Closing Bell - Closing Bell Overtime: Chips Rally Takes a Pause; After the Bell Software Earnings Test the Rally 5/27/26

Episode Date: May 27, 2026

Investors parse a critical wave of software earnings and shifting market leadership. Adam Crisafulli of Vital Knowledge breaks down the market’s latest theme and explains what strong software results could mean for the broader rally. Our Leslie Picker reports on Jamie Dimon’s latest comments around succession planning and what they signal for Wall Street leadership. Salesforce, Snowflake, HP, Marvell and Synopsys all report earnings giving investors a fresh read on enterprise spending, AI demand and infrastructure growth. Brent Thill of Jefferies reacts to the software results and explains where the sector goes next. Plus, the sharp drop in Zscaler and what it says about cybersecurity stocks and investor expectations with Evercore’s Peter Levine. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell is ringing an end to the trading day at the NYSD, Fortune Media, ringing the bell and at the NASAC. It's TTM technology is doing the honors. Welcome to closing bell overtime. We're live from studio be at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Sox making small moves today. The Dow up 200 points, small gains for the S&P 500 in NASAC,

but good enough for record highs. More on the market straight ahead. A big drop in the price of oil falling below 90 on WTI for the first time in about a month. And we've got another busy hour for earnings ahead. Salesforce and Snowflake will give us a. fresh read on the struggling software sector. Both of those names are down at least 20% this year. And we'll also hear from Marvell and HP, which are both up more than 25% in a month. But as for the broader market action, Mike, when we saw oil pull back, yields breathe a sigh of relief,

and yet those markets stayed within a very tight range today. Yeah, I mean, I would say it's kind of hesitating ahead of, you know, PCE, maybe some more of these earnings. It's sort of content to rotate around by its time near the highs. You mentioned yields in oil. Credit spreads are very low. low. The VIX is at 16. So it seems a pretty kind of subdued backdrop. It's time to be on alert for things getting a little stretched. I think that's fair to say. You know, the S&P 500 is like 7,8% above its 200-day average. It can get higher. It got to 15 in July of 24. NASDAQ 100 is much more stretched, 18% above. It's not something that automatically says sell it, but it sets the

conditions. And I think a lot of folks, sell in May has never really been a thing that's worked in a long time. but usually some point in the summer, like in July, is when the risk reward starts to turn against you tactically. Yeah, we do want to get to Salesforce earnings. They are out. Sima Modi has the number. Sima. Melissa, Salesforce earnings and revenue for the quarter well above consensus. EPS, $3.88 adjusted versus the $3.8.00% adjusted versus the $3.12 set estimate. If we zoom in, though, on Agent Force, it's AI agent platform. It now has more than a billion dollars in annual recurring revenue. So that tells us sales are continuing to trend higher on a sequential basis. First quarter bookings or current remaining performance obligations, a hairlight at $33.6 billion versus a $33.7 billion estimate, though operating margins notably beat looking to guidance.

Second quarter revenue outlook, the range is a bit weaker than expected, but it did raise its full year guide on earnings and revenue largely in part to this massive, massive Q1B. In the press release, comments here from CEO Mark Beniof says this was an outstanding quarter for Salesforce, record revenue, record. deals, cash flow, he adds that agentic AI is the biggest growth opportunity for our customers, guys. So he's sticking by it now and has numbers here to show that, again, adoption is growing. Share is fractually higher. Back to you. All right, keep us posted on any development. Seema, thank you, Sima Modi. We're seeing it jump

around a little bit up by one and a quarter percent right now, Mike. And obviously, you know, we saw IGV really bounced nicely off of, you know, a couple months ago, lows or so. And so this is sort of the last piece of it in terms of legacy enterprise software. Sure. And wanting to see the story prove out in terms of strength despite the AI disruption fears. I mean, the market's been pretty intolerant of anything that sounds like a miss on the guide. I mean, the revenue guidance really does bracket the consensus here for the full year. So it's not as if this is some kind of a real aggressive upgrade of the outlook.

But maybe enough after that decline, these stocks look very cheap based on how they used to trade and all the rest. Salesource buys back a ton of stocks. So we'll see if that mix prevails as we go into the call. Right. Meantime, let's get some more big movers of the day. Christina Parsneville is looking into that for us. Christina.

Well, consumers of discretionary led the S&P 500 today, while energy just kept lagging with only four out of 21 names finishing higher. And the big indices are all still on pace for back-to-back monthly gains, though. And I mentioned oil or energy. Oil prices did slide, but airline and travel names did get a boost. United, Delta, Norwegian, cruise line, carnival, all closing higher as higher fuel costs. costs have been a headwind since the war with Moran actually began. And Boeing also moved up after the CEO shared good news on key 737 max milestones. The company cleared a capstone review with the

Federal Aviation Agency opening the door to boosting its 737 max output to 47 jets a month. And that helped shares climb almost 2.5% higher. Meanwhile, the chip trade finally took a little bit of a breather today. Semis in memory relatively mixed. The socks was a lower about 1% after five straight days of gains. Micron remains the standout after topping a one trillion dollar market cap, still closing higher again today while SK Hinex joined that elite club as well today. And then you had App Loving, the top name in the S&P 500 and NASDAQ 100, jumping roughly 10% on a fresh, bullish analyst call. Mike? Yeah, and Nvidia, down another 1% 10% off. It's high, yet Semis in general managed to hang in there. Christina, thank you very much. Bond yields,

moving lower along with oil today. Rick Santelli, joined. joining us now from Chicago. Rick's pretty subdued moves in bonds, but still in the same direction. Yeah, definitely pretty subdued, but very significant in many ways. You know, if you look at the 467 high yield close that we had on the 19th, well, it coordinated and correlated very highly with the 18th, the day before, the high conflict close for crude oil in the July contract at 104.38, as you see on that chart. And they're definitely doing the tango together all the way down, and it's significant, especially at a time where many believe that crude oil,

no matter what the futures do, is going to create inflation that's sticky. The tenure doesn't seem to agree with that at the moment. There's also a lot of action going on in a foreign exchange market. This is a 12-hour chart of the dollar yen. Notice the level, 159 and a half. Why is that significant? because the trigger point for intervention this year has been 160. Now, if we opened a chart for 40 years, you can clearly see.

We are bumping against an area that seemed to trigger two interventions this year, and traders are definitely zeroing in on that. We want to monitor it very closely. And also, they had an auction in Japan today, and it isn't only our yields moving down. The auction, the 40-year security, went really well. And you know the reason? Because they're pricing in the end of the conflict. So maybe the markets are right. Maybe they're wrong. But investors are certainly putting their money down on the assumption that we're much closer to the end than many believe.

Mike, Melissa, back to you. Rick, thank you. Let's get to Snowflake. Those earnings are out. Stock is soaring. Seema has the number. These are the quarterly numbers here for Snowflake beating by seven cents on its bottom line, while revenue came in ahead of consensus at 1.39. billion. Most importantly, product revenue beat. It's also raising its full year product revenue outlook. That I imagine is a very good sign given the debate going into this report around the competition from the likes of Datadog, its main competitor in the cloud infrastructure space. Separately, Snowflake announcing it's increasing its investment in Amazon Web Services to $6 billion,

which includes the purchase of its custom arm-based graviton chips. So a win there for Amazon is it continues to grow its semiconductor business. We have comments here from CEO of Snowflake Streeterwama Swaming, saying AI continues to be a powerful tailwind for snowflick here. You're seeing the stock skyrocket here by as much as 24%. Melissa and Michael, wait for more details on the call. I would point out one other metric here. They now have $779 customers spending more than a million dollars on a trilling 12-month basis. So a sign that customer adoption increase, but also expanding amongst different clientele.

Back to you. All right, Sima, thank you. Seema, Modi. Again, the stock up really popping, 25%. There's 6% short interest, so that could play a role here. As Christina mentioned, there was a rotation out of semis and into discretionary, and new flow data from Bank of America shows the markets saw two straight weeks of outflows led by the tech sector.

Is this the beginning of a rotation in the market? Joining us now is Adam Christopher. He is a founder and president of vital knowledge. Adam, great to have you with us. I don't know if a trillion dollars on Micron in terms of market cap was a bell ringing of any sort, Adam, but I'm just wondering what you make of the market action that we've seen unfold. And whether you think we should ask that question if these trades are stretched, should we go into the broadening of the market sort of trade?

Yeah, I definitely think that tech at this point is a very, very stretch on the upside. You know, you've had a bunch of kind of bell ringing events, whether it's some of these IPOs that have been launching or about to launch, you know, the $2 million market cap club. You know, so I think rotation is going to be kind of the game plan for the rest of the summer. and you did see a pretty powerful moving consumer discretionary today, you know, not just within retail, but you would travel leisure, housing, some credit card stocks as well. And that, I think, if you really do see this Iran deal get signed and you see oil move off its eyes, that's the space rather than the entire market, which I think largely assumes a resolution to the Iran conflict.

But it's going to be consumer discretionary that's probably going to have the most fundamental benefit from reduction in yields, reduction in oil. So that's the group that, you know, I definitely think has legs to it. Yeah, I suppose if we get that sequencing, it's going to at least make it a more two-sided debate about inflation and whether we should look through energy-related inflation, whether the Fed, maybe it's going to be able to maneuver if, you know, shorter-term yields can come down, all that stuff perhaps in the mix. But we've got to get through, I guess, a PCI report and sort of see if the markets are still responding to the near-term macro.

Yeah, I definitely think, you know, even if Hormuz, the truth of Rousse was to completely reopen today. There's going to be a lag effect before conditions really normalized several months, if not quarters. So I think for the Fed, you know, I think you could probably take the rate hike potential off the table. You know, it was just less than a week ago with the market was pricing that in nearly 100%. But even with a deal with Iran, the Fed is very likely to transition its forward guidance into a more, adopting more neutral language. So taking, you know, the prospect of a rate cut or guaranteeing a rate cut in the second half the year off the table. So neutral Fred policy, I think the market largely is baking that in.

That's not the end of the world. And the Fed has to be very careful because they don't want to undermine their credibility as well. So they do have to acknowledge that there are a lot of inflationary pressures on the upside in the pipeline. And again, even if the Iran conflict is resolved fully. Adam, stay right there. Marvell technology is soaring. It's up 3%. Her earnings are out.

Christina Parks and levels got the numbers there. Christina. Yeah, so it beat on the top and bottom line, 80 cents, adjusted on revenues of $2.42, so $2.42. so $2.42 billion, not dollars. This is a company that makes networking as well as custom chips for the likes of Amazon as well as Microsoft. Their data center revenue also came in higher

than anticipated. Their non-gap gross margins came in at 58.9% higher. For the second quarter, their guide, they're providing a guide of $2.7 billion on EPS of a 93 cents. So both of those numbers are higher than what the street anticipated in the actual release to.

The quote is, we expect revenue growth to continue accelerating each quarter throughout fiscal 2027. And they say that they've significantly raised Marvell's revenue outlook for both fiscal 2027 and 2028. So relatively bullish comments there because of exceptional AI-related bookings. Guys? Christina, thanks. Christina Parts Neveless. Adam, I know that you think of Marvell is a key earnings report here.

You know, the trade going into Marvell today during the session was really interesting. Hit a new high early in the session on very heavy volatility. more than twice, the daily average. It traded and finished close to lows here. But here we are up 2% of the after hours in the back of the numbers. I'm just wondering if you think this is enough to keep the trade going. And in that notion that the broadening of the markets will happen this summer, that that's the playbook, that AI trades will actually suffer or will they just churn?

I think, you know, until you really see a change in the fundamentals, and you obviously are not seeing that between Snowflake and Marvell, the results from companies that are levered to AI tailwinds right now are spectacular. The demand trends are just very robust. You're hearing that across the board. And so to the extent that continues, it's going to be hard for these stocks to suffer material sustained declines. But expectations were extremely elevated, especially for Marvell. You know, I think behind memory, Marvell expectations, you know, were some of the highest in the entire market.

So the bar was very high for them to exceed. But, you know, as we can see, it's continued cycles of beat and raised results from these types of companies, quarter after quarter after quarter. that's definitely going to help prevent a sharp swamp. But, you know, I still think that there is room for this market to rotate away from some of these very white-hot AI stocks. Yeah, I mean, Marvell was 75 three months ago. It's a 203 at the moment. So, yeah, expectations had risen.

Adam, hang there. Synopsis earnings are out. Christina Portonello's has done. Well, synopsis topping expectations this quarter is the chip design. Boom, just keeps on rolling. The company sells software and IP that makes – that chip makers use to design and verify chip. So it beat on both EPS, $3.35 as well as revenue, helped by strong demand for AI-driven chip design and advanced packaging tools across its electronic design's automation business,

EDA. Plus, they saw solid momentum from their recent ANSIS acquisition. Management is leaning into that strength in tightening up execution. The CFO is saying in the release, they see a strong second half and are, quote, raising our targets for revenue operating margin, EPS, free cash flow for the year as we drive greater efficiencies across the business. They see a full year revenue midpoint of $9.66 billion with EPS of $14.76, both higher than estimates. Big picture. Synopsis is positioning itself right now as the Pixen shovels play on AI from the software, the designs of chips to high value IP blocks, but the market reaction is not as positive shares down about 3%. Guys. Christina, thank you very much. Adam, you mentioned, oh, by the way, don't miss

an exclusive interview with synopsis as CEO tomorrow at 10 a.m. Eastern on Squawk on the street. And quickly, Adam, you mentioned the IPOs that are going to collide with this market. Maybe that'll challenge the bow case, or maybe we're going to just kind of rev our way, you know, through the hype cycle until they're actually out. Yes, I mean, it's possible. You know, there definitely is going to be a lot of momentum and optimism around these deals, I'd say price. But, you know, just from a pure mechanical perspective, it's an awful lot of supply.

that the market's being asked to absorb from, you know, from a handful of companies. Not just, you know, SpaceX Open Eye Anthropic, but, you know, you're going to have also some chip companies. S.K. Haynix is going to come listed in the U.S. So this is an awful lot of supply linked directly to the AI theme. So that's a lot of money for that space to absorb. And just sort of a mechanical question as we show the Sibo close in Chicago there at the end of trading officially right now. Adam, when S.K. Heinex does list this ADRs here, do you think that,

that would cause sort of an ATM effect in terms of the other memory stocks here. Will that put pressure on them or is there enough demand for this trade to absorb that? Yeah, I mean, we're going to have to see. You know, a lot of U.S. investors aren't able to buy SK Hynix or Samsung. So if you have another major name in the public in the U.S., that potentially could hurt some of the domestic U.S. memory stocks. But, you know, like we've seen with Marvell and other chip companies right now, demand. Right now, it's extraordinarily strong. These companies are talking about how they're booked

out for the next several years. So until that changes, or unless, until you see these companies maybe take the IPO proceeds and perhaps announce some kind of dramatic expansion to capacity, which you haven't necessarily seen them do. That can really change the memory supply demand. But for right now, you know, the actual underlying fundamentals are quite strong. Yep. SK also, the trillion dollar club in Korea. Adam, thank you. Great to see you, Adam, Chrisafouli. Thank you. Kila Packard earnings are out as well.

Sima Modi has those numbers. Sima. Okay, Melissa, HPEE delivering a decent beat on its top and bottom line. In fact, EPS is 21% above consensus. The biggest beat since February of 2021. And if we breakdown, the different businesses, printing and personal system revenue above expectations, guidance is in line. Executives say strong execution in the second quarter is evidence that we can navigate headwinds

in future quarters and that cloud costs associated with agentic AI and security. considerations are driving demand for AI workloads. We're seeing the stock come back here by 13% and overtime, guys. All right, Tina, thank you. Well, shares of META ending the day higher after announcing subscription plans for Instagram, Facebook, and WhatsApp, Julia Borsten. It's here to explain the details. Julia. Well, MET is making its biggest move yet into subscriptions and laying out new potential revenue streams with new paid offerings across its family of apps. Facebook Plus and Instagram plus for $4 a month. And WhatsApp Plus, for $3 a month will give users access to extra features like profile customization, super reactions,

and insights into who's watching stories. Meta says it will also start testing new subscriptions for businesses, creators, and meta-AI users with all the subscriptions under the brand Meta-1. In addition to the free version of its Meta-I app and website, Meta-I will be available for $8 for the plus version and $20 for the premium version for access to deeper reasoning and more advanced image and video generation options. This news comes as today meta also held its annual shareholder meeting where CEO Mark Zuckerberg talked about the opportunity to offer subscriptions to personal AI agents in the future. He also spoke about potential revenue opportunities in selling computing capacity and also potentially building a cloud business

down the line. So really sounds like Zuckerberg's thinking about all the ways the company could grow its revenue streams. For sure. Julia, among the features that you went through right there, I didn't see fewer ads, right? So in other words, this is not supposed to be you pay instead of having your feed be kind of served a bunch of ads. In Europe, the company does have the ability or does offer the ability to pay to be ad-free, and that's so met it can be in compliance with the EU. The idea that if you're paying to be ad-free, then they're not going to be tracking you in the same way to target ads. This is really separate from that.

This is not about EU compliance. This is about the ability to offer super users, people who are willing to pay to have all these extra bells and whistles, the opportunity to pay more. Met is not expecting to get everyone to use these services, but looking at the success of something like Snapchat Plus, which is a subscription service for more bells and whistles, they must see an opportunity here to offer a percentage of their users the ability to upgrade to something a little bit more intensive. Julia, thanks. Julia Borson. Results from two big software stocks just out. Salesforce near the flat line Snowflake jumping of Marvell, by the way, is up 8%. We'll get instant reaction to the software numbers. You're watching Closing Bell overtime live from the NASDAQ market site.

Well, that's get another check on Snowflake. That's stock soaring in after hours. The company reporting earnings that beat expectations with the CEO saying AI continues to be a powerful tailwind for the business. Meanwhile, Salesforce moving slightly lower, following, its results. Guidance for second quarter revenue was a bit weaker than expected. Company did raise its full year guide. However, you see 30% now higher on Snowflake. Joining us now is Brent Thiel from Jeffries. He has a buy rating on both these stocks, I guess. Brennan, you mentioned for Snowflake going into the numbers that, you know, a lot to like,

but much to prove. So did these results prove much to you? Hey, Mike, yeah, they proved it on the backlog growth. They beat by 70 million, but they flowed $100 million through on the raise. So if you look at they raise more than the beat. And the narrative going into the quarter was that Datawricks was crushing them, and DataRex is no doubt the leader in the industry. But it got just overly negative that Snowflank was going to be the big loser in infrastructure. And the way we look at it, the snowflakes is a huge winner in AI.

You have stage and manage your data to get AI ready for the enterprise, and they're using all the LLMs, natively, Google, Amazon, all the platform stories are using their technology to leverage AI in the snowflakes system. So, in an incredibly negative bent from many of our institutional clients going in, and obviously the fear of software decaying while the rest of AI infrastructure is booming. So we've seen this now with Datadog. We've seen it with the Google infrastructure print. I think we're starting to see a separation in software,

which is not all of it is going to get AI roadkill. It's effectively you're seeing the infrastructure names really thriving, and that is key to our positive thesis on software infrastructure, which is they benefit the application companies like Salesforce, Adobe. Many of the app companies are effectively under duress. because of AI. And so I think going forward for Snowflake, we still believe stock has more upside because of this gravitational pull to create agents to run workloads in a safe harness. And Snowflake will be that safe harness to let these AI workloads run in the enterprise. How much duress is Salesforce in?

Is it in the bucket of AI roadkill, Brent? From an investor perspective, it is. You can look at the year-to-date numbers. You can look at the reaction. know, they, I think the, we're at our software conference down Newport, and we had many CIOs present about the fear of applications getting impacted from AI. So horizontal apps and back office, front office, you know, Salesforce, unfortunately, is in that category. The good thing for Salesforce is I think they, they had good numbers. They maintained the full year. The numbers weren't, weren't awful. They weren't inflection we're seeing in the growth. We're seeing in Snowflake, right? Snowflake grew backlog 38% and Salesforce is growing, you know, in the low teens. So you can see a difference in

the application company's growth rates. They're a lot lower. Infrastructure is a lot higher. So I think we're just saying keep it simple. Stay underweight software, stay overweight infrastructure, stay underway at the application category. I think Salesforce will figure out a way that the bounce out of this. But right now, they're, you know, kind of considered a name that's under duress because of many of the AI themes. And then if you look at the departures, there's been an incredible departure list from Salesforce. You know, Denise Dressor going to Open AI,

who's an incredible leader. You've seen just a huge list, if you ask me, what's the number one departure? It's been from Salesforce in terms of the number of executives turning over. And so I think Mark has to, Mark Benioff has to address this. When you look at that magnitude of turnover, We're not seeing that in infrastructure software. We're seeing it in applications and we're seeing it at Salesforce.

So I think they have to address that concern as well. And software companies, Brent, I mean, in addition to figuring out whether they're going to be disrupted by various AI applications, or also it's coming to the service, how much of a consumer they are, right? Just an experimenting and spending, you know, Beniof's comments about what they're going to be paying Anthropic this year and all the rest of it. Have they sorted out exactly how much of their own code writing and everything else is going to basically be doable in this way? Are they still in the experimentation phase? Yeah, I think we're in the experimentation phase. Again, at our software conference in Newport today, our CIO spoke about five application companies.

We could potentially see a reduction in spend because we are using Anthropic. We are using OpenAI to build new frameworks, and custom build these solutions. So I think what you're seeing is there are signals today that that's happening, but you're hearing from CIOs that are making the person seeing decisions that because many these application companies haven't delivered innovation and Anthropic and OpenA. are that they're going to not rip them out, but they're going to stall the spend on the apps and they're going to put more spend into Anthropic and Open AI.

And so I think it's going to be a world where both coexist, the systems of record with opening on Anthropic will exist together. But again, it's the application companies have to act fast. And Salesforce, again, it's good to hear Mark, you know, saying that he's spending on Anthropic and getting, you know, the agent force numbers higher. It's, again, it's really early for AI, for the app companies, it's like three, four, five percent of total revenue. It's not a major driver. So this is why my brand goes higher every day because of the influence that memory's having an AI. and the software companies go lower is because AI is not having an impact.

In many cases, it could potentially cannibalize some of their businesses. And then I think the other fact is if you look at the client's server to cloud movement, right? We had very few companies make that transition, right?

People soft didn't make it. They got bought. You got Sebel, didn't make it. You had Oracle and a couple others make it. So everyone's saying, well, in the last cycle, 80% of the industry kind of went away. who's going to make this transition. And right now, I think most are saying, well, I'm not going to bet on anything in software.

I have a higher degree of certainty in AI infrastructure and semis and memory. And then inside software infrastructure like Snowflake Data Dog and many to hypers, Google, Microsoft, Amazon, in my opinion, are safer. Brent, great to catch your take. Thank you. Brent, Thiel, Jeffries. Do not miss Jim Kramer's exclusive interviews with the CEOs of Snowflake and Salesforce. all coming up 6 p.m. Eastern time on Mad Money. Coming up, this mystery saw getting crushed today following

its CEO speaking at a conference. We'll have the details. And speaking of conferences, Jamie Diamond, also taking the stage today. And he says J.P. Morgan is ready to buy if the price is right. That's coming up on closing bell over time. Boston Scientific shares down sharply following comments from the company at a conference today. The CEO saying this year has been a bit more of a challenge and anticipated in lowering estimates for its watchman and implantable device designed to reduce stroke risk. Piper Sandler saying the new guidance is below its expectations, and it is now questioning watchman's growth rate. The stock was the worst performer in the S&P 500 today, off 12 percent, back to where it traded about three years ago. Wow. Jamie Diamond has been the

CEO of JPMorgan for more than 20 years, and for the last few, the question of succession has become a bigger and bigger issue for investors. Diamond was asked about the bank's succession plans earlier today at a conference hosted by Bernstein. I think there are potential successes inside the company that's, of course, up to the board. There are people you don't know, or you may have meant a little bit who are, you know, potential successors down the road from here. So we feel good about it. But, you know, succession is always going to be hard, and so we're quite conscious about it.

It is the most important thing like next. That is, we understand that, and my board understands that, and I understand that. But while he's still in charge, Diamond says the bank will be looking to spend some money if the right target emerges. I do think there might be, in the next couple of years, a chance to put $10 or $20 billion to work buying something. And when we do that, we'll explain to you why we think it's a great purchase.

And... But also, I think, if you hear me, I think asset prices are high, including J.P. Morgan's stock. So, you know, I'm not that fond of buying stock at these prices or companies. And we're quite patient with capital. I mean, it's not like, it's not bringing a hole in our pocket at all. If it sits there for a while, no problem.

That is rare for our CEO to call his own stock expensive. For more in all of this, let's bring in Leslie Picker, who was very familiar with the comments. And I don't know where you want to start, Leslie. I know Succession, he said in 2024 that it was going to be five years out when he retired. So the clock is really ticking here. And I think a lot of investors thought Marianne Lake was probably the number one candidate. I mean, tonality-wise, what he said with this is important, like, next, meaning, at least in kind of listening to his comments earlier today, to me, at Signal, just a really big priority. He did mention the successors, which are largely seen as those four big business leaders. You mentioned Mary Ann Lake there, Mary Callahan Erdos as well, Troy Warbaugh, Doug Petno, also kind of among the names, rumor to be in the succession race. But he also identified. some potential successors that the audience of investors and analysts and the media may be less

familiar with, people who are perhaps younger, who could be successors down the road, which I'd never heard him really mentioned that either before. But clearly it's a priority. It's something that the board, you know, he says the board meets without him every board meeting and so they can kind of discuss these types of issues that he doesn't need to be involved with. But ultimately, as he always says, the timing of when that happens is up to the board. It's always so interesting, Leslie, in the sense that investors and us, everybody, has been fixated on this because he's been CEO for so long. He kind of built the J.P. Morgan as it stands right now. But the whole point kind of of J.P. Morgan, as it now exists, is that it should just be almost impenetrable, no matter who's running it.

You know, it's the old Warren Buffett thing. It's like, you know, you don't want to count on a superstar CEO to run the business. And it is fascinating because it has the premium valuation. to a point where he says, I don't want to buy back much of the stock. And he's treating a potential acquisition of one and a quarter to two and a half percent of JP Morgan's market value. That's $10 to $20 billion, as if it's something that would be a little bit of a big lift at this point. Well, if you look at his track record, you know, the types of deals that they've done, there was the first Republic deal that they basically paid $11 billion to regulators to buy that one, that failed bank. And then they did a couple of crisis era deals.

They did some FinTech deals. There was the Frank deal that was acquired for $175 million that ultimately turned out to be a fraud. So he hasn't, we haven't really seen him do a $10 to $20 billion deal. That's kind of your basic M&A that we would see kind of at any other company. Now, part of the reason for that is because of the size and scale of J.P. Morgan. It's unlikely that they would be able to merge with another bank. So what does that mean? Is it an asset manager?

Is it a payments company? It would have to be something, you know, maybe more on the fintech side of things that they would have to consider, $10 to $20 billion is sizable. And then also you have excess capital that's resulting from this deregulatory shift that we're seeing. So there are numbers out there. I think J.P. Morgan's excess capital is about $40 billion. So what do you use that on? You're not going to use it on buybacks if you think your stock is too high.

You can invest it in your company. But, you know, $40 billion is a lot of money to invest in your company. Maybe there is some kind of inorganic opportunity for them to do as well. And then kind of to tie it all together, does that ultimately happen before he passes that baton, before that succession idea that we were just talking about? It would be an interesting and unusual swan song for a major deal to happen just on the eve of a CEO departing. But we'll see. Leslie, thanks, Leslie Picker. Time now for CNBC News Update with McKenzie Segalos.

A Google Software Engineer has been charged with making more than a million dollars by allegedly using inside information to place bets on prediction market platform polymarket. Now, the employee in Italian National is charged in New York with commodities fraud, wire fraud, and money laundering. It's the second prosecution involving polymarket bets brought by the Southern District of New York this year. A special forces soldier pleaded not guilty last month to making fraudulent bets over the Nicholas Maduro raid.

Matthew Perry's personal assistant who pleaded guilty to injecting the actor with the ketamine dose that killed him, sentenced today to almost three and a half years in prison. He's the last of five people to be sentenced for involvement in Perry's 2023 death. And the Treasury Department announced this afternoon that the new app for Americans to manage Trump accounts for their children is set to launch tomorrow, but people won't be able to fund the accounts until July 4th when the first $1,000 federal contributions to eligible accounts begin. The app was built by BNY Mellon and Robin Hood. Back to you.

Hi, Mack, thank you. Coming up, we'll catch you up on some of the big after-hours movers. And Z-scaler, getting crushed losing nearly a third of its value today. We'll talk to an analyst who just downgraded the stock. Overtime, we'll be right back. Welcome back to closing bell overtime, live from the NASDAQ market site. Another record day for the markets with the Dow, S&P, and NASDAQ, all hitting fresh highs, although minimal gains for the S&P and NASDAQ.

Two big software names reporting after-hour sales force slightly lower, despite results that were better than expected, but a huge gain for Snowflake. Also beating on the top and bottom lines and raising guidance for the full year. Product revenue also reaching a new high. Also, the company reaching a deal with Amazon to buy agentic computing chips. The stock up 32%. Meantime, a monster move lower for cybersecurity firm Z-scaler today. The stock posting its worst day ever after announcing full-year guidance coming in below estimates,

investors fearing a deceleration in annual recurring revenue and revenue. growth. That is dragging down the broader complex, the cyber ETF having its worst day in a month, but it has actually outperformed the SMH over the past month. Joining us now is Evercore cybersecurity analyst Peter Levine. He downgraded Z-Scaler earlier today. Peter, great to have you with us. It seems like all of Wall Street was caught really off guard by this sudden narrative change. And it seems really to stem

from change in the leadership in the sales division. I wonder if you could walk us through the biggest, the biggest change the narrative that makes it now an inline as opposed to an outperform? Yeah, so I first call out. I think the C-scaler move, I think, is company-specific rather than any broader cyber demand problem. You know, I think it was idiosyncratic to their own execution issue. So the quarter they reported was fine, but I think the commentary around sales disruption, net new logo weakness, I think is the bigger issue. I think perhaps maybe estimates were too high for next year and they want to get ahead of it. But I think the narrative around

execution issues lingering into next year, I think is just going to weigh on the stock for the next couple of quarters. The fact that it's execution issues in your mind, Peter, does it mean that there's no concern for knock-on effects to the rest of the group? We did talk about how, you know, I mean, you know, Palo Alto down 3% today. Is that right or wrong? So if you look at, you know, from year, if you look from Jan 1st to kind of early April, I mean, broadly these, all the security names are down 20 plus percent. A lot of that was due to some of the AI risk and dismediation, but you kind of saw that trade kind of flipped from early April to where we are today. These stocks are up 30, 40 percent. So even Z-Scalar, C-Scalor really 40 percent over the past six

weeks. So if you look at Palo Alto, you know, there's only a few, I think, platform plays that think stands a benefit. But I look at Palo. I look at the recent acquisition of CyberArc, Chronosphere, you know, checks in the space, demand for, you know, AI security, and especially protecting against the risk, I think Palo Alto is very well positioned to kind of continue to execute here. And not just continue to execute, but is there sort of a gain from Z-Scalar's missteps or the weakness in the Salesforce, et cetera, that they will see. Is it to another competitor's benefit? I'm sure it is. Yeah, I mean, Palo Alto now competes with Z-Skiller on the cloud networking Sassy front, and they have been a lot more competitive. I think the net new logo weakness, I think

Z-Scaler talked about last night is probably benefiting Palo Alto. We saw it from Fortnet, they have stronger than expected product sales. I'm sure that's going to benefit Palo Alto as well. But yeah, I would say the weakness from Z-Scaler is probably going to benefit Palo Alto, especially on the SACC, which is their Z-Ccalist's core products. All right. Peter, we've got to leave it there. Really appreciate you weighing in. Thank you. All right. Up next, why blackjack, jeans, and candles are giving investors hope of a resilient American consumer. Closingville overtime. We'll be right back. Consumer discretionary, the best performing S&P 500 sector today, up nearly 2%.

MGM Resorts, the best performing name in the group, both J.P. Morgan and Truest upgrading the stock today and increasing their price targets. Both upgrades are based on hopes for a bounce back for the Las Vegas Strip after two rough years. The firms, however, point out the potential overhang from fuel prices and macro events. I'm not sure where on the K, the Vegas casinos said probably more upper than lower. But anytime you think domestic travel is going to take a downbeat, it really doesn't. I mean, it's sort of been resilient no matter what. Contessa Brew, who covers the sector so well makes the point that MGM has more of sort of the upscale property. So the upper K, and if you compare it to like a Cesar's, which should also benefit from the same trends.

That is underperforming. So that really illustrates sort of the upper and the bottom K. Meanwhile, we are seeing some signs of strength in consumers at the mall. Abercrombie and Fitzshare surging, despite mixed results. First quarter revenue came in slightly below estimates. But the retailer reporting EPS of $1.47 versus expectations of $1.28 and reiterating its full year net sales and income growth forecasts. And bath and bodyworks also sharply higher after beating on both the top and the bottom line,

issuing better than expected earnings per share for the second quarter. The company did note that they see inflationary pressure from oil as a new headwind. Oil, of course, to transport the goods, not to put in the can. We mentioned candles. I was going to say, yeah. Not just giving you petroleum candles. It does seem like the retail trade at this point is very specific. I mean, we saw Walmart really sell off on earnings.

It has not caught a bounce back, and yet you're seeing some of these specialty names do well. And in the same day, you're seeing Capri do poorly because of softer Michael Corp. So investors are really sort of sifting through and seeing what the stories actually are. Yeah, it seems like you either catch lighting in a bottle in a given quarter or two. By the way, cheap, cheap stocks can also leave a lot of clearance for upside surprise. And both Abercrombie, Bath and Body Works, like 70s. eight times forward earnings. So really not a lot of expectation built in. They're also former corporate siblings, right. I guess the ball came out of the old limited. Oh, that's right.

Body Works and A&A. Yep, LTD. Okay, so would you let an AI agent make trades in your portfolio? That is an option one major online brokerage is introducing. We have that story when closing bell overtime, live from the NASAC market site returns. Welcome back to overtime. Robin Hood is launching new tools that will allow AI agents to take control of your portfolio and make trades on your behalf. Kate Rooney is here with the details. Hi, Kate. Hey, Mike. Yeah. So this is a first for the brokerage industry. Robinhood is letting clients now connect outside AI agents. So think of chat GPT or Claude directly into a trading account and then execute trades on their behalf. It's going to happen in a separate account.

Robinhood telling me that customers can limit access or disable it if something does go wrong. They're rolling out first with equities, but did say that options, crypto and other asset classes are going to be coming next. Company does also warn that AI agents can make mistakes, misunderstand instructions and then generate losses as well. They also say at the end of the day, the customers here are the ones responsible for that activity in their accounts. They are bringing this concept to spending as well. The other half of the news that came out this morning, they're rolling out agents for shopping to make purchases on your behalf. It's a major test, too, when we talk about trading for just how comfortable clients are going to be letting AI just fully

manage their money so far. Others have done it, but it's mostly been used. used for advice versus actually placing in the trade. So pretty much all of the major brokerage terms have some sort of chatbot or AI assistant. You've got Schwab, Morgan Stanley Fidelity, all have what they describe as more of AI co-pilots. There are some questions, guys, also, about how good this technology is actually going to be at picking stocks. I'm wondering, Kate, how simple it is to use this in terms of the kind of language a customer has to use to type in the parameters. Can you say, for instance, I want to buy discretionary stocks, you know, the XRT, ETF, when oil goes down to 80. I would think the way that these AI chat thoughts work, Mel, and I haven't seen the interface

that's sort of rolling out on a limited basis. They are so steeped in natural language. So that is typically how you see chat GPT or Claude set up. I would assume that it is user-friendly and that you can just sort of tell it what you're looking for. But there's questions over how crowded these trades are going to get, how different the strategies are based on the periphery. as you're set and some of the bias that it might have as you sort of prompt it in certain ways.

And so it'll be interesting to see, you know, how much input you actually have to add when you're looking for an interesting, maybe different strategy or if you are just looking to set it and forget it and have more of a passive strategy. But very much a test. I think the rest of the brokerage industry is watching closely. Got it, Kate. Yeah, big questions as to how different it's going to be from other just conditional orders that you would put in there.

Exactly, like a limit order. Exactly. A limit order or, yeah. Kate, thanks. Thank you. Let's get you set up. But tomorrow's trade today, and it'll be another big day of earnings in the retail and tech front, Best Buy, Dollar Tree, Coles, Burlington stores, and Hormel, reporting before the bill.

After the close, we will get Costco, Gap, and American Eagle. Outside of retailers, we'll get numbers from Dell, Autodesk, NetApp, MongoDB, and Octa after the bell. So lots of chew on there. Also, a lot of key economic data. The highlight will be April PCE. price index. Economists are expecting it to rise 3.8% year over year. Core PCE seen increasing 3.3% from a year ago. Also on tap, second rating of Q1 GDP, new home sales, and jobless claims. Of course, PCE is the highlight there. For sure. And it really a good test of whether the market

can kind of tune out a very hot print if we get that. If you get a print of 4% headline PCE, are we going to be able to ignore that? Bonds have actually gotten a bid recently. And then Dell, I think, is going to be really interesting, very hot lately. All right, that does it for overtime today. That's when he starts right after this.