Closing Bell - Closing Bell Overtime: "Blackrock-Backed Self Driving Startup on New Platform for Autonomy; Toll Brothers Earnings Tea Leaves" 8/19/25

Episode Date: August 19, 2025

Markets correspondent Kristina Partsinevelos kicks off today's show with key market themes, followed by Rick Santelli on bond market movements from the CME. Charles Bobrinsky, Vice Chairman and Head of Investment Group at Ariel Investments, and Tim Urbanowicz from Innovator ETFs break down the latest market action.We preview Target earnings with Zihahn Ma from Bernstein. In a major autonomous vehicle development, Applied Intuition Co-Founder & CEO Qasar Younis joins us to discuss the company's new self-driving system launch and expansion into passenger vehicles.Plus, Angelica Peebles covers Viking Therapeutics, and Alan Ratner from Zelman & Associates analyzes Toll Brothers earnings and the broader housing market outlook. 

That's the end of regulation. Action Against Hunger ringing the closing bell at the New York Stock Exchange. Clover Health doing the honors at the NASDAQ. Well, stocks moving lower today as tech and some of this year's biggest winners underperform. The NASDAQ falling more than 1%. The Dow did hit an all-time high before turning negative. Tech and communication services were your sector laggards, real estate and consumer staples outperformed. Commodities lower today with silver seeing declines of 2%. Goldoff marginally, really stabilizing here, though. Another down day for Bitcoin and Ether. Ether falling more than 4% while Bitcoin saw declines of nearly 3%.

Ether's now down more than 7% in a week. But remember, it had a huge run-up before that. On the back of that sell-off, though, crypto stocks seeing big moves lower. Coinbase, E. Toro, Robin Hood, Bullish and Strategy, all down more than 5%. Well, that is the scorecard on Wall Street. Welcome to Closing Bell Overtime. I'm Morgan Brennan. John Ford is off today.

Well, the equal-weighted S&P index is outperforming the MAG-7 heavy S&P ETF over the past week. So is the long-awaited great rotation finally starting to happen? We're going to discuss that. Plus, the retail earnings roll on with targets set to report tomorrow. Can the lagging retailers deliver or will it be troubles that continue? We've got your setup. And we're awaiting earnings from Toll Brothers, the options market pricing in a more than 9% move in either direction on the back. of those results, we'll break them down once we get them. But we do kick it off today with

today's biggest market theme, and that is this year's high flyers suddenly becoming the laggards. Christina Parts Navellis is at the NASDAQ with more. Hi, Christina. Hi, well Tuesday's sell-off, today's sell-off really delivered a textbook lesson. Market rotations cast catch investors off guard, and high flyers eventually face gravity, or as Mike Sentoli just said, a nasty little rip tide. Let's start with the laggarts. Palantir led the route shedding over, looking about 9% today for its fifth straight losing. day falling more than 10% from record highs. Despite the pain, though, big a picture, it's still up 110% year-to-date. Meta posted its worst two-day drop since April,

with S3 Partners research showing meta has the biggest jump in short interest of any U.S. stock this year. Netflix, Broadcom, both have their worst days since July. The semiconductor space got crushed, and video suffered its worst session since April's sell-off. AMD, Super Micro, GE-Vernova, all joined the, dare I say, the red parade. While growth names did bleed Lagerds found life, Centine, N phase, Molina Healthcare, those are among the S&P's worst 2025 performers, but they all posted gains today.

And within the top 10 year-to-date winners, only eBay and CBS Health stayed positive today. Both trading, though, at below market valuations. Morgan, you just talked about it, but the equal-weighted S&P 500, which is the RSP outperformed its mega-cap counterpart by nearly a full percentage point, so it's the RSP versus the spot.

Translation, money is rotating from concentrated winners into broader opportunities. Big rotation today. All right. Christina Parsnevelis, thank you. I also noted that the Dow closed lower. That is not true. We actually closed higher by a whopping 10 points for the Dow. The S&P closed lower.

The Russell 2000 was lower and the NASDAQ, the big underperformer down 1.4%. Well, let's turn now to the bond market and the moves we've been seeing there. Rick Santelli is at the CME with more. Hi, Rick. Hi, Morgan. Indeed. The bond market and the dollar index market. are nowhere near as volatile as some of those equities, especially the NASDAQ today,

they've been rather calm. As a matter of fact, when I was doing the data this morning at 830 Eastern, we are at 375 and a 2, we are at 4.32 and a 10. Let's look at the intraday charts. And as you see, basically the 10-year has dropped a little bit more in yield. That's been the feature today. But if you look at a 2-day, there's something more going on with a 2-day. Today's range is inside yesterday's range in 2's and 10.

10s, meaning we have a lower high and a higher low. Inside days, that's kind of a calm scenario. And the last Fed meeting, July 30th, let's open the chart up, put twos and tens there, because that's when everything changed. Basically, that meeting and all the activity thereafter, we've had weak jobs report, warm CPI report, and as you could see, rates have gone down and pretty much, for the most part, sideways without any Fed feature that's altered. Maybe that'll be a issue this week with Jackson Hole. And finally, since that last Fed meeting, here's the dollar index. Of course, losing the little interest in the notion that, well, rate cuts, whether they come or not, may not save the dollar index. What's interesting on that chart is look at the failure at 100 right there

in the last day of July. That's very telling because that's the highest point since we made the multi-year low in the dollar index. Morgan, back to you. All right. We'll continue to watch that level. Rick Santelli. Thank you. We got big tech names selling off today. Names like Palantir, Oracle, and Coinbase, among the worst performing names on the S&P 500. This comes as the equal weight S&P 500 ETF. The RSP is starting to outperform the Mag 7 heavy S&P 500 ETF over the past week. So does this mean that a rotation is actually starting to take hold? Well, let's bring in Ariel Investments Vice Chairman and Head of Investment Group, Charlie Babrinskwe, as well as Innovator ETF's chief investment strategist,

Tim Rabanowitz. It's great to have you both here. Charlie, you're the perfect person from to ask this question. The great rotation under the hood for major averages right now, does it have legs? Well, it's hard to make short-term predictions. You know we don't like to do that, but what we can say is relative valuation. And relative valuation, small cap value, mid-cap value, large-cap value, are all trading around their historic multiples, maybe even a little attractive, maybe a little cheap. That's very different from how large-cap tech is trading, which is very expensive. And over time, the best predictor of future performance is what you pay for something going in. The lower the multiple, historically, the better the returns have been. So we do think

this market is set up for value to outperform. I know I've said that for a long time. We're finally seeing it start to happen. The recent results have been very good, Morgan. Okay. Tim, I want to get your thoughts in this market, especially the fact that a lot of folks are focused on Jackson Hole and what we hear from Fed Chair Powell later this week, with expectations pretty heavily baked into this market, that rate cuts start next month. Well, that's exactly it, Morgan. And the level of confidence that this market has that the Fed is going to cut starting in September is pretty surprising. And why it's surprising to us is we still have core inflation running right around 3%. We've been stuck in this range of 2.75 to 3 and a

quarter, really for the better part of a year. And why this is surprising is, Morgan, that's not a range we typically see the Fed cutting into. In fact, we look at every Fed meeting going back to 1970. 94% of the time, when we're in that range, you either see the Fed holding rates steady or increasing them. Only 6% of the time do you see the Fed cutting. So this level of confidence, Morgan, I think, is really stemming from all the pressure

that we're seeing from the Trump administration. But at the end of the day, what's really important is that the Fed cuts at the right time for the right reasons. And we think Powell prioritizes his legacy over any short-term pressure. He doesn't want to be the guy that lets inflation run away on his watch. So we think he still stays with his data-driven approach. Okay.

Charlie, what are your thoughts on the Fed beginning to cut again? And how much for the value part of the market hinges on that beginning to happen? Yeah, this is going to be a big swing because a lot of the names that are real value names are interest rate sensitive, housing-related. We got a great starts number today up about five. percent, but some of the other numbers out of housing haven't been so strong. So I do think a cut in interest rates is important. The other variable I put into that is we're really are starting to see tariffs start to have an impact on prices. Retailers had been holding back raising prices until they had better visibility on tariffs. Now the visibility is in and they're starting

to rate prices. So I am short-term bearish on inflation, maybe over the next six to nine months, but then longer term, I do think we're going to get to a better place with AI helping to increase productivity, and so I'm longer term more optimistic. Home Depot was the leader in the Dow, Tim, finished up more than 3% here, and that's despite missing on same store sales. I realize they maintained their guidance for the year, and they saw incremental improvement throughout the quarter. Do you like this name here, and how does it set us up for the rest of retail earnings?

Well, we do, and Morgan, when we look at retail stocks, we look at consumer stocks, There has been a lot of dispersion this year, and we think that dispersion continues. And we're really looking at this in different consumer income buckets, low-end, medium, and then higher-end consumers. And we think the corners can do very well, but you really want to avoid that mid-tier consumer. On the higher end, we're looking at consumers that are making $100,000 or more. Their incomes have been going up at a steady rate. They've been getting good interest on their savings.

Their investments are doing well. We think they're going to continue to spend. We think that benefits stocks like Home Depot. We put Costco into that bucket as well. On the lower end, when we look at stocks like Walmart, they are heavily heavy presence in the essential goods, things like groceries where those low-end consumers, yes, they're getting squeezed,

but they don't really have another option or a lower-cost option that they can pivot to. So Walmart's outperforming the S&P 500 this year. We think they're positioned to do very well. But when we look at that middle ground, thinking about stocks specifically like Target, where they have a lot of their focus on electronics, home furnishings that are getting hit pretty hard by tariffs, that consumer in the $50,000 to $80,000 income range is going to pull

back. And we think that stocks like that are going to continue to struggle. So focus on the corners, really cautious on that middle ground. Charlie, what are the names you like right now? Housing-related names. Residio, the old Honeywell, thermostat business, Mohawk, the carpet business. we're seeing Buffett make more investments in housing. We've got lots of pent-up demand. Normally, at this point in a cycle, when depressed earnings, you'd have to pay a big P.E. multiple.

You're able to buy these names right now at very low multiples, 11, 12, 13 times depressed earnings. When we get a turn in repair and remodel and housing starts, these names are very well positioned. Okay. Charlie Abrinskoi and Tim R Banowitz, thank you both for kicking off the hour with May. And speaking of real estate, the best performing sector in the S&P today, up 1.8%. Well, coming up, we're going to keep talking about these retail earnings because that season is upon us. Target, lows, TJX, S. Day, Louder. Those are all set to report tomorrow. We're going to look at what to expect and how to position yourself.

Plus, the disaster de jour. Viking Therapeutics posting its worst day on record after disappointing trial data. We've got those details over time's back in two. Welcome back. Let's take a look at Home Depot. It's up 3% today despite a slight miss on the top and bottom lines. Its second straight quarter of missing estimates, investors were encouraged by the company standing by its full year guidance,

expecting comparable sales to rise about 1%. CFO Richard McPhail also, told CNBC that comp sales in July were up 3.3% from the same quarter in 2024. It's the best monthly comp of the year. So sticking with retail, Target is set to report earnings tomorrow before the bell. The stock is tracking for its third positive month in a row, but it's still under pressure this year. It's down 22% lagging Walmart, which is up 12%. So could tomorrow's number show that a turnaround is finally here? Well, with us is Bernstein Senior Research analyst Ji Han Ma. It's great to have you on and let's start right there. What are you expecting

from Target tomorrow. Thanks for having me. I would say I don't think Target is really out of the woods yet. We are expecting maybe a slight beat on the top line. This is assuming Target is still doing a negative comp, but against pretty easy expectations, consensus expecting a negative 3% comp for Q2, so we think maybe a slight beat on the top line,

but margins still not out of the woods yet, especially Target lapping some pretty tough comp from the year ago period, where they already recovered a lot of shrink in last year's Q2. So overall, I think the quarter is going to be a mixed bag. Now, the issue here is that we could potentially get a management change coming up. So that's also another key factor that investors are watching out for not just Q2 results, but also when and if they're going to announce a management change.

Yeah, and CEO Brian Cornell has certainly been under pressure given the results we've been seeing. So is your expectation that you could get something like that tomorrow when we're going to we get earnings? It could be any day. I can't say exactly well. You do think it's coming at some point. It's coming because his last agreement, he basically had an agreement with the board to stay on for another three years. That agreement happened in September of 2022. So it's fair game pretty much any time from now. We've seen record numbers of container imports into the West Coast ports. There's been a pull forward in inventory levels. How much is that going to matter? for some of these retailers like Target that do manufacture so much of their stuff overseas?

I definitely think tariff is going to be a wildcard going into the second half. Frankly, so far, among the consumers, we have seen some price increases on shelf and retailers are trying to pass on some of the tariff-driven cost increases. Consumers have been okay from a reaction perspective in Q2 so far, but that could change going into the second half of the year. We don't quite know if and when inflation starts to outpace, income growth, for example, are consumers still going to be as resilient as we have seen them so far? Can elasticity turn a lot more negative?

And retailers are trying to manage similar uncertainties on their side, right? How much inventory do they hold right now for the Halloween holiday season? If they hold too much, they ran into an access inventory situation. If they hold too little and demand turns out to be stronger, then they don't get to sell enough. So clearly a lot of uncertainties they're managing through. Okay. So you have an underperform rating on Target. What do you think of Walmart going into that print?

I think Walmart, again, going into this print, the stock has already run up quite a bit. So there could be downside to Walmarts when they report because there's been no, frankly, they could say or do that make the stock go significantly higher compared to where they're trading at now as 37 times PE. That being said, I do really like the Walmart fundamental story. over a three to five year time horizon. I think there's a lot of still e-commerce driven profitability improvement that's still yet to come through. I don't know if this quarter we're gonna see

a massive amount of upside to Walmart, frankly, again, given the stock is already priced for perfection. In general, I think people are assuming, expecting a four to five percent comp, expecting maybe a margin beat because of the rim accounting, technicality that they pointed out last quarter. But outside of that, I think on a four-year base, I'm expecting Walmart to hold guidance, and I don't expect a significant amount of upside

for Walmart in Q2. Okay. How about Lowe's, especially on the heels of the Home Depot report we just got? Well, I think for both Home Depot and Lowe's, it's a bit less about near-term fundamentals. I do think the Home Depot July exit rate as 3 plus percent comp clearly helped the stock price today. But I think what's really driving both stock prices recently, it's the rate cut trade. the hopes about the rate cut trade and we'll find out more on Friday from the Fed.

But as long as the hope is that the Fed is going to continue to drive rates lower, if that brings down mortgage rates, then finally, I think there's signs that were maybe towards the tail end of a five or even six-year-long housing downturn. And that's really what's been supporting Lowe's and Home Depot stock price. Similar to Home Depot today, I expect Lowe's to have a slight mitts on the top line, largely maintain their four-year guide. They'll have to update their guide because they close the ADG acquisition in June. So there's going to be some smaller tweaks here and there. But I think it's going to be broadly similar earnings results compared to people today

and maybe similar stock reaction as well. Okay. Ji Han Ma, Bernstein. Thanks for joining me. Of course, shares of lows also finish the day up 2%, perhaps in sympathy with at Home Depot report. Well, coming up, Momo No Mo. Palancey are plunging today, posting its first five-day losing streak since March. We're going to look at some of the other high flyers falling back to Earth next. Plus, we're minutes away from Toll Brothers earnings.

The home builders up 30% since May, tracking for its first four-month win streak in two years. We've got those results and the streets' reaction ahead, only on overtime. Welcome back to overtime. Activist investor Ancora writing a letter to the CSX board dated August 6th, but becoming public today. The firm calling on the railroads board to, quote, announce in the near term that it is working with identified third-party advisors to explore a range of merger options. The letter slamming CSX's CEO Joe Henrichs and the company's performance under his leadership. It comes on the heels of the announced Union Pacific Norfolk Southern merger, and Encore identifies Berkshire Hathaway's BNSF and C. C-P-C-K-C-K-C, oh my goodness, C-P-K-C as possible buyers.

Also noting, quote, if a deal cannot be struck, we assume it will not take us running a proxy contest to ensure a qualified operator like Mr. Jamie Boychuk or someone with similar credentials replaces Mr. Henricks. Now, Enkora, which is also a shareholder in Norfolk Southern, it led that high-profile proxy fight at that railroad last year, has been building a stake in CSX. Encore Alternatives President Jim Chadwick joined me following the Norfolk Acquisition News to disclose that investment. We've been a growing shareholder in CSX, and I think that that company finds itself at the crossroads, too, where it has to make a decision of whether it wants to find a merger partner or whether it's going to have to go retool management.

I mean, Joe Heinrich's been there now for several years. The company's been underperforming. So CSX responding to Encore's letter saying, quote, we've said it before, we'll say it again. CSX welcomes all opportunities for us to enhance value for our shareholders. CSX appreciates the input of its shareholders and engages regularly with them as it executes on its goals to drive value through profitable growth and industry-leading customer service. Now, CSX has arguably implied an openness to merger talks, but has stopped short of making an explicit announcement or disclosure of its interest in being acquired.

You can see shares of CSX, though, today finishing the day up 1.5% on this news and on this reporting and actually Dow transports in general having a really strong day, finishing up 1.5%. Well, now let's bring in senior markets commentator Mike Santoli. He's taking us inside the volatile rotation away from market momentum plays. Mike. Yeah, Morgan, a lot of ways to illustrate this. This is a five day of the NASDAQ 100 relative to the equal weighted S&P 500. You see more or less traveling in sync until today. And then you did see the pressure kind of break lower. The NASDAQ meta driving that, Nvidia driving that, and it seemed like it really just generated this impulse for a lot of these sort of dispersion trades to happen. That's when you're kind of selling one

thing to buy another offsetting stuff. So you see about a percent and a half of outperformance of the S&P 500 equal weight versus NASDAQ 100. Well, since the April low, the NASDAQ 100 has outperformed the equal weight by like 15 plus percentage points. So again, they got stretched. They're coming back together a little bit. Another way to visualize it, quarter to date, the momentum ETF against the quality ETF. Now, these things, as you can see, are not mutually exclusive. They're not really 180 degrees inverse to one another, but sometimes they do separate. And so now you see momentum getting hit. High beta, that's the most volatile stocks, also was getting hit, whereas quality and also defensives like low volatility stocks have held up better. So it's

leaders sold, laggards, bought, and quality outperform. me just a little bit. Now, finally, take a look at a couple of these bellwethers. I pointed out multiple times have traveled together, Palantir and Robin Hood. This is, what do we got here? Over a two-year, no, this is a one-year chart, actually. Over two years, it's similar as well. Massive, massive gains, on the other hand, traveling together very different businesses, but owned by a lot of the same folks, being driven by a lot of the same energy. And Palantir has really had this rough gut check here. Robin Hood. not quite pull back as much yet, Morgan.

So how much this is driven by profit-taking? How much of this is dog days of summer and low volumes, and thus you're seeing maybe bigger moves than you otherwise would? How much of this is anticipation of rate cut starting next month and positioning ahead of maybe what's a more dovish pal at Jackson Hole? Is it all the above? It's a lot of it. I don't really think that we're getting exacerbated moves that much based on it being summer

because, you know, you're seeing actually netting out to not being huge move at the index level. It's an unusually weak S&P 500 day, but only down 0.6% on a day when the vast majority of S&P stocks were up. So it feels like you had this kind of mechanical reallocation going on. It didn't read to me like gearing up for a greater chance of a rate cut because you had small caps down. It didn't really line up in that way, except maybe it's expressing some uncertainty as to whether we're going to gain perfect clarity on the Fed path come Friday. Okay. Mike Santoli, I'll see you later this hour. Thank you. It's time now for a CNBC News update with Kate Rogers. Hi, Kate. Hi, Morgan. The Pentagon says it's deploying

warships near Venezuela to fight against drug cartels. NBC news reporting the USS Gravely, USS Jason Dunham and USS Sampson will be sent. Reuters first reported the deployment, and it comes as the Department of Homeland Security said last weekend, the Coast Guard seized about 8,000 pounds of cocaine near the Galapagos Islands and detained six smugglers. The Justice Department is investigating the D.C. police over alleged fake crime data. Officials tell NBC News the office of D.C. U.S. Attorney Janine Piro is looking into whether the Metropolitan Police Department manipulated the data to make crime rates seem lower than they really were in the nation's capital. And President Trump says he's going after the Smithsonian and

museums across the country for, quote, woke ideology. In a post on truth social this afternoon, the president said he's directed his attorneys to review museums with the, quote, exact same process that was done with colleges and universities. He called museums were, quote, the last remaining segment of woke. Morgan, back over to you. All right, Kate Rogers, thank you. Well, coming up, the autonomous vehicle market is expected to grow to $4.4 trillion by 2034 ahead. We're speaking with a key player in the industry, Applied Intuition, who's partnering not only with the biggest auto companies, but also with OpenA.I. The CEO joins us next exclusively on their new massive evaluation, BlackRock's investment,

their new technology. It's all coming up after this break. Stay with us. Welcome back to overtime. Markets ending the day mixed with the Dow the only major index managing to eke out gains, albeit barely. The NASDAQ, the big loser, off nearly one and a half percent of some big cap tech names saw big declines. Chipmakers were among the biggest losers, Nvidia, Oracle, Broadcom, AMD, all slipping more than 3%. The Bitcoin-related names were also closing lower. Coinbase, bullish, strategy, and Robin Hood off more than 5%.

Strategy is the biggest laggard down nearly 8%. Shares of lazy boy falling in after hours on the back of an EPS mess. operating income also missing estimates. The firm saying there are recent investments to expand brand footprint combined with soft industry demands impacted margins. You can see those shares are down 15% right now. But let's turn now to AI in the race for autonomous vehicles. Tesla and Waymo dominate much of the headlines as big public companies. Well, Waymo as part of Alphabet, which is a public company.

One under the radar player, though, in the growing market is applied in tuition. The auto tech software company just fetched a 15. billion dollar valuation after raising 600 million in its latest funding around black rock and kliner perkins co-led that fundraising effort along with mark and dreason and portia the talk on the street now is that an IPO perhaps isn't too far away for the company let's find out joining me right here on set is applied intuition CEO and co-founder uh casor unis it's great to have you here welcome thanks for having me all right first let's take a step back what does applied intuition do because you You basically build out the self-driving technology that many of these new cars that are implementing it have.

Yeah, exactly. We're what we call a vehicle intelligence company. So if you think about AI, it's typically on your phone and on your laptops. We make AI for vehicles. So that's cars, tanks, trucks, whatever you name, whatever you name it. Some people sometimes call this like physical AI or like a subsection of physical AI. Okay. And you come to us with the news today about that software.

Yeah, yeah. Today we have our biggest product launch in the history of the company. It's funny you say we're under the radar being a $15 billion company, because you're not in Silicon Valley. Today's we launched SDS, which is like a self-driving system that automakers can use. It's kind of like if you think about self-driving, just to explain it a little bit, you have the Tesla FSD kind of systems, and then you have the Waymo systems. We're kind of like the FSD-like system or Huawei has an ADS system. There's a couple of other companies that have it, but we make it for all the manufacturers. And so we announced that today because it'll be big news in the automotive industry. Okay.

Is this the year? Is 2025 finally the year that self-driving goes mainstream? Well, I mean, definitely self-driving is having a moment. And I think, well, for the next many years, like any kind of new technology, the issue that you've had is we've been talking about it for a long time. So there's a fatigue as has kind of come in. But in this time, the technology's actually been built out and it's been proven. And so the reason I think a lot of people are talking about it right now is you have Waymo's rollout in San Francisco and L.A. and some other places and there's no drivers in there. And so, and then of course there's other news like Tesla and other companies like us who are building systems to market now. And suddenly it's like, oh, this is no longer like a research thing. This is an actual thing. You just extrapolate over the next five to 10 years. Autonomy will be very, very common. And we're just talking about passenger vehicles. This is happening in defense. It's happening in construction mining. It's happening.

you name the other verticals, everything's getting automated. Like, this concept of smart vehicles is really becoming a thing. Yeah, and you and I have cross paths, given your work, some of your recent work with the U.S. Army, for example, you are dual-use technology company. Yeah, we're a dual-use company, yeah, exactly. And what that means is we build stuff for the commercial market, but we also build it for the DoD and some of the military branches and the primes themselves.

There's surprising overlap, actually, between how you build a car and a tank. It doesn't seem too obvious, but it's kind of a bunch of systems. you have a driver, and then when you make them intelligent, it's similar. Like, you know, you're going to add some sensors, you're going to add some compute, and then it's going to help the person driving or the person in the tank actually do more things. So you just did this Series F funding round earlier this summer. Yeah. Is an IPO in the cards for you?

As I said to you last time, the finance folks always in this section say, do not engage. So I will not engage. But I think it's, you know, we're that kind of stuff. size and scope of the company. The company, we've been very fortunate, has been, we've been profitable, basically the existence of the company. So even a fundraise like this, it's to bring, you know, folks like BlackRock to the table who are looking at our company completely independently. They're not Mark Andreessen, who's been with us from the beginning, or they're not, you know, General Catalyst who've been with us from the beginning.

And as they kind of look at our financial statements and say, okay, this is, this is a good company. So that's the steps you would take if you're a company like us to go to a path to go public. You know, there's a big focus right now. And case and point, you saw it with some of the news today around Intel and the fact that the U.S. government is considering converting funds into an equity stake in that company. There's this big focus on this intersection between industrial policy, national security, how the government's thinking about it, and how that counters specifically China. Yeah.

I want to get your thoughts on that, because I know this is an area you think about quite a bit. Absolutely, yeah. So it's, we could spend an hour on it, but the short version is in automotive specifically, the Chinese ecosystem has basically become its own economy. The biggest issue or the biggest difficulty, if you're an automaker globally, competing against China, is the economics in the Chinese ecosystem are not as transparent as here. There's a lot of subsidies. Obviously, there's some protectionism happening. And so if you're a manufacturer in the rest of the world, what do you think about China? Well, one thing that you have to think about is, hey, the technology there is pretty impressive. The second thing that you think about is, well, if that technology

makes it to home markets and, you know, we don't have the same type of feature sets in our vehicles, we're going to lose market share. And one of the reasons we announced SDS today is we think that FSD or ADS, the Huawei product, these are going to be just table stakes going forward and making, you know, the Western automotive companies more competitive as part of our goal. So your plan is basically to work with all the OEMs X China. Yes, exactly. China's the only country we don't play in. It's the only market we don't play in for obvious reasons. We do the U.S. work. Okay.

Casper Eunice, great to have you here. Thanks for having me. Client intuition. Yeah. Well, speaking of tech, don't miss an exclusive interview with OpenAI CFO, Sarah Fryer. That's tomorrow morning at 8.10 a.m. Eastern. It's on squawk box. Meantime, Toll Brothers' earnings are out.

Diana Oleg has the numbers for us. Hi, Dai. Hey, Morgan, yeah, a beat on the top and bottom lines for Q3 for the luxury home builder. Toll Brothers reported EPS of $3.73 a share versus estimates of $3.6. 60 cents a share, revenue of 2.88 billion versus estimates of 2.85 billion. Home building adjusted gross margin, 27 and a half percent versus estimates of 27.3. Last quarter was the same, 27 and a half. Home deliveries, 2959 versus estimates of 2921, but kind of in the range of estimates. And the average price, $974,000. Estimates were a bit higher at 976,200. Told Brother's

CEO, Doug Yearly, said, while affordability pressures and uncertainty, certain economic conditions persist. We are pleased with the resilience of our luxury business and more affluent customer base. They did give higher delivery guidance of 3,350 for the next quarter. So beat on the top and bottom, Morgan. All right. Diana Oleg, thank you. And yet shares are under pressure down about 2%. Well, ahead. We're going to dive into tolls earnings with an analyst to break down what they may be telling us about the state of the housing market. The Home Builder ETF, XHB, it's having a monster two months. It's up 22%. Stay with us. Welcome back to overtime. Let's get back to Toll Brothers. So those shares are lower right now,

despite beating on top and bottom lines. The stock has already rallied about 25% in the past three months. That report comes after this morning when we got a mixed bag of housing data. Housing starts hitting the highest level since February. But building permits hitting the lowest level since June of 2020. So for more on Toll Brothers and the housing market, let's bring in Alan Ratner, managing director at Zellman. Alan, it's great to have you on. Why are shares trading lower right now? What was your takeaway? Hey, Morgan, thanks for having me. You know, listen, the quarter was pretty much as expected, almost right down the fairway. I think if you want to poke holes, a few small ones,

orders were a bit lighter than expected, down 4%. Consensus was more flattish, looking for flattish orders. In addition, they updated the guidance for the full year, closer to the lower end of their prior range. But I think it really just boils down to the fact that the stock, along with the whole group, has had a tremendous run over the last couple of months and probably taking a little bit of a breather here. Why has the group had a run? Is this all anticipation of rate cuts and what that's going to do to the housing market? Yeah, pretty much. You know, our recent home building survey for the month of July did show a little bit of a pickup in orders on a seasonally adjusted basis.

That was the first uptick we've seen this year. So if you wanted to get a little bit optimistic, you could highlight that. But overall, I think there's just a lot of optimism that the Fed's going to resume their cutting cycle in a month or so. And the hope and the expectation is that we'll gradually bring mortgage rates down

and kind of re-accelerate demand again. All right. So do you buy in here then in anticipation of that? And I realize a lot of these names for better or worse, whether they should or they shouldn't, do tend to trade together. Yeah. You know, we're more neutral on the group right now. I think that there's, you know, a lot of optimism that the Fed cutting rates is going to have an immediate and significant impact on mortgage rates. And, you know, the fact is they don't control the long end of the curve, which is where the mortgage rate is priced off of. So I think there might be a little bit of too much optimism priced in from that perspective. That being said, even with the run the group has had, they're still trading out a significant discount to the broader market, which, of course, is making a new high every day. So if you wanted to look at this in a relative world, I would still say that there are some pockets of attract evaluation out there.

Okay. Where do you see those pockets? What would you be buying right now? What are your picks? Well, Toll Brothers is one of our top picks. You know, we like the higher end of the market. We think that the toll buyer is benefiting from, of course, the recent strength in the stock market. They're less impacted by affordability challenges and the general deterioration of quality among the entry-level consumer today. So Toll Brothers would definitely be one of our top picks. We also like Pulte on the large cap side, which is similarly diversified from a price point perspective. And then we do see some valleys on the small and midcaps side as well. Taylor Morrison, M.I. Homes, which are recently upgraded.

And so those are two of our topics on the small and midcaps side. Okay. Alan Ratner of Zellman. Great to have you on. Thank you. Thank you so much. Appreciate it. Well, coming up on overtime, Viking Therapeutics getting clobbered on. disappointing trial data. We've got those details. What it means for the weight locks drug space. That's coming up next. Overtime's back in two. Welcome back to overtime. Check out Intel. Surging after SoftBank announced they would invest $2 billion into the beleaguered chipmaker, paying $23 per share. That was a slight discount to

the closing price for Intel yesterday. The investment equal to about 2% of the company makes soft Bank Intel's fifth largest shareholder. But that would pale in comparison to the potential 10% stake that the Trump administration is reportedly considering weighing. New reports say are the disgusting converting chips at grants into equity. Actually, Commerce Secretary Howard Lutnik talked about this on CNBC earlier today. Intel lost 60% of its value in 2024, but is up about 25% year-to-date. You can see shares of Intel finished today up 7%. Now from a big winner to today's big laggard. Viking Therapeutics posting its worst day ever following its latest trial results for its experimental oral obesity drug. Angelica P. Bulls has the detail. She joins me here

on set. This stock finished down something like 41% today. Was that move warranted? Well, that's the debate. But the reason that people are so disappointed is because this midstage trial, it showed that Vikings oral drug did help people lose weight. They lost about 12% of their body weight at the highest dose after three months. Now that's pretty competitive. After only three months, that's a lot of weight to lose. But the concern was on the side effect side. So overall, you saw 28% of people stop the treatment and 20% discontinue because of the side effects. Now, some of the rates of things like nausea, vomiting, those were particularly high. And the question is how many people really are going to tolerate feeling sick every single day to lose some weight? And so I think

that's why you're seeing so much disappointment. These results were worse and what people expected to see based on what they saw in the phase one. And now this raises the question of just how competitive is Viking going forward. They're planning to move into phase three, but the question is what happens then? All right. I'm going to ask you a really basic question here, but when we talk about people quitting taking the drug because of side effects, how many people quit? Do we know because they lost the weight they wanted to lose? Well, so that is something that we do see, especially on the longer trials. And that came up a lot with Lilly's data that we saw from its pill a few weeks ago because that was one of the questions.

It was 72 weeks long, and people wanted to know, that's a long time. So if you lost your weight, you know what, you're sick of taking this pill every single day. But here I think that's not so much a question because it's only three months. And especially when you have to count it as side effect related, that wouldn't show up in the data. So yes, 28% of people, maybe that versus 20%, maybe that 8% people are deciding to discontinue for whatever reason. but I do think here it's really about those side effects. Now, I realize this might be an apples to oranges comparison, but I think back to Lilly when they reported their earnings in the South we saw in that stock,

not because of the earnings themselves, but because of what they had to say about their own trial data for an oral for GLP-1s. I mean, what is the read-through here? Is there a re-through to going from injectable to oral, and maybe that needs to be viewed as a different process or different side effects, whatever, efficacy rate, et cetera, et cetera, versus the injectables. Well, I do think now people are starting to question just how big of a role orals will play in this overall obesity market. The thinking was that if you could get something that was almost as good

as an injectable, that that would be a big market. People would want a daily pill versus an injectable. And now as we start to see more of this data, that's coming into question because, you know, these injectables are so good. People are tolerating them. Yes, there are people who are who are concerned about giving themselves an injection, but by and large, you talk to doctors and people are okay with it. They're getting used to it, especially if they get the desired results

that they want to see from these drugs. And now with a daily pill, people are wondering, especially with those side effects, how much are people gonna tolerate? Do you wanna take a daily pill if you're feeling nauseous? I know if I'm taking my prenatal vitamins, and I don't feel great, maybe I'm gonna skip them that day. And so, you know, it's gonna be interesting

to see exactly how this market shakes out. There is a market people are looking at, which is maintenance. So maybe you start on the injectables. You take that. You lose the desired weight. And then you don't want to inject yourself anymore. Then maybe you switch to a pill. And that's one thing that Viking did talk about today that they're exploring. Okay. As a mother of three, I can relate to you, Angelica Peebles. Thank you for breaking it down. Well, coming up on overtime, the market is betting on AI disruptors and against the perceived disrupted players, is the divergence between the two getting stretched?

We're going to discuss that. Stay with us. Welcome back to overtime. Let's bring back Mike Santoli, who's breaking down the market's rising bets on AI disruptors and the growing pressure on the disrupted. What is the divergence telling us about the AI trade? Hi, Mike. Hey, Morgan. Yeah, I mean, this is from BCA research, and it shows you, obviously, the prevailing driver of this bull market has been excitement about development of AI. Now, these are different stock baskets BCA is constructed. The AI disruptors, believe it or not, doesn't have Nvidia in it. It's things like Roblox and Palantir and other companies that seem to be implementing AI and disrupting other industries. So they're disrupted would be things like certain software companies like Adobe is in their ad agencies, IT services for,

So this is an incredibly wide divergence. And right in here, by the way, is when chat GPT got introduced. So that's when it all did take off. And I think you could look at today's market action and see just a little tiny wrinkle of perhaps questioning as to how far the AI confidence has gotten in things like meta and others. Now, take a look here at some survey results. These are a vast number of businesses surveyed by the Census Department periodically. They ask, have you used AI in the last two weeks? And do you expect to start using it in the next?

six months. Obviously, steady increases until the latest reading, slight curl lower. Nobody thinks this is game over, but I do think it's interesting to suggest maybe we're getting another one of these periodic questioning or rethink moments for just exactly what your trajectory of adoption is. Maybe there's some disappointment with chat GPT5 in there as well. So interesting to watch how this plays out through the market, Morgan. Yeah, that's super interesting. I'm curious what the methodology is there. Is that for individuals using AI? This is businesses. Okay. It's only businesses. Yeah. In fact, it's a vast number of businesses. So it's a kind of a periodic check-in on business expectations. Yeah, it sort of gets back at this whole idea of return on investments. And who's realizing it right now?

Right. And so you have things like meta retooling its AI efforts again. And the question is, are there going to be a lot of redundancies? Everybody building an LLM, so many data centers. So for now it hasn't mattered. There was enough to go around. These companies have plenty of cash. We'll see if that, you know, know, maybe wears out investors' patience eventually. Okay. Mike Santoli, thank you. Well, let's get you set up for tomorrow's trade today. We've got more earnings rolling in, this time from Target, Lowe's, Stay Louder, TJX. We're going to get results from beauty company Cody right here on overtime tomorrow after the bell. And on the economic front, we're going to get fed minutes from last month's FOMC meeting,

some argument that that might be a little stale since we've seen a weaker than expected jobs report and all those revisions since then. This will be the first meeting since 1993 where multiple governors, though, voted against the final decision to leave rates unchanged. So that end of itself will be some interesting color. And then, of course, that sets us up for

Jackson Hole and Powell and the rest of the gang presenting later this week. We had a mixed day for stocks with the S&P fractionally lower that does it for us. Press here at Overtime. Fast money starts now.