Closing Bell - Closing Bell Overtime: 10/20/26

Episode Date: October 20, 2026

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Melissa Lee and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing an end to the trading day at the NYSC 3M, ringing the bell and at the NASAC. Mid-PEN, Bank Corp, closes out the trading session. Welcome to closing bell overtime. You're live from studio be at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Sox higher across the board today, Dow gaining more than 500 points. SAB 500 up a quarter of a percent. NASAC turning lower here just by a fraction of a percent.

The Russell 2000 is the biggest gain in more than two months. The hard hit AI trade mostly higher today. Cor Weave gaining a little more than 1 percent off its best levels of the day, though. Bond yields falling early in the day, following some weaker than expected housing numbers, but creeping back higher to some degree as the trading session went on. The focus also on earnings 3M, jumping on its results and contributing to the Dow's gains North of Brumman, also gaining as it raised guidance. But General Motors had its worst day and more than a year following its report. We got some big names, by the way, reporting

in just the next few minutes. Netflix do out any second now. SpaceX with only its second report as a publicly traded company. United Airlines also reporting will bring bringing you all those earnings and analysis as soon as they cross. But let's begin with the first take on the close. It was certainly a broader market. I don't know if there was anything convincing in terms of changing the AI narrative, though. Not so much. You know, there wasn't some kind of assertive response in semis at all.

Most of the hardware food chain not doing much. Even credit, you know, did not really repair very much of the damage from last week. So it's defensive. Low volatility, ETF, up more than 1% health care. Although 70% of all volume to the upside. So you don't want to necessarily say that this was people really tensing up in advance of something nasty. You did see home builders up 2.7% on bad housing numbers. So they're trying to make a stand here.

And banks finally did bounce as well more than 1%. Yeah. And the action core we felt technical. I mean, it was interesting that it hit a new low here. But it sort of preserved that 60 level, which was the prior low. So that's good news. And on heavy volume, it managed to bounce higher. So even though it finished off the highs of the session, it still did sort of heroic.

job in terms of trying to get off of the previous low there. Not convincing, but still at least no further technical damage. No further erosion. It probably is going to need the credit side to really firm up, maybe some kind of reassurance there before the stock can really get back. Yep. We got Netflix earnings. They are out right now. Julie Borson's got the numbers here. Julia. Netflix shares are falling now down about 6% in after hours trading. The company's EPS for the quarter did beat expectations coming at 87 cents versus the 82. expected. Revenue growth in the quarter of 12% to 12.87 billion is right in line with expectations, but the source of the stocks decline now down about 7%. The company's guiding to fourth quarter revenues

of 13.44 billion. That's just below the 13.5 billion expected. The company's saying they expect full-year ad revenues of about $2.7 billion. That's lower than the approximately $3 billion previously forecast for the year. Now, Netflix is saying it's fourth quarter. EPS will be impacted by restructuring with a negative impact of 120 basis points on margins. In the letter to shareholders, the co-CEO's addressing investor concern about engagement, about what they call view hours growth, saying, quote, member response to our 2026 price increases is consistent with prior price changes and our expectations, an indicator that our engagement, which encompasses quantity, quality,

and variety of viewing remains healthy, and that we continue to deliver strong value to members. but we do seek to accelerate growth in view hours as well. Now, the Code CEO saying they're focused on delivering more entertainment value to members, leveraging technology to improve all aspects of the service, including by integrating more content like they do with the French networks, TF1, also improving monetization. shares now down 6%. Mike?

Julia, thanks very much. And maybe, as you have hinted, the company getting ahead of potentially soft guidance with those executive changes earlier this month. Well, joining us now is Evercore ISI managing director, Mark Mahaney. Mark, what's your first take? This is the third quarter in a row in which Netflix shares have traded off high single-digit percent on the print. The bearish concerns have been rising, that engagement has been flat or down, and it was down in the first half of the year, total viewing hours.

The company had acknowledged that last quarter. There's been these lack of content hits, and then these... this RIF and now the senior changes to the content leadership just kind of raise questions about, well, the company's content strategy. They need to make some changes. They're acknowledging that. And right now, the market's sort of skeptical that they can do that. And you also still have this overhang of maybe there's long-form content as a whole is under thread or being nibbled to the leads being nibbled away by short-form content, TikTok, YouTube. So all of these concerns just seem to have been snowballing for a while. And the fears in the market, given this print and kind

the soft Q4, a little bit soft Q4 revenue outlook, you know, kind of the bears are winning this argument. I think this print kind of adds to concerns. Soft Q4 revenue outlook, but also soft full-year ad revenue forecast compared to what they forecast previously. And it's interesting that they talk about the reaction to the price increases in the context of engagement. And they're talking about how engagement is good, but yet they're moving to a once-a-year report on engagement Mark. So it doesn't answer that conservative investors that maybe they're moving away from reporting more often because there is an engagement problem here that they don't want to reveal. Yeah, that could be. I think some of this engagement issues, by the way, I think this is

addressable by the company. I mean, this is a hit machine. They just didn't have any big hits this year. But, you know, in most years, five or the last six years, they've had a major global hit. My guess is that they'll probably have it next year. They've got a major content live sports event on their network next year exclusively stream, which is women. World Cup of Women's FIFA. So my guess is that the engagement story is going to turn. But obviously they need to make some changes to their content strategy. I think they probably need to accelerate the pace at which they roll out sequels.

At least I've read that in some of the industry mags in Hollywood take on it, is that there's just been a little slow on these renewals. It's hard to know. I think they still kind of carry the crown in terms of the best, highest quality content out there. But it's a more competitive landscape. And they need to make some changes. I think they can do it.

this is a very season, very good management team. Right now they've had, you know, kind of three strikes, but this is not baseball. So I think they get a few more swings at the bat. But yeah, there are concerns here. I think they're addressable, but, you know, they've got a lot to talk about on this earnings call, at the top of which is how do they improve their content strategy. And is that the sole answer to the ad revenue piece as well? Because I've harped on this a lot. I mean, everyone keeps saying it's early days. It's been a while. It's been multiple years. It's still not that material as a growth driver, and they don't seem to be able to kind of concentrate the eyeballs in such a way where the kind of ad serving mechanism is really bearing as much fruit. Well, you're right, Mike.

They started off with, I think Microsoft was their first ad partner. That was kind of mistake number one. And it's just taking them a long while to build it up. I've actually been relatively muted in our advertising expectations because I think the money really comes from the subscriptions. And I always saw the ad supported plan as the way to bring in subs and then over the, time, you know, upsell them to premium plans. So that the ad revenue comes in the light isn't a huge thing, but it's certainly not a positive. I think that with the real win still has to be grow users, grow engagement. And you do that through more live entertainment, you know,

really compelling live sporting events. And you do it with better content. And the content strategy needs to improve. Advertising is still, you know, we're 5% of revenue. So I don't think it really moves the stock one way or another, but it certainly doesn't help, take us to your point. and it's hard to build up ad revenue when you've got companies like meta and Google that are taking share hand over, fist, quarter in and quarter out. I'm sorry, it's just going to be hard

for Netflix to do that. You wrote in your earnings preview is engagement softness becoming a revenue problem. Do you think that is the case, Mark? Is that the question that you're going to ask on the call? I think the questions should come up, and I don't think they're going to answer it, but how do we think about growth next year?

So the bears on the stock are going to tell you, or are telling you, and they're betting that growth goes single digits percent next year. Of course, you know, you can engagement in any one quarter. This doesn't impact the revenue in that quarter and probably not for a couple of quarters. But softening engagement will impact engagement growth, their ability to raise prices next year, the ability to bring in new customers. I mean, it's usually reflective of something, which is kind of some misses in terms of the content front. There's been good content at Netflix, but then we haven't had the big explosive hits that we've had, you know, 18 months ago. And the

companies acknowledge this. So they need to fix the content. They fix the content. They'll drive up engagement. And then, you know, we'll look back on this and the company will, the stock will have re-rated. But you still got to start off by fixing the content. Mark, thanks so much. Yes, stock's starting to look cheap if you believe the numbers. We'll see. Mark Mahaney. Well, SpaceX earnings are out. Morgan Brennan has the number. Hi, Mike. That's right. We're still going through this report, but it looks like a pretty big beat, at least on the top line for SpaceX, $14.58 billion. That was 161% increase year over year, better than expectations for $12.7 billion.

Gap estimates coming at at $0.35. We're going to hold off on comparing those to street estimates here, but that looks pretty strong as well. In terms of the breakdown of the different businesses, space revenue coming in better than expected, 1.77 billion. This is the Starlink business, $5.25 billion, also better than expected, an AI revenue, now known as SI, superintelligence revenue, also much better than expected at $7.5. $5.6 billion. Total adjusted EBDA also much better, $8.8 billion that represented a 306% increase year over year. You saw beats on EBDA and the space business, the connectivity business, but that SI adjusted EBITA really beating street expectations at $4.95 billion.

A few other stats I'll give you here. Compute 1.7 gigawatts as of the end of the quarter. So they're continuing to add that compute capacity here. And CAPEX, the street was expecting about $18 billion. came in higher than that at $19.6 billion in CAPEX for the quarter. And you can see shares right now of SpaceX are popping. We're up about one and a half percent. But overall, stronger than expected numbers, I'm going to continue to go through all of this because there's a lot of metrics that matter here. But that SI business, formerly known as AI, is really what's going to drive it. And what we're hearing the conference call in just a few minutes around guidance there. Is the big driver around SI revenue leasing wholesale data? I would expect. This is the first. We'll find out more color,

more context, but this is the first full quarter where you have that lease deal with Anthropic, and then, of course, they've signed other deals too. So that conversion from, you know, deals to compute deals to actual realized revenue as they can continue to build out all the infrastructure here seems to be turbocharging in this quarter. We'll see what they have to say. Okay, Morgan, thanks. Joining us now is Julie Jew from Moffat-Nathanson. Julie, great to have you with us. Your first take on this report. Thanks for having me. Look, I think it was just covered now. it was a beat against consensus across the board, particularly in the AI segment, which I think folks will be listening on the call with particular interest in terms of one, whether or not

the 100 billion AR target for December is still on track, if not higher, and also what this means in terms of potentially incremental deal signed on the infrastructure as a service business. Yeah, and what do you think the kind of bogey is in terms of how much capacity will be added next year. I know they've talked about, you know, pretty aggressive plans for additional compute at this point. Yeah. So by the end of next year, on the last quarterly earnings, SpaceX had noted that there could be up to potentially 10 gigawatts added, sorry, eight gigawatts added. And I think where the street landed is closer to six absolute gigawatts at the end of 2027.

Whether or not on this earnings call, we hear if that incremental gigawatts added is going to come to fruition next year. We have yet to see. But as of today, the SpaceX reported gigawatts installed is pretty

much in line with what folks had expected for this quarter. In terms of SI revenue, Julie, are we to understand that the bulk of SI revenue comes from leasing that compute capacity? We are in a period where now they've signed a bunch of deals, Google being one of them, where starting in October we're going to see a major ramp up in sort of these deals falling to revenue.

What is your sense of that trajectory? And have you gotten anything from this report that either confirms that or dispels that? I think that this report at least is quite confirmatory. You'll see the majority of the ramps start later in the fourth quarter of this year. kind of going to, the bolus of the deals should come in by the first part of 2027. You're going to see Anthropic ramping in this particular quarter. Next quarter, you're going to see Google and then two additional unnamed deals that were announced both in Q2 and during the conference season the past couple of months.

And so today I'll be listening for, are we going to see incremental deals on top of what has already been announced? But the ramp and the trajectory is as expected. And then in terms of the other businesses, what do you think of the main debate points or swing factors? I know there's been a lot of back and forth about what the opportunity actually is in the connectivity business in terms of mobile service, for example. Yeah, so maybe if we start on the Starlink broadband business, you'll see that the ARPU was much higher at $69 versus the $67 that was expensive. expected by the street. On the flip side, Starlink broadband subs came in a little lighter than the 14.3 million that was expected by the street. And what that tells you is that the business was probably a little less promotional than folks had expected and or the penetration into the

lower Arpoo areas outside of the U.S. was maybe a little slower to ramp than you would have expected this quarter. But it really just shows you the tension in a P-Times Q business. And And SpaceX and Starlink broadband is no different. And then on the call today will also be listening keenly to the D-to-D or mobile ambitions for the connectivity business continue to be. You'll see that there was a purchase of low-band grain spectrum announced a couple of weeks ago. I'm sure that that'll be of key interest to investors on the call today. Julie, thanks. Julie, Jouf, Muffet-Nathanson.

And take a look there, Chicago. Zach's investment management, bringing the closing bell. at CBO in Chicago ending the regular trading day for options. United earnings are out. Phil of Boas got those numbers. Hey, Phil. Melissa, take a look at shares of United under pressure after the company missed on the top and the bottom line for the third quarter. Not by a lot, but a miss is a miss. Here are the numbers for United earning $2.54.00. The street was expecting 257 with revenue coming in at $17.88 billion, just shy of analyst expectations. The numbers within the numbers of the third quarter. Fuel costs $4.843 billion. That's how much United spent on fuel

in the third quarter. That was up 61% year over a year. Cost per seat mile, when you strip out fuel costs, still up 7.8%. And then you have revenue per seat mile up 15.9%. Not a surprise given the higher fares that United, and all the airlines have been issuing and charging customers over the last quarter. Take a look at revenue by segment. Domestic revenue, up $4,000. Up $4,000. 15.5%. International, 17.4% increase. Basic economy revenue up 16% year over a year, premium revenue up 17% year over a year, and corporate revenue. Always important for United and all the airlines. That was up as well. And then a couple other notes as well. You've got pre-tax margin of 6.2%. Negative free cash flow of 1.84 billion. The guidance, and this is where

that pressure is coming from right now, the guidance for the fourth quarter EPS, between 50 cents and a buck 50. The estimate on the street is a buck 76. Now, United believes there's a difference between what the analysts are expecting and what United plans to charge or what it expects to be charged for fuel in the fourth quarter. United is basing its estimates on $4.80 a gallon for jet fuel. For some comparison here, they paid $3.90 per gallon in the third quarter. That's the increase that United is seeing in the fourth quarter,

expects to see relative to the third quarter. Tomorrow morning, we will be live in Houston with United CEO Scott Kirby. We'll talk to him regarding not only the third quarter numbers, but the guidance for the fourth quarter. And the big question that is out there in terms of they're passing along a lot of the fuel cost guys, all of the airlines are. And so far, the demand has been there. But when you're getting with jet fuel prices up at $4.80 a gallon compared to $3.90 a

gallon, you have to wonder if you start to see some resistance at some point. We'll talk with Scott Kirby about that. Yeah, the Ryanair CEO was just talking about how he thinks that, you know, there's going to be price hikes in Europe, the biggest in history. So they're all talking about it, Phil. I'm wondering, in terms of the guidance, 50 to a dollar 50, is it typical that the guidance range is so wide? Well, they strip down there. If you look at their full year earnings, the fourth quarter is really where they're bringing down their estimates. And, and, 50 cents to a buck 50. That doesn't surprise me given the volatility of jet fuel. But if you compare their full year expectations, as recently as July, they expected full year EPS between $9 and $11.

Even the most optimistic at a buck 50 in the fourth quarter means they will only earn $7.22. So that shows you the impact that the cost component is having on United Airlines bottom line. The fact that they are going to be drawing down their full year guidance, they're not doing it, but the analyst will add up the numbers. You see what I'm talking about. It's going to be well below what they were previously issuing as guidance. Yep. Phil, thank you. Phil Leboe. Well, in October so far, tech is the worst performing of the S&P 500 sectors, but other groups have been emerging as winners, energy, thanks to oil prices, but also health care, consumer discretionary and staples is a broader market, a stronger market.

That's next. I'm closing bill overtime. Welcome back to overtime. Health care, once again, the top sector today, Moderna. Up 6%, 700% this year, Eli Lilly, up 10% in the past week, adding more than $100 billion in market cap. It's actually at the highest level it's been at since its IPO. But it's not only the so-called safety sector rising utilities and staples also hot lately, and it comes as debt worries hit the AI trade. Is this the kind of broadening that can keep the bull market intact?

Joining us now to discuss is Lizanne Saunders, Charles Schwab, Chief Investment Strategist, here on set. Lizanne, great to see you here. Nice to see you both, too. Thank you. Did you like the action in the market here? like the sort of broadening that we've seen? I think it's great. We saw it earlier this year when you were in the

throws of the prior turned down in Mag 7 and extended areas, but you saw more of the soldiers march into the front line, and that's not a bad battlefront when you have more of the soldiers. So I think I've had this view that this rotation is the momentum trade. But, you know, the concern would be that cap-weighted index would ultimately be weighed down if you didn't have enough participation. So it is nice to see that broadening out. So when you say momentum is the rotation is the momentum trade, in other words, that seems like where either the excess is or we're too reliant on the rotation for it to keep working? Because I look at things like you saw a speculative peak in a lot of areas this market in May and

June. And we've absorbed it pretty well. And I wonder if it means, hey, it's all about quality and defense now. And that's because the tide's going out or is it just sort of a phase? I think the quality trade is less about just a move to defense and more about the move up in yields. Because you're seeing it not just in a broad quality sense, but particularly down the cap spectrum. Russell 2000, the profitable stocks are now beating the non-profitable stocks by 18 percentage points. It was the complete opposite last year where the non-profitable stocks crushed the profitable stocks. You've got high interest coverage names doing well. You've got lower volatility names doing well, stronger balance sheet, lower debt to equity.

So I think that's the way to approach this market is at the factor level, as opposed to at the kind of cohort level or the monolithic sector level. Is this here to stay, though? I mean, are we to assume that the AI trade has sort of had its best days? I mean, Mike was mentioning the derisking. The semiconductors slowed down 23% from their highs in June. So does that sort of stay here at this point? invest around that? I think the concern is now about the financing. And, you know, when you're looking at highly levered companies, you're really financing the timeline, the timeline between

the investment and the return on that investment. And as we know, the timeline associated with anything AI has shrunk so significantly, narratives change quickly, you know, earnings estimates change. CapEx assumptions change. So I think the focus, brightly so, is on that leverage piece of it and why you're seeing such carnage in segments like the zombie companies. So to me, that's where the focus has been in this latest rotation. You mentioned, you know, yields going up. Obviously, financial conditions are tightening. That's what we're talking about, kind of capital getting rationed out there. We have a Fed meeting next week. The market expects no move. Usually kind of a patient Fed that skips meetings is okay. But do you think that, you know, as long as we're in this

hiking mode, at least in general, the risk appetites are going to remain in check, or can we overcome that? So historically, what has mattered in terms of hiking cycles for the equity market, where you see the biggest spread difference is the speed of what the Fed is doing. To your point, they're likely to skip next week, maybe hike again in December. So a Fed that takes the escalator up and not the elevator up, tends to be supportive of kind of low double-digit kind of gains in the year subsequent to the initial hike. If they have to move really, really sharply, they have to, you know, do more than 25 occasionally, that's when you tend to get into the negative returns a year out from the start.

We just heard from United Airlines, and Phil was saying that their assumptions for jet fuel were tremendous for next year. They're modeling in 480 versus $3 and change for, you know, in terms of what they saw this year. That's going to happen, I would imagine, across corporate America. How do you sort of think about that? You know, it's not transitory anymore. It's entering the models. And not only that. There have been these ongoing concerns about the stability and profit margins because the forward 12-month S&P profit margin assumption is up to 17, 18 percent. It's kind of gone parabolic. But so much of that story has been around AI. There's the general story of energy as a feedstock for so many industries

and sectors. And I don't think that has been yet fully worked into forward assumptions, specifically profit margins. And it has been noteworthy that, you know, we've had this blockbuster earnings growth last quarter. And at an index level, the market hasn't really moved very much. We're going to get another, you know, on balance, very good quarter this time. So is the market telling us that companies are kind of over-earning? We're front-loading a lot of factors. Are they going to decelerate next year? And what does that mean? There was a lot that was one time in the second quarter earnings. The non-operating earnings from investments like in SpaceX and Anthropic and Open AI,

tariff-free funds came much more quickly. A lot of companies booked those. I don't think that's been extrapolated, but it may subtly mean that there's maybe too much enthusiasm driven by the sheer scope of earnings growth. 53% I think was the final number for Q2. And I worry a little bit that that sort of general expectations bar has gotten set a little bit too high. Lizanne, it's great to see you. Good to see you. Thanks for coming by. Lizanne Saunders. Well, Netflix and SpaceX about to start their conference calls, we'll monitor and bring you any news that comes up. Up next, we'll turn our attention to one

of the day's big earnings winners. Hasbro soaring following its results, $600 million of sales for Magic the Gathering. the quarter. The CEO joins us exclusively right ahead. Hasbro's magical run continues. The Toymaker was one of the big winners in the S&P today after reporting blowout third quarter earnings and raising its full year guidance. Thanks to strong sales of its magic, the gathering brand. Hasbro shares are up more than 30 percent so far this year, well ahead of Mattel. Joining us now in an exclusive interview is Hasbro's CEO, Chris Cox. Chris, it's good to see you. Pretty familiar theme in terms of what's been driving your growth, as well as raising guidance, but perhaps not, you know,

as much as the past quarter's beat would suggest. I don't know, the street might be on to you that you're being a little conservative here. Well, I'd be happy to be guilty as charged. And so is this a matter of just leaning into the same franchises that continue to provide most of the push behind the numbers? Or are you looking for ways to, I don't know, surface other parts of the portfolio? or build new ones? Well, I think what's happening this year with Hasbro is it's a really diversified growth story. You know, we have Wizards of the Coast. That's been on fire, you know, and we have multiple brands in there.

Magic is the one that gets a lot of the headlines, and deservedly so. We had our first $600 million dollar quarter for that game. But we're seeing growth in D&D in some of our lesser-known brands like Dual Masters, which is one of the biggest trading card games in Japan. Our consumer product segment was up for the fourth quarter in a row. Our licensing business continues to be on a tear. We're one of the top five licensers in the world. And we disclosed for the first time that that's nearly a $700 million business, a very profitable one at that. So, you know, I think the story of Hasbro is increasingly it's high growth. It's more older audiences. It's high-endous. It's high-end.

margin and it's asset light. And, you know, I think our investors appreciate it and you have days like that when they do. When you say older audiences, Chris, what do you mean? I mean, magic's been around for a long time, as Mike had alluded to, and I'm just wondering, you know, who's playing it today? And how do you think about the strategy around, you know, making this still something that kids who see it for the first time want to engage in? Yeah, I think what really distinguishes Hasbro as a toy and game company is we've been in this business of kiddults for a long time for decades. Over 65% of our sales are to consumers 13 and older. That doesn't mean we don't sell to kids or appreciate kids. They're absolutely

important to us. They're a first handshake. But whereas a lot of toy companies, I think of kids as the market, we think about that as the beginning of a lifetime of fandom. So for a product like Transformers, we start selling to preschoolers at the age of three and four for projects like Magic or D&D. We're enrolling middle schoolers between the ages of 11 and 13. And we keep selling to them throughout their entire lives. You know, most games measure retention in days and weeks. For a game like Magic, we measure it in terms of years and generations. I mean, clearly that means it's not, you know, sort of a fad at this stage or at any stage. But do you have a current theory as to why you have so much uptake, just societally, why there is this return to these types of games?

Well, there's a couple things going on. I think, first off, people like to build things. And a trading card game is inherently something that you build a deck around. They like to collect things. And I think they like to collect physical things. and trading cards are very convenient to be able to do that. And then last but at least, you know, I think there's a generational thing going on. We invented trading cards.

Magic was the first trading card game back in 1993. So all of those 11 to 13-year-olds around in kind of like the mid-1990s, they're now like 35 to 45-year-olds. And they're kind of in their prime earning years. And they want to go back and experience the things that they really enjoyed in their childhood, they just want to do it as an older, more sophisticated consumer. And when you combine all of those things together, I think it really powers robust and durable growth. You know, trading cards today are the biggest category in toys and games. They've supplanted building blocks. And, you know, we've only seen building momentum both with our games and the category as a whole.

Chris, how do you think about competition? I'm asking you this on a night where we got Netflix earnings. And there's always talk about, you know, a competition for, attention, a competition for time spent. And I would imagine this sort of falls into that category, too. So how do you think about the competition, the competitive landscape in that framework? Well, I mean, I think more in terms of partnership than competition. You know, Netflix, for instance, we're one of their master toy licensers for K-pop demon hunters. That actually was a big performer for us in Q3. We're doing our Magic the Gathering animated series with them, which should debut at the end of next year. We think about play as an important extension of any kind of entertainment brand.

So, you know, that tends to be kind of our superpower, building a lifetime of fandom anchored in play. And so, you know, if you watch something, you probably want to collect something. And so we tend to do that across a whole host of partners. I think our licensing business has over 1,000 partners that we work with, both in and out, across over 10,000 collaborations, and it's important part of what powers our brands. Chris, really appreciate you joining us this afternoon. Thank you very much. Thanks.

All right, after years of delays, the Transportation Department approving Boeing 737 max 10 jet for passenger service. Transportation Secretary Sean Duffy joins us exclusively and closing bell overtime returns to discuss that. and much more. Transportation Secretary Sean Duffy announcing the official approval and certification of Boeing 737 Max 10 for passenger operations after years of multiple delays due to safety and certification issues. Boeing expects to make diverse deliveries in 2027. Boeing stock has been under pressure this year, down 12 percent so far this year. Our fellow Boe joins us exclusively now with U.S. Transportation Secretary, Sean Duffy. They'll take it away.

Thank you, Melissa. Mr. Secretary, good to be here in Everett. Good to see you. Max 10 in the background here. You know, a lot of people realize that this is six years after when they were supposed Boeing was originally going to deliver and have this plane in the skies. And we know all the issues that have copped up since then. How do you convince the public, hey, this plane is safe and it is ready to fly? Yeah, so this has been almost a 10-year process getting to this day of certification,

which, by the way, is huge. We have FAA safety inspectors, a whole team that's on the ground that's worked through this process. Safety is our North Star. For Boeing, it's their North Star. They don't have safety. They don't have a company. So we have laboriously worked through this process to make sure we can certify it today. We feel comfortable.

It's a great airplane. Phil, this is going to save 20 to 30% in fuel efficiency. So one, you're going to have less gas burn. You're going to have potentially cheaper flights on airplanes like this. But also, if you look at the environment, we're going to emit less carbon into the atmosphere. So it is a great day for aviation, a great day for Boeing.

You talk about all the great potential benefits here, but just a few weeks ago, there was a headline that there was a software glitch that could impact this aircraft's landing in certain situations. Not a safety of flight issue, according to the FAA. You've gone ahead and you've certified it. But can you understand why the public sees these headlines and they say, here we go again, another issue at the mass? You know, it's kind of like your phone. Sometimes you'll get a software update. This was a software update that you might get on your phone. That was done.

We spent a lot of time on that and feel like it was not a safety issue. Again, if there's safety issues, we shut down travel. We'll shut down aircraft. We felt very good at the FAA with our safety teams that this was not a critical safety issue. And so the update came and we're in a good place. This certification comes just a week after you met with the heads of Boeing, GE Aerospace, all of the giant air industry companies. And you said, how do we speed up the certification process? Because it's long and it's laborious. Are you confident that it'll be quicker for Boeing? in the future to bring an aircraft to market? So it takes Boeing to certify an aircraft in Europe, but half the time, less than half the time that it does in the U.S. You have China now plane to take over in aviation. And so for us, listen, safety is paramount. But we have to certify aircraft more quickly if we're going to still compete as Americans. Boeing is our number one exporter in the U.S. It's a huge deal. We want to make sure they're successful and they're safe.

our job at the FAA, Boeing has to do their job in partnering with us. So I feel very confident. If we all come together and get a better process in place, we'll be just as or more safe, but also can certify aircraft far more quickly. I want to ask quickly about upgrading the air traffic system in this country. You've already had $12 billion that you're investing into software for air traffic control. But you need another $30 billion in order to make the advancements in terms of the towers and other things that need to happen. Can you get that much? money, especially if, let's say, the Democrats take over control of the House. So first off, the FAA has tried to do this for 25 years. It was called NextGen. We're actually

building a brand-new air traffic control system, radios, radar, voice switches, new telecom, surface awareness systems, all new technology. It's all going to be done by the end of 28. But to complete it, I do need more software to complete this process. So there's 10 billion for that that I need. I would like to, you know, a JFK of the world, they have a lot of money. They can access. the bond market far more, far easier than maybe a mid-sized airport. I want some money for mid-sized airports. Towers in America, Phil, they're really old. It'll take 300 years to replace all the towers in America.

I want tower money. But we're building. Give us the money, Congress, and it's bipartisan, by the way. It is bipartisan. Aviation is bipartisan. If the Democrats win the House, can you get that money? I think so. Yes.

Listen, this is not a partisan issue. Republicans and Democrats fly, their families fly. Democrats and Republicans are pilots. They're all going to work together. The key is we're actually spending America's money well. We are under budget and we are on time. We are saving money all over the place in this bill. Jet fuel prices continue to soar.

United just reported earnings, and they're going to pay $4.80 a gallon in the fourth quarter compared to $3.90 a gallon in the third quarter. And increasingly, and I'm sure you hear this from people, they're looking at trips for the holidays and they're saying, this is ridiculous. I can't afford this. How concerned are you about the rise in general?

fuel prices. Well, listen, I'm concerned about the supply. I want to make sure we have enough jet fuel supply, which we don't see any issues there. And we're going to manage this issue as we deal with Iran. But to make sure that we don't have a nuclear Iran, that is paramount. But making sure we continue to invest in American energy like President Trump has asked for, American energy dominance. I think that's the key.

And we're going to get through this. And we're going to get to even better fuel prices and even better airline pricing, because like the max 10, 30 percent, more fuel efficient, more energy, more. American energy, and the world will be a safer place, Phil. Transportation Secretary, Sean Duffy, out here in Everett, Washington, guys, we'll send it back to you. All right, Phil, thank you very much, and thanks to Secretary Duffy as well. Up next, the latest from the SpaceX conference call, as the stock rallies 2% following strong results. And here's a check on some S&P 500 stocks hitting new highs today. Visa, MasterCard, Eli, Lilly, William Sonoma, and Hill. Closing Bell Overtime. We'll be right back.

Welcome back to closing bell overtime live from the NASDAQ market site. Let's get a check on some of the after-hours movers. Netflix falling despite an earnings beep. Revenue guidance for the fourth quarter seems to be what's hurting that stock. It's off 5%. SpaceX moving slightly higher after posting a profit for the first time, only its second report as a public company. Revenue was a big beat with a big chunk of that coming from its AI division,

which it now calls superintelligence, a stock up 3%. And Super Micro jumping right now after pre-announcing strong first quarter numbers, the company sees revenue of $18.5 to $19.5 billion. The high end of the previous guidance was $15.5, crediting increased demand for AI platforms. Gross margins are estimated to be in the range of 12 to 12.5% versus guidance of 10.4 to 10.8%. Super Micro shares up 12% on that. And then some of the other somewhat adjacent companies, like Dell has a bid in the in the after hours as well. Corweave is slightly higher.

We should note, though, 15% of the shares outstanding are short, super micro. Oh, yeah. It's also down 20% this month and 40% from the highs. Exactly. Time now for our CNBC News Update with Kate Rooney. Kate. Hey, Melissa, President Trump called on Ukraine today to settle the war with Russia and said that it's time for President Vladimir Zelensky to make a deal. His comments did come shortly after U.S. envoy Steve Whitkoff met with Zelensky in Norway. Whitkoff is expected to travel to Russia tomorrow.

to meet with Russian leadership. Meanwhile, the federal government announced a $5 million settlement with Instacart for allegedly discriminating against U.S. workers in its hiring practices. U.S. officials claimed the delivery platform preferred to hire foreign workers through an employment-based green card program, rather, than Americans. Instacard denies the allegations but said it's settled to focus on its business. And finally, CNN is threatening the Trump administration with fresh legal action, claiming the network continues to be denied access to Air Force One

and the pool of reporters who cover the president when he travels. It is the latest development in an ongoing legal fight that began when the president suddenly banned CNN. Our sister network, MS now and Politico, from the White House last month. The judge restored access to the grounds while the lawsuit plays out, guys. Back over to you. All right, Kate, thanks. Kate Rooney.

SpaceX's earnings call is happening right now. We'll have the highlights straight ahead. closing bell overtime live from the nasact market site right back SpaceX's analyst call is underway Morgan Brennan has the highlights what are we hearing Morgan uh yes and this call is very much still going on uh Mike here is the headline for you Elon Musk saying just a few moments ago he's expecting annual recurring revenue of between 500 billion and a trillion dollars next year yes you heard that between half a trillion and a trillion dollars next year and annual recurring revenue this is tied to

the AI segment, which is now called the SI segment. How do you get there? Well, Musk also saying on the call that he's fairly confident getting to 10 gigawatts of compute online in 2027, so that is the up range of guidance that was previously given. That's in addition to two and a half to three gigawatts of compute capacity. They expect to come online by the end of this year. In other words, we're talking about 13 gigawatts of compute capacity by the end of 2027. Here's where it gets even more interesting. He's deploying one of the top SpaceX teams to all of this terrestrial compute infrastructure because he says that the real bottleneck here isn't the chips, it's power and cooling infrastructure. So they're building out an incremental 20 gigawatts. On top of that 13

gigawatts that they expect to come online next year in anticipation of being able to deploy all of those invidia chips. He's also talking about usage of grokbox, that that's increasing per user. They're getting ready to deploy that for Enterprise as well. And this is already, into the call. The call actually started with something else that Wall Street was looking for, which was guidance on Flight 15 for Starship. They are targeting next month for that. They're going to attempt to catch both the booster and the ship for that. He says more likely than not, this is going to succeed these catch attempts on Flight 15. And if not, they have a steady stream of Starship flight attempts through the rest of this year and that's going to accelerate next year. He expects Starship

to fly weekly in the first half of 2027 and that that cadence is going to up from there in the second half of 2027. Also talking about Starlink, basically said it's just getting started. Laying out the bandwidth and satellite constellation size, something like 100,000 satellites that they plan to deploy, each of which will have 10 times more bandwidth than the current Starlink system. Also talking a little bit about Starlink mobile and saying that they are going to build out those terrestrial networks and basically create a competitor to what currently exist for that connectivity and that access wherever they're allowed to deploy it. So we're going to continue listening to this call, but you can see those shares are at session highs at 4% right now,

guys. Yeah, Morgan. Thanks. Morgan Brennan. I don't know what you make of that ARR revenue. I mean, the guidance is crazy. Half a trillion to a trillion. It's a half a trillion wide is the range. Right, exactly. Look, if the market believed that it would be up a lot more than 4%. What is it, like a 5x to 10x? And, you know, whatever. They're ambitious. We'll see how much they can deploy. And, you know, in context of Anthropics, leaked S-1, where they had great revenue, but it was only like, you know, $16 billion or something like that. I don't know where the money's coming from. Exciting stuff. That does it for overtime.

That's money starts right after this.