Closing Bell - Closing Bell Overtime: AI, Markets and the Next Big Winners 6/1/26

Episode Date: June 1, 2026

Our Kristina Partsinevelos breaks down Nvidia’s push into the PC market and explains why investors see it as a potential new catalyst after earnings. Then our Kate Rooney reports on Anthropic’s confidential IPO filing and brings reaction to the latest comments from OpenAI CEO Sam Altman. Dan Niles weighs whether the AI landscape is entering a new phase and identifies the winners and losers emerging across tech. Mike turns to the dashboard to track Berkshire Hathaway’s investment performance and a new position in homebuilder Taylor Morrison. Steve Wieting, Chief Investment Strategist at Citi Wealth, assesses the broader market outlook and where investors should focus next. Healthcare takes center stage as Angelica Peebles reports from ASCO with exclusive comments from Eli Lilly’s head of oncology. Jared Holz of Mizuho breaks down the biggest takeaways for biotech and pharmaceutical stocks. 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 in to the trading day at the NYSD, the NYSD International Retail Forum, ringing the bell. And at the NASAC, it's Crescent Biopharma. Welcome to closing bell overtime. We are live from Studio B at the NASAC market site. I'm Melissa Lee along with Mike Santoli. The three major averages all higher today, small loss for the Russell, eight straight up days for both the S&P 500 and the NASAC. And once again, new closing highs. InVITA having its best day since February, it's announcing a new AI chip from Microsoft Windows PCs. Microsoft also gaining those are only.

two mag seven names higher today, though. That's also helping the PC trade continue its run. Dell up another 10%. Both the HPs also gaining Gila Packard Enterprise earnings due out in a few minutes. Software names continuing their gains, Oracle up about 10%. Octa, Datadog, MongoDB, all up significantly as well. Does it matter if the Iran talks are continuing? Does it matter if oil's up 6%? As long as a tech trade works, Mike, that's all that matters. It doesn't really matter in an aggregate way. Although what's it? interesting is intraday, you see the sensitivity to it within a range, right? I mean, oil did finish off of its highs, yields did come in a little bit, but it really is a side show to what's

really going on here. And it was, Invidia Microsoft enough to keep the S&P positive on the day. More stocks were down than up. So you do see, again, more of this churn below the surface. 7,600 on the S&P, we tagged that. And, you know, we'll see if that means it's a kind of a culmination here. First day of the month, sometimes it's a little bit noisy in terms of the market That's a good point. It feels a little grabby. We were talking about IBM shortly before the show in terms of the pop. Yes, there's a lot of quantum news out there. Quantinium, also

going up public later this week. But for IBM, it was this viral video circulating on X. It's six months old. That's right. That initially caused the pop. Of the president, kind of with a nice gesture toward the CEO of IBM. I think that speaks volumes about where we are. It does. And you've seen it roll through, for

example, I noted earlier this morning Virgin Atlantic shares symbol S-P-C-E, like. almost like SpaceX, was surging. And so, yes, you do see the froth kind of churning around. You see it in the options data in aggregate, though. It kind of offsets against a lot of weakness in kind of Main Street stocks at this point. Well, the other big story for the markets today, a big jump in the price of oils.

We mentioned some comments from President Trump to our Aiman Jabbers. But oil prices then reversed a bit as the president seemed to reverse himself in a social media post. Let's bring in Aymn for all of the details. Zaman. Yeah, Mike, that's right. Talk about a fluid news environment today. So the morning began with this report that we had from Iranian media, Iranian state media, that the Iranians were breaking off negotiations, and that sent the price of oil skyrocketing more than 8% earlier today. That's when I called President Trump to ask him if, in fact, he could confirm that negotiations had been broken off with the Iranians. And what was his reaction to it? And here's what the

president told me earlier today in a phone call. He said, I don't care if they're over on. honestly, I really don't care. I couldn't care less. If they're over, they're over. If they're not, you know, I think they took too much time. Frankly, I thought they started to get very boring. They were giving us what we needed. But I think, I think they handled the negotiations poorly. It took too long. I thought they were tapping us along. That's all. So the president, this was about 1215 this afternoon, Mike. The president suggesting that it didn't matter to him whether negotiations were on or off. Then something happened after I hung up, the phone with the president because we saw this post on social media a short time later,

and the president said this. Talks are continuing at a rapid pace with the Islamic Republic of Iran. So at some point between my phone call with the president and his posting of that, he must have gotten some additional information that changed his view on whether or not these negotiations were happening or not. We still haven't heard from the Iranians, and that matters a lot. Obviously, there's two parties in any negotiation. If both parties say there's negotiating, you can assume that they are. If one says they are and the other says they're not, then you've got a dispute. So we'll see where we land with this one. But it's been a back and forth kind of a day, Mike. Amen, earlier today, Iran said that the ceasefire was broken. I'm wondering if

there's any clarity on that from the White House. Yeah, I asked the president whether or not it was time to end the ceasefire, and he didn't say so. He didn't indicate in any way that he views this ceasefire to be over. But he did threaten. and I'm just looking through the transcript here in front of me, he did threaten the Iranian government with military action in my conversation with him. He said he put all this in the context of the most important thing to him in the negotiations is that Iran not be allowed to have a nuclear weapon. That's his overriding goal. He has said that all along. He said that to me today.

And he said, and if they want to try and have a new nuclear weapon, I will blow them up to Kingdom Come. So the president issuing a real military threat there if these negotiations don't produce some kind of results and if he decides that it's clear the Iranians are pursuing a nuclear weapon. Yeah, I guess in the meantime, we're suspended here in a familiar spot, Damon. Thanks a lot for taking us through all that. While Nvidia has been lagging behind the broader chip sector for the last couple of weeks, but leading the way higher today, let's bring in Christina Parts and Evelas for more on the company's latest chip news and the impact it's having across the industry.

Well, it's making a play for the PC market and the data center simultaneously. At Computex last night, our time, Jensen Wong unveiled the RTX Spark, Nvidia's first processor for Windows PCs, pairing a custom arm-based, they're calling it gray CPU with a Blackwell GPU. For specifically AI and gaming, every major PC maker from Dell to Lenovo is on board. But for now, we have to say that this is a niche product aimed at power users who need on-device. AI compute. The bigger question is whether Windows can actually deliver the apps and workflow that make the compute worth paying for, worth upgrading your computers. On the data center side,

Nvidia's Vera's CPU is now in full production this fall. And then you have Anthropic Open Eye Corweave among the first customers of the actual CPU. Analysts expect Nvidia to become the largest server CPU vendor by fiscal 2020. So quite a dramatic increase there. One clear winner, Arm, closing up roughly, what, 15%. The RTX Spark run. on Arms architecture. So think of it like a blueprint and not Intel's architecture, which is why you saw Intel shares fall, which is a major vote of confidence for Arm whose PC market share outside of Apple has been somewhat limited. Also worth noting today, Fluence energy surging more than 40% after the company said it partnered with Nvidia and Siemens to develop a blueprint for AI

data centers incorporating Fluence batteries into 136 megawatt facility design. That is separate from Computex, but worth noting. And just in conclusion, and you just got In video that built built business on GPUs, and now it's coming for the CPU market at both ends. So how does the, so Invitya invested in Intel, and they're supposed to come out with a GPU CPU. How does this all fit in? It's like they're frenemies or something. Well, everybody in Silicon Valley is frenemies. They're supposed to, but perhaps it's more of an investment in Intel, which is actually already reaped benefits, paper benefits for Nvidia. And I don't want to throw cold water on that pairing, but just like OpenAI made that

promise or Nvidia made that promise with Open AI. I have 100 billion dollars and we know how that got scaled back to a 30 billion dollar equity investment. I just, I don't know yet what that chip will be between the both or perhaps it'll be packaging. So we haven't really received details. Good question, though. Christina, thanks. Christina Bartonabless. The other piece of the tech puzzle right now, several huge IPOs looming. That includes Anthropic, which confidentially filed its S1 today. Kate Rune's got the details for us. Kate. Hey, Melissa, so Anthropic does appear to be pulling ahead of rival OpenAI with this filing today. It may be the first AI lab to go public.

Earlier today, Anthropic, finally, in that key paperwork with the SEC, and just two weeks ago we reported Open AI was doing the same. They were preparing to file their own prospectus and looking to list as soon as September. That's at least according to a source familiar with matter. No update on if that has been officially submitted. Here's what OpenAI CEO, Sam Altman, told David Faber about that earlier. I think there is a race to deliver the best technology. and build the best business. But, you know, going public is a financing event. And I don't think

that's one that we're focused on the timing of. We'll do it when we think it makes sense. But you will do it as well. I assume we'll do it someday. So investors that I'm talking to in both of these big AI companies do tell me that there is pressure to get out there first, to be first out of the gates and really frame their financials to Wall Street. It is a very capital-intensive business. The Sam Altman was sitting in front of an excavator there. And they do spend big on compute, Anthropic, now has an almost trillion dollar valuation after that finance. And we talked about last week is $65 billion fundraise that they closed.

Also, one up in OpenAI in private markets. When you look at valuations, Open AI in comparison, $850 billion price tag. I have also heard from sources. That company, Anthropic, is on track to hit its first profitable quarter in Q2 and is now at a $47 billion run rate, guys. Yeah, Kate, it's interesting. I mean, presumably Open AI and Anthropic will be either coming public in marketing their deals in quick succession, or maybe it's even going to be an overlapping process.

I'm trying to think through how each is going to frame what makes them distinct, right? So is open-A-I maybe has to make the case owning the compute longer-term is actually a better bet. It's going to be more secure, and it's going to be enduring value as opposed to Anthropic. It's kind of like the asset light version and the enterprise software play, in a sense. It's a great point from what we've heard so far, and you would think that this would translate into the IPO process and the message to the street from open eye is that compute is an advantage. All the spending that they're doing, they've described it as a moat and talked about there's this compute shortage. We've got it all. It's durable. It's long term.

And that's where we're going to stand out. And they've said that the more they spend, the more it translates to revenue. One of the big questions, though, is losses. Are they, you know, negative gross margins? How are they going to explain this to the street? And even if it's, yes, you're unprofitable now. What is the path to get there? And when does this business start to make more sense? Sam Altman pushed back on those questions from, David saying, you know, this is, we believe in this spending. There is demand to support it. So I think that will be one of the big questions. Anthropic, though, really has been seen as the

winner at Enterprise. They're both really competing for those businesses. But that's Anthropics' core of their DNA. They started that way. They've been seen as the winner. They're winning and coding. And from what we've heard, the financials look a little bit, a little bit better. Margins might be better because they're spending less. But we'll see a couple months here, guys. Kate, thanks. Kate Rooney. H. HP earnings are out. We want to get to those. Christina Parts Nevelas has the numbers. Christina. Yeah, they just blew past their own roadmack. The company is now two years ahead of its fiscal 20-28 long-term financial plan.

So let's start with the numbers. And blowing past, look at the shares are up 20%. EPS came in at 79 cents adjusted nearly 50% above the 53 cent estimate, and more than double a year ago. Revenue hit a little bit over $10 billion, almost a billion dollars above expectations, with the upside coming almost entirely from servers and the server beat. able to speak with HPE CEO Antonio Niri about these earnings who told me traditional server bookings are up triple digits, the biggest backlog the company has ever seen. He said AI demand is accelerating specifically on premise, especially in industries where security matters. That's why

they want to do it on prem. On supply, he was a little more direct. Memory still remains constrained, cost stay elevated well into 2027, and he sees no necessarily memory price decreases on the horizon. HPE is raising full year guidance for a third time. in just six months. This time, the EPS Outlook, earnings per share, is being hiked by a buck, which reflects both the big Q2 beat and also bullish performance

on the back half of the fiscal year. HB also raising revenue growth to at least 29%. And that is why you're seeing shares I had up sharply, but this is soaring, almost 24%, guys. And this is on top of today's game, going to the, on top of last week's gain on Dell. So, I mean, that's just a...

Yeah, I mean, it's building on it. date coming into this number. Christina, thanks. Christina Parts and Nevelace. So with Invidia part venturing into PC chips and anthropic filing and IPO, what does it all mean for the overall tech trade? Joining us now is Dan Niles, founder of Niles Investment Management. Dan, it's always a pleasure to speak with you. I first want to get your take, not necessarily specifically on HPE earnings, but the reaction

to HPE earnings and the sort of vertical moves that we've been seeing. What's your take? Is this rational? Well, two things can be true at the same time. You can be in an irrational market but still have a lot more to go. And so I think that's the way you want to think about things right now because, remember, there's been a lot of bearish calls on semiconductors really starting, I think, you know, March of last year, guys having big put positions.

This is all a fraud, et cetera. But you fast forward to January 30th of this. year when you had OpenClaw get formalized, right? So agentic AI. And then all of a sudden, token production goes from being up 20% over the prior two months to up over 130% in the next two months. You're in that next wave of demand. And so are some of these moves you go, does that really make sense on one day? No. But if you think about the fact that OpenClaw just came out, what, four months ago, it's going to take. probably another year for corporations to really embrace this. And so I think you're going to see,

you know, upside from here through the end of the year, which is sort of what our call is. Dan, I guess at some point, given how far a lot of these stocks have moved, the way the companies have been re-rated in terms of their multiple, you almost have to make the call as to whether something structural and long-term is going on here as opposed to just, hey, a particularly hot part of the typical cycle. Well, I mean, it depends on what you consider it over. value. If you say, well, if a company's growing revenues at 80%, and the PE multiples 26 times, is that overvalued? Especially compared to the SMP that's growing revenues at 12% this year, that's trading at about 22 times. Obviously, the company I'm referring to is NVIDIA.

So I think there are some definite disconnects between what certain stocks like an NVIDIA is trading at, relative to other names out there, like a cerebrus, where you go really a hundred times revenues. Does that make sense? But I think in general, that's why stock picking gets, you know, more important going forward. And the bottlenecks keep changing, right? Where CPUs, who cared about CPUs? Then in late March, when people started to figure out, we wrote about this, that all of a sudden the ratios are changing, now everybody's talking about CPUs.

All right. Dan, we just want to show in Chicago the Sibo closing bell ending the regular day of trading for options. It sounds like you would be potentially a buyer of some of these bottleneck stocks. Where do you continue to find value recognizing the fact that even if the moves seem irrational, they might have much more to go? Well, in Biddy, as I said earlier, that's not irrational. That's our biggest position by far. We add more to it. But how about like an Intel or Dell?

I mean, that's how you made your bread better way back when. Yeah, no, I mean, Intel we started writing about that late March saying there were going to be a huge beneficiary of this move to CPUs. And, you know, today obviously got hit because everybody's concerned about Nvidia. But demand is through the roof because Agenic moves from eight GPUs to one CPU. All of a sudden with Agentic, you're closer to unity. And that's a huge mathematical change in where the bottleneck sits and tells the leader in server CPUs. Will Nvidia gain some share? Of course they will. They have no share today. But does that mean that Intel's going to suffer when they've got the majority of that? No. So it may take a few more days for this to settle out. But at which point then I think, and by the way, with Intel, you have a couple of ways to win. Number two, even if Arm does take off, I think there's a good shot. They end up with Apple as a foundry customer before the end of this year. Invita invested $5 billion in them back in September. So let's not forget that. And then you've got

the fact that they should be the foundries for some of these hyperscalers. Don't forget they have an announced agreement with Google. Tesla announced working there as well. And all of that should help us get a better source of supply in the U.S. for these advanced chips, 90% of which come out of Asia. So I think there's a couple of ways to win with Intel, which is why I like it. Dan, how are you thinking about the approach of the mega IPOs at this point, whether it's just going to crank up the hype cycle even more,

whether it just gives you other stuff to potentially buy, or does it destabilize, you know, the market because of their size? Yeah, I mean, I think it depends on which one you're talking about. There was some talk, obviously, before Cerebrus came out, oh, my God, this is going to hit AMD and Intel. Clearly, that's not the case. Now, you move to SpaceX and you can say, well, that's coming out of what is, I think, June 12th. That's probably more focused on a narrow portion of the market,

which is sort of the space economy, which is maybe half a trillion in total size when you have. all those companies up together. The more interesting one is going to be Anthropic, right? Because Anthropic all of a sudden touches on names like a Microsoft or an Oracle, other companies in that ecosystem. And I look at it this way. These companies can be added to indices in as little as five days with some of the rules changes that have been happening. So at that point, I do get concern where people go, well, I want to own Anthropic, but I already own a bunch of Microsoft, so let me sell that, let me sell Oracle, because this is going to be whatever the waiting is in

my index, and I don't want to be short this and have this rip my face off. Same thing with an Open AI, because don't forget, a lot of mutual funds, they're closet indexers as well, right? No portfolio manager wants to get fired because Open AI for some reason or Anthropic goes up a lot from where it started out trading. So that, I think, is going to be a very interesting dynamic to see is that a negative impact, which, you know, it could be. But the fact that Anthropic got profitable in Q2, that was reported a couple of weeks ago. And now the revenues have surged from $9 billion to start the year to $47 billion today. You know, that's obviously a very positive sign that you're profitable, you can raise money and you're growing at a rate we've never seen before.

Dan, always great to speak with you. Thank you. Thank you. Dan Niles. Earnings meantime from Credo Technology, the stock is sinking after ours. Earnings and revenue both better than expected for its fourth quarter and its revenue guidance for key one, also better than the current consensus. The only number which may explain the stock's decline is 140%. That's how much the stock is up since the beginning of April. So maybe some sell the news. Profit taking occurring here on the back of these numbers down about 12% right now. Crypto continuing to fall as stocks sore. Now one of the world's biggest holders is starting to sell. What could it be telling us about market optimism for Bitcoin? You're watching

closing bell overtime, live from the NASDAQ market site. Bitcoin today falling to just above $70,000 as Michael Saylor's company strategy is selling. Tenea McKeel joins us here with that story. And today, it's a small amount of Bitcoin and yet people are really reading into it. It's a big signal. Yeah, so the Bitcoin treasury pioneer in this space selling 32 coins last week for $2.5 million, and that's profiling today. The stock closed down almost 6%. And the company still has more than 843,000 coins in its treasury. And I have to say at front, this is not a signal that the company is wavering on its bullish approach to Bitcoin. It's quite the opposite, actually.

I think this was very well telegraphed by strategy. Michael Saylor himself, as well as CEO Fongli, says. on the earnings call last month, in very plain terms, we will sell Bitcoin when it's advantageous to the company, and we want to be net aggregators of Bitcoin, increasing our total Bitcoin, but more importantly, increasing our Bitcoin per share. And that, of course, is an informal metric they use to measure how much Bitcoin each share of strategy represents. So here we go. Now they are selling Bitcoin to fund dividend distributions on its preferred stock. That's a big focus of this new approach, which is to more actively manage their Bitcoin,

rather than simply holding onto it as they've been doing. And that, of course, is because Bitcoin has been in this price lump and companies across the industry, not just the Treasury strategy companies, are feeling pressured to generate steady revenue, even when trading volumes drop. So I don't think that this is saying anything about their view on Bitcoin or their bullishness.

I think it's a signal. But it is a huge shift, as we said at the top. And I do think that that's why you saw this stock drop so much today. I mean, the amount of Bitcoin is 0.007. 0.04% of their total holdings. So like I said, it's a very tiny amount. But they really have no other options at this point in order to fund the dividend of that preferred. I mean, that preferred is trading below par at this point. And they can't issue more common stock because it'll be highly dilutive. Right. And so I, and that's why I'm saying I think this is a signal.

They are, so we don't know which preferred stock that they're talking about here. They are very big on stretch right now, STRC. And I do think it's a signal, especially because we've we've seen these doubts from people in the past, you know, if Bitcoin gets, if there's another bear market and we see another price lump from Bitcoin, is a strategy going to be able to make good? And so, you know, it is a minimal amount, but we, you know, we also, you know, saw the sale of shares in that same filing. And I think it's a signal, you know, strategy is saying, you know, the dividends come first and we're going to be here for the people who are really interested in this security. Tenaena, thank you. Tenea, thank you. Thank you.

Hathaway making its first big buy of the year of actually the Greg Abel era as well. Can it help that stock get out of its post-buffet doldrums? That's next on closing bell over time. Welcome back. Shares of Taylor Morrison surging today after Berkshire Hathaway announced. It will acquire the company in a $5.6 billion all-cash deal. Berkshire will pay $7250 a share for the company, a roughly 24% premium to the stock's closing price on Friday. Taylor Morrison CEO, Cheryl Palmer, telling squawk on the street today that that is exactly the patient capital advantage that Berkshire provides in an industry with ups and downs. This is, of course, the first deal under new CEO, Greg Abel, who took over for Warren Buffett in January. So Mike has been taking a look at Berkshire stock from here.

Yes, this is 30 years of Berkshire Hathaway shares relative to the S&P 500. And one of the things I wanted to highlight was the spikes in performance of Berkshire versus the market. So right here, that's the 1998 long-term capital. management meltdown. That's when the defensive qualities of Berkshire Hathaway really traded a huge premium. And you can go down the line. That's the bankruptcy of Lehman Brothers. After the crisis passed, the premium goes away. This is Liberation Day last year. Also, when Warren Buffett announced he was going to be sunsetting his time as CEO. And so it shows you that we've given back some of that premium. And you're now back to levels where really all the outperformance over this period was in the books

by 2007 or so. So it does, you know, require in a weird way a risk off market to really get the stock moving in. They want to take a look at Berkshire compared to what you might consider the component peer groups. So insurance, railroads, you know, other areas that are, in fact, homebuilders, too, because aside from this Taylor Morrison deal, they own Clayton Homes and several other companies in the homebuilding area. And they've all been a net drag on the performance of the stock. So it shows you they've been fighting a little bit. bit of a headwind when it comes to their performance. What was your take of this acquisition?

It's interesting because UBS jumped to the conclusion that this was a good sign for the industry, but the other home builders did not do well. They didn't. It seems a bit of a one-off. Look, first of all, it's less than 1% of market cap for Berkshire Hathaway, less than 2% of the cash. And I noted that the acquisition price, 725050 is exactly the previous all-time high of the stock. So a lot often happens when a company decides they want to sell.

Just get us all even. And so I do think it fits in with. their portfolio pretty nicely. It's not family controlled, but I do think it's a little bit of a pleasant sign for Berkshire shareholders that they're still kind of getting first look at friendly deals like this for decent assets. All right. Time for our CNBC News Update with Mackenzie Seagallo. Smack. Hey, Mel. The American Civil Liberties Union and other civil rights groups filing a lawsuit over alleged human rights abuses at the largest immigration detention center in the U.S. located in El Paso, Texas, where three people have died in nine months since.

it opened. It's the first lawsuit against the facility. Plaintiffs say the goal is to improve conditions for its more than 2,700 detainees. Spending on data center construction passed $50 billion in April. That's a new record, according to the Census Bureau. According to the figures out today, data centers now account for 2.3% of all U.S. construction spending. And Super Bowl champion 10-time pro-bowler Russell Wilson reportedly retiring from football and heading to the broadcast booth. ESPN's Adam Schaefter reports the quarterback is close to finalizing a deal with CBS sports to join the network's pre-game show as an analyst. Wilson has yet to comment. He signed a one-year deal with the New York Giants last season after playing in Pittsburgh, Denver, and Seattle.

Guys? All right, Matt, thank you very much. Well, some of the hottest stocks in the market adding to their gains today, does the run have to end or at least slow down at some point? We'll talk to someone who is starting to trim tech next on closing bell overtime. Welcome back to closing bail overtime, live from the NASAC market site. A record day for markets, closing highs for the Dow, S&P 500 and NASAC, S&P and NASAC higher for the eighth straight day. Invidia, the Big Gainer, having its best day since February as it announces new chips for Windows PCs. Dell also continuing its rally, and the rally for those names may continue tomorrow. As HPPE, take a look at this.

It's seasoning ripping after hours. The stock is up almost 30 percent here after. reporting much better than expected earnings. Well, tech and especially AI leading the gains once again. So is the trade getting stretched or should we expect this run to continue? With us now is Steve Whiting. He's chief investment strategist and CIO of CIO Group. Good to see you.

Good to see you. I mean, this is obviously the enduring question. Look, you're supposed to let your winners run and kind of embrace the prevailing themes in the market. On the other hand, they can overshoot in a short term. Yeah, look, at CIO Group, we're staying overweight tech. where particularly overweight software. Let's just think that names like Micron, Sandisk, Hynex, they've had all the return of Nvidia

over the whole AI boom just in the past year. DRAM pricing has been up or down every other year. So there are unsustainable elements to the build out of AI infrastructure. It's not the top. It could be up further, even in 2027 for the whole year. But you've got to say that some elements

of this run in semiconductors, outperforming software of the largest amounts since year 2000, right? You want to be a little cautious about what can happen with some of those positions. Can you walk us through how you manage those positions and how you think about it? Because I think a lot of investors, hopefully, are in similar positions where they've seen a lot of gains, and they don't know how to think about how much to trim because they're afraid that they're going to lose out on the participation, and where you put that money once you do so? Yeah. So a couple of things. A little bit more money. back into non-tech themes. A bit of this is defense. Some of this is in dividend strategies

because I'll tell you, I mean, the U.S. stock market, and to a significant extent, EM, has become so tech-focused. We're talking about 38% S&P waiting for IT, add in consumer discretionary and communications where you have tech, and it's 50% of the market. So it's so big, it's going to be, again, very directional for the market when something goes down at some point. has a history of going down as recently as early 2023. So I think it is fundamentally in a good position. DRAM pricing is surging. Profits are going to be high.

And I'd say that the drop, we've got to remember that we've got to maintain all of this infrastructure. It's going to be at a higher level than it was ever before the AI boom for years to come. But can it only go up? So I think, again, when we look at software, it's the sector, you know, application software, has the strongest risk-adjusted returns of any industry group in the S&P 500 over the longest periods, and yet it had a double-digit loss this year, and it's still down for the year. You know, these are areas where everybody could tell us, well, it's going out of business, but DRAM will go up forever.

The way this index is set up structurally, does it mean that we can kind of dismiss a lot of the macro, as the market and aggregate seems to be? Do you think that longer term, let's say we get the straight reopen and everything else, you're going to have a revival on old economy stuff? If you compare 7% growth rates to 70%, you know, a lot can happen, you know, with one without affecting the other. But we won't be at a 70% growth rate forever. You know, again, we accelerated this year.

What are estimates for next year? I mean, there's a chicken estimate, really. If you think about it of like what's next year going to be for AI infrastructure spending, it's 15% growth. That's what we used to say about this year. So it's going to be real. there's going to be something that's going to move this in a different direction at some point. We just have to be prepared that any large piece of the economy isn't growing at a 70% growth rate forever.

And again, one estimate we had, it would be bigger than the whole economy, even with generous estimates by the middle of this coming decade. Can't be. Stephen, we've got to leave it there. Thank you so much for coming by Stephen Whiting. Coming up, we'll tell you why this company's keynote presentation at a major oncology conference got a standing ovation. Welcome back to overtime. Shares of Eli Lilly moving lower despite announcing its lung cancer drug candidate met its primary goal in a late stage trial. The company is just one of hundreds that presented at the annual ASCO conference.

Angelica Peebles is there and got a chance to speak with Eli Lilly's president of oncology. Angelica. Hey, Mike. Well, that study is for a rare type of lung cancer. It affects about 1 to 2 percent of people with lung cancer. And so one of the criticisms that I've heard about Lilly's oncology pipeline is that they're not going after big things. And I had a chance to talk to Lily's president of oncology, Jake Van Narden. And he says that that's not true and that Lily is actually going after some of the biggest opportunities in oncology.

One of the examples that he points to is multiple myeloma. If you remember, earlier this year, they announced that they want to acquire a company called Colonia for about $7 billion. And that's just one of the deals that Lily has announced this year. They've been on quite a tear. And Van Narden tells me that that is intentional. He is now actually the head of corporate development. And just this year, they've announced $10 billion in upfront spending up to $25 billion. And that's just on eight acquisitions.

So to give you a little bit of perspective, last year they spent $4 billion on 40 acquisitions. And so that just speaks to the fact that they are going after bigger drugs and companies that have already presented data. So they say they're willing to bet big on things that are real medicines, as Van Narden calls it. So earlier, they like to go after some of these really early. early assets, things that were more experimental, but they're willing to pay for things that look like they could be real and could be large deals. And so we asked Van Narden, you know, what's to come? What more should we expect to see? Take a listen. We're looking at all kinds of things that don't neatly fit into one of those four buckets.

So, you know, don't be surprised if we have more to come for things that, you know, don't perhaps neatly fit within what we've done historically. If you see it, it means we're excited and we think we can make a big impact. Is there anything that's off the table? Within, you know, medicine making? No, not really. And, you know, one of the questions I also asked him was how much are you willing to spend? How much more should we see? And he said, you know, I don't like to put arbitrary size limits on things. And if it's interesting and there's compelling science, and it could have a good return for lily shareholders, that's on the table. Guys, back over to you. Angelica, I also have to ask you about the standing ovation for RevMed for its phase three,

results for its experimental pancreatic cancer drug. Walk us through why the reaction was so great. I mean, the overall survival rate was much, much higher compared to chemo. Exactly, Mel. The drug doubled the overall survival. And so people were going from about six months on average to 13 months. And, you know, it might not sound that impressive. You know, you think, okay, you're going to extend someone's life by six months.

But I think you talk to anyone in this space. And it's such a jarring diagnosis because you go from, being told you of pancreatic cancer, unfortunately dying within half a year. That's really not much time. And this is also a space that's been such a graveyard for drug development. It's been so hard to find in advance here. And also Keras itself, this was considered an undruggable target. And so not only are you seeing such an impressive result in the survival, but now you're saying

that no longer is this an undruggable target. And so, you know, the Discussin actually presented this slide showing just all of the different trials in development. And so people felt like not only was this. this a monumental result, but this is just the beginning. Angelica, thank you. See you next hour with the co-CEOOO Summit Therapeutics. For more, and ASCO, joining us now is Jared Holes, Mizuho Healthcare Sector Strategist. Jerry, great to have you with us.

I want to ask you about Redmond. I think this is really interesting because it had been an acquisition target. Merck was interested in it. I think the offer was something like $32 billion. Its market cap today is $34 billion. And what's the next step? Can they commercialize this product on their own? I think so. I mean, that seems to be the direction things are going. If interested parties, for whatever reason, decided not to pursue it or decided to walk away, most analysts think this is a $5 billion drug, maybe $10, potentially even larger than that. So if you look at it from that standpoint and you just look at the math on price to sales, it's not egregious. Obviously, they have to deliver now. What other results or themes coming out of ASCO have caught your eye that are actually going to have legs? in terms of market reaction? I mean, I think a lot of the stocks that would have moved, moved.

I mean, we saw RevMed up today. Arraska was up a bit. Tango therapeutics had a decent day relative to biotech, which had another week session today. But I think the thing that is sort of most resonating maybe is just the power of Merck's Ketruda and the fact that there are so many companies that are using Ketruda as the backbone for their therapy,

no one can seem to get the results that they want in monotherapy. So I think Merck probably had a decent showing. Obviously, they have their own data that we have to worry about, and they've got to supplement the loss of exclusivity there. But I think the fact that Ketruta is still such an important drug as far as this entire industry goes, I think is a big takeaway. I want to ask you about some of therapeutics. We're going to talk to the co-CEO in Fast Money today.

But it was an interesting sort of reaction because the initial reaction to their phase three results for this experimental lung cancer drug was a positive one. And then it seemed that people started thinking about where this trial was done. It was done in China. And there's concerns that that demographic is different, and you can't replicate these results in Europe as well as in the United States. How concerned are you? You indicated that it was interesting to you. It's definitely interesting.

I mean, the opinions vary on this one for sure. You've got bulls. You've obviously of a skeptical camp because this trial was homogeneous in nature, only China. can they replicate it? The data is actually pretty good. I mean, they're showing this NIPD1, VEDGEF is actually leading to better survival than the chemo combo with Ketruda. Maybe there's a three to four month delta, which some say is significant. Some say it's not that meaningful. Obviously, we just talked about revolution with a six to seven month improvement for obviously a killer disease, and that is transformational, yet the three to four

month that summit is giving is not good at all. So I think a lot of this, has to do with where the, you know, where the trial emanated from. This is Chinese domiciled. And they're going to have to run pretty big trials globally. And they're going to have to replicate what they've seen. So it's clear why there is a skeptical camp. I'm a little bit more positive than most on it, just given the visceral reaction today. I mean, to be, I guess, levered to health care as a sector, I know it's a crazy diverse sector, has been a tough grind. I've seen some work, though, you know, maybe some signs of life. in pharma, maybe even as just as an anti-tech trade, right?

I mean, just how would you position around it? How would you frame the case for having a full position here? I think you just have to look at health care as almost like a value sector, right? So if you're incredibly levered to growth, and obviously we're seeing some of these tech verticals up every day, and there's been parabolic moves left and right. But if you feel like there could be a pause in the action, I'm not sure health care is defensive because, you know, we've talked about, you know, all the pain that has happened over the past couple of years with large cap pharma, with drug pricing and managed care. But it is certainly a value-oriented sector now.

So if you're very, very full to the gill with growth and you want to take a little bit off and you're trying to find some names that have underperformed, that's really what it's come down to. No, it's not. It's not a pounding the table. It's sort of like, it's cheap. I'm not sure what's going to do. But if you want to take a small position as an offset, I guess. Look, I mean, it's funny because everyone's obsessed with scarcity of DRAM and everything else. There's a scarcity of dividends in this market right now, right?

I mean, there's some places you could find them, like in value health care. Yeah, that's what it could come down to. I mean, there's a ton of share buybacks here, too. So obviously companies believe there's value. Maybe investors will pivot here at some point. Okay. We'll see. It'll take a change of tone.

Jared, great to talk to you. Thank you. You too. All right. Up next, everything you need to know to get ready. But tomorrow's trading day. closing about overtime live and the NASDAQ market side. I'll be right back.

Google share is moving slightly lower after hours. The company is raising cash. McKenzie Sagalos has the story, Matt. Hey guys. So Alphabet announcing that it's looking to raise $80 billion. This is an equity capital raise in the spirit of expanding its AI infrastructure and compute ambitions. Now, as part of this announcement, they said that Berkshire Hathaway has agreed to invest $10 billion in Alphabet in a private placement. They say that concurrent with that, they've got underwritten offerings, $30 billion in underwritten

public offerings consisting of $15 billion in depository shares representing mandatory convertible preferred stock. They also talked about at the market offering, $40 billion at the market or ATM, offering a program for common a common stock and Class C capital stock over time. This, of course, feeds into Alphabet's larger ambitions here. They're looking to, we knew as of last quarter, they had up their CAPEX spend to $190 billion Now we're looking at part of how they plan to fund this. It's unclear at this point whether this is additive to what they already announced.

I'm out to Alphabet. We're also out to Berkshire Hathaway about the investment. Guys? Yeah, Mack, I mean, obviously the price reaction is probably because maybe people trying to extrapolate, does that mean they're going to spend even more? Obviously, slightly dilutive, not very dilutive for a company of this market cap. But it does raise the question because Google's been out there raising debt as well. And maybe they felt as if they reached the limit of how much more.

leverage they wanted to put on. Precisely. And so that's specifically the question that I'm asking. And does this mean that, you know, in the upcoming quarter, we're going to see that 190 billion top end of the CAPEX pushed even further out if they're looking to raise this in an equity capital raise? So that's a standing question here. I mean, remember, we were talking about Google and others going overseas. That's right. In every market around the world, basically trying to raise debt. So I guess that's a question.

It is true. I mean, clearly they could take on more debt. It's a matter of whether they feel it's advantageous. And it wouldn't surprise me either if Berkshire Hathaway, which already has a position of close of $20 billion or so in Alphabet, if it was almost a reverse inquiry. They'd like to own more. This is an efficient way to do it. We don't know that. But sometimes that happens, or at least they're known to be a potential anchor investor in the new offering.

Right. But I think the notion, though, that, you know, are they going to spend even more? Yeah. I think that's a huge question, right, Mack? I mean, that's really what's gotten a lot of these stocks, a lot of MAG 7 in terms of the spending plans. Investors are unhappy with that. They want to go to where the money is being spent, not the spenders, these days. But I will say this, over the last few quarters, you've seen Google rewarded for its Upt-CAP-X guidance because of the fact that GCP, their Google Cloud business has done

so well. It's something that has become advantageous and really paired with their Gemini offerings. It was just two weeks ago that CEO, Sinder Pichai, talked about Gemini 3.5 Flash, this new model that really was compatible with their enterprise offerings through the cloud business, said that essentially if you moved your business to Google Cloud today, you'd basically be spending a billion dollars a year if you moved 80% of that workload to them. And so this is just a part of this flybill where they try to bring people in, spend more on CAPEX, and it's advantageous to the cloud business clearly. Mack, thanks.

Quite a switch, though, from going from, we're buying back a ton of stock and we have lots of free cash flow, and now we're net issuers. completely. Let's get you set up for tomorrow's trade today. We'll get some more clues on the health of the consumer when Dollar General, Signed Jewelers and Victoria's Secret report in the morning. Alta will be out after the bell. Palo Alto also reporting after the bell tomorrow. That stock has had a big runoff recently. And it will be quiet on the economic front. We'll only be getting the job opening and labor turnover survey or Joltz and light vehicle sales. Of course, the big one is jobs on Friday. I was going to say I'm puzzled by the suggestion that Joltz is a minor release. I always dig into it. it. And I think it's an interesting little setup for the official job, so we'll see if it lives up to the billing. All right, that does it for overtime. Fast money starts right after this.