Closing Bell - Closing Bell Overtime: Hedge Fund Investor Dan Niles On Tech Stocks; Earnings from Robinhood, Reddit and Cisco 2/12/25

Episode Date: February 12, 2025

Barbara Doran and Kara Murphy join for a market panel as we analyze key earnings from Robinhood, Reddit, Cisco, and more. Mizuho's Dan Dolev weighs in on Robinhood’s results, while Citizens JPM analyst Andrew Boone breaks down Reddit’s earnings report. Dan Niles shares his take on CPI and the broader market, plus Emily Wilkins reports on the GOP tax plan. We wrap with Citi’s Drew Pettit on what’s next for equities.

That bell marks the end of regulation. Wex, Inc. ringing the closing bell at the New York Stock Exchange. The Optimized Strategy Index ETF doing the honors at the Nasdaq and a mostly lower finish for the major averages, but closing well off the worst levels after the day, after that hot inflation print this morning initially sent stocks tumbling, pushed yields higher. The yields did stay higher.

That's the scorecard on Wall Street, but we're going to stay late. Welcome to Closing Bell Overtime. I'm John Fort. Morgan Brennan is off today. More key earnings rolling in this hour, including Reddit, Robinhood, Applovin, Cisco, MGM, and more. We're going to bring you all the numbers and analysis. Plus, investor Dan Niles joins us to weigh in on tech's outperformance today, why he thinks the inflation report raises the odds of a rate hike this year. As we await earnings, though, let's bring in BD8 Capital Partners CEO Barbara Duran and Kestra Investment Management CIO Cara Murphy. Guys, good to see you. Cara, the 10-year yield

has really been spiking for the past week from 4.4 percent on February 5th to over four six today on that hot CPI number makes it harder for investors to want to risk on stocks. So is the broadening of the stock market more at risk, you think, after today? So I think this is certainly going to be a headwind for a number of stocks, particularly as you look at smaller cap stocks, which tend to be more reliant on debt, often floating rate debt. So as you have higher inflation, you, which tend to be more reliant on debt, often floating rate debt. So as you have higher inflation, you have less chance of Fed rate cuts, higher for longer interest rates. That means higher debt costs going forward. And that flows through to certain consumers as well. But certainly those smaller stocks that have to go to the debt markets pretty

regularly, that's going to be a significant headwind for the foreseeable future. OK. I want to mention the Trade Desk results are out. That stock initially plummeting down almost 20%, 19%, 20%. We're going through those results. We'll bring them to you as soon as we have. And lots of questions here about what's going on with those results. Barbara, we've got a couple of high valuation tech names reporting today. Besides that, I'm thinking about Applovin and Reddit. Might this be a fresh

test of the market's risk appetite post-CPI? John, it's a good point, and it could be. Again, both of these stocks, they're very fully valued, if you will, but their fundamentals are very good. Both stocks, obviously, very different. But Applovin is discounting quite a lot, but they look like they have a lot of growth drivers going forward so. It will be interesting to see how the market reacts is it good enough is it better than

expected how much profit taking will come in. So I think Reddit. Right it probably has a much longer runway for growth I think with the- stock up five and a half times- as you reporter said earlier- from their I. P. O. just last last

March people weren't okay when will they stop realizing all the synergies and the and the penetration and ads and that As your reporter said earlier, from their IPO just last March, people weren't in okay. When will they stop realizing all the synergies and the penetration and ads and that sort of thing? But I think that is really in the early stages. So I would expect them to have a raise and beat. And if the market's appetite is still there, you know, stocks should go up. Okay, let's find out what's going on with the trade desk. Down like 20% now.

Kate Rooney's got the numbers. Kate. John, so it was a mixed quarter and it looks a little bit light here on Q1 guidance. Company also announcing a one billion dollar buyback. We'll start with that adjusted EPS number. It was a three cent beat at fifty nine cents. Revenue was a miss, though. Seven hundred and forty one million. Street was looking for seven fifty nine million there. And on Q1 revenue, they say at least $575 million. That was light of what the street was looking for, which was closer to $592 million. Also mentioned that $1 billion buyback, but the revenue miss. A little light on guidance. Looking like that's what's driving the shares lower, unless there's something we're missing here, guys. We'll keep looking through it. But that's the top and bottom for you now.

Yeah, it sounds like that'll do it. I mean, quite light on the revenue, you know, missing. It looks like by nearly 30 million dollars on on a seven hundred fifty nine million expectation. Barb, let me go back to you on this one, because in this environment, we're still on the S&P over 6,000. The valuations across the market are, in general, pretty strong, pretty hefty. What is this reaction? And maybe these revenue misses both on the print and on the guide tell you. Well, I think in this case, this is surprising for them because most of their revenue is advertising. So it sounds like it may be an execution issue because certainly we haven't heard from any other companies that rely on

revenue like Alphabet or Meta that they're seeing any signs of slowdown there. So I think that's probably idiosyncratic here. But I think what we're seeing today with the, we had the big sell off with the hotter than expected inflation numbers, the market came back. And part of that, I think, is that we've known the Fed's going to be higher for longer. This just pushes it out and they may have to stay there. And I think there's still so there's a bit of uncertainty in terms of the impact from Washington and the budget cuts. Are we going to actually explode the deficit even more? What's happening with tariffs? Everybody right now, I think, is assuming it's more bark than bite. But we'll know in about 20 to 25 days,

you know, about that. But there's a lot of uncertainty there. But the earnings are coming in very well. I mean, before we started fourth quarter earnings, I think the aggregate estimate was for about 11.5 or 11.8 percent growth. And right now, we had 62 percent report as the end of last week. We'll have 77 percent this week. It looks like it's coming in just under 16 percent. And guidance is for something like 15 and a half percent for 25. So earnings are good. And that is providing the underlying support for this market. So I think, yeah, hold on. We got another big report out. Cisco, Christina Partsanovas has that. Christina.

Well, Cisco's big bet on AI is already paying off. The tech giant's beating expectations in Q2 with adjusted EPS of 94 cents on revenues just shy of $14 billion, powered by its Splunk acquisition, a software firm. The result, so strong that Cisco's opening up its wallet, hiking its dividend, and rolling on a massive $15 billion buyback program.

But here's what's actually turning heads right now, contributing maybe to the stock up 3%. Cisco's AI infrastructure sales to tech titans like AWS hit $350 million this quarter alone. You add that to last quarter's $300 million, and they're racing towards their billion-dollar AI target way ahead of schedule. The company's confidence showing up in the numbers, lifting both revenue and profit forecasts for the full year above Wall Street expectations. Here it's now popping almost 5%. All right. John? Yeah, that'll do it.

Thanks. Let's get back to Kate Rooney, see if Robinhood is doing better than the trade desk. Kate? Yeah, John, it looks like it. It was a beat across the board for Robinhood, thanks to this huge tailwind we're seeing from crypto and then equity trading in the quarter. Also looking like pretty strong deposit growth. EPS was a dollar and one cent.

That does include a couple of accounting and settlement related gains. So the SEC settlement was smaller than expected. That's showing up here. If analysts do wind up stripping those out, the adjusted number is going to be 54 cents. And that was still 1010 ahead of expectations. Revenue roughly doubled in the quarter. That was around $1 billion, a beat there. And then assets under custody grew 88% from a year ago.

So that was $193 billion. Average revenue per user also beat by around $13. And then crypto was a huge contribution in the quarter, made up the largest slice of transaction based revenue, up 700 percent in a year. Options were up 83 percent and then equities up 144 percent. I did catch up with CFO Jason Warnick, who told me it wasn't just a crypto quarter. He said strength was across the board and it's showing up in all of the metrics showcases their business model. He also highlighted some better profitability for this company, pointing out that incremental

margins were over 80 percent. Adjusted EBITDA margins were 48 percent and then for the year and then over 60 percent for the quarter. But says that wasn't long. It was not long ago for Robinhood that they had negative margins. So talked a lot about more discipline on cost. We are also going to be sitting down with Robinhood CEO and co-founder Vlad Teno. That's a first on CNBC interview tomorrow here on Squawk on the Street in San Francisco. Guys, back over to you. All right. Looking forward to that. Kate, thanks. Well, MGM earnings are out as well. Contessa Brewer has those numbers. Contessa. It's a top line beat here from MGM Resorts International. Revenue is coming in at $4.35 billion,

slightly ahead of estimates here. Quarterly earnings per share of $0.45. Now, that includes a tax benefit, and it's not clear whether analysts were factoring that into their expectations. But look at caps off a year where net consolidated revenue set a new record, fueled by record performance in Macau, which is still on the rebound from the pandemic. Las Vegas and regionals basically flat for the year. Analysts on the call are going to want to hear about the visitation and customer spend during the Chinese New Year this year, 2025.

And the digital business includes that joint venture and BetMGM saw revenues grow along with losses. But we heard from BetMGM CEO last week, they're really gearing up for a profitable year. And look at the shares reacting now, up more than 7% in the extended trade, John. All right, Contessa, thanks. Well, after the trade deaths, this is going to raise eyebrows. Reddit results are out and that stock looks like it's down double digits. Julia Borsten, what's going on? Well, Reddit did beat across the board. EPS of 36 cents per share,.11 ahead of expectations. Revenues of $428 million ahead of estimates of $405 million.

First quarter revenue guidance in a range of $360 million to $370 million. That's ahead of estimates of $358 million. But looking at what the factors that might be weighing on shares right now, the company reported that daily active users of 101.7 million fell short of the estimate of 103.1 million. In the letter to shareholders, Reddit attributing that lower than expected user growth to, quote, volatility with Google search triggered by a periodic algorithmic change, but saying that traffic from search has recovered so far in the first quarter, saying they have regained momentum there. I spoke to CEO Steve Huffman and asked him what was driving the accelerated revenue growth of 68% in Q3, 71% this quarter. He said we're successfully going through this transition of mid and small businesses, more objective focused advertising, more performance ads,

saying that diversification means we can grow faster over time and be resilient. So certainly pointing to accelerating revenue growth, but shares do seem to be lower on that user issue. Back over to you. All right, Julia, thanks. If it trades 12% lower tomorrow, that'll be about where it was two weeks ago. Well, Dutch Bros earnings are out. Caffeine high here. Angelica Peebles has the number. Angelica.

Hey, John, it's a big beat for Dutch Bros. Fourth quarter adjusted earnings per share coming in at 7 cents versus the 2 cent estimate that the street was looking for. Revenue also coming in ahead at 343 million versus the 318 that Wall Street was looking for. And same store sales was up really big in the quarter, up almost 7 percent. The street was only looking for 1.5%. And then 2025 revenue coming in slightly ahead of estimates. They're saying anywhere between 1.55 billion to 1.57 billion. So that's just a little bit better than what we're looking for. You can see that stock is up 25% after a really big year for that company. John. All right, Angelica, thank you.

Want to get back to the panel here. Cara, it's been a while since I had a chance to talk to you with this deluge of earnings here. But how does some of this speak to part of your thesis for the year, focusing in on mid caps? We're hearing a few people talk more about mid caps. These companies that have been reporting outside of Cisco, not that big, a lot of them doing quite well. What should investors be looking for in these names to see how investable they are? Well, I think looking at some of the results that are just coming in right now, there's this interesting dichotomy where you have a number of names that are beating on revenues, on earnings and positive forecasts. Those stocks are doing quite well. But then anytime you have a bit of a chink in the armor and you have a fairly aggressive valuation, that's where stocks can

run into trouble. And that brings me to mid cap, where you have a space that's been largely left behind by many investors. Mid caps are a very small portion of the overall US trading market these days, much lower valuations. But you're starting to see earnings begin to pick up. And so that creates this really nice catalyst where I think you have a big opportunity for outperformance over the next couple of years. Exactly when that starts and what that catalyst is, it's hard to really pinpoint, but you have fertile ground for these smaller names that have been left behind to start to shine going forward. All right. Well, Barb Duran, I want to talk about

Applovin. Those numbers are out. We haven't heard what they are yet, but I can see here it's spiking after hours. And this is one that had already been on quite a run. How are you treating some of the go to her? Let's go to her now. OK, OK. Julia Borson has those numbers. Applovin, Julia, something good happening here. Yeah, that's right. Applovin beating on the top and bottom line. EPS of $1.73 ahead of estimates of $1.24. Revenues of $1.37 billion ahead of estimates of $1.26 billion. You see shares are now up 16%. The company's first quarter guidance also ahead of expectations. The company guiding to first quarter revenues in a range of 1.36 to 1.39 billion, ahead of estimates of 1.32 billion. And adjusted EBITDA in the quarter for the fourth quarter also well ahead of expectations,

848 million versus 762 million. Shares now up about 15.5%. Back over to you. Wow, Julia, thanks. Okay, Barb, now we've got a little bit more meat to talk about here. App Lovin' and the Trade Desk, not exactly in the same business, but not as different as some people might think. App Lovin', think about app stores.

Think about data optimization of apps and being able to monetize them. The Trade Desk is supposed to be making money off of advertising. We don't yet know. Of course, we have to listen to the calls from these companies. What's going on beneath the surface? But there's something perhaps here in the story of data in apps and monetization beyond raw advertising. Yeah, we know the app level, they do have very different business models. I mean, app level is very, app level is very early on their e-commerce scale and also trying to go into other verticals, which will be an interesting update on the call. And that, again,

I think is very different why you see the upside there. On the other one, it's programmatic advertising. And so it's very different trying to hook up buyers and sellers to just buy ads without having to do it manually. So it's almost an automated process. So it'll be interesting to see what's going on there because they are the leaders in that space. It doesn't sound like it's competitive inroads, but that one is going to be interesting to hear about. But Applovin is actually, they make their money both on fees charging for their software, for the mobile advertising, and also when people sell or buy something on their app, on their mobile games, they get paid there.

So they're very different business models. And again, Apple 11 is still, despite it being the number one performer last year, up some 615 percent, they still have a lot of room to grow. So what's interesting is, again, when they reported and they were expected also to do a beaten raise, would the stock go down? Would it be enough or not? But I think it's clearly telling us that investors think there's a much longer runway for growth despite the massive appreciation. And it's expensive on the current P.E., but it means earnings are likely to come up. Strong positive initial reaction for sure. Barb, Cara, thanks to you both. Now let's bring in senior markets commentator Mike Santoli for a closer look at the market's reaction to this morning's CPI print.

Mike. Yeah, that CPI number, John, certainly hotter than expected across the board, reinforces this idea that the progress on inflation has stalled in recent months. And the bond market does reflect that the two year note yield, the one that's most sensitive to the Fed intentions down the road, the market's guess on what the Fed's going to do. It did pop above 435, basically also just above the effective Fed funds rate, the one that's set by the Federal Reserve. And it also is sort of perked above its 200 day average. Now, that average is sliding. So that means that this yield has been in a downtrend. You've had a lot of technical analysts say this means that, you know, it looks like you might want to bet down the road on still lower yields. But right now, the two-year note yield saying Fed's on hold kind of indefinitely at this level. Now, take a look at market-based inflation projections. This is from the Treasury Inflation Protected Securities,

five-year projected inflation. It's just up under 2.7 percent annual right now. Now, this isn't some kind of finely tuned instrument for actually predicting inflation, but it shows you how the market's migrating. And this is a three year chart. So this kind of takes you back to this zone, late 2022, early part of 23, when we were falling to these levels. So obviously, static, the level is not too scary. The trend, obviously, you'd want to see calm down a little bit. Otherwise, other asset markets are probably going to have to take account of that and what the Fed might have to do in response. Yeah, that chart there, the U.S. five year break even, it seems to be trending pretty steadily up since the end of 2024. To what

degree are these kinds of metrics factoring in the possible impacts of tariffs? It doesn't seem to be a universal agreement on whether they're going to be inflationary or not and how that flows through. But people are certainly thinking about it. It's educated guesswork. Now, presumably, if somebody who wanted to buy a security whose return was based on what inflation is going to be in part of the next five years, you'd probably want to include every possible influence on inflation. But I don't think there's really a precise market estimate of how that filters into the numbers. By the way, it all only all that matters is that it eventually gets into the CPI for to determine that return on these securities, not

whether the Fed looks through it or whether it's self-sustaining inflation or, you know, what happens thereafter. All right, Mike. Thanks. I'll see you in just a bit. Well, we've had some big numbers and some big moves so far in overtime and still ahead. Analyst reaction to results from Robinhood and Reddit. Those are moving in opposite directions after reporting quarterly numbers moments ago. And investor Dan Niles is going to join us with his first take on today's inflation print, plus his thoughts on Meta's remarkable winning streak, and much more. Overtime's back in two. Welcome back to Overtime. We've got more earnings results rolling in. Check out Fastly falling off a cliff right now after turning in a mixed quarter. The cloud computing company missing bottom line estimates with a loss of three cents a share versus estimates of a fractional loss of less

than a penny. Revenue did beat, though, at $141 million versus $138 expected. Earnings guidance, though, was weak. Robinhood shares moving quite a bit higher, all good in the hood on that chart in overtime after reporting Q4 earnings results. Let's bring in Mizzou host security senior analyst Dan Dolev. Dan, looking here, transaction-based equities revenue, $61 million versus some consensus that looks like it was about $4 million lighter than that. Robinhood had been talking about diversifying outside of just being based on trading but it's a really strong trading quarter so how should investors read it. Hey I you know last time you know we met I told you they smoked earnings I don't have a better superlative today so you know they smoked earnings plus plus plus. I think what you're saying is very

true. What you're seeing now is you present. If you think about the future, they're going after a $600 billion TAM getting into Asia. So all these good things that we're seeing today, revenue ahead, 7x growth in retirement, 88% growth in AOM, 60% EBITDA margin, that's just the beginning. It's going to get way better down the road. So I think things are great, and they're going to get better down the road. I'm just thinking about what Interactive Brokers told us a couple of weeks ago, how there was a strong risk appetite. There was a lot of margin trading. It's kind of that kind of market right now.

That doesn't, it sounds like, get Robinhood to where it wants to be diversification-wise, maturity wise, what do investors need to look for to have a sense that it's getting there and that it's going to be, you know, stable up into the right? Yeah, I agree. Look, this is now the things, you know, things are as good as they are in terms of the animal spirits and what it did to their trading. But I would say there is a lot more self-help here, right? They're getting deposits in. They're up $16 billion versus $14 billion last quarter. They have ARPU growing 60% sequentially. All these things are not just because of the animal spirits. It's self-help. I think to answer your question, John, the most important thing, they need to get into Asia. They need to get into Europe. They're going after a $600 billion TAM.

If they just take 5% of that, it's a 30 billion dollar company, right, versus sort of the four billion dollar today. So I think that's what investors are looking for. And I have faith in that management team that they can deliver. All right. Trading in the 60s in overtime, getting close to your price target there. Dan Doloff, thank you. Thank you. After the break, investor Dan Niles shares his first take on today's hotter than expected inflation print, why it could lead to a more hawkish stance from the Fed and much more ahead on today's after hours action. We'll take a closer look at Reddit's quarter and the read through, if any, for the rest of social media and the digital ad market. Overtime will be right back. Welcome back to Overtime. The Nasdaq started the day down more than 1% as inflation fears gripped the market. But the index climbed all the way back, led higher by Intel, Tesla, and Apple.

Well, joining us now is Dan Niles, Niles Investment Management founder and portfolio manager. Dan, good to see you. I actually want to start on Cisco, though, because it just reported it's one of the names that you're watching for the year. And one of the standout areas for them seems to be an area that you are watching is the data that's tied to this AI revolution. But I want to ask about exactly how investors should consider this, because I remember 20 years ago, John Chambers, and he was CEO of Cisco, was talking about how big a revolution video was going to be. It was going to be this transformative moment. It didn't do for Cisco's stock what investors might have expected. Cisco bought Flip Video when really maybe YouTube would have been the play.

How should investors think about whether Cisco is going to continue to benefit here and what kind of acquisitions or investments they need to make? Well, you took that question in a way that I wasn't expecting it to go because I thought it would bring that back to, well, how should investors think of NVIDIA? Because it's a very similar question because Cisco obviously was. So back then there was this thing called the Internet. You may have heard of it. And it became a big thing. And Cisco stock is nowhere near where it was in 2000. Now you have this thing called AI.

You may have heard of it. And you've got a similar thing going on with investment right now in terms of the infrastructure. But, you know, so we'll see where that goes. With regards to your question on Cisco, my basic thesis, because Cisco is one of my top five picks entering this year, and what I said was, look, the last two years have been about spending on AI infrastructure. This year, I think, is going to be more about companies getting access to all of that data being created and moving it around, which is why Cisco and AdTran, which is more on the telecom side, those were two of my top five picks. And both stocks are, you know, given up for dead, much like Oracle was several years ago when I made that one of my top five picks. And it's gone from this, you know, who cares about Oracle to maybe it's a viable

competitor in cloud Data Center. And I think that's how Cisco is going to transform. And at a 17 times PE, with the S&P trading at 26 times, if they've actually gotten their act together, I think, which I think they have, because of some of the acquisitions they've made several years ago that are now helping them to produce very competitive products. You're seeing that in the order growth. Why can't a 17 times PE go to a market multiple or above, which is where Oracle's trading? And so that's how I think about Cisco. So we started narrow on just Cisco. Let's go broad. Talk about the market and the CPI print. It was about 50-50. I think you were saying some weeks ago whether the Fed would stand pat on rates or go higher versus cutting. Now you think the odds of them actually raising rates have increased after this report?

Yeah, I think the odds of them doing nothing to raising is I started the year thinking it was near 50%. Now I think there's a two thirds probability they do nothing or raise. And some of this comes down to, John, you know, if I were to tell you, hey, I think CPI is going to be up 5% between now and year end, you'd be like, oh, my God, it's a disaster. Well, that's what happened in 2021, where CPI went from 1.4 percent to 7 percent. And the S&P was up 27 percent because it isn't really when, you know, things happen. It's how people react to it. And so the Fed was pretty clueless the first time around where they were calling it transitory. And there was a group of us, including myself, saying there's no chance this is transitory.

And when they figured out it wasn't, you had a problem because then they had to play catch up. And if you think about it, CPI ended 2021 at 7%. It ended 2022 at 6.5, but the S&P was down 19. So it comes down to when does Jerome Powell go I might have a problem because CPI is now gone up for four prints in a row in terms of headline. Core PCE which is what they focus on bottomed in June. It's been going up since then not in a straight line but it's higher. And all the four measures of inflation core P PCE, you know, CPI, core CPI, et cetera, all of that either bottomed in June or in the third quarter and has been going up. So I'm going to be very curious to see if Powell makes the same mistake twice.

I don't think he will. And I think one more print, you've got a problem. So, Dan, my sense has been on a number of different things, some valuation concerns. You've been kind of cautious. Right now and over time, Dutch Bros, Applovin, Robinhood, all up double digits. It seems like folks are still excited out there. And that's even reflected in how people are trading on Robinhood. How long do you think that excitement lasts since you seem to feel that valuation wise things have gotten out of whack with a number of names? Well, don't forget, you also didn't bring up Trade Desk or Reddit on the other side. So, you know, I think you have

to remember it. There's a famous saying by, I think, John Maynard Keynes, that the market can stay irrational longer than you can stay solvent. And you saw that in 2021. And coming into this year, I said, look, market could be up 10% if inflation remains under control. It doesn't look like it is, but people haven't acknowledged that inflation is a problem, much like in 2021. The other thing you have to remember is the market's

driven by two things. So it's the P.E. ratio that's driven by just sentiment. Then there's the earnings. If you think of the six magnificent seven companies that have reported so far, all six of them have had their March quarter estimates cut in terms of where they were before they reported and where the estimates move to after in terms of the revenues. The Magnificent Seven are down year to date. The NASDAQ is up, I think, 2 percent. The S&P is up 3 percent.

But the equal weighted NASDAQ is up like six. So people are moving away from some of these names. But to me, there's a reason for it, which is if you've got five of the seven mag seven down, six of the seven mag seven, all of who have reported have the numbers getting cut. There's a good reason people should start to be getting concerned about valuations if the earnings aren't matching what the valuations are telling you. That's what you're seeing on Trade Desk or Reddit, for example. See what happens if these yields stay as high as they are as well. Dan Niles, thank you. Well, it's time for a CNBC News update with Bertha Coombs. Bertha. Hi, John. The ACLU has sued the Trump administration for access to dozens of

migrants flown to Guantanamo Bay, Cuba. The organization and several immigrant rights groups allege that the detainees have been denied the right to an attorney. Department of Homeland Security head Kristi Noem previously told NBC News Meet the Press the administration would follow due process for the detained migrants there. The Education Department has revoked guidance issued by the Biden administration that name, image and likeness NIL deal payments should be shared equally between male and female college athletes. The Department's Office of Civil Rights said the NIL guidance has no legal basis under the 1972 Title IX law that's banned sex-based discrimination. And patients taking weight loss and diabetes GLP-1 drugs like Ozempic may notice a surprising

side effect, fewer cravings for alcohol. A study published today in the journal JAMA Psychiatry found semaglutide, the active ingredient in ozempic and wagovi, was linked to lowering cravings for drinking alcohol in people with alcohol use disorder. But it did note that more studies were needed to understand that gut-brain link, John. You know, this follows on a study in rats last year that showed the same thing. It reduces cravings. Okay. Maybe dry February as well. Bertha, thanks. Well, Tesla getting a bump today and gaining back some of its steep losses on the week. We'll take a closer look at that move and the action in another widely held mega cap

name. And we'll take a deeper dive into Reddit, which is cooling off in overtime after a monster run over the past few months. Check out Royal Caribbean, too. It's floating higher. And after hours trading after the company hiked its dividend and announced a one billion dollar buyback. I'll be right back. Welcome back to Overtime. Mike Santoli returns with a look at some tech names getting a pop today. Mike? Yeah, John, some interesting relationships here. Really interesting one year race going on between two of the big crowd favorites, Tesla and Nvidia. Together, they're about one twelfth of the S&P 500 market cap.

Kind of trading leadership here in recent times. Tesla's 30 percent decline or so, even though it bounced today, leaving it behind. Nvidia also kind of reflects the issue for the overall index here. I mean, these stocks are up close to 80 percent over the one year period. They're already so big. How much more can they give you in terms of goosing the index down the road? Something to ponder over. Take a look here, too, at Chinese Internet stocks, the K-Web ETF relative to the Nasdaq 100. That's our mega cap growth proxy. And even on a one year basis and incredibly choppy wide swings in the KWeb. But it is now leading. In fact, on a year to date basis, a lot of global indexes are doing pretty well against the U.S. It seems like a bit of a mean reversion trade. Also want to take a look at two of the favorite kind of retail trader

excitement proxies. That would be Robinhood. Of course, we just got those results. And then Palantir, it remains remarkable how close they are over a one-year period in entirely different businesses. So I think it's a good kind of sensitive gauge of what the fast, small money is up to. All right. You say that it's a mean reversion with the K-Web and others. I'm sure in China they think it's a nice reversion. Mike Santoli, thank you. All right. Up next, an analyst with a buy rating on Reddit reacts to those results and what he wants to hear from

management on the call, which begins at the top of the hour. Plus, Citi Research's director of U.S. equity strategy on what he's telling clients to do in the face of today's inflation-fueled volatility. We'll be right back. Welcome back to Overtime. Reddit is down more than 14 percent in overtime after reporting Q4 results. Citizens JMP analyst Andrew Boone joins me with his reactions. Got a buy rating, $190 price target on the stock. Andrew, is this a kind of meta iOS 15 situation, but with Google and with this stock, is it a buying opportunity? Well, that's definitely one of the things that we're going to be looking for on the call is talking about the U.S. users, which were down from 3Q to 4Q. You've seen such strong engagement historically from Reddit. And look, we think that

there's a ton more room to go in terms of personalization. Some of the machine learning, AI work they've done to contextualize and make just the content more relevant. We assume this is a wobble, but we're going to want to hear management say that. How dependent is Reddit on Google? I mean, a ton of traffic recently has come from the algorithm, right? And the interesting thing that they noted in the letter is that users are increasingly appending Reddit to search results, right? They talked about 40% of users find Reddit to be the most highly trusted recommendation portion in terms of making purchases. So I do think that there is just a natural inclination to users coming to Reddit more.

But nonetheless, like a lot of casual users just find Reddit via results, right? And that's not going to change. Do you think the AI upside for Reddit from its content is fully baked in here or is there more? You know, I think there's a ton more room to go in terms of monetization, right? They're still very early in terms of just looking at Orpu, right? The thing that I like to point out to clients is that Twitter was at 50 bucks. In 2024, Reddit was at $22, right? And so there seems like there was a ton of room to go in terms of just bettering that ad product, improving targeting, again, just increasing relevance with

AI. I think Reddit has a lot of room to go on that. And then we continue to look at the search opportunity, right? It's just what we talked about, but can they take ad dollars from Google and bring it onto their platform and really get into that low intent search revenue that is so valuable? All right. Andrew Boone, thank you. I'm going to take a check on this later, but goodness, App 11 now up more than 20 percent after hours. Up next, why writing legislation to advance President Trump's agenda, including a tax package, is already proving to be a struggle for the Republican-controlled House and Senate. We'll be right back. Welcome back. Let's officially check in on some overtime earnings movers. Shares of the trade

desk are tumbling down 25 percent after revenue came in below estimates with light revenue guidance as well. The company also announcing a billion-dollar buyback. Cisco, meantime, is about 6.5 percent higher after strong earnings and revenue along with solid guidance, a dividend hike, and a new $15 billion buyback. Applovin, as I just mentioned, is up 21% after beating on the top and bottom lines, giving strong first quarter revenue guidance. And Dutch Bros is up 17.5% after beating across the board and serving up some solid guidance. Well, one big, beautiful bill. That's what President Trump wants from Congress to achieve his agenda, including extending his 2017 tax cuts. But Emily Wilkins looks at why that's proving to be easier said than done. Emily. Hey, John. Well, yes, Republicans finally released the details

for the spending and the cuts for that one big, beautiful bill. But there is a lot of concern about whether or not they are going to have the support to pass. You've already heard some Republicans raise concerns that the cuts haven't been big enough. And then, of course, as you mentioned, there is a tax component here. The Republicans are currently allocating $4.5 trillion to extend Trump's 2017 tax cuts. It sounds like a lot, but when you consider that Republicans want to extend this for the next 10 years, plus include Trump campaign promises like no tax on tips and raising the SALT cap, it actually doesn't quite do enough. It looks like at this point that Republicans are going

to have to either find more cuts or they're going to wind up having to do either a shorter extension or maybe not get everything that Trump promised in there. Now, of course, this is the House package. It also includes that $4 trillion increase to the debt limit. It's the one big, beautiful bill route. Compare that to what the Senate's doing. The Senate's taking two separate bills and they started on one of them today. It's just that they've got the conservative priorities of border security, energy, as well as defense funding. And Senator Lindsey Graham, who heads the panel that's beginning the process, says, look, we just need to move quickly. We need to get border funding done ASAP. Tax policy is too complicated. It's going to slow us down. We'll

just wait for later. At the same point, even if the Senate does wind up getting their bill done, House Speaker Mike Johnson has said it is a non-starter here in the House and that if Trump wants to get his agenda done, he's going to have to do that one big, beautiful bill. So a bit of a clash here among congressional Republicans, John, and we're going to be having to see whether the House can actually even get their package over the finish line. We'll see how it works out. Emily, thank you. Well, up next, City Research Director of U.S. Equity Strategy, Drew Pettit,

on how to navigate this uncertain market and whether you should be buying despite new inflation fears. And don't forget, you can catch Overtime on the go by following the Closing Bell Overtime podcast on your favorite podcast app. Be right back. Welcomeosing Bell Overtime podcast on your favorite podcast app. Be right back. Welcome back to Overtime. The Dow and S&P 500 closing lower after this morning's inflation report, but showing resilience, finishing well off the worst levels of the day. Let's get you set up for tomorrow's trade. Joining us now is Drew Pettit from Citi Research. Drew, what's the right rational response to these CPI numbers? Honestly, I think longer run when inflation is moving higher and that's a sign of good demand, that should be equity positive. It normally is. But we're in that environment right now where

honestly, it's a bit of a catch 22. Markets want good growth, but they want lower rates at the same time. So for now, you know, bad news might be good news and inflation, while a little bit hotter than expected, not terrible really for equities. So if you're a long-term investor, you just keep averaging in or are there significant shifts that one should be making based on what's happening in Washington, based on the global dynamic shifting? It's funny when you're worried about the macros and we're in this heightened macro sensitivity world, I actually think you kind of do the opposite. Instead of thinking about the big shifts, you think about incremental alpha. And honestly, the story that we've heard on this show throughout the day, over the weeks, it's it's broadening.

There's a lot of interesting stock selection opportunities outside of mega cap growth right now. But do you even need to select or should you trust the indices? Should you trust the broader ETFs? Yeah, it's funny. I actually think you probably want to do some incremental stock selection here. When we talk about broadening, we kind of forget that that applies to growth as well. It's still a growth market. There's a lot of really good growth themes outside of AI that are really kicking in. A couple that you've almost highlighted during earnings is video gaming and digital leisure, something like Applovin plays too. And then on the cyclical side, we're emerging

outside of some of these kind of mini under the surface recessions. I think you can buy some of those names and themes as well. So barbelling through the macro chaos is really the play here. Applovin, you know, if it trades tomorrow where it's trading right now in overtime, it's going to be up about 10x in a year, near $150 billion market cap. What does that say when you take in also the AI plays, what we've seen them do? What does that say about this environment that we're in? And should investors be worried about names like this or inspired by them? Because these are periods of breakneck growth that you want to capture? So honestly, a little bit of both. Like for this name specifically, if you look at what the market's

pricing in, again, us doing our reverse DCF work and where our analysts think fundamentals are going, it's still an attractive growth stock. The valuation actually for its growth isn't as crazy as people might think after that move. There are some bigger names, especially in the NASDAQ 100, where you might want to be a little bit more selective here. I think, honestly, if we're looking for growth, we want operating leverage like you see in a name like Applovin. You want to see premium growth, but you want to make sure the DCFs make sense. What about the AI story? It's certainly helping Cisco right now with its results.

You know, there's a lot of data out there, especially generated by and for AI. It needs to be moved around and networking equipment does that. Do those stories you think have legs? I do. I do, honestly. We've talked about this a lot. Honestly, it had to be almost over a year ago we started talking about broadening out in AI. It's not just about chips. It's not just about data centers. You have to start playing the whole value chain here and expanding. And yeah, you're starting to see that in more and more names, especially the

users in the application level now. That all plays to growth broadening. And I really think that's been the story so far in 2025. We didn't even talk about the drive-through coffee. Dutch Bros also up more than 20 percent. Drew Pettit, thanks for putting it all in perspective. Thanks, John. Good thing there's another show coming up, Fast Money, because there's a lot to come from these earnings calls Thanks, John.