's going

to be the equivalent of throwing the spikes across the road as the parade does try and march on. Because if market conditions remain unsettled, you have to really keep your eye on some of these things to see what the calendar really looks like. Les, thank you so much. It's Leslie Picker. I want to get to McKenzie Segalo. Speaking of a space, You just have some new news. What do you have, Mac? So, Scott, in a new filing with the SEC, SpaceX says that Google will pay the musk-led company $920 million per month from October

2026 through June 2029 for compute capacity. That includes access to 110,000 Nvidia GPUs. This follows a similar deal announced last month, where Anthropic will get access to more than 300 megawatts of compute capacity from SpaceX. One caveat I am seeing in this filing, both those compute deals do have out clauses once we hit January 1st, 2027, so they may not follow through to 2029. Alpha shares, they've been trading down all day, but they took a leg lower on this compute deal now down around 2%. All right. There's just a lot of selling all the way around.

Mack, thank you, McKenzie Segalis. Professor, I'll come back to you. You've seen a lot of IPOs, obviously. You've never seen one this big. How are you thinking about it? what the impact could be as all of that demand, excuse me, all of that supply comes on the market. Yeah, Scott, and you know, I don't think it's a particularly good idea for these brokerage firms to restrict these investors that get these allocations two weeks into selling because that's just going to make the

supply that much less when that trade opens. You know, so, you know, instead of 135, if they restrict people from supplying that at that open, then it might open at $235 or $300, and that's going to be a disappointment to all those people that want to participate into that. I mean, my feeling is try to get as many people that want to supply this unbelievable demand as you can to balance the market.

Tom, your final thought. And by the way, I should ask you, too, Tom. I mean, crypto's getting destroyed. Bitcoin, I mean, you have pins on your jacket. I think you're wearing one. I usually see them when you're sitting here next to me on Ethereum and what you've had going on with Bitmine. This is ugly, to say the least.

Oh, yeah, Scott, it's ugly because, you know, in the last few months, AI stocks have been doing well and crypto stocks have lagged. and then now we are seeing a, you know, a big correction in tech stocks, and now crypto prices and crypto stocks are getting hit. So I think it's very disappointing. But to me, part of this has to do with, you know, the supply that we are talking about, that there's a lot of IPOs and there's a lot of capital being raised. And I think that's putting pressure on the stocks. And then there have been some, you know, headlines around AI trying to do exploits around crypto. projects. And so I think investors are nervous. But to me, the driver for the future of demand for

crypto remains Wall Street tokenizing assets. There still is no other way to decentralize those assets. The second is in the future, there's going to be a lot of demand for managing and identifying AI agents as, you know, this machine-to-machine economy takes off. That won't run on centralized rails. It's going to run on crypto rails. So I think the story is still very strong. But in the term, it's been very ugly, as you point out. Yeah, that's for certain. I mean, I think some are doubting at least a good part of the positive story that you and others have been telling. The price action, don't lie, as they say. Steph, last word to you? I don't know, get your shopping list out, Scott. I mean, I think that there's so many great long-term themes out there between, we didn't even

get to my Palo Alto buy, but you do, the food chain of AI is alive and well. Cybersecurity, very strong. I thought Palo Alto actually crushed the quarter with great guide and it went down. I bought some more there. I think you want to own some of the laggards, like financials. You know, I own financials. Some of the brokers are getting hit hard today, Goldman and Morgan Stanley. You want to own those. They're going to benefit from all of this volume that's coming down. All right. Everybody, thank you. Tom, the professor. We'll see you soon. Steph, of course, you as well. Appreciate everybody's voice in that conversation today. Much needed. There's no doubt about that. We're just getting started up next. On the other side of the weekend, Monday, WWDC, it's Apple's biggest event

of the year. We'll be there we discuss with Ives and Kanchowitz next. Welcome back Monday. We'll be live at Apple Park for the company's annual worldwide developers conference, Tim Cook's final one as CEO. For more, we're joined now by big technologies, Alex Kanchowitz and Wed Bush analyst Dan Ives. Alex is a CNBC contributor. Gentlemen, it's good to have you. You know what? I looked at the notes and I just want to have a debate. I want you guys to have the debate because your new note today says we expect fireworks, Okay? Your note today says Apple's going to show a less ambitious but potentially significant AI plan after its attempted Apple intelligence failed. Why do you think fireworks? I mean, to me, it's really, look, when it comes to iOS 27, when it comes to Gemini, it's the first time they actually are going to bring the goods in terms of you're going to have the iOS update. You're going to have the technology that's ultimately going to plug in in terms of Gemini.

anthropic and LMs that will now really be where I sort of view foundationally on the Apple ecosystem. The last year, it was void. Two years ago, they promised everything, as we know, never came out with this. I think it's actually the first time that they now put their hat in the ring and they actually get into the AI game from a consumer perspective despite the last few years, obviously, you know, some of the disappointments we saw. You think he is overly ambitious on his expectations? No, I think Dan sees it the way I see it, which is that they are finally going to ship some AI features that might work. Well, that sounds like a ringing endorsement for a really exciting day. Compared to what's happened, it does sound like an endorsement, but what I'll say is

in the past. So I'm comparing this to the Apple Intelligence Rollout or announcement, because it never really rolled out the way they expected. It was all about the vision, the omniscient AI on your iPhone that will know exactly what you're going to do and get things done for you. And that never materialized. I think what Apple's doing this year is taking a much more realistic perspective into what the technology can do. And they're leveraging their operating system in order to deliver that experience. So instead of the app letting you know when your flight's going to depart and pushing you a notification, it's simple. When you're opening your iPhone and you pull down on the center, you'll get a search and ask functionality that's going to help you tap into AI so you don't necessarily

need to tap into the chat GPT app on your phone. To me, that is something that is less ambitious than what they initially rolled out, but it could be significant. Significant enough to keep the stock moving. Because, I mean, the stock's already moved. Yeah. The stock before this little, you know, sell-off that were in the midst of, was at an all-time high. Sure.

I mean, look, to Alex's point, if you didn't have 2.5 billion iOS devices, 1.5 billion iPhones, it would be a sort of, okay, this is fine, but not great. The reality is that they have an unmatched consumer ecosystem. And now this is going to be the start of monetization. they're going to be essentially a toll collector on the consumer AI highway. We think we talk about $400, $75 to $100 a share for AI, maybe some that start to get factored in.

But I think also Ternus is going to come out there, and this is really him being we're going to double down services. We're going to give developers what they want. We get the disappointment of the last few years, but now this is just the start of what's going to be the monetization of AI, and we believe 20% of consumers in the world will ultimately access AI through an Apple device. This will be the most public event, if you will, the most important one for the baton pass,

right? Not an earnings call where that happened a little bit, but this is now wide open in front of us. Tim Cook passing the baton to John Turnus. What do you think that means for how important this event is in Tim Cook's mind, given it's the last WWDC that he's going to bring to market? it, so to speak. I think it's very important. And I think you could say the last blemish on Tim Cook's resume has been that to date, he hasn't really made an impact on the AI story. We know almost every single big tech company has some impressive AI development that they could point to,

and Apple does not. And even though I would say that, you know, AI is important, it hasn't made a major dent on the iPhone or the smartphone market yet. And Apple is up 53% over the past year, not because of AI, but because they've sold a lot of iPhones. Even that being said, Cook wants to leave this and turn as his hands, saying you're on the road to this AI transformation and I've left you in a good place. That's crucial. Does that factor into what happens on Monday, just knowing that that is on the table? No doubt.

And look, it needs to be at that Jalen Brunson moment for Cook because ultimately it's hand in the baton, but as Alex, and we've seen in firsthand, you need to make sure this does not disappoint importantly for developers. All right, we'll see. I'll see you, Dan, out there at Apple Park on Monday for both halftime and closing bell. We look very much forward to being out there once again for that big event, the biggest of the year for Apple. All right, we are, as you know, under significant pressure. The NASDAX hanging out around a 4% decline. It's more than a thousand points. Bitcoin discussed it with Tom Lee briefly, falling to its lowest level since October of 24.

We're all over that move too. See after the break. Nearly 10 from the close. Let's get back now to Christina Parts of Nevolos for the stocks as she's watching. Tell us, please. Well, on a down day, we've got to focus on some names bucking the trim, and that's consumer staples. The sector is higher just about 2% right now as investors flee tech names for defensive corners of the market. And that's why you're seeing the biggest names in the sector like Walmart, up over 1% Coke, Procter & Gamble,

also up roughly about almost 4% at this moment, 3.5. Meant, and Warner Brothers are sliding right now on a Reuters report that a group of states, including California and New York, is preparing to block Paramount's acquisition of WBD. A Paramount spokesperson told CNBC in a statement, they will continue to fight against attempts to derail the deal.

Paramount shares, which were down about 4% before the report, are now down about, about 3.5 almost, so it's kind of the same thing. WBD shares are sliding roughly 3%. Last but not least, Chipotle's shares, higher as JP Morgan upgrades the stock because they say that the recent slide in the stock creates an attractive entry point,

and that's why shares are up roughly 4%. Got. All right, Christina, thank you for that. Christina Parts in other. It's coming up next, all over the market sell-off. About 10 minutes from the Bell's market zones next. We are now in the closing bell market zone, Mike Santoli and Kara Murphy from Kestra Investment Management

here to break down these final moments. moments of this trading day. Oliver Renick standing by at Cebo with Options Action, Mackenzie Sagalos wrapping up an ugly week for crypto. Michael, I'll let you riff here as we head towards this close. Yeah, so obviously we were right for something like this with the most crowded and overheated parts of this market, having a little bit of a gut track. The question I think for days was about, you know, would it take the rest of the tape down? Today's a yes and no on that question. There has been a little more disorderly selling in the semis. You kind of broke through some levels where the overall indexes could well have bounced for the S&P, for example.

That would have been the 20-day average, 74-90. We didn't stay there. On the other hand, there's still this attempt to kind of rotate around, you know, consumer cyclicals, which have been awful this year, outperforming. So I do think of it as much more of a little bit of a reset in a, you know, otherwise strong trend. But the fact that it's coming with Treasury yields higher and a little bit of a rethink of just how fast the economy is moving, it could need. that there's a little more of a macro shift happening, at least perceptively, and that could mean that we don't just stay with the old winners again. And something like a July 2024 where you had a kind of choppy two-month period as those things got sorted out, those offsetting currencies.

It's hard to get all bared up with a job market that's strong and the AI story that's intact. So that's going to be the forces that are at play with an overextended market in some area. So what do you guys do top of the hour? Sure. Well, no, and it's exactly that question. What we're seeing here is, is it just that evidence that the market had front-loaded a lot of that good news? In other words, we completely gave credit to the AI food chain for all the visible spend at a time when we're going to have to absorb a lot more equity supply. We're going to talk all about that. Also, is crypto bottoming here at all? And finally, Howard Soberblatt, the keeper of the S&P index for 50 years, it's going to come on to weigh in on that space. SpaceX decision. Yeah, good stuff, Michael. We'll see at the top of the hour thinking about the derivatives market today. What kind of options action? Oliver's seeing at CBO. Tell us more. Yeah, loudest day in a couple weeks for sure, Scott. If you look at it through volatility metrics, it also looks like an overdue reset. This time last week, we pointed out the record

disconnect between options prices in single stocks versus the S&P 500, which hit its widest spread ever. As a result, correlations coming into this week were at their lowest in a year. What all that means is it's been madness in single stocks, mostly to semiconductors, where day traders, prop firms, speculators of all forms were

getting paid to basically gamble on far out of the money calls and that hit a wall today. So volatility is going up but the catch is it was already up a ton in those stocks. So traders you are really having to scramble so much so that it's

spilling into the broader market. If you're wondering why today, bonds are not helping. IPO incoming supply doesn't help. But the key message is that unlike stock prices that usually go up, volatility metrics stay range bound. And coming into this week, we were way off the ranges, Scott. Oliver, great stuff, as always. Thank you for a good week.

That's Oliver Renick, of course, with the options action. Speaking of crypto, Mac, tell us ugly there, no doubt. Not looking good. Bitcoin briefly breaking below. 60,000 today, touching its lowest level since October of 2024, down 18% on the week. Ether is getting hit even harder off more than 20% in the past five trading days. Part of this, it's technical. You're seeing cascading selling pressure after roughly $1.5 billion in crypto liquidations over the past 24 hours.

Much of that tied to long positions getting washed out. But the bigger issues that some of the key support pillars for this market are weakening. Bitcoin spot ETFs have seen about $2.9 billion in net outflow. over the last nine trading days. And the corporate treasury trade long treated as a leveraged bet on crypto is losing Steam 2. Strategy down 20% this week after disclosing a Bitcoin sale. Only the second time it's ever done that. Bitmine immersion, the Ether Treasury proxy, down more than 10% on the day.

Scott? Okay. Mack, thank you very much for that. All right, Carrie, you got about two minutes to take us towards this flows. And it's going to be an ugly one. We know that. What do you make of it? Well, we can't have markets go up every single day.

as nice as that would be. So I see the correction today as a really healthy part of the market. We have a number of names that had done absolutely extraordinary, despite a fair amount of headwinds, like conflict overseas, higher inflationary pressure. So what we're seeing today is just some of those expectations had gotten a little bit ahead of themselves. Also, a lot of money had come in off onto these names. So I think it's healthy that people are looking to take a pause here. You'd think it's the start of something bigger, at least in terms of the rotation out of tech and potentially into other areas? Yeah, and we think, I mean, this is the playbook that we've had for a while where, yes,

AI and technology is incredibly important, but eventually those benefits start to migrate to other areas of the economy. That means, you know, going down cap, going to other sectors. We think this is a trend that will continue over some time. That doesn't mean that other names are going to plummet. It just means others are going to benefit as well. What about the dip buyers? Where are they?

When do they come in? Where do they still say, you know what? We're big believers in the AI story. Alphabet and meta don't go to market if they're not still big believers in this story. So why shouldn't we be? Well, think about it. We've had $800 billion of new money coming in from the retail side into ETFs today. That's on pace to be one of the best years ever.

So there is still money coming in. Now, the thing to remember, though, some of those names that you mentioned need to come to market in a way that they haven't in the past, right? this CAPEX needs to be funded in some way. So you're right, in order for them to fulfill their capex streams, they're going to rely on this incremental dollar coming in. So it's important that they continue to tell that story and bring new money in. All right. You have a good weekend, Kara. We'll talk to you soon. I'm certain of that. It's going to ring the bell. Not much as it's sheer about. Let's be honest. That's the way it goes here, though, the opens and it closes, no matter what the market does. And today is decidedly bad.

Chip stocks really leading tech to a nasty day, the worst in more than a year. for the NASDAQ. See what the weekend brings. Headline, deal politically, and we'll see that this market does on the other side. Fiat and two Pacino on Monday.