Closing Bell - Closing Bell Overtime: Keith Rabois On Trump's First Week, AI and More; Twilio CEO On New Growth Targets; Boeing Preannounces 1/23/25

Episode Date: January 23, 2025

Barbara Doran of BD8 Capital Partners and Crossmark Global Investments’ Bob Doll give their playbook for the market as earnings ramp up. Earnings from CSX and Texas Instruments. Susquehanna's Christopher Rolland joins to dissect TXN earnings and the chip sector, while Sheila Kahyaoglu from Jefferies on Boeing Q4 preannouncement.Jon Fortt sits down exclusively with Twilio CEO Khozema Shipchandler on the company's new growth targets. Keith Rabois of Khosla Ventures on the Trump economy, Musk vs. Altman, and the future of Stargate. 

That's the end of regulation. Wall Street bound ringing the closing bell at the New York Stock Exchange and Aliana doing the honors at the Nasdaq. We're going out at session highs here with the S&P 500's first record close of 2025, closing above 6,100. It's also the first record close for the SPX since December 6th. Healthcare and industrials taking the lead today. Every sector in the green. That's the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. We'll be all over the market's push to record highs throughout this show. Plus, we're moments away from earnings results from Texas Instruments.

CSX will bring you those numbers as soon as they cross. Let's get straight to the market action with BD8 Capital Partners CEO Barbara Duran and Crossmark Global Investments CEO and CIO Bob Dahl. Great to have you both here. Barbara, I'm going to start this conversation with you. It looks like as we settle out here, maybe 61-18 for the S&P 500. Seen a nice rally after a pullback to start the year. We've really reversed course here for the major averages and for stocks. Can it continue from here, especially given the

fact that you have a key ingredient that's still missing, which is inflows from big money managers? Right. And I think, you know, it could be a while in terms of even that $7 trillion sitting in money markets. Still, that comes out because interest rates are still high enough to attract it. I think this can continue. Anytime we've had a big rally, though, you always have to be concerned about momentary pullback. You know, when things get, you know, and I don't think they're ahead of themselves yet because earnings are just starting. And I think that's going to be key. Valuation is clearly a concern. But I would say the market is somewhat fully valued. But with earnings coming in as they come up and guidance goes up for the year, I think that these companies will grow into that.

So I think there's more to come this year. I think it's going to be a solid year. Inflation seems to be coming down. You had the CPI and PPI numbers last week. And, you know, this this week looks like there's people are excited about the pro growth policies of the new president, President Trump. OK, we've got Texas Instruments out. We're going through those results. We're going to bring them to you in just a moment. In the meantime, Bob, I want to get your thoughts on this market here at this valuation, especially as you do say you see more headwinds than tailwinds. I do. Hard to quarrel with the earnings. They've been quite good since this fourth quarter earnings season started. Suspect they will continue to be. My complaint is valuations. A lot of the good news is in the market. Unless you're going to tell me inflation really is going to 2% without a recession,

I struggle with that. I think inflation is a bit sticky, stuck 2.5 to 3, and multiples reflect closer to a 2% inflation belief. Okay. I want to mention CSX. Results are out as well. We are going through theirs. Initially, both Texas Instruments and CSX are lower. Barb, I wonder, can this market, you talked about your expectation that it can continue higher, but without the mega caps also being considerably higher. Over the last couple of years, it's sort of like different mega caps have handed off the baton leading this. At this point, is it going to take more smaller stocks, more broadening for the market to head higher? Well, I think what we saw last year was this continual rotation looking because I think people want to put money to work. They know this is a bull market. They know the economy is strong and all the data coming in supports it. One should

be in the U.S. stock market. But when valuations are this high, it is a problem. But you saw it even this last week. You know, yesterday was pretty much the mega cap tech, the AI play. And yet the industrials, you know, have also been having a strong start to the year. So I think we're going to see this back and forth rotation. Now, small cap, if that's what you're meaning by small, I still don't see small cap performing here. I think that's a lot of those names. It's either some 40 percent of their debt is short term or tied to variable rates. And I think with rates high, they're not going to do that well. So I don't see that as potential play. And I think that'll continue to be a trade where people will jump in because it's it's lagged or they'll say, oh, for 10 years,

it's been behind the 500. But it's been for a good reason. Yeah, I didn't even mean small so much as maybe smaller than a trillion dollar market cap. But Christina Partsenevelis is ready with those Texas Instruments results. Let's get them. Christina. Yeah, we have a beat on the top and bottom line. So EPS coming in at $1.30. That's 10 cents higher than what the street anticipated on revenues of $4.01 billion. It's the guidance for Q1 that is slightly weaker than anticipated. EPS coming in, the range is less, 94 cents to $1.16. Revenue, we'll call it relatively in line, but nonetheless, it is still weaker. And they're saying too, I'm just reading the report, revenue decreased 3%. We talked about that. And this is the first quarter outlook.

Yeah, what we're seeing is just a weakness in Q1. So I'll go through to see if we can get to a full year soon. But you can see the stock reacting negatively to that earnings outlook. Christina, thank you. Barb, Texas Instruments results not expected to be great, in part because of the lagging recovery in autos and industrials. So does it fulfill its bellwether role for you here? Well, not really. I think Texas Instruments has a special set of circumstances. I mean, they're really tied to analog. They're not in the AI play. And so I think that you're looking at the rest of the economy and the GDP number right now for

the fourth quarter from the Atlanta Fed is 3 percent%. So I don't think this is giving us a read in the economy. They've got, there's more competition in certain aspects there. Things in their auto and industrial probably haven't bottomed, but that's, I think, because of the analog chips that they do. There's a lot of capacity there. Okay. Bob, I want to get your thoughts on what we are seeing in some of these more economically sensitive parts of the economy, whether it is industrials. We're awaiting these results from CSX. We've seen some pretty big moves in transports, for example, materials just in the last couple of days. And what it signals about this rotation or increasing breadth in the market? I think we do need the improving breadth. I think we'll get it. I agree with Barb. It's not

small cap. It's just broader within the 500 or the Russell 1000 even. And we will get this back and forth. Yesterday, tech was the cat's meow and everything else was ho-hum. Today, it's sort of the opposite. I think we're going to get a lot of that. You put the politics on top of that. We'll get a tweet one day that makes us feel good, a tweet the next day, not so good. So I think volatility will be higher. And that doesn't mean down. That means in both directions, I think we're going to bounce around a bit more. Okay. Let's see, Barb, when we're looking at CSX, we've had a number of different transports reporting up to this point. I know it's not AI necessarily. It's not some of the hot stuff in the economy. But what I was referring to with Texas Instruments is more

the bellwether for some of that autos and industrial stuff. When we're looking at beyond the things that are hot, how important are these earnings to you adding all that together? Well, I think that you're talking to me, not Bob, or was that question for me or for Bob? Barb, sorry. Yeah, there was an R in there. It's hard to hear. Thank you. Yeah, well, I think they, I think, you know, ultimately they are telling us something, but it's really about looking forward. And so much of the industrials have run up in this, even this year to date, I think it's a to eight percent because the anticipation of the pro-growth

policies, you know, of the Trump administration that will spur these on. You know, I think we've been in a freight recession for some three years and people are trying to figure out what to do. This hasn't held the economy back. There's pockets, as we know, in housing and in freight transportation that and even Texas Instruments, where other semis have done very well. In fact, they're lagging the SOX index. So, you know, they tell us something, but it's not in the grand scheme of things has not been a real tell in these two particular names. OK, how the economy is doing. All right. Robert Duran and Bob Dahl, thanks for kicking off the hour with us with a record close for the S&P 500. Well, we told you CSX earnings are out. Let's get to Frank

Holland for the numbers for the railroad. Hey there, Morgan. Looking at shares of CSX, they're moving lower, more than 2% lower after a miss on the top line and earnings of 42 cents a share that we are not comparing to estimates. Merchandise, its biggest segment when it comes to revenue, generates about 60% of revenue. That beat estimates with revenue growth of 3%. They say they saw positive volumes and favorable pricing. However, the company did say the impact of hurricanes and also the Key Bridge outage, remember that bridge in the Baltimore area being knocked out by a ship earlier in the year, that impacted the quarter overall for the company and the full year results. So again, shares of CSX, they are lower right now after missing on the top line,

earnings of 42 cents a share, not comparable to estimates. Back over to you. All right, Frank Holland, thank you. It looks like we've got volume growth low to mid-single digits for 2025 guidance as well. Don't miss my exclusive interview with CSX CEO Joe Henricks. That will be tomorrow at 10 a.m. Eastern on Squawk on the Street. Shares are lower, John. All right. Well, the S&P 500 is at all-time highs, but not every sector has enjoyed the rally back to records. Let's get to Mike Sangioli for a deeper dive

on one of the most unloved sectors of the past month. Mike? Yeah, John. In fact, unloved for a long stretch of time, a couple of years, consumer staples. And it has relevance on a few different dimensions. One, it shows you that the market here, you have the equal weighted consumer discretionary against consumer staples really opening up a wide lead on a two year basis.

It shows that the equity market is pretty confident in the economic growth story. If you wouldn't see some kind of a bid in defensive type stocks like staples if in fact you were talking about recession risk going up or anything like that i think we might be at risk of over reading this though because of the secular issues and the news flow that's working against staples such as glp ones and food such as inflation coming back and them losing some pricing power but nonetheless this so far is the message and one of the results is Netflix and Procter & Gamble, both with some numbers this week and both pretty good. They've kind of swapped places in terms of the largest, what you might call household necessity, over $400 billion market cap now for Netflix. It's

for the first time eclipsing Procter & Gamble. So just a little bit of a sign of what the market prefers here. P&G has got about double the revenue, about 60 percent higher net income for the 2025. So it shows you paying up a lot more for a dollar of Netflix earnings and revenue than you would Procter & Gamble. Now, one of the results is some pretty high dividend yields among some of the worst of the worst within Staples. That would be the food companies. Again, a lot of things that are really pushing against these as fundamental stories but on this you know 15 year or 10 year chart of the dividend yields you see we're pretty much up near where they've peaked recently in the four percent range for smucker campbell hormel hersey the problem here is safe short-term bonds are now yielding at least that and more and so there's not a lot of impetus for yield hunters to go in this direction.

Yes, dividends can go up over time. But unlike back here in 2018 or so, when short-term bonds were yielding very little, there's more competition for these low-growth stocks right now, John. Mike, tell me, Netflix being in a group with staples i don't know i mean i i i know some of these shows are can't miss but are they really can't miss but i think it's table thinking things that you can't do without no of course i think it's it's behavior so when investors think about that group

and and netflix alongside it how should they actually parts what what the difference between what makes uh... netflix more of a staple versus discretionary? Well, the way I would think about it is, is the reason that Netflix is at a 400 billion dollar market cap right now and trades at, you know, 35, 40 times forward earnings is because investors collectively are saying that consumers are treating it as a must have. And it's one of the last things they would do without even within the entertainment and sort of services budget of a household. It's sort of you. You'll hang on to that and you'll you'll probably cut back elsewhere if you have to. It's the old core and explore. Netflix is

your core. If you have some extra cash, you'll get extra things alongside it. But no, the business dynamics are obviously different than, you know, putting stuff on shelves and trying to get an extra nickel per box of, you know, you know, dryer sheets or something like that. All right. They are raising prices. Yeah. Mike Santoli, thank you. Well, after the break, we'll take a closer look at the results from Texas Instruments and the read through for chip stocks and the rest of tech. And President Trump just signing a wave of new executive orders at the White House relating to crypto science and technology and more. We've got new details from Washington when Overtime.

Twilio hosting its investor day this hour. Our news is crossing on the company's new targets. See the stock up about 1%. I spoke with CEO Kozema Shep Chandler exclusively about Twilio's growth plan. Over the next three years, the way that we see that manifesting is $3 billion of cash flow. So that really kind of provides ballast for the organization. We're increasing our profit targets over that time frame to 21 to 22 percent non-gap operating margins. And we're orienting the company towards double digit growth. We're underwriting a financial plan that's a little bit more conservative to that so that we know that we can deliver on some of those

bottom line metrics. And we're going to have much more from that interview coming up in just a few minutes. Meantime, Texas instrument shares are lower in overtime after reporting Q4 results moments ago. Earnings guidance was a bit light. Let's bring in Susquehanna senior analyst Christopher Rolland. Christopher, audios and industrial have been tough areas for Texan, despite the strength and the relatively small AI exposure here. What does this report tell us about the bottoming in those trouble spots? Yeah, the top line in general was slightly better than expected, both results and guidance. We have to wait to the call to get those sub-segments, but a large portion is auto and industrial. So I think that speaks fairly well, at least from a revenue perspective. Maybe we're basing here and now starting to move off the

bottom. What should investors keep in mind for those semiconductor players that are not exposed to AI that have been lagging in this market? If you're, I guess, optimistic about the U.S. economy and the hopes for growth from here, would that boost those semiconductor stocks given their valuations? Yeah, I do think that's right. This has been a long down cycle after unprecedented upcycle during COVID. There's a huge amount of inventory out there, or at least there was, and we're burning through that. And so these are maybe signs that we're at a bottom here. How much do you read into the Hynex numbers that we got this morning? Because that did move the semis during the regular trading session,

and certainly it set the bar for the results we just got from Texas Instruments. Yeah, it's a step in the right direction, but that's really about memory, and in particular, memory serving AI with HBM. So that is a highly specific segment and not broad based like we're seeing with TI. OK, what does it take to see the industrial? You just talked about bottoming and we had Alcoa see you on yesterday and they talked about auto as one of their end markets continuing to be somewhat challenging. So what does it take to go from bottoming to actual recovery when we are talking about autos or industrials? I mean,

how much does something like flash PMIs, which we get tomorrow, matter? Yeah, I mean, PMIs matter. We want to see a PMI in Europe above 45. Let's say that. And let's see some of the larger economies moving well above 50. I think that will cause a base in industrial and an acceleration into the back half. Okay. Christopher Rolland, thanks for joining us with shares of Texas Instruments under pressure right now. Well, President Trump just signing more executive orders. Eamon Jabbers has the details. Eamon. Yep, Morgan, that's right. The president signed five executive orders here at the White House just

a few moments ago. And we're getting the details now on this cryptocurrency related executive order that he signed, which establishes a working group at the White House led by David Sachs to look at cryptocurrency policy to stop what they call regulatory overreach on cryptocurrency. One important point here, because there's some question about whether the president would go ahead and establish some kind of strategic reserve fund of cryptocurrency. This executive order does not do that. What they say specifically here is that the working group will be tasked with developing a federal regulatory framework governing digital assets, including stable coins, and evaluating the creation of a strategic national digital assets stockpile. So the word evaluating there is doing a lot of work. Basically, that means this working group

is going to take a look at it and maybe make some recommendations down the line. So, you know, no concrete movement in that direction. You might get a sense that this kind of opens the door a little bit from this White House to take a stronger look at that than certainly the previous White House would have done last week. But there you go on cryptocurrency. Also, the president was asked by reporters in the Oval Office whether it bothers him or not that Elon Musk came out and criticized the deal he announced at the White House earlier this week between Oracle, OpenAI, and SoftBank to do hundreds of billions of dollars worth of investment in AI data centers here in the United States. Elon Musk tweeted that the group simply didn't have the money to do what they said they would

do. Sam Altman, the founder of AI, a longtime rival of Elon Musk, they've had a tense relationship over the years. Altman obviously was in the room earlier this week. Elon critical of that. Altman firing back on social. The president was asked about all of that just now. And here's what he said.

No, he hates one of the people in the deal. Have you spoken to him since then? No, no. Well, I've spoken to Elon, but I've spoken to all of them, actually. No, no. People in the deal are very, very smart people. But Elon, one of the people he happens to hate, but I have certain hatreds of people, too. So the president there is saying one of the people not naming Sam Altman,

presumably that's who he's talking about, that Elon hates. The president's saying he can relate to that because, you know, he hates people, too. Another point the president made is on interest rates. The president was in Davos, speaking to an audience in Davos earlier today, said that he's going to demand that interest rates come down. In this outing with the press this afternoon, the president said that he feels he knows interest rates better

than the folks at the Fed, and he does expect the Fed to respond to what he says in terms of demanding lower interest rates. We'll see if the Fed responds to that. I wouldn't imagine that they will. Jay Powell has said that he's holding on to the job. When he was asked whether there was any indication that he would resign in the face of an incoming

Trump administration, Powell said that's not under the law. So presumably this is the White House here in the in the person of Donald Trump sending a signal down the street to the Federal Reserve that they want rates to come down. We'll see if it has any effect, guys. Back over to you. All right. A lot of news there that you just unpacked for us. Eamon Javers, thank you. I should note also Bitcoin, Ether, other cryptocurrency prices are lower, perhaps because of that word evaluate in that crypto executive order. Right. And as far as who Elon Musk hates, we know it's not Larry Ellison. So we can eliminate that one, like multiple choice. Not that one. Not that one. All right. Well, still ahead.

American Express is off to a strong start this year, up nearly 10 percent. The company reports earnings tomorrow before the bell. We're going to talk about what to watch from that release. And much more on the news from Twilio this hour as the company unveils new growth targets and the stock jumps higher, up now 8.5% in overtime. We'll be right back. Welcome back to Overtime. Credit card activity showing a big split regarding the state of the consumer.

Mike Santoli is back. He has a closer look. Hi, Mike. Hi, Morgan. Yeah, there have been some headlines about a record or near record percentage of credit card borrowers making only the minimum monthly payment on their balances. And that's what this lower number here is. It's crossed above 10 percent at last report. This is data compiled by the Philadelphia Fed. And that's obviously showing some stress among perhaps lower income households, those that maybe let debt get out ahead of them. However, it's also coming at a time when the number of credit card accounts that are getting paid the entire balance each month is also well above the long term norms. That's that top number right here. So this obviously reflects a relatively big split that has been developing for a while between, you know,

upper income, higher wealth effect households and the rest of them. And you can see it in some of the stock market behavior as well. Here's a proxy for this relationship. American Express massively outperforming. And actually, over the last couple of years, this is a five-year chart, Ally Financial and, you know, Ally's got a lot of auto loan exposure. There's some specific factors there. But generally, in terms of credit quality, they are in two separate tiers here. So really, the bottom line here is that we've talked about the bifurcated

health of the consumer, whether it's the higher end or the lower end and the impact of inflation or perhaps lack of impact of inflation if you're on the higher end. And so this is what we're now seeing in the credit card data. That's exactly right. And also right after the pandemic, when you had a lot of the stimulus checks hitting, you had a lot of people able to pay down a bunch of balances and maybe get their credit scores go up and maybe get access to more revolving credit. And, you know, whether their incomes could support it or not, you're starting to see some of the after effects in the last year or two.

All right. Mike, thank you. Well, now it's time for a CNBC News update with Seema Modi. Seema. Hey, John. The Senate advancing Pete Hegstead's nomination as President Trump's defense secretary. The vote was mainly along party lines with the exception of two Republicans, Senators Lisa Murkowski and Alaska and Susan Collins of Maine, both voted against the nomination. Hegstead has been facing allegations of sexual assault,

excessive drinking. The final confirmation vote expected this Friday. California approving today a fire relief package of more than $2.5 billion to help the Los Angeles area recover as it continues to battle a series of wildfires. The proposals also include funding to help local districts streamline approvals to rebuild homes and school facilities. And the brand new Trump administration has another high-level early departure. The Wall Street Journal reporting Doge's legal counsel, Bill McKinley, announcing he's leaving the position for the private sector.

The announcement comes just days after co-chair Vivek Ramaswamy stepped down to run for governor of Ohio. John and Morgan. All right, Seema, thank you. Now we've got a news alert on J.P. Morgan. Leslie Picker has the details. Leslie. Hey, John. Yeah, J.P. Morgan shares slightly lower in after hours trading. There was an SEC filing that showed the approved annual compensation for Jamie Dimon, the chairman and CEO, for 2024, the amount of $39 million that compares with last year's annual comp of $36

million. It comprises a base salary of $1.5 million and performance-based comp of $37.5 million. The board decided this number. They believe it reflects diamond stewardship of the firm, growth across lines of business, and record financial results in a fortress balance sheet, all of that according to that SEC filing. Additionally, the filing revealing that Diamond and his family plan to sell about one million shares for financial diversification and tax planning purposes. And after the contemplated sales, Diamond will continue to have about seven and a half million shares of J.P. Morgan.

The filing goes on to say there's no intention to execute further sales at this time by Diamond and his family. But they do retain the option to do so in the future, guys. All right, Leslie, thank you. The banks have been doing well. Jamie Dimon sitting at the helm of the kind of fortress bank in the market, Morgan. And so it seems like the compensation parade continues. Yeah, we're going to watch that. And of course, it's set the stage for a very strong earning season and watching that play out in real time. But in the meantime, we're going to go to Phil LeBeau because he has some breaking news to share with us. Morgan, take a look at shares of Boeing, the company preannouncing its Q4 results.

And these are ugly numbers any way you look at it. The company reporting a gap loss of $5.46 a share. Now, most analysts report their estimates as core EPS, not on a gap basis. But the gap estimate is for a loss of $1.36. The core loss estimate is a loss of $1.84. Any way you look at it, this is far worse than what the analysts were expecting. Revenue will come in a billion dollars light of expectations at $15.2 billion. The company is taking in the fourth quarter charges totaling $2.8 billion, covering six different programs, both on the commercial side as well as defense and space. For the commercial airplanes, the charges total $1.1 billion. On the defense and space side,

they total $1.7 billion. All of these, almost all of them, are tied into the machinist strike, which shut down much of the commercial production for the first month of the fourth quarter and then limited production as they were slow to ramp up production through the remainder of the year. Bottom line is this. 2024 will go down as the sixth straight year for a net loss from Boeing. We don't know what the total is at this point. It was up at $8.8 billion, or just over $8 billion, I should say, through the first three quarters. We'll tack on over whatever the final total is here. But again, Boeing preannouncing a massive loss for the fourth quarter. Company expecting a gap loss of $5.46 a share. Guys, back to you.

Phil, I feel like I'm having deja vu because you did this with us last earnings cycle as well. And every time it happens, we have the question is raised. Is this is this a kitchen sink quarter? Is this the bottom? Do things start to turn around now? It doesn't seem like that's the case. Do we have any sort of sense of what it's going to take to right this ship? It's going to take to right this ship? It's going to take slowly, methodically building back production on the commercial side. And depending on who you talk with within the airline or the airline industry, some like Scott Kirby at United told us yesterday, look, I think Boeing has turned the corner. Others who I've talked with have said, yeah, I'm not quite sure they've turned the corner, but they are making

progress. We're going to talk with Kelly Ortberg, the Boeing CEO, next week when the company formally issues its Q4 earnings release. And at that time, we'll get a better sense of where he believes the company is. Are they in a better spot than they were at the end of the third quarter, in the beginning of the fourth quarter, when they were coming out of the machinist strike? Yeah, probably they are. But incrementally, they're a long ways. They're a long ways from turning a profit. And this is a company that right now is sitting on, by the way, just over $23 billion in cash at the end of last year. So they've got the cash on hand for the foreseeable future. But this was, you know, 2024. Any way you look at it, any way you look at it,

just a horrific year financially for Boeing. Bill, thank you. Shares are down 3 percent. John, I just I just want to say the commercial piece of the business so much different than the defense and space piece in the sense that when you look at these charges, defense and space has been a unit that has been struggling for a number of years, in part because of how competitive they were with some of the contracts that they bid on within the Pentagon. And then, of course, there was the whole Starliner fiasco where we still do have two NASA astronauts that are on the International Space Station and aren't going to be coming home. And when they do, it'll be via SpaceX, but not until March. So a one-week journey turning into a 10-month journey. Okay.

Yeah. Well, we've got much more on this breaking Boeing news right after the break. Welcome back to Overtime. Let's get another check on Boeing after the company preannouncing Q4 results below the streets expectations. Stocks down about 2 percent. Joining us now is Sheila Kayaglu aerospace and defense analyst Sheila how bad is it I don't think it's that bad at all and I know this is definitely deja vu because we've done this before last quarter as we think about Boeing you know free cash flow we knew 2024 was going to be about 14 billion of cash and a lot of that was related to 777X that's losing $3.2 billion. Of course, they reported about another billion dollars today. And then, of course, defense was $4 billion in our estimates. And it seems like they're adding on

$1.7 additional to that. So it's kitchen sinking defense and 777X. And those are some of the biggest moving pieces as we look towards normalized free cash flow in the 2027 timeframe. Those are $7 billion of swing as we think about 2025, where we still assume a $6.8 billion free cash flow burn. For 2025, I think the street's at $3 billion. But looking forward commercial, we just got off the phone with American Airlines CFO and General Electric. It does seem like max deliveries are working. Leap deliveries are improving. So the cadence of max delivery should improve from here. But the bad is still bad. And that's really defense and 7X. So you take this and you juxtapose it against GE Aerospace this morning, which was trading at a 20-year high on the back of those results. I know a big part of

what propelled that move was the aftermarket services. So how much has been, and I realize this is a rudimentary comparison, but how much of Boeing's challenges have been to the benefit of others in the aerospace market? You know, when we think about 20, the last three, four years, we think we've under-delivered about 4,000 aircraft. And going forward the next three years, we think we're still going to under-deliver about 1,000 aircraft out of a global fleet of 30,000. So we're under-delivering what air traffic is growing. And that has been to the benefit of aftermarket names. GE has been a primary beneficiary of that. They power 70% of the global fleet. 50% of their business is commercial services. So they have a big benefit to that. Heiko, Transdyn, names like

FTI, those are names we continue to support on aftermarket. And GE had just guided a month ago, and they raised their guidance from low double-digit services growth to mid-teens today. All right. Sheila, thank you. Thanks. Still ahead, venture capitalist and outspoken Trump supporter, Keith Raboy, with his first impressions of the early policy decisions from the second Trump administration and what the tech community is hoping to see out of Washington. And Twilio shares surging up about 10 percent after announcing new profit targets.

Coming up, we're going to hear much more from the company's CEO in an exclusive interview. Welcome back. Twilio shares now up about 10% in overtime as the software company hosts its Investor Day. The company is spotlighting an expanded total addressable market in a segment called Customer Experience as a Service, sizing that at $158 billion. Now, CEO Kozema Shib Chandler, the former CFO, is also touting profit targets. So we've basically taken a company that a year ago wasn't even making any money, right? So sitting here today, $700 million nearly in profits, an equivalent amount of cash flow to accompany that. And then on top of that, over the last couple of quarters, we've been able to return to double digit growth. Over the course of the last year, we've got 9,000 unique AI companies that are building on top of

Twilio. That's 9,000 AI startups, many of whom didn't even exist two, three years ago. We've got over 90% of the Forbes 50 AI companies who are building with Twilio. And so that's super exciting. And then on the flip side, we've got a bunch of enterprises that are equally developing with us. And so we've always had kind of this builder ethos. And now the time is to take communications, combine it with data, and then use AI as an unlock for our customers, their consumers. Chip Chandler's promising to ramp up Twilio's pace of product releases in 2025 to fuel that growth. Last year, we delivered 251 unique products to our customers. This year, we've got to do even better.

And we've got the right team in place. That's great. We've got the right strategy in place. That's great. And I think we've kind of imbibed the right values in terms of this discipline, rigor, focus. What we want to be known as is a really innovative company that's also really well run. And I think we've really done a good job in assuring investors, assuring ourselves that the company will be well run, that we'll do the right things for customers, that we'll always be there for them. But now it's time to kind of supercharge the innovation cycle. well run, that will do the right things for customers, that will always be there for them.

But now it's time to kind of supercharge the innovation cycle. Like one thing that I really took from my experience working with Jeff is, is that, you know, while you've got to manage risk as a CFO, on the flip side, you've got to seek it out because on the other side of that is growth. Well, get out your smartphone because you're going to want to watch the rest of that entity. The stock is moving. You can scan there the QR code. Follow us on LinkedIn where we post a lot of exclusive content, including this entire interview. Up next, venture capitalist Keith Reboy will join us to talk about the business focused announcements from the early days of Trump 2.0. Plus, is Hollywood heading for a brain drain because of the deadly L.A. fires? Well, coming up, the latest on the fire fallout

for the film industry. Welcome back to Overtime. A brief moment of normalcy in Los Angeles today with the release of the Oscar nominations, but there are major questions looming about the future of Hollywood as fires continue to rage in Southern California. Julia Boorstin joins us now with a fast-forward look at what's next for the film industry during this devastation. Julia. Well, John, the fires wrought massive damage on communities with high concentrations of Hollywood workers. The latest blow to an industry struggling with a contracting box office down more than 23 percent last year from 2019. Plus cord cutting, putting pressure on the TV business.

And all of this comes after work stoppages from the pandemic and the writers and actors strikes. Now, sources tell me there is a lot of concern about both above and below the line workers leaving the L.A. area, which could further accelerate production declines. Last year, the amount of L.A. production declined nearly 6 percent from the prior year, giving last year the lowest annual production in L.A. behind only 2020. Now, to battle that trend, Governor Gavin Newsom proposed more than $750 million, more than doubling California's film incentive to $750 million, which is now on track to go into effect on July 1st. The head of California's Film Commission, Colleen Bell, telling me today that this program is so meaningful because of the trickle-down effect. One study finding every tax credit dollar

allocated drove more than $24 in economic activity to all the small businesses that are surrounding the entertainment industry. So, John, that production subsidy is so important now more than ever as we look at trying to rebuild the L.A. economy. Julia Borsten, thank you for bringing us the latest on this. Well, President Trump speaking to the crowd at Davos today, touting two high-profile investment pledges in his first week, Saudi Arabia saying it will invest $600 billion in the U.S. during the next four years, and the Stargate project, which will deploy $100 billion immediately and up to $500 billion longer term. Well, joining us now in an exclusive interview is Keith Raboy, managing director at Kozla Ventures. He was also a general partner at Founders Fund,

has served on multiple boards and has been an outspoken supporter of President Trump. And Keith, it's great to have you back on the show. It's a pleasure to be with you. So that's exactly where I want to start. I want to start with Stargate, because not only does it really reflect this new incoming era of AI and is raising a lot of questions in its own right. But it has also thrust into the limelight this long simmering, now very public feud between two figures that you know personally very well, and that is Elon Musk and Sam Altman. I want to get your thoughts on all of it. Well, the future of this country and the future of the world is

predicated on AI. And whoever succeeds at innovating AI faster and better is going to dominate the economy over the next century. It's either going to be the United States or the CCP. And that is an existential threat to the United States. Economic power drives military and political power. This is why we won World War II. And so fortunately, both Elon and Sam want to build technology in America and want to compete with the CCP. So both are good for President Trump and both are good for America. Obviously, the future of technology being in one person's hands, there's going to be a competition for it.

When everybody knows that the future is AI, Elon and Sam are competitive. They have competitive products. They have competitive companies. What's different a little bit is that many of the people that support SAM and are excited about OpenAI are also friends and quite enthusiastic supporters of X in all of Elon's projects, Tesla, SpaceX, etc., Starlink. So that's unusual where you have a combination of people that are fans of both. But ultimately, both Elon and SAM are great for America. They're doing great things for America. Their companies are building America.

They're going to make America more prosperous and secure. And that's the most important point. Yeah, and it also speaks to the prominence of technology as we do have this new administration taking the helm. I mean, look no further than the inauguration this week and the fact that you had the CEOs and founders of some of the very largest American tech companies on the planet standing in attendance. The chief U.S. policy strategist at AGF Investments had this to say about that. He basically said that this is a sea change. The dominance of the tech sector is now the biggest economic story in Washington and that with all the Silicon Valley superstars at the inauguration, they have, quote, bowed to Trump and in exchange, they will enjoy a gentle laissez-faire regulatory climate for the

next four years. I wonder if you think that's the right analysis here and what all of these technologists being so intertwined with the administration is going to mean for policy. Well, I'll paraphrase the next Treasury secretary, which is we're shifting from the most anti-business, anti-innovation presidency probably in American history to one that aspires to be pro-innovation, pro-business. And so obviously the innovation people, those are my friends, those are the people you just shared photos of, those are the people that are going to drive a more prosperous America for everybody. And it's exciting that this president wants to embrace that. The only way we can grow

out of our debt and our problems is to improve productivity, improve growth. And you need to do that through technology. Technology is this magic wand that makes things that used to be expensive cheap. And it makes things that used to be impossible possible. And so, as the president alluded to in some pretty compelling passages in his inaugural address, this is what has made America great. We, you know, have solved all kinds of diseases. We put the man on the moon. We've, you know, put all the world's information in your pocket. These are things that technologists do, and there's another whole century forthcoming if the government will get out of the way. The Biden-Harris administration was an unmitigated disaster for American innovation. And fortunately, that error is over. The error of excuses is over. Every entrepreneur I know, including those who voted for Kamala, is now excited

and challenged by the president. They've been motivated by the president. It resonated both in the heartland and with technologists. And you're going to see innovation like you've never seen before, sort of paraphrasing the president. Are you in talks to join the administration? Would you be open to it? Oh, no. I am an entrepreneur and I am a venture capitalist. The rapidly emerging nature of technology does not allow you to take two, three, four years off and come back and still be good at what you do. So I want to pioneer the next generation of American success, find undiscovered talent, back founders, council founders, be the consigliere as they build their iconic companies. If I take

one, two, three years off, I'm never coming back. And so right now it's really exciting and invigorating. I have ideas. I can spoon feed them to the right people. Hopefully they like them and hopefully they embrace them. That's the most value I can have. Spoon feed. I get your point. On that and the Biden administration, I mean, OpenAI did ramp up, go public with its product

during the Biden administration and NVIDIA had this run. I know NVIDIA is not happy with the Biden administration at all for various reasons as well. But I want to ask you about the startup ecosystem. We saw a number of startups fail in 2024, an accelerating number. Do you expect that trend to continue in 25? Are you seeing VCs playing triage still? Well, startups are supposed to fail. That's the whole point. This is risk capital. If I am successful 30% of the time in funding an early stage company, I'll be in the hall of fame. But it was an accelerating number in 24, I think is the concern. And there was kind of like a limited pool of capital more so to go around. There's a legacy of a bad error in both technology and in politics and society.

And most starkly demarked by October 21 when the market collapsed. And it led to a reassessment of all kinds of businesses, all kinds of investments. And you're seeing the hangover from that. Companies that were funded pre the market correction in October 21, which we've talked about several times before on the show, are damaged. And there may be a few that survive, but that cohort, just like a vintage of wine, is going to have serious issues. I think companies built post that correction are going to be more solid, more secure, more stable, and control their destiny. Until Elon fired 80% of Twitter, there was a vanity metric that many companies were using about employing people, hiring people. I hired

one people, 10 people, 100 people, I have 1,000 employees, etc. And that's just bad. And it took Elon being draconian and saying, look, only 20% of you are creating value. I don't need the rest. And that has had ripple effects through the entire ecosystem of technology. And so I think these companies are meaner and more capital efficient, which should mean higher probability of success. So we also had the S&P close at a record high today,

but at the same time, we haven't had a really hospitable environment for software IPOs. Do you see that changing in 25? Yes. There are some really great software companies that will time, you know, when they want to have their IPO that have been built over the last 10 to 15 years. I'm not worried about that. We have several companies in our portfolio that will be wonderful, you know, investments in the public market and that will be wonderful investments in the public market,

and that will be iconic companies. They can choose when the right time is. If they're that lean, though, they're capital efficient, they don't need an IPO as a capital event. They may use an IPO strategically, but they don't really need the capital. So you're going to see successful companies emerge. I'm not worried at all about that. I care more about are the fundamentals sound? Is the fertile, like sort of using the wine metaphor, applying it, is the ground fertile? Are we doing the right things that lead to innovation that improve American lives over the next century? And technology has really done that since 1950. The American story over the last century is the story of technology.

All right. Keith, boy, great to get your thoughts. And of course, we've got this crypto news as executive order as well. We're up against the end of the hour. So we'll get you back another time to talk a little bit more about that, too. Appreciate it. We also get a Bank of Japan policy decision overnight and you get a monster IPO potentially. Venture Global, LNG exporter tomorrow trading. For sure. I've got my eyes still on Twilio. We just had the CEO on that stock is still up about 10 percent in overtime. Smaller software stock in the midst of a turnaround. All right. Record high for the S&P. That does it for us here at Overtime. Fast money starts now.