Closing Bell - Closing Bell Overtime: 2/10/26

Episode Date: February 10, 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 is bringing an end to the trading day at the NYSC Amphanol bringing the bell and at the NASDAQ, Al-Farmaceuticals. Welcome to closing bell overtime. Live from Studio B at the NASDAQ market site. Now Mike Santoli, Melissa Lee is on assignment. Stocks mixed. The Dow once again, setting a new record just barely eeked it out as a closing high, but the other major averages did fall. And we did see a move lower this afternoon. The S&P 500 had been up 22 points at it.

peak before ending lower by a third of a percent. We'll get to that, plus the bond market with Rick Santelli. We're also waiting for earnings from Ford and Robin Hood, plus Lyft, Mattel Gilead, among others, due out this hour. But let's start with today's market action and Christina parts in other. Christina. Right next to you. The NASDAQ and the SPP ending in the red today, like you mentioned with the NASDAQ, flattished for most of the session before just rolling over around 1 p.m. Eastern one. President Trump told Axios, he was thinking of sending a second aircraft carrier to the Middle East, if talks with Iran, Phil. through momentum stocks that really gave back some of last week's bounce momentum, the ETF,

MTF, MTF, MTF, METUM, closing in the red today. You had five of the magnificent seven names also closing lower, alphabet among the laggards, as investors really digest the sticker shock from its new debt levels announced just yesterday. But software names did stage a comeback, Datadog, Snowflake, App Loving, MongoDB, you could see just a sea of green with Datadog up 13% today. The IGV software ETF closed higher for a third straight day after seeing record retail dip buying just yesterday. There were also some signs of a defensive tilt after weaker than expected retail sales,

data, I should say. Utilities and real estate were the best performing sectors with Vistra Energy, closing roughly 4% higher on a Jeffries upgrade. But investors weren't hiding in consumer staples, Kroger's, Costco, Walmart, all down at least one and a half percent, Mike. All right, Christine. Thank you. Some interesting moves in the bond market today, following a softer headline retail sales number and some comments from Fed officials, not to mention a drop in a labor cost gauge. Rick Santelli has all that for us. Hi, Rick. Hi, Mike. Indeed, these are all big issues, and I can make it even more complicated. We've talked many times, Mike, about how seasonal adjustment processes might not be working as they should. Well, today's non-seasonally adjusted retail sales,

Unlike the seasonally adjusted, was not weak. As a matter of fact, it was the strongest December on record. So that really makes it confusing. But the Fed has to weigh labor versus what's going on in inflation. Let's look at the five-year charter non-farm payrolls we're going to get tomorrow. And you can see the last three months, October, minus 173, no 50,000 plus. October, 50,000 plus. It's been deteriorating.

Let's look at a five-year chart of the Fed's, favor an inflation gauge, the personal consumption expenditure, year-over-year core. Our last read was 2.8. Hey, it's flatlining, but nowhere really near 2%. So those Fed comments, you reference, that's exactly what they're weighing. Make it even more complicated. Tomorrow's January jobs report is going to include benchmark revisions. And those benchmark revisions go from April of 24 to March of 25.

and they could be anywhere from minus 750,000 to minus 900,000, so we really have to pay very close attention. Mike, back to you. And we will, Rick, thanks so much for setting that up. Well, the Dow extended its record today, but the S&P 500 closed lower in what has been a volatile few days. The S&P 500 suffering a quick 3% pullback in the last couple of weeks and an even quicker rebound with wild volatility sweeping through various sectors under the surface. Now investors are getting ready for more potentially market-moving events as we were just discussing the jobs report and the CPI in coming days. Joining us now to discuss it all are Nicole Webb from Wealth Enhancement Group and Warren Pies from 314 research. And welcome to you both.

Warren, quick assessment of how the market has been acting so far this year. In fact, even past the start of the year, S&P 500 has been kind of stuck around here. the majority of stocks are up, mag seven, down three and a half percent. What's the market telling us? Yeah, I mean, I think you can, we needed to correct some of the sentiment. If you think about how we came into the year, strategist, it was very consensus to be bullish on the year. It was hard for anyone to kind of even imagine a risk coming out of left field and side swiping the market. So you basically have sentiment that was extreme coming in the year and you need to correct that. And there's two ways you can correct sentiment. You can either have a sharp pullback in the markets, or you can do

some work under the surface, have different areas in pockets of the market correct, and have some time and some chop. And that's what we're doing right now. I think that the chop that we've gone through, it's put a lot of fear in the market. Our sentiment gauge has gone from middle of the road to mildly pessimistic. We see it in retail behaviors, inverse ETF volume, spiking up. These are the things that indicate that the market's ready to put in a low and move higher. Today, there's just a lot of indecision out there because there's so much data ahead of us over the next 48 hours. But I look at this and think it's pretty constructive. When you have these big dispersion events near all-time highs, they're very rare. We've only had five previous to what we've seen

this time. Six months later, markets up double digits almost every time. That's because we're correcting sentiment in a different kind of way. Yeah, all right. I guess there's the easy way and the hard way. and Nicole, hang with me one second. Robin Hood earnings are out. Kate Rooney has the numbers. Kate. Hey, Mike. So it was a mixed quarter for Robin Hood. EPS did beat by $0.66 per share,

but revenue coming up short at $1.2 billion. Some other key metrics, though, did disappoint, which is why you're likely seeing the stock down about 7% transaction-based revenue. That tends to be sort of a reflection of trading volume. That missed expectation. 776 million Street was looking for $801 million for context options. The biggest contributor of that did fall short of,

census, and then so did crypto and equities there. Funded customers pretty much in line, 27 million there. And total assets, though, average revenue per user, also a significant miss here. That came up short. CFO Schwerma telling me that the street got a bit ahead of where Robin Hood was on transaction-based revenue because of a change in rebate. So basically pricing on the back end, they moved to a different model in Q4 to cater to more active traders, where the numbers tend to be a little bit lower. The rebate is lower, but he did say they are gaining market share with those traders based on some of the public SEC reports says they now have the highest market share in options. A lot of focus. We've talked about Mike on predictions, growth area

for Robinhood tends to show up in the other revenue line item that did beat expectations, 96 million. The CFO telling me that was up 300% year over year predominantly due. He says two predictions markets calls it the fastest growing business within the company's history. And then January, we did get some updated numbers. Contracts there hit a record 3.4 billion. Robin had did also share some January-February volume numbers. These are important. Equity volumes up 57% options up 20%. Verma telling me that was thanks to a lot of dip buying. Start of February, he says, in the first 10 days, we are seeing, quote, a lot of trading activity, a lot of net deposits, and a lot of our customers leaning into the dip buy now. Flash word, though,

crypto trading volumes. That was down about 57% year-over-year in the month. Did ask him about a prolonged crypto-bear market, Vermo says, Verma, rather, says that crypto, it's less than 20% of revenue or roughly 20% pointed to more diversity in the business. That other 80% has 11 businesses now with 100 million of ARR or higher. They're not going to give revenue or earnings guidance. We don't typically see that those spending is set to increase 18%. They have done some in M&A and they plan to invest heavily in product launches. But recovering a bit here, but still down more than 5%. Mike, back to you. Yeah, obviously after the stock has already been down some 40 plus percent from its highs, we'll see how it digest all those numbers. Kate, thank you. Lifts results are

also out McKenzie Scholars has those for us. My Gantleafshare is dropping 14.5% gap EPS coming in at $6.72. That's not comparable to estimates. They're noting a sizable benefit from taxes, which analysts were not factoring in. Revenue coming in at $1.8 billion adjusted. We're also not going to compare this to estimates. The company pointed to a $168 million impact from certain legal tax and regulatory reserve changes in settlements.

Now, without that item, Q4 revenue would have been $1.8 billion, which is actually in line with estimates. The Q4 release announcing a new $1 billion share repurchase program that represents roughly 15% of their market cap. Active rides for the quarter coming in light, 29.2 million versus 29.5 million expected gross bookings coming in right in line at $5.07 billion. And then looking ahead on guidance, you got Q1 gross bookings in line with street estimates at the midpoint of about $4.9 billion. Q1 adjusted EBTA and adjusted EBTA margin, both coming in light at the midpoint. Those shares down still around 14 and a half percent, Mike. Yeah, a pretty negative reflux reaction. Mack, thank you very much.

Don't miss a first on CNBC interview with Lyft CEO. That is tomorrow at 8.40 a.m. on Squawk box. Want to get to Ford earnings. They are out. Philibot ad. Mike, take a look at shares of Ford under a little bit of pressure after the company fell short of expectations. By the way, this is the worst quarterly miss of their results,

relative to analyst estimates in four years. Ford earning 13 cents a share. The street was expecting 19 cents to share. Revenue did come in better than expected. A couple of things may explain why the analysts were expecting better results than what Ford reported. First of all, there was the Novellus aluminum plant. That fire in upstate New York, which supplies aluminum to the F-series. That hurt volumes there.

Perhaps the analyst didn't expect the volume impact that Ford actually saw in the fourth quarter. And they also saw a $1 billion greater than expected. impact due to tariffs due to some of the offsets that they expected to be factored into 2025. They're not going to be factored into 2026. So it's a $2 billion headwind hit there for Ford in 2025. So as you look at the metrics within the fourth quarter, a couple of numbers stand out. Adjusted EBIT of $1 billion. The street was expecting $1.23 billion. Free cash flow, negative $2.1 billion. And for each of the divisions at Ford, this is the same story that we've told for some time. Two of them, profitable, one is not. Ice models made a profit of $727 million. Commercial vehicles continues to be

the best performing division within Ford, earning $1.23 billion. And then the EV division continues to be a loss. One point two billion in the fourth quarter. The guidance for 2026, Ford expects to earn between $8 and $10 billion with free cash low between $5 and $6 billion, dollars, capex of nine and a half to ten and a half billion dollars. And within those divisions, it's the same thing again. They expect to make money when it comes to their internal combustion engine vehicles, anywhere between four to four and a half billion dollars, but they're going to lose four to four and a half billion dollars, or at least that's their guidance when it comes to electric vehicles. The pro division, still the standout. They're going to make six and a half to

seven and seven and a half billion. Mike, the call starts in one hour. We'll see what Jim Farley has to say. For sure. Stock actually firmed up. It's up more than 1% at the moment on all that. Phil, thank you. Nicole Warren, thank you for your patience. And Nicole, you know, this maybe is a microcosm. You generally seem very strong earnings results. We're targeting like 14% year-over-year growth in aggregate for fourth quarter results. But responses have been mixed. I wonder if, you know, there's a concern that the market has sort of front-run the results. Yeah. I mean, Across the board, whether it's the names we just covered or we think about the financial services, the banks today, software last week, what's becoming more and more headline to us.

And as we're coaching our clients, it's all about the fact that the economies of AI are still being developed. And so what I expect to continue is that until there's clarity and a robust buildout of where the economies of scale come from AI, who wins, who loses, we continue to see either a shoring up with earnings or, you know, we're seeing kind of this fallout of sectors as we hear about new innovative ways to approach the same, you know, businesses of the past. Well, how does that kind of wait and see type of an attitude among investors, Nicole, translate into what one should do right now? In other words, do you just sort of stay away from the affected areas, looking for, you know, more stable business models or kind of stay invested and assume

the market's going to sort it out? Yeah, you know, I think, Mike, what you're going to hear many professionals talk about this year is that we're going to see, we're going to see returns generated from earnings growth and to look for quality cash flow. Underneath that, the setup is just changing. What we're finding is that the magnificent seven, their business models are changing, their cap X heavy, their margins are low. where we're seeing more debt leverage exposure up. So how do we translate that into future valuations versus how we have historically? And so instead, we're looking at these intersections, places where you find earnings demand,

earnings growth based on the current business model and increasing demand. And so you start to hear more about infrastructure, industrials, the under allocation or exposure to energy utilities inside of consumer portfolios. And then I think the other flow-through metric there is with names like Robin Hood, which we just covered the earnings. You know, of the past since April of last year, it's been trading like this future technology company. Right now, you're seeing the stock come down in value because of the business as it exists today. Is it decoupling from crypto? Is it building out a robust financial services platform that's diverse and it's offering that generates, you know, future growth and earnings potential in the near term?

And so, again, I think it's just this fits and stops of where these economies are born. Warren, you mentioned that it seems like, you know, sentiment has been reset in a pretty constructive way in the last several weeks. Where does that take you in terms of looking for parts of the market, maybe that have overshot, that have been dislocated? Do you want to go in and look for the beaten up stuff or stick with this kind of cyclical trade, hard assets that's been working? I think you want to mostly stick with the cyclical trade right now. So I think that if your risk to your portfolio is disruption really simply, you need to start thinking about what can't be disrupted. And this is a theme that we started hammering coming into the year.

I think there's going to be, I think there's kind of everybody on this side of the boat right now. So there's going to go back and forth. And as much as everyone wants to run away from Mag 7 and Mega Cap Tech, I think that's a good barbell with that cyclical side of the port. portfolio because ultimately if we're going to have the entire industries just vaporized because of AI, if software is just going to go away and moats are being destroyed, that implies a lot of compute, a highly compute intensive future. And so some of those AI buildout names along with the more

cyclical commodity names is not a bad place to be. I think energy is a little consensus right now, given the fundamentals personally. I think you get beyond this Iranian. conflict and potential air pocket there, but in general, it makes sense. And I think there's a lot of money that has to rotate in those areas, and they've been unloved for a long time. So there's links to this trade. Yeah, a lot of money, and they're pretty small relative to the size of the rest of the market. Warren, Nicole, we'll have to leave it there. Thanks so much. Really appreciate it. Robin Hood, as we just told you, reporting earnings just moments ago, a mixed bag, but with an EPS beat revenue coming up short, the stock is lower after hours down almost 8%. With

this now is Dan Dullo, senior analyst at Mizzouho. Dan, good to see you. And thanks for coming in. Of course. There was, you know, I think some concern about options trading volumes, which of course Robin Hood makes good money on. And then, of course, the stock had been down along with crypto. I guess, what does the quarter tell you about where it goes from here? Everything we see is like moving up into the right. I think it's an expectations management game. And this is what happens when you had like a massive 2025 winner with. everything going, you know, the right way. I look at, for example, at event, you know, prediction markets. I think January was stronger than the entire month of the entire quarter of

like 20, 25, like fourth quarter. So I think this is, you know, I would use that pullback as an opportunity to say, like, this is a structural winner, and they're doing really well in a crypto winter. Right. Is that drawing from people who would otherwise be trading on Robin Hood in other, in other areas, in crypto, in options and cash equities, or is it fully added? And by the way, it's mostly sports. But yeah, go ahead. So we've done actually survey around it. It's actually drawing a little bit at crypto.

So the survey respondents that we did show you that they're selling crypto in order to buy prediction markets. The good news for Robin Hood, it's only like a double-digit percent of their revenue. It's not 100 percent of the revenue. So the puts and takes are actually favorable for them versus some of the other pureplay companies. So this stock has almost been cut in half from the highs. I mean, what gets it rolling again? Obviously, the valuation has been moderated. It's probably comparable to interactive brokers now.

Yeah, so two things, I think. First, Europe is a big initiative, and they just started the ISA accounts. It's like the equivalent of the 401k, and you need that in order to play in that market. So Europe is a big, big thing. You know, prediction markets. You're seeing what's happening with polling markets like Kalshi. I think this year is going to be a huge prediction and international expansion. All right. see how it develops, Dan. Thank you very much for the quick analysis. Big moves today in wealth management stocks. Morgan Stanley, Charles Schwab, Raymond James, among them. This comes after a company called Altruist announced an AI tool that could compete with these companies. We're going to ask Altruist C-O

if this new tool really is a threat. You're watching closing bell overtime live from the New York. Excuse me from the NASDAQ market set. The AI disruption narrative hitting a new sector today. Shares of financial services stock stumbled after financial software provider, Altruist, excuse me, launched an AI tool for creating tax strategies, sparking concerns that traditional players could be at risk. Altruist's new tool helps financial advisors create personalized strategies for clients, as well as create documents like pay stubs. Joining me now is Altruist C-O-O, Mazi Bahadori. Mazi, great to have you on to talk about this, and we just said it.

This tool is meant for financial advisors. wealth managers to help clients sort through their taxes. So, you know, is this supposed to displace financial advisors or is it supposed to help them? Yeah, well, first, thanks for having us, Mike. It's a real pleasure to be here. And no, it's not designed to displace financial advisors. Alchrist's mission since the very beginning has been to make financial advice better, more affordable and accessible to everyone.

And we believe the best way to do that is to empower financial advisors with the tools they need to go out and build their practice. in ways that they've never been able to before. And so for us, the name of the game has always been, how do we get financial advisors to go out and give really high quality fiduciary advice to as many households as possible. Hazel, our AI software and this new tax mode, just allows those financial advisors to do that with tax planning in a way that they haven't been able to before. So really designed to accelerate their growth, not to displace financial advisors. What is, I guess what's proprietary and new about this? Because obviously the underlying data is the individual's tax documents and financial history and things like that. So the tool essentially what? Just kind of like distills it all down and create some kind of a plan around it?

Yeah, great question. So there's loads of, obviously, AI tools out there for wealth management. They're all relatively diamond-dozen. The thing that's unique about us and what's very novel and it's the first in the industry is that Altruis is the very first AI tool to have a complete custodial integration. And so what that means is that any other wealth management AI tool is just sitting on top of a layer of software to go talk to one of the legacy custodians or incumbents with Altris, because we are our own custodian, our tool is able to do all of that, any of that kind of work in real-time. So if you upload any sort of documents, you give it any kind of commands, it's able to transact precisely what you need. It can move money. It can rebalance. It can take RMDs, all of those types of things in a way that no other tool is able to do that. I thought I saw in the announcement from you today that the tool is available or the software program is available, even if you don't custody the assets with you? It is. It is. So you can certainly use a certain note-taking capabilities, record meetings. It's a very powerful tool in that

respect. To get the real unlock, and I think what the market is observing today is that if you use altruist to custody and you're not using one of the legacy custodians to custody, if you're a financial advisor, that's when you get the real power. That's, you know, the analogy that our founder and CEO Jason Wink likes to use as, you know, adding an AI layer to an incumbent is kind of like putting GPS or touch screens on a Model T. At the end of the day, it's still only going to go 40 miles an hour. If you're using a modern custodian like Altrus and you have, you know, the AI Hazel tool on top of that, that's when you get the massive unlock where you can then go out and serve 5 to 10x more households. They previously were able to.

I can see, obviously, feel as if, you know, built from the ground up with the newer technology, it's going to have an advantage. But do you believe that inside of Schwab and Fidelity and Morgan Stanley, they're not going to be able to, you know, have something similar for their advisors? Yeah, it's a great question. Obviously, I can't speculate precisely what they're doing. But, you know, when you've got businesses that were launched in, you know, 1971, 1946 and so on, they've got decades and decades of just architectural. technical, operational debt. Part of the reason why wealth management is so expensive today, why there's such high minimums to go serve retail clients,

is because it's just so laborious. There's tens of thousands of people that are involved kind of navigating their way through really antiquated software. Will they build something? Will they eventually get there? Probably. I've no doubt about that. I think any savvy business person would do that.

I think it's probably going to take them a good 10 to 20 years to catch up to where altruists is today. All right. That's clearly what the market's trying to sort out today. Mazi, thanks so much. Really appreciate you jumping on with us. Our pleasure. Thanks, Mike. Mazi Bahadori of altruist. Up next, we'll get you caught up on some big news after hours. Some of the movers in particular, as we head to a break. Look at some of today's all-time highs. Caterpillar continuing its run, the biggest upside contributor for the Dow this year, now up 30% year-to-date.

Cisco Systems hitting another record as well, a week after finally passing. its March 2000 high. Tapestry, also at new highs, as is Marriott after beating on earnings and revenue and saying it sees first quarter earnings above the current consensus estimates. Overtime, we'll be right back. Welcome back to closing bell overtime, live from the NASDAQ market site. Time for CBC News Update with Julia Borsden. Julia. Mike, court documents on sale today revealed new information in the FBI search of Fulton County Georgia's elections hub. The documents showed the investigation started with a referral from Kurt Olson, an election integrity official appointed by Trump and former Trump

campaign lawyer. Olson previously promoted unverified claims of widespread voter fraud in the 2020 election, which President Trump lost. The National Park Service removed a rainbow pride flag from New York Stonewall monument following a directive from the federal government. The Stonewall Inn was the site of an uprising against a 1969 police raid and is considered the birthplace of the the modern LGBTQ rights movement. And the operator of Saks Fifth Avenue and Neiman Marcus says it will close eight Saks Fifth Avenue stores and its Neiman Marcus Boston store amid its Chapter 11 bankruptcy restructuring. The company says the stores represent a small part of its business and were not profitable. The move will leave it with 25 Sacks locations and 35 Neiman

Marcus stores. Back over to you. Julie, thank you. Well, the Dow eking out another small gain. That's its third straight closing high above the 50,000 level. But the S&P 500 and the NASDAQ, as well as the Russell 2000, all closing lower on the day. Turning to after-hours earnings, Robin Hood, down about 8% had earnings of 66 cents a share. That was $0.3 better than the estimate, but revenue of $1.28 billion came up short. And Lyft also getting hit hard following its results. Earnings of $6.72 a share, but that is not comparable to estimates because it includes big one-time gain. Revenue also not comparable. We can compare the active rider and total

rides numbers. Both of those fell well short of estimates. It has been an okay start to the year for U.S. stocks, the S&P 500 up 1.5% in six weeks. But look at some of the gains around the world. Japan and Brazil, each up about 15% will international continue to outperform at his next on overtime. international markets are beating U.S. stocks by almost 20 percentage points over the past year. The S&P 500 is up almost 2% year to date. Japan and South Korea, both are up double digits. Mexico ahead by 12%. The Brazilian Bavispa is up by 15% and the UK's Futsi is up 4% year to date. And on the currency front, the dollar index recently hitting a four-year low, so will this overseas outperformance continue? Let's bring in Riedel Research founder and president David Riedel.

So, David, first of all, what's your story in terms of what's driving all this? There's obviously a currency impact. Seems like some catch-up after many years of underperformance by overseas, but also this kind of global reflation and growth story is out there as well. I think that's exactly right. And this is also a diversification of trading relationships. You've seen the mother-of-all trading deals between the EU and India recently. you've seen a EU, Latin America, trading deal get closer.

You've seen a China, Canada trade deal. So a lot of trade deals getting settled away from the United States. So I think it's a diversification of trading relationships and a bit of a reset. And then I guess I didn't even mention the fact that some of the Asian markets have been really propelled by elements of the AI trade, right? The memory chip, Taiwan, semi-Korean markets, things like that. Where do you go from here? I mean, to capture some of these effects, or do you think that they're played out? I think there's more a run here.

And I think one of the ways to look at it is to look at some of the domestic companies that will benefit from people having more money in their pocket, more economic growth, and more upside. So you look at someone like in India, for example, where you've had these high-level diplomatic missions recently. I think you want to try to buy some of the more broadly based consumer-oriented names and also the names that connect with regional trade. I think you're going to see a lot of more trade within regions and between regions away from the U.S.

So ports companies, shipping companies, logistic companies that trade in emerging markets, I think will do well. Interesting. I mean, Japan has been just such a fascinating story. It's been running for a while. We obviously just had elections there, which I guess reinforced expectations for, I guess, more active fiscal policy, maybe even, you know, higher inflation, things like that. where does that story stand as far as an investor today in thinking about whether to get in? Well, Japan is still the third largest economy in the world. They've had a demographic shift against them in the last 15 or so years. But this most recent election involved a lot of young people coming out to vote and a lot of youthful support for the LDP, which was traditionally a pretty senior and stable party.

But now they're being seen as an agent of change. change, and that could be really very interesting. Japan has a lot to offer the world in manufacturing and financial services, obviously a big market for consumables. So I think Japan could continue to surprise to the upside. I do worry about heavy spending plans tied to the current government trying to subsidize utilities expenses and bring down food prices. The cost of rice in Japan has doubled in the last two years, and that's a big impact of pocketbooks. Sure. And I guess we have to, you know, register. how that would impact Japanese bond yields, which, of course, impact yields around the world.

A lot of effects and the chain reaction there. David Riedel, I'll have to leave it there. Appreciate the time today. Great. Thank you. All right. Up next, find out what the CEOs of top private credit firms are saying about the recent sell-off in their stocks. Closing Bell Overtime live in the NASDAQ market site will be right back. Some of the biggest names on Wall Street are gathering at Bank of America's Global Research Financial Services Comp.

conference in Miami, including executives of recently battered private credit companies. Leslie Picker joins us with some of the highlights. Leslie. Hey, Mike. Yeah, it's been a busy few weeks for alternative asset managers, many of which got caught up in the software sell-off due to concerns about exposure among both private equity and private credit. And then over the last few days, of course, the publicly traded ones reported earnings where they disclosed somewhat minimal exposure to the software space, but most are still trading lower by double digits just over the last month. So today, as you mentioned, executives at the Financial Services conferences in Miami continue to try and explain their story. Overall, they made

the case that their exposure to software is small, that they've been super selective in the space, and they're surprised by the market reaction and their role in that reaction. Here's ARI's CEO, Michael Araggetti. It is quite odd to us that the public markets have woken up to AI disruption as a theme. You know, if you've been investing over the last five plus years and you haven't been thinking about opportunities and risks created from technology and AI implementation, you've probably been asleep at the switch. Blackstone CFO Michael Chase said, whenever you see such, quote, indiscriminate and very technical trading against a whole sector, as you have seen with software stocks, that almost definitely means it's being overdone.

K-K-R CFO, Rob Lewin, said they have not gone and re-underwritten their software exposure and its impact on the portfolio because they've been, quote, doing that consistently for a long period of time. He said the big and unknown variable of AI could be negative for some software names in the portfolio, but it could also get the benefit of AI as well. It's just too quick to kind of make those underwriting decisions, I guess, over the course of a week, Mike. For sure. I do wonder, I mean, you can't tell in the moment exactly what investors collectively are worried about here. Clearly, exposure to potentially weakening software credits is one thing. But there's also, you know, in everybody's mind, the fact that these players are having a large role in the financing of the data center build out. And they've really kind of ridden this kind of asset raising boom in private credit. I just wonder if people are feeling as if just

the tide might be shifting underneath these firms? Yeah, I mean, they would say basically that's the hedge for them. Blue Owl Co. CEO Doug Ostrover basically said he's super bullish on digital infrastructure, expressing some very certain sentiments about kind of their decisions and their exposure on that front. So they basically believe that, you know, you've got software on one hand, and then you've got digital infrastructure and their exposure to AI on the other. And in theory, if AI were to disintermediate software, they should balance each other out. Now, the unknown that's out there, and I think this is why you're seeing these stocks get whipsod so much over the last week, is yes, you've got kind of direct exposure with private equity, you've got direct exposure

with private credit, which most of these executives have said is pretty minimal, just, you know, less than 10% across the board for each of those various products. But then you also have areas like GP stakes, which may mean indirect exposure. You've got other types of financing, which means may mean indirect exposure. And then you may have exposure to places, you know, that may not be software in the kind of the software category, but still are at risk of being disintermediated by AI. So that's what the market is, is concerned about right now. Yeah, all wrapped up in kind of an opaque bundle there.

Yes. They're concerned about what they don't know. Right. No, exactly. Shoot first. I really appreciate it. Thank you, Leslie Picker. Well, we've got a news alert.

Amazon's 13F for the fourth quarter is out. The company disclosing a new 11.8 million share stake in beta technologies as of the end of Q4. Shares of beta technologies are up about 11% after hours following that filing. Up next, we'll discuss whether the AI fears driving the slide in software stocks are being overblown. Let's look at software now. The industry has recently been hit hard on fears AI could replace some of its services. The software ETF, IGV is down more than 19% this year. Names like HubSpot, Intuit, Unity, Dube, and,

Doc, you sign service now, down more than 30% each. Our next guest, though, says the market is reading the death of software wrong. That storyline is mistaken. Joining us now is Lo, Tony, from Plexo Capital. He is also a CBC contributor. So, Lo, I mean, the market is rushed to this moment where they're saying, look, these business models are at risk. We thought they were stable.

We have to just panic out of them and just give them a massive valuation discount. What do you think is actually going on? I think first we have to take a step back, maybe 10, 20 years, and look at the historical reference points. that drove venture capital investments into software. And it was the increasing returns model. So this notion you write the software once and incur that cost up front, but then you can sell it over and over at near zero marginal cost.

And that justified the ability to have seat-based licensing, unmetered usage, and then the margins themselves, the economic model became the moat. But what we're seeing now with AI is, AI is changing that, but it's not changing it across the board. It's changing it based on whether AI, AI is an ingredient into an existing model, whether it is the product itself, or whether it is an optimizer. And I think when we look at it, we think about it in a two-by-two matrix. And so in the X-axis, we look at is the AI intelligence actually the product itself, or is it an ingredient?

And then on the y-axis, we think about the leverage that's gained. And so people talk a lot about Jevin's paradox, and that's the concept where, you know, maybe it's a 10, 20, 30%, percent drop in the cost of intelligence actually sees an incredible drive in the usage much greater than the percentage or relative drop in the price. And so that's a little bit of what we're seeing. And so when you kind of start to place these companies, and I think you have to look at the products themselves, because you could have a product like, you know, Nvidia, obviously is in the upper right of our quadrant because it benefits from scale more people using.

But then you look at something like meta ads or even Google ads. And we place that in the upper left because, you know, the ability to have the optimizer effect on the ads. And then I think, you know, there's some interesting companies. You look at the model companies themselves, OpenAI, Anthropic. They're in that lower right because, in essence, inference is the product. And it's not clear yet how much they'll be able to kind of scale to increase margins. Right. So that's the way that we're looking at the world.

And, you know, there's some ability to place some of the traditional. additional companies in there as well. Well, the market seems to be saying that's interesting. It's going to play itself out over a lot of years, but all I know right now is we just need more computing power. And let me just play the hardware piece of that. Is that short-sighted? I don't necessarily think it's short-sided. We have so many different vectors that we have to look at. We look at record infrastructure, CAP-X that's going to be deployed over the next year. You know, you've got alphabet basically doubling the amount. I think it was 80 or 90. They're going to go about 180. You've got, I think, Amazon said about 200 billion, right? And so when we think about

that, there's clear demand that's not being met, and we know that revenues can scale up with that. I think part of the challenge is people are looking at what's happening on the software side, and they're just blanket, just, you know, overselling that sector and moving a little bit more to the hardware because they're looking at these big numbers and saying, who's going to benefit us the hardware force. That gives you the conviction. Awesome stuff. Lo, thanks a lot for coming, breaking it down for us. We appreciate it. Thanks for having me. All right. Well, the banks are back when it comes to commercial real estate lending, at least according to JPMorgan. We've got the details ahead. And Mattel shares down big after hours. Ernie's committed to 39 cents a share 15 cents short of the estimates. Revenue also missing the company, saying sales in the crucial holiday period did not surge as much as expected, forcing it to offer discounts. That hurt gross margins. The shares down almost 23%.

Welcome back. Financial is the worst sector today, among those dragging the group lower. S&P Global, the company reporting EPS that was shy of estimates and saying earnings growth will slow in the current calendar year. S&P and other financial data firms have been hit hard recently in that software selloff. A lot of concern about whether these information services will also perhaps be disrupted by AI. On the conference call, the company's CEO at S&P was asked about competition from AI, such as Anthropics Claude. said the company is working with all the major AI players itself and thinks the ability to use AI to improve its offerings to customers will be a growth driver. But you see there the year-to-date moves in these related companies, S&P Moody's fact set as well as Broadridge. Well, audio streaming giant Spotify, a big winner on Wall Street today after reporting better than expected fourth quarter earnings. That is thanks to strong growth in monthly active users and premium subscribers, There's also some relief on gross margins. Despite today's gain, Spotify still has lost roughly a third of its value over the last six months.

And on a one-year basis, looks a whole lot like the related business Netflix, even though Netflix is involved in that hostile or contested acquisition of Warner Brothers Discovery. Let's now turn to real estate. Are there signs of green shoots in the commercial real estate lending market? Diana Olik is at a key conference in San Diego with the answer to that question in this week's property play. Diana? Well, Mike, the short answer is yes. I'm at the Mortgage Bankers Association's CRA Finance Conference,

where they're forecasting commercial mortgage originations to increase 27% this year, that after a massive pullback by big banks. I spoke with the head of commercial real estate at J.P. Morgan on the new lending landscape. Private capital certainly stepped in there with additional lending sources to keep a portion of the liquidity to the market. I think as we go through 2026, that normalizes. The banks are back, which as the bank that stayed active the last few years, we're happy to see. And I think with that, the returns that some of that fundraising was around in the private space

will be harder to find. And I would expect those equity allocations to maybe move to a different area versus debt to find those appropriate returns. I also sat down with Willie Walker, CEO of Walker and Dunlop, who's talking to talk to. about stress in multifamily. Everyone saw that the supply curve was going to come down and that the demand curve was going to keep going up. And what we've seen is the demand curve has started to bend and it started to fall off at the end of 2025. And a lot of apartment owners are waiting for that demand curve to sort of turn around and head back up. And when's that going to happen?

It's a great question because there are lots of questions about the jobs report. There are lots of questions about whether this growth in GDP is actually corresponding to growth in employment. Now, we'll have much more from CEOs at the conference in the next Property Play newsletter and video podcast. Make sure you sign up CNBC.com forward slash property play. Mike, back to you. So, Diana, if commercial real estate lending is perhaps about to uptick here, what areas of commercial real estate have been most starved? Where might it help the most? Well, you know, of course, everything is data centers, right? And we talked a lot about liquidity in that sector and much, you know, billions of dollars going on to that. I was in a panel discussion with the CFO of digital realtor.

who was very bullish on the coming year, but also despite the fact that multifamily is seeing weakening fundamentals, there's a lot of talk about, you know, tons of money going into the multifamily sector, especially in deals for perhaps distress properties where they can get a bargain and then turn those over because the expectation is that demand is going to continue to be high because the for-sale housing market is just so expensive.

All right, Diana, thanks so much. Well, jobs report, first thing tomorrow morning, as well as CPI in a couple of days. That's going to do it for overtime. Olympic curling begins right now.