Closing Bell - Closing Bell Overtime: Chips, Tech Stocks Fall; JPMorgan’s Q2 Playbook 3/26/25

Episode Date: March 26, 2025

Our Eamon Javers reports on Trump’s auto tariffs announcement. Kevin Gordon of Charles Schwab and Adam Crisafulli of Vital Knowledge break down the current state of the market. Kristina Partsinevelos analyzes weakness in semiconductor stocks. JPMorgan’s David Kelly shares his market outlook, while Invitation Homes CEO Dallas Tanner discusses the impact of tariffs on housing and mortgage demand. Plus, Phil LeBeau reports on Hyundai’s new EV plant amid growing U.S.-Korea trade tensions, and Forethought CEO Deon Nicholas talks AI advancements in customer support.

That's the end of regulation. Light speed commerce ringing the closing belt. The New York Stock Exchange, Tabula, doing the honors at the Nasdaq. So much for a comeback. Stocks taking a turn lower as tariff fears ramp up and as chip stocks sold off today. The Nasdaq finishing down by 2%. That is the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Belt Overtime. I'm Morgan Brennan at CNBC headquarters. And I'm John Ford in San Francisco. Coming up, President Trump is expected to make remarks this hour about auto tariffs. We will take you to the White House for a preview in just a moment. Plus, JP Morgan Chief Global Strategist David Kelly will join us to weigh in on today's

steep market pullback and where we go from here. And we will talk about the serious pain for the chips today as Nvidia leads that sector lower We begin with the latest volley in the trade war though president Trump expected to announce new auto tariffs this hour Megan Casella has the latest Megan John. That's absolutely right We are waiting for the president to speak from the Oval Office any moment now He has already confirmed that he will be placing tariffs on car imports coming into the U.S. What we don't know are any of the further details there. We don't know the rate of those tariffs.

We don't know whether there will be any exemptions for specific countries, for specific aspects of those cars. We also don't know whether tariffs will be only on finished cars or on car parts as well. So a lot of questions, a lot of things to watch for once the president starts speaking. Anything along those lines, any exemptions, for example, could sort of soften the impact. But we have seen those auto stocks taking a hit today. So any moment now that will get underway. And one thing I will note, guys, is just how much this episode today underscores just how much further the president is willing to go now versus what he was doing in his first term. He completed

that his commerce department back in 2018 completed an investigation. They found that imports of cars and car parts at the time were harming U.S. national security but he never went through with tariffs then. He was repeatedly talked out of it. Now of course moving forward with at least some level of those tariffs I would also say at the time guys, commerce secretary Wilbur Ross at that back then was recommending tariffs of between 25% and 35%. Any minute now we'll find out whether that's the rate they go with or whether it might be something lower than that. Guys back to you. Yeah the section section 232 report. Megan Casella we know you'll be monitoring all of this for us and so we'll come back to you with those headlines. In the meantime let's get back to the markets and this tech driven sell off. Let's bring in Charles Schwab,

senior investment strategist, Kevin Gordon and Vital Knowledge founder, Adam Chrisafulli. Great to have you both here. Kevin, I'm going to kick this off with you. We just mentioned the NASDAQ falling 2% today. Tech really led, including mega cap tech names leading to the downside here. We have the NASDAQ falling back below correction territory level of more than 10% off of the record high. You got an S&P crossing back below, it's 200 day moving average here. How much the technicals matter?

Are you surprised given the tariff dynamics, the hawkish fed speak we got today and some of the other dynamics here in this market to see us taking a breather again? Well, not surprised to see tariff dynamics driving this. And I think if you add on to the fact, you talk about a lot of this weakness in tech, there are these two really interesting dynamics

and it's almost a double whammy at play for the stock market right now in terms of what's contributing to the weakness. You do have the kind of reversal and the big momentum trade that has been the case within tech and tech adjacent. That is mathematically going to hit the index in a harsher way, especially something like the NASDAQ.

But you've also got all of the tariff concerns, the back and forth, on again, off again, this really uncertain environment, which is starting to hit other areas. Even today as the sell-off worsened, it started to move into financials, it started to move into industrials. But if you look at the correction that the S&P had,

the industries that are hit hard by tariffs, like retail, for example, or like autos, they were sort of at the bottom of the leaderboard. So it isn't the case that it was just tech or it was just the mega caps that were leading to the downside. Mathematically, sure, they contributed a lot because of their weight in the indexes, but you definitely saw the tariff concerns hide out in there as well. I mean it just was masked a little bit by what was going on with the mega caps. I don't want to get your thoughts on this market here.

I mean, is this a buying opportunity or is this a time to sit on your hands and just be cautious given all the uncertainty? Yeah, I think it's more the latter than the former. The underlying price action today wasn't horrible. The equal weight S&P really was barely down and finished off about 20 basis points. So it was primarily confining tech,

which is almost independent of tariffs, what's happening and driving tech lower. And this has been a year to day theme now where the NADSEC has been a huge underperformer, the EqualWay S&P is held in better. I think right now, we rallied about 5% dropped to peak in the last couple of weeks, week and a half. And it's probably better not to sit on your hands. We wait to see next week's going to be huge. We get a lot of important more economic data. We get to big power pronouncement on the second. And that will provide some clarity as to what's happening

in the underlying economy and then in the coming months. But I think for right now, we had a rebound rally. I don't actually think we set fresh lows immediately, but it's best to kind of just sit on our hands and wait for more data to make a decision. Kevin, what about the consumer? The New York Fed today fleshing out how student loan delinquencies and defaults are going to tank the credit scores of around nine million borrowers, a couple million into subprime,

just in the first half of this year. Is that pressure on the consumer on top of what you were just talking about with tariffs, priced in to the market at this point? You know, I don't think fully, and I think part of the reason for that is because we're still seeing a relatively large gap between all of the soft data and the hard data. And I think one of the reasons that the market

has been relatively resilient, even though, yes, we did have a full blown 10% correction in the S&P, But certain parts of the market that you would expect to get hit much harder, like the deep recyclicals, have been relatively resilient in that process because there's probably still a focus on what has been relatively resilient hard data coming into this year, but also a hesitancy and uncertainty

to not know whether the soft data is telling us and giving us a reliable signal. And I mention that because consumer confidence data that came out yesterday was weak virtually across the board. There were some labor components that were a little bit better, but when you look at the broad array of data that we've gotten, whether it's from the University of Michigan, whether it's from the New York Fed, some of the sentiment surveys that had come out from the conference board

beyond the consumer, there is more weakness there. So I think directionally it probably matters more. It's harder to put more weight on the magnitude of it. But if that's the direction we're going, where confidence and sentiment are softening, then I think you have a little bit more of an issue, especially to the point you just made from the New York Fed and that data that's coming out.

Adam, is this a market where investors have wanted to be on balance too optimistic? And I ask that just thinking back to what's happened since November when for whatever reason investors didn't want to price in the possibility that President Trump was actually going to do what he said he was going to do. Yeah, I definitely think that there still is some skepticism that tariffs are a negotiating tool, much less than before. I think markets appreciate that Trump 2.0 is going to be a lot different than Trump

1.0 when it comes to tariffs. There is a genuine embrace of a tariff-first economic policy, and these are going to be put into effect. So I think the market has certainly shifted its view on that. And tech is an area where there's still kind of a lot of stubborn optimism around that group given the multi years that we've seen of robust outperformance. We continue to see people be surprised by just the degree of the underperformance in tech so far year to day.

So tech is where there's still kind of a lot of optimism that's being squeezed out. A day like today in particular, after a few days of a rebound, it's kind of definitely causing people to, I think, turn a little bit more cautious on the group. All right, Adam Chrisafouli, Kevin Gordon, thank you both for kicking off the hour with us with the Dow Transports,

the only major average that actually finished in the green up half a percent today on a down day for other stocks Well, the Nasdaq had been pacing for solid gains on the week But today's pullback has dampened some hopes of a more sustainable rebound Let's get to Christina parts nevelis with a look at one area that weighed heavily on tech today, Christina It's interesting. We're talking about tariffs, but Some of what hit the semis was trade related in its own way now tariffs but some of what hit the semis was trade related in its own way, no? Yeah, well tariffs trade related especially about the AI diffusion

rules in mid-May and what's gonna happen with that and then the third point to Morgan is Microsoft reportedly canceling or delaying planned data center leases across the US and Europe and that really helped drive chips lower. TD Cowan analysts say these lease deferrals might be tied to slower than expected expansion of open AI related workloads. Key point though, algorithms may have traded on this headline you're seeing right now. This is from Bloomberg, Microsoft Abandons, Data Center projects. But that headline doesn't necessarily tell the whole story.

According to the report from TD Cowan, Google and Metta actually might step in taking over those leases as they need more capacity for their own projects. So it's not all doom and gloom, but again, an example of how algorithms just trade on the quickest headline. Whispers though of capex cuts do spook hardware investors. We saw that in February. Nvidia fell about, what is it, 6% today with the information also reporting earlier this morning that Chinese officials might block H20 chip sales over energy efficiency concerns. The ripple effect of potential capex cuts, the tariffs that you've been talking about,

are really spreading. Arista Networks, Broadcom, Marvell, all seeing their shares close at least four or five percent lower today. And then BTIG put out a note this afternoon saying that the semiconductor index is 200-day moving averages lower, which is a bearish sign that they haven't seen in over two years. So you got tariffs, data center capacity shifts possibly, technological challenges creating really a perfect storm

of uncertainty for chips and hardware as a whole guys. All right, Christina, thank you. We've got a news alert on GameStop. Julia Borsten has the details on that. Julia? John, GameStop announcing a proposed private offering of $1.3 billion of convertible senior notes. This would be due in 2030.

They are also granting the option to purchase an additional $200 million of notes, which would mature on April 1, 2030. And the shares of GameStop appear million of notes which would mature on April 1, 2030. And the shares of GameStop appear to be trading down in after hours trading. This is obviously such a volatile stock and certainly one of those meme stocks. Back over to you. Yeah, down 8% at the moment.

Julia, thank you. Let's get back to tech now with our Mike Santoli, who has a technical look at the NASDAQ 100 after today's sell-off, Mike. Yeah, John, first the technicals, then maybe the valuations. You see it's struggling, the NASDAQ 100 is, to get back above its 200-day average. The S&P did do so and then slipped back below.

You know, again, I say there's nothing really kind of magic or decisive about this level, except it does define the intermediate-term trend, and the longer you spend below that, the kind of more erosion you have to that trend itself. So still has a lot to prove here that the bulls can still mount a bit of an offense here. Take a look at the valuation side of things for the NASDAQ 100 as well. You have not seen as much of a valuation reset lower with this correction and a price to

cash flow basis as you have price to earnings. Now what you'll see is the PE and the price to cash flow have mostly moved exactly together. One of the bullish points about mega cap growth stocks was sure they look expensive on the surface, but almost all the earnings are free cash flow because these are such wonderful businesses,

low capital intensity. Well, what's going on now is these companies are using a ton of their net income of their cash flow to plow into CapEx, and that is reducing the expected amount of free cash flow that's going to be left over, which is really what shareholders have. That's what they get acclaimed to. And so as you see, it's really not, it's just opened up this wide divide between the free cash flow metrics and the earnings metrics,

and it sort of shows you why it's become a little more of a complicated picture. How much are we paying for those earnings if it's going to be plowed into the AI infrastructure investments that may likely have a payoff down the road, but we just can't quantify that today, guys. Mike, you're talking about the NASDAQ 100, but at this point, how much of this is really Apple, Nvidia, Microsoft, Amazon, Google? Well, the Mag 7 is basically 42% of the NASDAQ 100, and so that basically tells you it's principally those dots.

You could throw Broadcom in there. Costco's really big right now as part of this. But you're right, those are the main drivers. And I think Microsoft is a really emblematic case here because that projected free cash flow for the company is supposed to be down this fiscal year versus last fiscal year, even as they start to show a little bit of resistance

to writing further checks on this score. Again, this is fine. These companies can pay these bills. They're not taking on leverage to do it. It's different from the, you know, the tech bubble in the late 90s in that respect, when you had a lot of leverage in the system. But it just shows you that when it comes to investors

trying to figure out whether the risk reward has gone back in their favor, they're a little more hesitant. Yeah, and it's such a key point you make about Microsoft and free cash flow and certainly Christina parts and Evelish just flag that. But the semiconductor stocks also under some pressure today after another

80 some odd companies added to the U.S. export list from China and other companies. Mike Santoli, we'll see you later this hour after the break. JPMorgan Asset Management Chief Global Strategist David Kelly joins us with his take on the renewed selling pressure on Wall Street and where he thinks the markets head next. Chief Global Strategist David Kelly joins us with his take on the renewed selling pressure

on Wall Street and where he thinks the markets head next. And later we will talk about the outlook for the home builders with the CEO of Invitation Homes and how tariffs on building materials could impact his business and just the general state of housing as he's seeing it right now, over time back in two. Welcome back. The major average is finishing the day lower with the NASDAQ getting hit the

hardest down 2% dragged down by chip stocks including Arm, Marvell, Nvidia. Let's bring in JP Morgan Asset Management Chief Global Strategist David Kelly. David, good to see you. So on top of that, how do you see the U.S. fiscal situation affecting this market going forward? Well, I think it's going to have a very interesting impact because I think what we're going to see here is a zig and a zag. Right now, there's a lot of cuts going on. We've got the Doge cuts.

We could perhaps lose 300,000 federal workers this year, so maybe a 10% reduction in the overall federal workforce. And that's, you know, admittedly, the federal government needs to get more efficient, but that does impart a certain drag on the economy. So you've got to drag from that, you've got to drag from tariffs. But the more this drag materializes, the slower the economy gets, the more stimulus they're going to pump into that tax bill that is winding its way through Congress right now. And so I think that 2026 will be a year of

significant fiscal stimulus. And we're going to go from a year where the economy was really growing below trend to one when it's growing above trend in 2026. And for markets, that's a pretty complicated thing to try and figure out. But I do think the debt and deficits are going higher here. What about the entitlements piece of this? I keep trying to figure out whether the doge cuts are really effective versus what the entitlements weigh on on these big areas of spending for the government. No, I think it's all a matter of scale. The truth is the deficit this year is going to come in at about two trillion dollars. The Congressional Budget Office is saying 1.9. I think it's going to be

closer to 2. If you got rid of every single civilian member of the federal government, you'd save about 300 billion dollars. So you'd save about a sixth of the deficit if you just get rid of all the federal employees. You can't actually balance the budget without cutting Social Security, cutting Medicare, cutting defense, and raising taxes. You can't get close to deficit reduction. So I think while there is waste and inefficiency in the federal government, it's a good thing to get rid of it. I think you've got to be careful how you do it, make sure that you're genuinely getting

rid of things that can be got rid of. But it doesn't really affect the big long-term deficit story. That requires hard decisions on taxes and entitlements. I don't think we're going to see either of those ahead of elections. And we're always within two years of a congressional election. If you were to actually see some of those hard decisions materialize, say that actually happened, is that the type of thing that could lead us into recession? I just think about previous times in history when we've had to go back and balance the budget.

It doesn't have to because hard decisions, it's like in life, I mean if you've got to go on a diet because you're like you know 50 pounds overweight, don't try and get rid of it in a week. Give yourself a year, 18 months to do it, do it slowly. The economy is very like that. If you had a long-term slow process by which you would gradually raise more revenue, gradually chip away at different parts of entitlements and try to make it a more efficient system, try to make the healthcare provision in this country more efficient because it's horribly inefficient. If you do it slowly over time, you can get it. You don't even need to get a balanced budget. If you get to a deficit of 4% of GDP, that'll stop the debt to GDP ratio from rising. We're at about 6% right now

The problem is I think we're more likely to go from 6 to 7 rather than 6 to 4 So no, you don't have to have a recession and you don't have to fix it overnight But you do have to head in the right direction Hmm and to your point and the interest payments alone that come due here over the next couple of years I do want to go back to what you said earlier, and that was the fact that you expect this drag on the economy and then through tax cuts and other means that maybe we see this fiscal stimulus begin to emerge in the second half of this year.

What does that mean for investing? How do you navigate this right now? What would you be buying or how would you be positioning? Well, I think, first of all, I don't expect the actual stimulus to kick in until 2026. I think they'll try and warm up the't expect the actual stimulus to kick in until 2026. I think they'll try and warm up the economy ahead of the November 2026 elections and it'll all be part of that tax bill.

But I do think there'll be stimulus there. Investors should look forward to that and recognize that if we have a soft patch here or even if we had a recession, it's probably going to be short lived. But having said all that, we've got heightened uncertainty. We've already had a correction. That correction could sort of reassert itself, could get worse. And this is a year for thoughtful defense. I mean, if you look at what's happened so far this year, value has beaten growth, international has beaten the US. You know, there is the things that have got hurt the most are the

things that were most bubbly to start with. So I think this is a year when people really need to think carefully about valuations here. Don't get out of long term assets. I think there are plenty of good long term assets around the world and in the United States. But just be more broadly diversified. This is not a year for momentum trade or just piling into the indices, piling into the mega caps and the meme stocks and the cryptos and so forth.

This is not that kind of year. And today was definitely not that kind of day. David Kelley, thanks for joining us. Anytime. Mortgage applications falling in the latest release. Just another data point indicating weakness in the housing market. We will ask the CEO of Invitation Homes

what he's seeing from customers and how tariffs could impact the builders. And speaking of tariffs, one commodity is having a stealth rally this year and trade policy is a key reason why. We're gonna explain when Overtime returns. Welcome back to Overtime, weekly mortgage applications falling in the latest release

that was out this morning, putting further pressure on the housing sector. As it faces headwinds from tariffs and macro slowdown concerns, joining us now is Dallas Tanner, the CEO of Invitation Homes in Dallas. It's great to have you back on the show. And that's where I'm going to start with you because we've been talking about the

health of the consumer. We know housing has been sluggish. You're in a very particular piece of the housing market. Single family rentals. What are you seeing in terms of the customer base, the health of those consumers and what that means for the housing market. You know, we talked about this this morning with our group, and we're just not seeing

a whole lot of change currently with our current customer. Maybe a little bigger propensity to renew than we'd seen in years past, and that might have something to do with the for sale market. There's certainly plenty of supply in the resale market today. Our customer feels pretty convinced that renewals, most likely the best option with the affordability being so drastically different between ownership and for lease today. On average, in our markets, about $1,100 cheaper on a monthly basis to lease the same home when you take the considerations of homeowners insurance, property taxes, and the like. And so as you start to think about that imbalance, it's certainly favorable to a customer who wants to rent. What do you think it takes to see that imbalance narrow? Is it going to be mortgage rates continuing

to come down and more inventory in general coming online? It's a great question. I mean, there's a couple of things going on, right? First, you still have a little bit of the lock-in effect based on everything that we read and sort of follow in terms of people out there with good existing mortgages. I think to see mortgage rates come in obviously would help. There's going to have to be some catalyst probably for that. The supply story is pretty good right now if you're somebody in the market looking for a home. I think the affordability factor is a little bit of an issue with the elevated rate environment

that we're in right now. But the customer that we keep coming across feels pretty good. And look, I'm biased to the for lease space, obviously, right now, but we work with a ton of different builders around the country. We're building 2,000 to 3,000 homes a year for the purpose of flexible housing arrangements. And builders business sounds pretty good. It sounds like they're giving a little bit more away. And some of the public market data that's out there from an incentive perspective. There's

still people transacting. So it's sort of hard to hard to read if it goes sort of one way or the other quickly. I think we're sort of where we are right now. It's going to take some sort of a catalyst to move rates. Yeah. And you don't construct the homes, but you do work with a number of home builders. So how are you gaming that out in the midst of tariffs? And we already have tariffs on some lumber products that come into this country from Canada, for example, but with all the talk that we could see more plus factor in immigration and the impact that could potentially in crackdowns there and the impact that could potentially have on a workforce for the construction sector, what are you expecting?

So you know, taking a step back, a healthy housing environment has both the right balance of ownership and flexible for leased product, and that could be a number of different things. As we've talked with our partners, both public, private, and we're trying to get a better sense of where we think potential risks exist, there certainly are areas like that you mentioned around lumber and steel and some of these areas that will either happen directly or indirectly as they pass through to vendors in the plumbing, you the plumbing markets and in the framing markets, et cetera. So we're underwriting a little bit more risk there, but we still see on a balanced view that given the demand and the need for more housing in this country, that there's still

going to be ability to bring high quality housing both in the for sale and also in the flexible for lease areas of the markets that were involved in in a meaningful way because the demand is just there but i do think it as a as an entrepreneur as somebody who is investing in housing they're certainly taking some of that risk into their underwriting models they think about their return profile some of the markets that we've seen be the hottest and most sought after in recent years i seem to be shifting here.

Case in point, Florida. You have a lot of investors appear to be pulling out of Florida right now. The supply of homes for sale is the highest on record, according to CNBC's Diana Olek. Is it a good market to be in? I still think Florida is a really healthy market. And you say, well, why? And remember, just taking a step back, like trees don't grow to the sky. So at some point, you get back into sort of a seasonality or, to your point, maybe in certain pockets, things have been maybe a little bit overbuilt, but that absorption will

happen naturally. You have a very friendly government that's pro-housing, pro-business. I think the governor does a nice job in that state. There's a lot of opportunities to invest. It's warm weather, great demographics, net household migration's pretty good, and the markets all behave a little bit differently. Miami's very different from Orlando and Tampa, Jacksonville, et cetera. We're in all those markets with our company.

We love being there. We think the customers are terrific. We think the environment's very friendly in the for-lease space. There certainly can be a little bit of noise. We talked about this in our fall earnings call that we saw a little bit more supply coming into the marketplace

uh... especially the bill direct category and so it'll take a few quarters for some of that to absorb it might have i'd make about the people are leaving florida it's a great place to live a great place to do business in bales center great to have you on c o limitation homes thank you time now for cbc News Update with Pippa Stevens. Pippa. Hey, John.

An appeals court in Washington just upheld a lower court's temporary block on President Trump's use of the Alien Enemies Act of 1798 to deport alleged Venezuelan gang members to a mega prison in El Salvador. President Trump and his allies blasted the lower court judge, calling for his impeachment, saying he encroached on the executive branch's ability to make national security decisions. The administration is likely to ask the Supreme Court to take the case. Former Brazilian President Jair Bolsonaro will stand trial for allegedly conspiring in a coup to overthrow the government after he lost the election in 2022.

A five-judge panel voted unanimously to put him on trial. Bolsonaro called the allegations against him, quote, grave and baseless. And the NBA is reportedly in talks with owners of some of the biggest soccer clubs in Europe to back a new basketball league on the continent. That's according to a Bloomberg report. And if it comes to pass, would be the biggest ever international expansion by a U.S. league.

NBA owners are reportedly reviewing expansion plans this week that could see more than a half dozen franchises launch across Europe. John, back to you. Pippa Stevens, thank you. Up next, we'll look at what's behind copper's massive rally this year and the stocks that stand to benefit the most. And later, the company hoping to make long waits on customer service phone calls, a thing of the past.

And we are still awaiting remarks from President Trump on auto tariffs. We will take you to the White House for those comments as soon as we get them. Over time, we'll be right back. Welcome back. Copper posting a record close today after President Trump said he may implement tariffs on the metal. Let's bring back Mike Santoli for his take. Mike.

Yeah. Well, markets for now, anyway, assuming that that's a likelihood and you can see that in the ratio of the copper price in New York versus London. That's what this chart shows. So obviously domestic copper prices are expected to have this pricing umbrella due to tariffs. Obviously, you can't just move that much copper around and do the arbitrage in real time. And it shows you, I think it's definitely not specifically

a demand-driven, at least not a global demand-driven issue when it comes to why New York copper has been surging relative to London. Now take a look at Freeport Macmoren shares, that's obviously the biggest copper producer here in orange. And they've got a spurted higher relative to the metals and mining ETF, as if there is a little bit of a windfall effect

for the higher pricing, although it's complicated because you really only get the benefit is if you produce here and you sell it here, as opposed to sort of integrating the global flows all over the place. So complicated, still not determined exactly what's going to happen, but certainly the futures market is taking hard here, Morgan. We saw something similar play out in steel, US steel versus steel from other parts of the world too.

So I do wonder how much of a template already exists when you think about some of these other industrial metals that have experienced tariffs. Yeah, I mean, absolutely. It definitely shows you that, again, it's much more about, you know, sort of creating this price. Look, if you want to incentivize domestic production, incremental production of the metal or fabrication of it, then you have to essentially give a price incentive to do that.

So, you know, it's kind of what tariffs are supposed to do when it comes to a commodity-based business, unless it is just a matter of, you know, raising revenue as you, you know, in terms of privileging domestic prop. All right, Mike Santoli, thank you. Well, data security startup, Sierra, a fast-growing company with a three billion dollar valuation, announcing this week that Frank Slutman, former CEO of Snowflake, ServiceNow, and Data Domain, is joining its board. I caught up with Slutman and Saira CEO, Yotam Segev,

to talk about the data software market and the public markets. Segev told me Saira's technology, which uses machine learning to help enterprises label, organize, and protect sensitive data is a major on-ramp for AI. We all have access to the public chat GPT style models, but the real secret here or the real magic is going to start to happen when the enterprises that have been accumulating

data and information about their business for decades, sometimes centuries, are able to unleash and unlock the power of that data. Now, think about a bank that might have thousands of data scientists, data analysts, AI engineers today. How long does it take them to get to all of the compliance checks to actually make that data accessible to a new consumer? Today it might take them many months. We have to shorten that cycle to weeks, days or hours. That's Yotam Segev, our CEO. He

said he's not looking at an IPO anytime soon as demand for the young company's product is still ramping so quickly. I asked Frank Slootman, who led three companies through the IPO process, as CEO, for his thoughts about the state of today's public markets. The market is obviously not that attractive in terms of multiples, which is why a lot of companies are holding back and they're doing secondaries and they're finding other ways to deal with liquidity, which is usually the driver of an IPO. For enterprise companies, there are other objectives other than liquidity.

That's really to acquire the stature and posture that large companies are going to standardize on your platform, that they want to see that they're dealing with an entity that's not going to be taken off the market, as we recently saw, actually, by another player, that may or may not be in their interest. Being a public company is still a real thing, and it's still really important for enterprise companies. Much less so, probably, for those who are on the consumer side, you can sort of do whatever the hell they want.

But I think if you're a serious sort of global 2000, you know, type of enterprise company, I think Goal in Public is a real shot in the arm. Some pretty big names though, Morgan, Databricks and Stripe among them still holding back. Well, up next, as we await President Trump's remarks on auto tariffs, we're going to look at the future of making cars in the U.S. I'm Phil LaBow in El Abel, Georgia, where Hyundai has officially opened its latest final assembly plant here in the United States. It will ultimately employ 8,500 people.

But you know what else you'll find here? A number of robots. These little guys from Boston Dynamics helping on the quality control of the vehicles coming off the assembly line here. When we return, a look at the future of auto manufacturing in the U.S. and the importance of this plant to Hyundai when closing bell overtime returns. Welcome back. We are waiting remarks from President Trump on auto tariffs. In the meantime, though, Hyundai is making moves to produce more cars in the U.S., opening a brand new EV plant in Georgia.

Phil LeBeau has the details for us. Hi, Phil. Hi, Morgan. It's an EV plant. It'll also do hybrid production, and they can be flexible. In fact, Jose Munoz said just a few minutes ago in a roundtable with myself and a few other reporters down here that regardless of what is announced by the White House, they are ready to adjust.

How they adjust, well that remains to be seen because when you look at where Hyundai gets its vehicles from, the ones that are sold in the United States, last year almost 58%, more than a million came from Korea, built in Korea, imported into the United States, about a third built here in the U.S. and the remainder are coming from Mexico. But this plant, this gives Hyundai the flexibility to potentially change that in the future. Yes, right now the production is focused primarily on electric vehicles, the IONIQ 5 and the IONIQ 9, but they have the capacity to change and to be more flexible over time. It'll certainly cost money, it'll take time, but Jose Munoz says they will be able to do that

depending on what the president announces in terms of tariffs and how that might impact the demand for certain vehicles, vehicles that might be imported from Hyundai plants in Korea. By the way, Hyundai Kia, they already have, they have three plants now in the United States and they also have a plant down in Mexico.

You take a look at shares of Hyundai keep in mind that they plan to invest 21 billion dollars in the U.S. They made that announcement at the White House on Monday. Part of that 21 billion is having the flexibility to expand capacity not only at this plant but at its two other plants here in the United States and again like everyone Jose Munoz, the CEO of Hyundai, waiting to find out exactly what the White House is going to announce when it comes to tariffs. Morgan, back to you. We're all sitting here on Tinterhooks wondering what the details of this, because there's so many ways it could go, to your point, Phil.

I do wonder, are we going to see more of these types of moves by more companies like Hyundai in terms of investments in this country to be able to see more of these types of moves by more companies like Hyundai in terms of investments in this country to be able to have more regionalized manufacturing and a more flexible supply chain footprint? We will probably see more commitments from automakers, but keep in mind, Morgan, they made the decision to build this plant in 2019, during the first Trump administration. Began in 22, finished in 24. Takes time.

All right. Phil LeBeau, thank you. Up next, the founder of AI for Customer Service Company forethought on his new voice product that can fully resolve customer problems without the need to speak to an actual person. And Dollar Tree, one of the big winners in the S&P 500 today after reporting better than expected fourth quarter earnings and announcing it is selling its struggling family dollar business to a pair of private equity firms for $1 billion. We'll be right back.

Welcome back to Overtime AI for customer support startup, thought launching for that voice this week founder and president Dion Nicholas is here CEO Dion Nicholas here to talk about it in San Francisco so impressive. Can every customer do this out of the gate does their data have to be ready. Does their data have to be ready? Yeah. One of the beautiful things about the FourThought Voice Platform is that, we integrate right into your systems. We have 70 plus different integrations, whether that's the help desk, the telephony systems, to your databases.

We do the work of pulling that in, creating the model so that it can understand your business policies, and then ultimately being able to deploy and host conversations with your customers from end to end. How thick is the competition out there? Brett Taylor at Sierra is out there as well. Absolutely. So I like to think that voice is really the next frontier of AI. A lot of people have interacted with AI through things like GPT and chat and email, but over 65% of consumers want

to interact with customer service through the phone, through voice. And so I think the competition is gonna be stiff, but one of the big things is that fully agentic AI, one that can handle issues from end to end, resolve issues, take action, and do things like that are pretty rare. And so we're really excited about this launch. How are you positioned with agentic?

Because you and I were talking about that before agentic was this buzzy term So we're really excited about this launch. How are you positioned with Agentic? Because you and I were talking about that before agentic was this buzzy term that everybody, you know, banning off, et cetera, spouting around. Yeah, so what we're seeing in the market is that a lot of AI, now that GPT, now that there are a lot of language models out there, most AI is really going after FAQ-based questions.

If you're using a large language model, you're able to answer questions like how to, how do I do this, but take an issue like a password reset or reactivating your account. You don't want an AI that's gonna just give you the five steps to resetting your account and sending you on your merry way. You want it to go do it.

You want it to go do it, exactly. It's gotta verify your identity, make sure it's you, look you up in the system, actually issue the password reset email or reissue a refund or whatever the action may be. And that's actually where the really hard part is when it comes to actually being able to do agentic AI. You guys haven't raised money in a while, why not?

So the last time we raised funding was in December of 2021. We actually raised a great round then that was our 65 million series C. And one of the things we saw was that as we're scaling, two things. One, businesses were becoming more and more efficient, ourselves included. So being able to make funding last and being able to grow and still have record years, 2024 for us was a record year, while becoming extremely efficient, means that you're the kind of business that's actually delivering value at scale.

We're seeing a lot of noise and a lot of hype around companies, some of which you've mentioned earlier, that are raising a lot of money but not delivering a lot of value. And so we want to be the company that delivers ROI to our customers at scale. How important are partnerships at this stage? And that in line with the fact that people are looking to save money and customer support is one of those areas where a lot of companies that people are looking to save money and customer support is one of those areas where a lot of companies seem to be looking to save it. Absolutely. When you look at the agentic AI or even the gen AI landscape, there is so much buzz and so much hype out there,

but at the end of the day, customer support and the customer experiences where we're seeing the first real impact happen in agentic AI. In terms of partnerships, for example, we launched this voice AI in partnership with Cartesia, a very exciting startup that built their own voice model. They raised 64 million in a Series A recently. And so being able to partner with the best foundational models, but also integrating with systems,

whether that's your Five9, AWS Connect, and many other telephony-based systems that these businesses are using, allows us to leapfrog and ultimately deliver value. Everybody wants better customer service. We'll see if the software can do it. Dion Nicholas, thank you. Thank you.

We have some big individual stock moves happening right now in overtime. We've got a rundown of all the after hours action. That's coming up next. Welcome back. Let's hit some earnings movers. Shares of PEDCO are climbing after first quarter guidance with strong office furniture maker Miller. Noll is falling after the company said costs related to tariffs could impact net

earnings per share by five to seven cents. Steelcase though, that's jumping after guidance came in above consensus. Variant Systems is falling after missing on earnings and revenue and another check on GameStop because that's falling after the company announced a proposed private offering of $1.3 billion in convertible senior notes, expecting to use those proceeds in part to buy Bitcoin.

Well, Mike Santoli is back with us and Mike, I suspect you have thoughts on the GameStop move which we know came on the heels of a social media image of Michael Saylor from Strategy and Ryan Cohen from GameStop a little over a month ago. Then we got the news yesterday and now how it's getting funded today. Right, exactly, Morgan.

I mean, this is the MicroStrategy playbook, of course, is not just to use the cash you have sitting around or the cash throw from the core business to buy Bitcoin, but to sell securities, let the capital markets give you what feels like free money in the moment, lever up a little bit, and then buy Bitcoin because you amplify that, in that sense, the potential upside if you own the asset. Now, what's interesting about it is, you know, part of the talk of GameStop doing this is

the company does have like $4.8 billion in cash in the balance sheet, has basically no debt, so it could just kind of buy Bitcoin with that cash. Clearly that's not enough juice in there. One of the reasons that the stock would be falling, I mean many, right? If you sell convertible securities, that's potential dilution, $1.3 billion in this convertible sale. That's like 10% of the market cap of GameStop at the moment. So that's significant potential dilution down the road. The other mechanical reason is what traders do, what hedge funds do is they buy the convertible,

they short the comment against it and you kind of arbitrage, you know, the sort of embedded option in the convertible security. Don't need to know the details. The point is, mechanically, that's how these things get done. So we'll see if the market rewards GameStop the way it has MicroStrategy

by effectively paying a massive premium for every Bitcoin a company owns. Mike, the chin scratcher for me here is, again, potentially diluting shareholders, making their shares less valuable to buy Bitcoin, which a shareholder could just go and do on their own, but they could buy something strategic in entertainment, in technology that they think is going to support the core

business, couldn't they? They could, but I do think that maybe there's some conclusion that they've come to where the real asset of GameStop is its memeification in terms of the market. Yeah, sure. Most mergers destroy value. The core business is shrinking. This is also the case, by the way, with MicroStrategy. I mean, that

software business was a real business that had cash flow, but it was kind of shrinking and in runoff mode. So I do understand because of the example of how the market is treated, MicroStrategy, that they would do this. One other wrinkle, all the

earnings that GameStop reported are basically interest income on the cash they hold so maybe they didn't want to part with that cash directly. I knew you'd have thoughts on all of this Mike Santoli it's great to get them from you. Thank you. We had a down day for the major averages X the Dow transports John final GDP tomorrow pending home sales we also get seven year notes auctioned off and more fed speak. Looking forward to it.

Well, that's going to do it for us here at overtime.