Closing Bell - Closing Bell Overtime: Advertisers Pay Big for Super Bowl & Intuitive Machines CEO 02/07/25

Episode Date: February 7, 2025

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, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

Well, that's the end of regulation. Milrose Properties ringing the closing bell at the New York Stock Exchange suit up doing the honors at the Nasdaq. New inflation, tariff fears fueling a sell-off inflation date, I should say, a sell-off for the week. That's a scorecard on Wall Street, but the action's just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Ford is off today. Well, the Dow falling for a second straight day, the S&P 500 and the Nasdaq both snapping three-week winning streaks after a higher-than-expected jump in wage growth, weak consumer confidence data, and President Trump promising reciprocal tariffs on some countries as soon as next week. Coming up, former Council

of Economic Advisers Chairman Jason Furman on the potential economic fallout from more tariffs. Plus, Palantir is up roughly 40 percent this week. Palantir co-founder Joe Lonsdale weighs in on the stock's amazing run and where he is putting money to work through his venture fund. But let's bring in Unlimited CEO Bob Elliott and G-Squared private wealth founder Victoria Green. It's great to have you both here. We had a down day for the major averages and we had everything but the Nasdaq 100 finishing the week lower. Bob, we really saw this particularly today on the heels of the data we got this morning and the bond market reacting. It really seems like treasuries are in the driver's seat here. Yeah, I think we've got a combination of challenging environment for stocks. We've got the uncertainty related to tariffs. We started the week with tariffs and we've ended the week with tariffs. And that uncertainty is the sort

of thing that rattles the stock market. On top of that, not just the tariff inflationary pressures, but we're also seeing underlying inflationary pressures that are not quite yet resolved. A lot of concerns both from consumers and from what we see in the wage data that inflation is not beat the way maybe the Fed thinks it is. Victoria, I want to get your thought on the market here because there's been a lot of talk about valuations. On the flip side of that, earnings. And I realize Amazon finished the day lower. The guide was not very well received. We also know FX is baked into that, too. In general, it was a pretty solid report. We've had pretty solid earnings at least the last couple of days. How much does that matter versus the economic data we're getting versus the uncertainty out of Washington? I think a lot of this was just noise

and macro. I mean, if you look at the walls of worry, the S&P and the U.S. indices have had to walk over the last two weeks between deep sea and then tariffs. Wait, no tariffs. But now we're back to tariffs and the de minimis coming in and out of play. Wait, no Taras, but now we're back to Taras. And then DeMinimus coming in and out of play. I mean, it is a lot to digest. So I generally was very positive on earnings. We've had a nice feed across the board. And yes, Amazon was a little bit of a miss on their guidance, but they're also saying, hey, we're investing $100 billion in AI.

This AI trade is not done yet. We still see a lot of legs to AI. They're still very, very profitable. But the other thing is it's a 27-year-old company. It's not an IPO anymore. It's still a growth company, but this isn't a young company anymore. They're a hugely diversified conglomerate. And AWS will get back to work and will get back to growth when they can get through all of this infrastructure they need to build. They talked about the same capacity constraints Microsoft and Google talked about. We want to sell more, but we have to have more servers, more data centers, more electricity, more chips. And so you're going to see this massive spend still, which I think is still a huge boon because if CapEx keeps going, the U.S. economy keeps going.

I mean, we're talking about a $2.4 trillion market cap. We're talking about Amazon. And we've talked about AI as the secular growth story. And certainly we see the CapEx numbers continuing to push through and push up here with the hyperscalers, Bob. But the other thing that's been doing really well and where a lot of money seems to be going to work is gold. It's had this record rally. It's resumed it. Your thoughts on putting that in a portfolio right now? Yeah, I think what we've seen over the course of the last couple of months since the election is that while stocks have languished, gold has really attracted a lot of attention. I think the reason why that is, is gold really benefits from the

uncertainty, particularly the global uncertainty that we're seeing, not just the risks in the U.S., but concerns about China and their need to respond to U.S. tariffs, as well as their economic malaise. You put those two things together, that's a perfect combination that's good for gold. And that's happened in the context of bond yields continuing to be elevated. So if you get any relief there in terms of the bond market, gold is set to be a great asset to be holding in a portfolio, particularly in an environment where basically no one holds it and everyone is basically overweight stocks in their portfolio. Speaking of stocks, Victoria, I mean, the other 493 in the S&P 500, what's compelling right now?

I think a lot of things. Equal weight is actually outperforming S&P 500 year to date. It's phenomenal we're seeing that the rally is broadening out. Go value, go Dow. We've got these sectors like financials and healthcare that are stepping up and taking leadership. Look, the MAG7 looks mortal. Absolutely. Only, what is it, only Amazon and Meta are outperforming the S&P so far year to date. You've got plenty in the red. And so I look at this and say, passing the torch is a good thing. Market breadth is a good thing. Let's have financials run. Healthcare sector run. Staples versus discretionary suddenly flipped around a little bit, and Staples doesn't look as dead.

And so I think that's a very sound principle. We want the 493 to run. I don't want the MAG-7 to die. I do want to make that clear. I would like them to perform a little bit better. But I think it's a very healthy thing to have a market rotation so we're not just dependent on six or seven stocks. That being said, NVIDIA Day, 226, definitely going to be a market mover still. OK, we're going to leave the conversation there. And of course, to your point,

financials are actually the top performing sector so far this year. And we do have healthy gains on the year for all the major averages, even though we're lower not only today, but for the week. Bob and Victoria, thanks for kicking off the hour with me. We've got more companies now warning investors about the fallout from China's weak economy and the threat of tariffs on their businesses. Seema Modi has more. Seema. Morgan, just this week, President Trump imposing that 10 percent tariff on Chinese imports, to which Beijing responded with retaliatory tariffs on U.S. products. Today, Trump signing an executive order that leaves open on a trade exemption that is commonly used by Chinese e-commerce companies. The nearly century

old exemption known as de minimis has been used by many e-commerce companies to send goods worth less than $800 into the U.S. duty free. If these Chinese and other foreign goods are subject to additional taxes, it could lead to a major slowdown in shipping and processing. This could be an advantage for domestic players like Amazon and Walmart. But trade tensions in general remain a big topic of discussion. Newell Brands, the maker of Sharpie pens, saying it was working to reduce its dependency on the country by moving production to other geographies. While Skechers chief financial officer telling shareholders just a couple days ago that trade tensions are clouding the shoemaker's visibility into future earnings. And China will likely get a lot of attention next week, Morgan, with Marriott Applied Materials

and Cisco among the multinationals set to report earnings. All right. Seema Modi, we'll be watching for it. We know you will be, too. Thank you. Now let's bring in Senior Markets Commentator Mike Santoli for a look at the split market that we have so far this year. Yeah, Morgan, not exactly an all-inclusive uptrend, although we'll say also not outright weak. Clearly, the S&P 500 managing to stay within a percent or two of record highs has been a positive. Market's been rotating around. But this is a

sign that internally there's been a little bit of a culling of the herd, a little waning momentum. This is the percentage of S&P 500 stocks that are in a technical uptrend. It's from Chris Farone over at Strategas. Basically means kind of has upward sloping, longer term moving averages. And the stock is above that right now. It's at more than a one year low, below 60 percent at last report. Does not mean that the overall market is going to have to break down. But it shows maybe there's a little bit of a narrower path for the indexes to keep working here unless this perks up a little bit. Now, even within the mega cap growth sector, which really

peaked as leadership seven or eight months ago relative to the overall market, you're seeing a lot of split action. So this would be on a six month basis, Amazon and Meta just vastly outperforming Apple and Microsoft. Obviously, a lot of these things kind of slide around relative to each other at times. But that's an unusually large, you know, 40 percentage point gap in performance over the course of half a year. And it just sort of shows you individual stories are working a lot of offsetting action within the Nasdaq and the other indexes, Morgan. It is fascinating to me how dramatic this tear has been for Meta up, you know, more than two weeks now. What is driving that?

What is it about Meta that investors are valuing more greatly than the other magnificent seven names? Well, it starts out with, I mean, there was absolutely great earnings revision momentum. So in other words, the earnings estimates were going in the right direction even before this period. Investors just love the fact that the kind of growth versus value tradeoff was always really favorable going back to last year, essentially growing fast into its valuation, still modestly valued on a PE basis. And then every little development from there, whether it was, you know, kind of Zuckerberg making these gestures towards, you know, making sure he's close to the new administration or deep seek showing

that open source AI where a lot, you know, people get to touch it on the consumer side. And it's basically confirming Meta's approach to all this as being something that's going to have legs. I think all that's working along with just sheer momentum for the stock. And also, you know, Google, you saw the reaction to Alphabet's results and guidance and CapEx. The market doesn't 100 percent trust Alphabet still in terms of capital allocation. It's going to get a payback on it. And a lot of that money seems to be bets now laid on Meta. So we'll see if it's, you know, getting overextended here in the short term. But those are the storylines.

All right. Mike Santoli, we'll see a little bit later this hour. Thank you. Well, now we're going to shift from public markets to some private market news that I have to bring you in. Andrel Industries, this is the fast-growing defense tech startup founded by Palmer Luckey, is in talks for a massive funding round. The maker of AI-enabled and autonomous weapons systems has signed a term sheet to raise its Series G. That's according to sources close to the company. What could be as much as $2.5 billion that the company raises, which would double Andrel's valuation to $28 billion pre-money. Now, post-money valuation, that'll be determined by the final amount that's ultimately raised. Peter Thiel's Founders Fund is leading the round with $1 billion.

That is the largest check that VC firm has ever written. Worth noting, Anduril co-founder and executive chairman Trey Stephens is also a partner there. But for Anduril, the raise comes on the heels of what is apparently a very strong 2024, in which revenue doubled to approximately $1 billion and annual contract value came in last year at about $1.5 billion. Now, investors have been bullish on Andral for quite some time now. I'm told the round is already massively oversubscribed. The defense tech DecaCorn is likely to use the funds to continue to acquire startups and to invest in scaling up production at the company's recently unveiled mega factory site, Arsenal One in Ohio, among other things. But just to put all of this in context, this would be the second largest raise this year behind OpenAI. So we're going to continue to watch this. And actually, we'll be talking more about this potentially and the broader VC landscape when I am joined exclusively by

Palantir co-founder Joe Lonsdale in just a few minutes. Lonsdale's VC firm is already an investor in Andral, among a number of other companies as well. Well, still ahead, former Council of Economic Advisors chairman Jason Furman on what the White House can do to drive down inflation fears, even as President Trump threatens new tariffs. We've got a big show straight ahead. Stay with me. Welcome back. Stocks under pressure today. The Nasdaq is the underperformer, closing off more than 1 percent and lower on the week. But Palantir has been a standout this week, rallying nearly 35 percent. We actually started the week with Palantir's earnings. Joining us now on this and so much

more, Joe Lonsdale, 8VC managing partner and Palantir co-founder. Joe, it's great having the show. Welcome. Thanks, Morgan. So I am going to start right there because Palantir certainly seems to be, and we saw this in earnings on Monday, providing in real time the use case for how AI is changing business structures as well as the battlefields. And I just do want to get your thoughts on where we are in this cycle of AI investing. Yeah, you know, I mean, listen, Palantir, it turns out, solves some really hard problems that are really valuable for AI, right? It turns out right now this is a big theme for a lot of things we're doing in every industry. And if you actually organize the data

and organize workflows into ontologies, you could then extrapolate on top of that. And Palantir is, I think, surprising all of us is how fast it's growing, how much value it's creating. It's actually kind of fun. Some of our early teams I used to know there from 15 years ago, you know, they celebrate every time it goes up one point

with a drink with each other. They've had a tough couple of weeks. It's gone way up. I mean, and Palantir and I would also argue SpaceX have really forged the way for this idea of disruption in defense. And now you're seeing it increasingly with other names in the startup ecosystem, including Andral Industries, which are just reported before the break is raising another funding round to the tune of $2.5 billion, which would double its valuation. Wanna get your thoughts on that.

Listen, I mean, Palantir and SpaceX led the way for the new wave of defense and DoD companies. Andral is the fastest growing thing we've ever seen now in the space. You know, Andral was founded by three guys who were stars of Palantir alongside Palmer Luckey. So it's a lot of Palantir DNA in that company. I've been invested in every round since the very beginning. This is the fastest growing thing we've seen. They're not

giving out numbers, so I don't want to get in trouble saying it, but it's amazing how well they're doing. It's amazing how well they're running circles around a lot of the legacy defense primes by providing solutions to the government that are much, much cheaper and much, much better. And thanks, I think, to a lot of the shifts you've seen in the last 20 years that really Palantir and SpaceX kicked off, we are seeing a lot more fair competitions where the DOD is saying, what's the best solution here? Rather than running this just for an old prime to automatically get it, let's let people compete. And you're seeing Anduril lead the way with a bunch of other new ones coming up, like EPRES and Ceronic as well, that are starting to really

break in and build some great companies. I think Anduril is going to be one of the biggest defense companies in the world. And, you know, it's $28 billion pre, I guess, it leaked out that it's happening right here. We're investing again. I think it's going to be a lot bigger still. How do you think companies like this are poised to perhaps drive more business from this administration at a time where Doge is going in and Elon Musk is going in and sort of taking that Silicon Valley ethos of moving fast and breaking things? Well, listen, I'm, as you know, a huge fan of Doge. I have a lot of friends involved in Doge and have been doing my best

to help them. There's so much waste in government. There's so much to cut. Companies like Palantir and Andral actually do better when you cut the waste, because what happens is, is that if you are forced to use your money more efficiently, if you are forced to say, we're going to have to do this twice as efficiently, 10 times as efficiently, that's when Palantir and Neanderthal win. You literally have things they're deploying that are a tenth the cost that are better. And this new administration, by the way, Pete Hegsteth, our Secretary of Defense, he's very clear. He wants to have competition. He wants the best ideas. I don't think he's going to favor new things versus

legacy companies. He's going to favor whatever the best solution is. And that means companies like Yanderel and like Palantir are going to keep growing really fast. I mean, you're going to cut a lot of other nonsense that's really crony and shouldn't be there. You published what I'll call a manifesto a little less than two weeks ago about some of the reforms that could take place in the Pentagon. Is this a key moment, whether it's the Pentagon, whether it's Medicaid and Medicare, since I know you also invest in health care, when you look across some of these big spenders within government, is this a moment where real change can actually happen? And if so, what is it going to take to get there,

especially given the fact that there's a lot of politicization right now? You're already seeing the lawsuits come out as changes are being enacted very quickly. What does it take to get there? You know, Morgan, I was in D.C. briefly this week and meeting with a lot of senators, as well as our friends in the White House, meeting with a lot of staffers on the Hill who are trying to work on this. And it's bipartisan. Staffers agree like the DOD, the way procurement works right now is broken. It's not getting the best answers. It's a bureaucratic mess. I mean, the famous cold 1911, before World War I, we needed better pistols in the jungles in the Philippines, as we wrote about. And rather than give 300 pages of specifications, they said, here's what we need, common sense. Now let's test out. Six companies

applied. They had contests. They chose the most reliable gun. It took a few months. It was very fast. It was very efficient. And they bought tons of them. We tried to do a new pistol over 10 years ago. We had several hundred pages of nonsense of bureaucrats trying to over-define things rather than saying what the outcome they wanted was. I think we still haven't gotten a good pistol out of it. The whole thing's a giant mess. You don't need hordes. We should be the arsenal of democracy, not the arsenal of bureaucracy. And I think everyone knows this, and we have to be bold in getting to where we need to be and rewarding people who win the competitions and driving solutions based on outcomes, not based on top-down specifications.

Joe Lonsdale, great to have you on. Thanks for joining me. Thank you. Well, inflation becoming a real fear again for investors after a higher than expected jump in wages last month. Up next, former Council of Economic Advisors Chairman Jason Furman on what that could mean for the economy. Plus, Cloudflare shares sky high after beating Wall Street's earning estimates, finished the day up almost 18 percent. Coming up, the company's CEO on those results and why he thinks the emergence of DeepSeek could be good for his business. Welcome back. Mike Santoli returns with a look at shifts within

Chinese asset holdings. Mike. Yeah, Morgan, among other things, it's a little bit of an explanation as to why gold prices have been so strong. So here we see U.S. Treasury holdings by China officially down from its right scale here. One point one trillion dollars just a few years ago, down below 800 billion right now, down about 330 billion in value. At the same time, China has been purchasing plenty more gold. You see here in ounce terms, in dollar terms, it amounts to about $90 billion more in the value of their gold holdings from here up to there. So not a full offset to what they've done on the Treasury side, but it shows that they've wanted to diversify their reserves, really been reducing their appetite for U.S. Treasuries.

I mean, obviously, some of that also goes to other currency paper and things like that. Now, one side effect of this is that the overall ownership of U.S. treasuries by foreigners is well down as a percentage from the highs of about a decade ago. You see right here, it's in the 30 percent range. This is a percentage of federal debt held by the public. And, you know, obviously a massive ramp in the early in the 2010s after the financial crisis. It was a safety bid. Also, our yields were higher. Let's keep in mind, even though the ZERP was was in effect. So now, I mean, it's not as much the story that U.S. government sort of owes the rest of the world in a dangerous way for their debt. Yeah, this is really fascinating to me to look at these charts, have this conversation,

particularly on a day where Japan's prime minister was meeting with President Trump. And we know that country is one of the biggest investors, not only into U.S. treasuries, but also into actual physical assets and companies here in this country, too. And you've got to wonder what this balance starts to look like looking at cross-border flows across the countries over the next couple of years. Well, for sure. And by the way, the money that these countries have, it comes from U.S. consumers buying more than we sell to them, right? So in other words, the trade deficit is kind of where the dollars come from to be plowed back into our asset markets in large degree. So obviously, everything kind of has these little offsets and rebalancing effects. I guess we'll have to be watching for the stable coin market and see what and if that does to this

entire picture at some point in the future as well. Mike Santoli, thank you. Stocks closing lower today as investors grow more fearful of inflation. This morning's jobs report showed a spike in wage growth last month. Another factor driving markets lower is tariffs. Earlier this afternoon, President Trump said he will announce reciprocal tariffs next week. Joining us now is Jason Furman. He is the former chair of the Council of Economic Advisers. And Jason, it's great to have you back on the show. And actually, that's exactly where I want to start with you,

because the thing that really sent markets lower today and Treasury yields higher was not the jobs report and some of those hotter metrics we just mentioned, but it was the University of Michigan report and the fact that we saw a jump in inflation expectations in part tied to expectations around the possibility of tariffs. Do we have any sort of sense yet what reciprocal tariffs could mean or could be? And at what point do you start to see, if we do get them, start to see that show up in data? Yeah. So consumers definitely showed they were more worried about inflation. Now, it's the preliminary survey. It's a small sample size. I don't believe the true jump was as big as the jump it showed,

but I'm sure it went up. And it went up for good reason. The China tariffs are probably going to add about one-tenth of one percent to our inflation rate, but that's just two weeks in. There's a lot more tariffs that might be coming. They could easily add, you know, half a point to our inflation rate, depending on where we add up, end up with them. So what would you be watching in terms of data points to understand what this does to the broader inflation picture and how sticky it already has been? Yeah. Now, you know, tariffs and Trump's first term weren't a big deal for inflation. In part, they were much smaller.

But back then, inflation was below target. Now we're starting with inflation above target. The real side of the economy, the unemployment rate, that's good. That is at target. So really, there's just risk going in one direction here. How big and how certain that risk is, is certainly unclear. But there's just a lot of different doors to go through for tariffs. Tariffs as negotiating leverage, tariffs as a way to raise revenue, tariffs to bring back jobs, tariffs to restore fairness. And the president keeps,

you know, at least knocking on every one of these doors, which of them he's ultimately going to open, we don't know. I do want to get your thoughts on the jobs report we got this morning. I've seen this chart circulating today that I thought was particularly fascinating. And it was showing that, based on the data we get in that monthly jobs report, that jobs for Americans have basically come up a little bit in the last couple of years post-pandemic and kind of stayed flat. And that jobs for immigrant workers, which they don't break down whether that is legal or illegal immigrants, but that those job gains have been much stronger in the last couple of years. So if that's the case, if you start to see this immigration crackdown and that

happens in a bigger, more significant way here, and we already know it's starting to gain momentum. What does that do to the labor market and thus wages? Yeah, I mean, the facts you said are correct. At least they're in the data. And it's a reminder that were it not for the inflow of immigrants, we would be losing jobs as a country. Our workforce is aging. People are having fewer children. And so our population would be shrinking. Our workforce is aging, people are having fewer children, and so our population would be shrinking, our workforce would be shrinking, we would be posting negative jobs month after month were it not for immigrants. We saw immigration turnaround starting the middle of last year, a big halt on the inflows of illegal immigration. What remains to be seen is what President Trump

does on the legal side of immigration. Does he keep them flowing in? If he doesn't, it'll be very hard to get decent job growth or GDP growth. So if we bring all of this fiscal policy back to the monetary policy piece of it, the fact that we've gotten comments from Fed officials today and this week that basically suggest inflation continues to be the most important metric that they're looking at and sitting on their hands and maybe that we're closer to a neutral rate than previously thought, all of that makes sense?

Yeah, every piece of it. One, the real economy is fine. Two, inflation is a bit high when you look at prices. Three, when you look at wages, those are consistent with even higher than the price inflation we've been seeing. And finally, for all I know, we're already at neutral. I think we're probably above it, but I wouldn't be shocked to find out that this is actually a neutral interest rate. All of that, plus the uncertainty about tariffs we were talking about earlier, means it will be a high bar for the Fed to cut rates again. I think it will take a material rise in the unemployment rate for them to want to

cut rates again this year. Okay. Jason Furman, great to get your thoughts. Thanks for joining me. Thanks for having me. Coming up, marketing guru Gary Vaynerchuk on whether paying up to $8 million for a Super Bowl commercial this weekend is really a cost-effective way to reach consumers. Stay with us. Welcome back. It's time now for a CNBC News Update with Angelica Peebles. Angelica. Hey, Morgan. Elon Musk says he'll rehire a Treasury Doge staffer behind a series of racist social media posts. His announcement today came after President Trump supported Vice President Vance's recommendation to hire the staffer back. The Wall Street Journal first reported the 25-year-old staffer resigned after he was linked to a now-deleted social media account that advocated racism and eugenics. The Pentagon will send about 1,500 more active-duty troops to the U.S.-Mexico border to support the president's immigration crackdown. A U.S. official tells the Associated Press that

the order has been approved to send a logistics brigade from North Carolina to support Border Patrol. With this deployment, it brings the total of active-d duty troops at the border to about 3,600. And a group of men arrested in connection to the December break-in at Cincinnati Bengals quarterback Joe Burroughs' home took a selfie with the stolen items. According to the FBI, the three men from Chile broke into the home while the Burroughs security team was changing shifts. And they're believed to be part of a transnational criminal organization. Back over to you, Morgan. Angelica Peebles, thank you. Cloudflare, a big winner today following its earnings beat yesterday during overtime. Up next, CEO Matthew Prince joins us exclusively to break down those results

and whether its big investments in AI are starting to pay off. Plus, shares of Intuitive Machines are up more than fivefold over just the last six months. So coming up, the space exploration company's CEO on why he wants to be at the center of a thriving commercial lunar economy. Stay with us. Welcome back. Shares of cybersecurity company Cloudflare closing up nearly 18% today after posting a strong fourth quarter earnings report that beat Wall Street expectations. So joining us now exclusively, Cloudflare co-founder and CEO Matthew Prince. Great to have you here on set. Welcome. Thank you so much for having me. So you had a strong earnings report. We covered it here on the show when the numbers crossed yesterday.

One of the things that really stood out to me was the fact that you saw record growth in your largest customers, those that spend more than $1 million with a company per year. What is it about that cohort that the momentum is building and building strongly? You know, I think there are two things that are really driving that at Cloudflare. The first is we've got a really broad product suite. Any problem that you have as a company in networking, whether it's security or performance or liability, we can solve that for you. And so more and more companies are adopting our full product suite. But the other thing is over the last 18 months, we've been really focusing on improving our go-to-market action. Mark Anderson, who joined us, is one of the world's best

go-to-market leaders. And he's really built an incredible team that is just taking our product to larger and larger companies. And that's showing up in the numbers. So how does that position you for 2025, especially when we talk about cybersecurity? I mean, it is a fragmented market, and there's many different companies operating in many different aspects of it. Yeah, I think that's right. I mean, Cloudflare is focused on being the leader in network security. So, again, if you have a problem in your network in any different way, whether that's you need a new modern VPN, you need

protection against cyber attacks from a firewall. Those are the sorts of problems that we solve. We partner with other companies that provide things like identity or endpoint security. But for that, we have a really comprehensive solution. And I think that positions us extremely well in 2025 as cybersecurity is still one of the top concerns in almost every company that I talk to. How is AI driving demand for the business? You know, I think one of the things that's really unique about Cloudflare is that we count a huge percentage of the content creators, the people who are generating that original content that is sort of the fuel behind AI engines as customers. More than 20% of the web uses Cloudflare in order to protect their systems.

At the same time, we count most of the large AI companies as customers. And what we're seeing is that there needs to be a conversation between those two to figure out what the sort of future business model of the web is going to be. And that puts Cloudflare in a really unique position to be able to help broker that conversation.

And that's something that we're really excited about in 2025. We haven't really talked about that very much on CNBC. What do you think that business model needs to be? How does that need to come together? Well, to give you some sense, one of the things we've tracked over the last 10 years is how do content creators like CNBC, like others, get traffic to their site? Ten years ago, for every two pages that Google would scrape on your site, they would send you one visitor. Today, that's six to one, six scrapes to one visitor. And if you talk to anyone who's in the publishing space and you say, how much harder has publishing got over the last ten years? Three times is about that.

And that's still the good news. If you look at OpenAI, it's 250 to one. If you look at Anthropic, it's 6,000 to 1. And so we need some new model in order to help content creators make sure that they have incentives to continue to create content. And again, I think that's one of the conversations that we're helping facilitate at Cloudflare. And we're really excited that I think that there are going to be some new models that emerge over the course of this next year. Oh, okay. I do want to get your thoughts on DeepSeek. We've had a number of tech CEOs in the past, call it week, two weeks, since we saw this shake out in the market around concerns around it, basically come out and say, you know what, this is actually a good thing. It makes the

case for open source, and it just, as costs come down, it's going to drive more demand for more products. Your thoughts? So first of all, I think that we've looked at the actual research that the DeepSeek researchers put together, and to their credit, published online. And there were really two big innovations that they drove that, again, we can quibble about exactly what the numbers of training were, but they made training significantly more efficient. I think that's going to mean a couple of different things. One, the foundational models, I think, are going to be much more of a commodity than we might have seen before. They're going to be a lot more of them. They're going to be open source. They're not going to be proprietary. And I think that's a great thing. That's going to drive, actually, more AI use cases. The second thing is that I think it's shown that the right answer and the

winner in this space isn't necessarily going to be who throws the most money, the hundreds of billions or trillions of dollars at it. It's going to be some people who actually find real innovations in order to make AI more efficient. So that's what we're focused on at Cloudflare. We focus on the inference part. So once you have the model, how do you actually use that model? And what our team is seeing is the same way that DeepSeek showed that they could get at least 10 to 1, maybe 100 to 1 advantage in training, we're seeing similar advantages in inference, and that's something that we can pass on to our customers

to give them a higher ROA, lower cost, and better performance when they're doing inference tasks, whatever model they want to use. I think we're going to be talking a lot more about inference here on CNBC as we move forward in this AI cycle. Appreciate the time, Matthew Prince of CloudFlare. Thanks for being here with me. Thanks for having me on. We have a news alert on Bank of America.

Leslie Picker has the details. Hi, Leslie. Hey, Morgan. Yes, Bank of America revealing Brian Moynihan's compensation for 2024. This is an 8K filing that dropped a short while ago. In it, they say that Moynihan received $35 million in 2024. That was up from $29 million, about a 21% raise from compensation in 2023. The company's stock price was up 30% last year and earned $27 billion in net income, which is what they use in terms of the way that the board and the independent members of the board decided that compensation.

In terms of how it's comprised, the annual base salary remains unchanged at $1.5 million, and the aggregate value of his 2024 equity incentive awarded by the board is $33.5 million. I'll send it back over to you. All right, Leslie Picker, thank you. Up next, the CEO of Intuitive Machines, which had the first commercial lander to touch down on the lunar surface on how his upcoming mission could boost the emerging moon economy. And investors are over the moon for Take-Two Interactive today. The stock is a top performer in the S&P 500 after announcing a smaller than expected third quarter loss and reiterating that Grand Theft Auto 6 is still on track to launch in the fall. Those shares finished up 14 percent. Stay with us. Intuitive Machines made history last year when its Odysseus spacecraft

became the first commercial lander to successfully touch down softly on the moon. Now, the company is preparing to do it again. And this mission is even more ambitious. It's an aggregate of a number of payloads, but the one that clips payload and and the bulk of them are commercial payloads. And so this really is the beginning of, you know, the commercial economy on the moon. And I would call them all a flavor of the ice hunting kinds of payloads. And so we're really starting to think about prospecting on the moon. Well, Steve Altomus, the CEO of Intuitive Machines, says the five-day launch window opens February 26th.

The plan is to land the Athena spacecraft on the moon on March 6th. Athena is carrying a collection of items, including a NASA-supplied drill and a hopper that will, before the landing, deploy to attempt to make a flyby of an asteroid. Now, for Intuitive Machines, this is just one piece of a growing portfolio of transportation, data services and infrastructure centered around the moon and eventually, perhaps, beyond. When we think about what we're doing here to lay in the infrastructure around the moon for potentially a thriving commercial lunar economy, why not take those models for contracting and building out that infrastructure all the way out in the solar system to around Mars? You know, there's a number of satellites, imagers, space weather satellites, communication satellites around Mars that are aging infrastructure. And so the commercial sector is now capable of flying complex missions in space and deploying

satellites and imagers and equipment in and around Mars. And I think that's a natural extension moving forward. And we've already been seeding discussions like that for a couple of years now in terms of how to replace the aging infrastructure at Mars. And so I think it feeds in nicely. Living and working and learning about the moon and how to do that efficiently from a commercial sector, applying that out towards Mars makes a lot of sense. Now, it isn't just Intuitive Machines that's heading to the moon either. U.S. startup Firefly Aerospace and Japan's publicly traded iSpace are both poised to attempt soft landings in the coming weeks as well.

For Intuitive Machines, I am too, Mish, though, investors are along for the ride. The space firm went public exactly two years ago this month, and the stock chart has been on a spaceflight of its own. If you take a look at it, we're up 425 percent over the past 12 months and even larger gains over the last six months. But for more from the CEO of Intuitive Machines, scan this QR code on your screen or download Manifest Space wherever you get your podcasts. Up next, marketing guru Gary Vaynerchuk on whether paying up to $8 million for a 30-second commercial at this year's Super Bowl is really worth it. Welcome back. Companies are paying big for their ads during the Super Bowl on Sunday. The price for a 30-second spot this year is estimated to cost up to $8 million.

But my next guest says the coveted slots are still underpriced. Joining me now is Gary Vaynerchuk. He's the CEO of VaynerMedia, which has produced 14 Super Bowl commercials in the last six years. This year they did two, one for Duracell, one for Tubi. Gary, it's great to have you on. It's interesting. I was going to start this conversation by asking you if at $8 million, this was overpriced or worth the money, but you're saying underpriced? Underpriced. Morgan, thank you for having me. Look, we pride ourselves in being digital leaders. We're really spending most of our money in social because they're biddable markets and they're actually underpriced. But on VaynerMedia's best day,

I can't and we can't get 130 million Americans to watch 30 seconds of a video for $8 million. The Super Bowl is still the most underpriced ad. But if the ad itself isn't good, if the creative isn't good, then it becomes the most overpriced. So the media's underpriced, but the creative has to hit to justify the spend. We keep talking about the fact that live sports is really what's holding the cable bundle together. And yet we know there's

cord cutting. We know there's cord nevers. How long does this dynamic last? And I guess if that is the landscape and it's changing for advertisers, what does that mean in terms of how you gauge success for something like a Super Bowl ad? There's a lot there. I mean, look, Super Bowl, regardless where it is, wherever the commercials are, that's going to play. And whether that goes off of network and goes to streaming or somewhere else, nobody's going to give up those economics. As far for brands, I mean, look, brands, I believe, are overspending money on traditional channels, including traditional digital. Social media is eating up the attention of the entire world. And the more that brands spend in there smartly,

the more they'll benefit. But Fortune 500s, a lot that sell on the Nasdaq and others, are still overwasting money and not under investing in social. The question becomes, when do they figure that out? So the AI piece of this is really fascinating to me because you have reports that OpenAI is going to have a commercial this weekend. We've seen the reports about Alphabet's Gemini commercial having to be fixed in part because apparently some of the data that was scraped for the commercial was actually incorrect. Is this the zeitgeist moment for AI to go mainstream as you see these companies start to actually directly market to consumers? You know this because this is a business program. In the early 2000s, we had the Internet Super Bowl. Just a couple of years ago, we had the crypto Super Bowl. This will be the AI Super Bowl. Unlike those other

things, though, I think everyone is very aware of this AI thing. It's scaring a lot of people, unfortunately, because people are scared of innovation. But yes, I believe this will be an AI Super Bowl. Well, I guess it also raises the question, is the advertising mix changing? The people that are actually willing to spend the money. I mean, yeah, I mean, look, you're speaking my language. I wrote a book recently called Day Trading Attention using a Wall Street term. I could not sit here and communicate enough

to everyone who's watching. If you care about Fortune 500 companies as an investor, as a private equity firm, as a day trader, you have to understand these companies are wasting an ungodly amount of money on both traditional and digital marketing because the Madison Avenue framework is completely broken.

So do I think the marketing mix will change? I do, and it's gonna happen because a lot of these brands are gonna feel pain because you have creator-led brands popping up every single day and they're eating up market share because they know how to use TikTok and YouTube Shorts and Instagram and Facebook

and Twitter and Snapchat. And big companies will still waste money on very bad 1980s and 90s behavior. The marketing mix is going to change because they're going to be forced because their businesses are declining. So in terms of the actual creation of the content for these advertisements, at what point do we start to see AI actually make the content? And what does that look like in terms of AI in the driver's seat versus creatives in the driver's seat using AI to be more productive?

Morgan, you're asking good questions. This is the big elephant in the room. AI creating these commercials, not just commercials, movies and television. I mean, we are going into a transformational era with AI. And what does the government do?

And how many jobs could be potentially lost? I think to your point of how you asked it, I think the first thing you're going to see is creatives harnessing the power of AI.

But when is the tipping point? And I think within the next decade, we'll see real transformation. And companies like myself are looking at that. And so it's a big deal. Gary Vaynerchuk, great to have you on ahead of Super Bowl weekend. Thank you. That does it for us here at Overtime.