Closing Bell - Closing Bell Overtime: Markets Push Higher as AI IPO Fever Builds and Global Tensions Stay in Focus 5/14/26

Episode Date: May 14, 2026

Markets climb and investors turn their attention to the next major AI IPO: Cerebras. Eric Vishria of Benchmark and a Cerebras board member joins to discuss why the company’s debut matters for markets and what it could mean for the broader AI ecosystem. Keith Lerner of Truist explains what it means for the Dow to reclaim 50,000 and whether momentum can continue. Our Angelica Peebles reports on a key Alzheimer’s trial from Biogen and what it could mean for biotech and drug development. Our Eamon Javers reports from China on the latest developments surrounding President Trump’s meetings while Michael Froman of the Council on Foreign Relations analyzes what the U.S. may have gained and the implications for Taiwan and global trade. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing an end to the trading day at the NYSC, the New York City Fire Department, ringing the bell. And at the NASAC, it's Mobia Medical. Welcome to closing bell overtime. We're live from studio be at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Sox higher across the board, the doubt back above 50,000, just short of a record, S&P 500, 7,500 closing for the first time at that level. And the NASAC, about 1% gain there. Also a record close. And all this week, we've heard about echoes of 1999. Add this to the evidence, Cisco, leading the S&P, after a blowout earnings report and a hotly anticipated IPO soaring in its debut. Cerebrus closing 70% higher than its IPO price, and it had been up 100% at its highs of the day.

And the two biggest chip stocks in the world hitting all-time highs, Nvidia and Broadcom combined market cap of nearly $8 trillion on a day when all eyes were on the biggest tech IPO of the year, Cerebris, of course, the chip company. So it really lifted the roots there. It did. Yeah. It did. I mean, obviously, it sort of fed right into the dominant theme of this market. You mentioned Broadcom and Invidia. That was almost enough to carry us toward 75 another percent upside in the S&P, and it's a 20 percent move off the March 30th low. So it does seem as if the market's

been kind of in this almost mechanical upward grind sucking people in that have been resistant to it. I do say today you got some relief in some of the problem areas like banks were higher, consumer was higher. So, you know, maybe the market's getting ready. to kind of shift away from that leadership, but not quite in a big one. Yeah, it was specifically regionals that showed strength up a percent on the session. Home Builders also poked its head higher with a gain. And software, quietly going to 90. I mean, this has been sort of on a steady march since it's low, you know, like 74-ish or so

back in February, end of February. Yes. And so here we are. It's not the software is dead if AI hardware is strong kind of. It is true. Look, the market's almost as if it's listening to all the complaints and it's been an incredibly narrow rally. And it really has been.

If you look at momentum versus quality, it's just gone absolutely vertical. I mean, that's been the whole story for a while right now. And it is because there are uncertainty around certain macro items. And so everyone's crowded into the stuff that seems insulated for macro. We'll see if that can last. If it can end in an elegant rotation or we have to have a little more of a gut check. Yep. Speaking of momentum, shares a cerebrus ending the day up by more than 68% around $311 a share.

That's after pricing at 185, peaking of. above $3.85 in the biggest IPO so far in 2026, one of the largest in years. The AI chipmaker's debut couldn't come at a better time as investor appetite for all things AI, particularly chips, doesn't show any signs of slowing down. Joining us now is Eric Vistria, one of the first outside investors in Cerebris, the lead independent director of the company's board. Eric, great to have you with us. Thank you, you, you're actually in the series A 10 years ago. 10 years ago when Chat GPT didn't exist and all this AI hype didn't exist. It wasn't even a glimmer in anybody's eyes. So what did you see in the company then? And what about where we are now is making

it this hot? Well, I think 10 years ago, you saw the beginnings of the AI wave. So deep learning was becoming a thing. And in our world, in venture capital, you're trying to catch these things very, very early. And while it was before ChatGPT, it was actually before LLMs or even the Transformer paper, you knew that something was going to happen in deep learning. It was too big. It was too powerful. And as we thought about it, it was a question of, well, we can't quite figure out what the application's going to be, but all the applications are going to need better infrastructure. And that's what led us to invest in Cerebrus. It's an amazing team with a very provocative idea to build a wafer scale chip. And if you thought about that, that would make AI a lot faster. And

here we are 10 years later. There's an angle on this moment and in terms of why Cerebrus is kind of fitting with it so well, which is that this massive increase in memory prices has essentially made this type of infrastructure and this product more economic than it otherwise would be. It's a window that it can get through. But maybe that also limits ultimately how big it will scale because who knows what happens to memory prices down the road and who knows if how many customers will want to make that commitment. I actually took a different view, which is, if you think of all of these models as a way of translating compute into intelligence, just very simply translating compute into intelligence,

then how much demand is there for intelligence? A lot. And so how much demand will there be for compute? A lot. And, you know, right now, memory's hot and, you know, different parts of the chips have moved up and down, and all that stuff is going to fluctuate, and the public market investors will move things up and down in that way. But in general, I think if you zoom out even a few quarters and you look at what the trend is going to be, there's going to be massively more inference next year than there is today. And I don't think there's any signs of the demand slowing. In a few quarters, though, we're going to get the Vera Rubin chip. And a lot of people say once that chip is released, you guys will have fierce competition. They can scale better. The chip will be very powerful.

they've already got the customer base there. You have customer concentration, particularly in sovereign AI. And so how do you see that coming as competition? I mean, Nvidia is what, 99% of the market. So, like, what do we think? They're going to go to 100. Like, it's a great company. It's a great. You know, they've done a great job. They'll continue to do really well. But I think this is one of these situations where the tide is rising very quickly. And there is clearly room for very, very, very, very fast inference and nothing can compete with surrebers in that regard. All right. If you could say right there, we have applied materials earnings, which are out. Christina Parks and Nelves has numbers. Christina. This is a Wayford Fab Equipment company. They beat on the top and bottom line, $2.86 adjusted with revenues of $7.91 billion. I'd like to point out that that EPS beat every single, topped every single estimate on the street right now. In terms of what helped drive it, a semiconductor revenue came in at $5.97 billion.

the non-gap gross margins at 50%, it's a little bit higher than the street, but the guide too also higher. EPS Q3, $3.36 on revenue of $8.95 billion. Last quarter, they did really well. And then all Q2 estimates came up. So this beat is already on higher

and raised estimates, which is why you're seeing shares jump over 5% in the release. They also said they expect their semiconductor equipment business to grow 30% in 2026. Guys? Christina, thanks.

Christina Bortsnevelace. Thanks. You know, this phase that we're in right now, it fascinates me that the market seems to be privileging all of these. We once thought we were commodity hardware companies, right, or down the chain, because it's just a amount about brute force, spend a lot of capital to get that much more computing power. Is Cerebrus and other companies like that trying to kind of apply a more of an engineering innovation workaround to that idea. I mean, it seems to me like that's ultimately where the incentives should be. Yeah, I think it's a very differentiated product, right?

Nobody has built a wafer scale chip. It's a dinner plate size chip that people have attempted for 50 years and no one had been successful before or after Cerebus in terms of doing it. So I think it is a breakthrough kind of innovative product. It's taking time to figure out for AI to mature, to figure out, and to like find its place in the world. But the speed is an actual differentiator. You know, I think there was a lot of things that were commodities,

that were actually commodities and everything was incremental. And the pitch then to a customer is it saves you on what side of things? In other words, you use us so you don't have to do what? Well, I think the real thing that's happening right now is, obviously there's so much coding, AI coding that's happening. And the demand for AI coding is tremendous. But if you can imagine you're just sitting there waiting for AI coding and get back to you as you're asking it to do things, that's bad. If you're 10 times faster, that makes a huge difference.

And that's the value proposition. What are your goals in terms of customer diversification? Because that has been a major concern with this issuance. You know, the thing, anytime you have a giant customer contract like the Surrogis contract with OpenAI and AWS, you're going to have concentration. Like, it's just, it's a, it's a relatively small company. to have a $20-plus billion contract with Open AI, that's going to lead to concentration. So over time, it feels really big,

and then afterwards you get the next bigger one, and it will seem more diversified. Give it time, you're saying. Yeah. All right, Eric, great to see you. Thanks for coming by. We appreciate it. Thank you so much.

Eric Vishria. Figma earnings are out as well. The company reporting EPS of 10 cents a share versus estimates of six cents a share, revenue coming in above consensus, beating by about 20 million. Figma raises fully your revenue and operating guidance based on what they say is promising early traction on AI monetization and strength across the core platform. Just a note, I mean, Figma rising here to 23, it peaked 22, basically a day after the IPO.

So this was, remember, a very celebrated hyped IPO, and the high price was like the day after it opened. Which we saw a couple times. Yeah, also the case with Chime. Corweave, although it has come back a bit, I also looked at Clarnet. and E Toro, basically. First or second day was all you got. So we'll see. All right, a bullish day in the markets as the S&P crosses 7,500, and the Dow reclaims 50,000 for the first time since February, solid profits and strong upward earnings revisions keeping the bid under stocks, even with concerns about inflation, rates, and geopolitics. With us now to discuss where we go from here is Keith Lerner, chief investment officer and chief market strategist at Truest Wealth. Keith, good to see you. Yeah, great to be with you guys. interesting moment here. I mean, we again have to, I guess, try to explain the market dynamics in getting

to the new high. It has been dominated by a particular theme, even if it is earnings driven. So how do you see the market field position at the moment? Yeah. Well, you know, in our recent note, we talked about if we came into this year, it's probably better not to have the headlines ahead of time, because with everything going on, there's carousal of concerns. As you mentioned, markets are really drifting higher at all-time high. So, Mike, all in all, we just, look today about, you know, when we've seen a market over a 30-day period, as far as trading days, up more than 15 percent, what does that look like going forward? Does it give you any type of signal? And, you know, what you tend to see, and I know you're familiar with this, Mike,

is over, you know, the next one or three months, it's a bit of a coin tors for markets. But when you look out over the next 12 months, markets have been up 14 out of 15 times with pretty strong gains. Last time we've seen this type of action was last May, no coincidence. And as you mentioned, it is fundamentally base. I think the question we're all wrestling with, it has been a pretty straight line in a short period of time. And the winners keep winning, and the market is somewhat divergence underneath the hood. So all in all, Mike, we're sticking with the underlying trend, but cognizant that it's probably not going to be the straight of a line for the rest of the year. Keith, I've got to ask you about Cerebris, and that does the debut of Cerebrus

pricing 185 going out, you know, 300 plus. Does that make you feel better about the AI trade, or do you feel like the AI trade is topy? You know, we've been saying this for some time that, you know, every bull market has a dominant theme. Obviously, the dominant theme of this bull market is AI and tech. And when we look back historically, Melissa, in the 90s or the 2000s, that dominant theme tends to persist until the end. It doesn't mean it doesn't, there are periods where it may leave lose leadership for a couple of months. But all on all, it doesn't change our view that the tech trade is still intact. Is it going to get a pause at some point? Probably, I think the bigger test really will be when we see these massive IPO and all the supply that comes to the market later

this year will be a bigger test than the IPO that we saw today. Yeah, it's as if, Keith, because of the structure of the big cap indexes, there's more of a detachment from the macro environment, from maybe each incremental economic data point, things like that, given how relatively small things like the consumer discretionary sector is and things like that. But what do you think the underlying economy is doing as we celebrate these new highs? I think it's a two-speed economy. And I think what's really notable is, I mean, we are seeing this kind of business investment-led recovery,

where we see, like, as far as cap-x spending on tech relative to the GDP, well above the levels that we saw in the 90s. So I think that's why you look at consumer sentiment surveys and they're really negative, even though we're still seeing some spending. So it's a bit of a split market. And you're also seeing that, obviously, in the stock market where tech is not only driving the S&P

with about 50% of tech and tech-adjacent stocks, but look at small-cap tech up about 40% this year. Look at emerging markets. What's driving that? You know, South Korea and Taiwan. So there is this one big macro trade, which is AI. But one thing I would also say, Mike, today, the Equalweight S&P just made a 23-year relative low to the S&P, meaning the average stock, that broadening trade, has really fizzled out.

And then we look at something like the Equalweight consumer discretionary sector also making fresh relative low. So we are seeing some of that kind of more subdued action in the economy reflected in areas of the market. But as you mentioned, it's top heavy with tech. And that's why the board-based indices are doing fine. Two-speed economy, two-speed market. Thanks, Keith Lerner Truist. Thank you. Now let's get to the bond markets as yields pulled back by just a bit today.

Rick St. Talley's in Chicago for us, and I know, Rick, JGB, 29-year high. Absolutely. There's so many different parts moving in the sovereign debt market along with foreign exchange. Look at a one week of 10-year yields. And granted, yesterday and today we're hovering in levels that we haven't closed that in 10 months, July of last year. But it is rather tame. and as you pointed out, we're actually, you know, only about one basis point higher than we were yesterday, and we did touch exactly 4.5% of 1130 Eastern yesterday. I continue to say that's a big psychological level,

but from a technical basis, it really probably is not a great resistance level. We look for a lot of consolidation right in this area. If you look at a two-day of the 10-year here minus the 10-year booned in Germany, look at how it's starting to widen out. at 142 basis points. Look at the next chart. We're near the widest we've been all year. And the reason this is so important is because just the subtle let-up on the gas on rising crude prices and Brent prices have made a big difference. Bull yields were down rather substantially today,

and the notion of how much tightening the ECB may have to do is easing back a bit. So we want to pay a lot of attention to the distance between those two yields. And finally, as you pointed out, JGBs since Golden Week, man, they are just moving up and yield down in price, even the yen with the intervention. The dollar's slowly coming back a bit. Today's close right around the 262, 2.62% in the 10-year-government bond. That yield is a fresh 29-year high. Back to you.

Well, Rick, thanks. Rick Santelli. Coming up, we turn our attention to the mega-IPO SpaceX new concerns raised about its ownership structure. us out for recovering after a midday dip, but still closing lower, it could be facing a legal battle with Open AI. We'll have those details. You're watching Closing Bell Overtime, live from the NASAC market site. Welcome back to Overtime. The SpaceX IPO in the spotlight today as leaders of the three major pension funds, of three major pension funds, express concerns around its ownership structure, the heads of the New York City and New York State controllers offices, along with

CalPERS CEO, sending a letter to Elon Musk, objecting to provisions they say limit shareholds. holder protections, including board powers granted to Musk, veto authority over his own removal, and litigation protections. Letter says, this is, quote, the most management favorable governance structure ever brought to the U.S. public markets at this scale. These public pension funds have a sort of a tendency of kind of grandstanding moves like this. And, you know, the one solution is, well, don't buy the stock. Exactly. But usually their way into these things is the stock is in the indexes that their funds own. And that brings up, I think, a bigger and more interesting issue, which is the way that SpaceX perhaps also Open AI and Anthropic are going to get sped into the

indexes. NASDAQ is already seemingly going to do that. There's talk that S&P might suspend. It's how long you have to wait. J.P. Morgan had a very exhaustive look at how, you know, maybe at the lockup period expiration, the companies will kind of be able to directly sell stocks into the index funds. So it's trying to balance out, look, indexes should be representative of the public markets. These are massive parts of the public markets. On the other hand, are you going to loosen your standards for profitability and things like that in order to represent? And that's a real debate. Now, I mean, these complaints about management, about, you know, the way the company is structured, we've heard these time and time again. And remember when Facebook went public, that was the big,

you know, upbore, this super voting class, Mark Zuckerberg is king, et cetera, et cetera. And here we are. They tried to close that door after Facebook and then they reopened it. I don't think it's, I don't think it's the case anymore that they exclude dual class. companies in the ESMP. Shares of Apple falling slightly today after hitting an all-time high yesterday. Evercourt getting more positive on the stock, raising its price target to 365 from 330. The analyst sees an opportunity for the company to make money off of AI without having to increase cap spending like its peers. Apple stock saw blift midday, though, on reports that Open AI is exploring legal action against the company over its two-year-old AI partnership saying what Apple has delivered

is different from what it promised. So that's an interesting development. The Evercore ISI, I mean, that's, you know, he's basically calling for a 22% upside from yesterday's closed. And he's saying, even if iPhone sales slow, customers are still going to buy the higher price phones, the higher margin phones. Yeah, it's going to help a lot. Yeah, it's an upper K thesis in a way, upper part of the K. It is interesting, given that for as much as it seems like Apple is a kind of a lower risk play on AI, because not doing a ton of spending, the valuation is like 32 times plus forward earnings.

More expensive than Nvidia. and Apple has spent almost no time at a higher valuation in the iPhone era. Like brief periods in like 2020 and 22 thereabouts. So, you know, it's a call to say this time is different in a sense, you know. We've heard a lot of those this time around. Obigen, Snappy, an eight-day winning streak after announcing it will move its experimental Alzheimer's treatment into late-stage trials despite disappointing phase two data. We've got the details straight ahead. Welcome back to closing bell overtime.

Shares of Klarna ending the day sharply higher after the company reported better than expected earnings, with merchandise volumes rising 20% in the quarter. It now has 119 million active customers and expanded its merchant network by 49% year over year. Well, Biogen giving investors whiplash today after the company released top line results from a phase two trial of an Alzheimer's drug. Angelica Peoples joins us now on what is behind the move. Angelica. Yeah, Melissa, well, it's a little complicated, so let's break this point. down. So biogen is saying that the phase two trial of its experimental Alzheimer's drug failed,

but it's going to advance the drug into phase three anyway. So why is that? The goal of the study was to show that higher doses of this drug produced better results, and that's what you typically want to see, right? The higher the dose, the better result, but that didn't happen here. So technically the trial failed. But biogen says that they are encouraged by some of the other signals that they're seeing here. Biogen's head of development putting it to me this way, that the drug decreased a protein associated with Alzheimer's called tau. It showed cognitive benefit, and it brought biogen a little bit closer to finding the right dose. And those are the three things that you want to see before you move to phase three. But investors clearly not convinced at what they're seeing.

So biogen will present the full results at a medical meeting in July. And as you guys know, there's a huge need for Alzheimer's drugs, right? The only disease modifying drugs that we have right now target another protein called amyloid. And biogen and Eli Lilly are both looking into Tao and using these drugs as the next frontier. And there's also a small biotech company called Voyager Therapeutics. Again, it's a really small company, but this week they're touting some animal data for an experimental gene therapy to turn off production of Tao. So I think we should expect to hear more on this and everyone's watching the space pretty closely, guys. It's interesting to hear the analyst's reaction to that Celia's study, Angelica,

you know, Barrett said it was convoluted and the messaging was messy. There was actually no data release. This, though, is separate, correct, from the FDA extending the timeline for the next formulation of Lekembe, which would be a competitor to Kusuma? Right. So Lekembi's already on the market, and that's a totally separate drug. So that's a different issue, right, that biogen's contending with. And I think this all speaks to just the problems in why investors feel burned by this. You know, I was just reading another analyst note where they talk about, you know, they saw what happened with the other Alzheimer's drug aducanamab and, you know, how that was really, that was eventually called Adu Helm. And, you know, that was such a mess, right? You know,

you had this drug that they said was promising them. They stopped the trial and they said, actually, it works. Now we're going to go ahead and get it, bring it to the FDA and they ended up, you know, pulling that drug. So that was a really, you know, a really big mess for the company. And also, I feel like investors, you know, probably are a little bit more skeptical now, right? You're saying that you have this drug that looks so promising, but you didn't show us any data, and now we have to wait and see. And I asked biogen today about that phase three, when will you have a timeline? And they said that they need to go talk to the FDA and they also want to talk to the Alzheimer's community about what that phase three trial needs to look like. So again, I think there's a lot more

questions than answers. And that might be, you know, why you're seeing some of this reaction today. Angelica, thanks. Angelica Beables. Time now for a CNBC News update with Julie Borson. Julia. Melissa, the EPA today proposed delaying enforcement of a Biden-era vehicle pollution rule. The rule will require significant cuts in vehicle air pollution, but the EPA says delaying it would save automakers $1.7 billion. The Sierra Club criticized the move, saying the reductions are readily achievable and already used in many vehicles. FBI director Cash Patel today appealed the decision that threw out his defamation lawsuit against former FBI agent Frank Viglusey. As soon as over a comment he made on our sister network, MS Now, that Patel was more visible at nightclubs than at FBI headquarters.

The federal judge who originally dismissed the case called the comments rhetorical hyperbole that cannot constitute defamation. And the Las Vegas Raiders are selling a 25 percent stake in the team to a group led by Silver Lake executive Egon Durbin. People familiar with the matter tell Bloomberg the equity is being sold for minority investors and not controlling owner Mark Davis. CBS's latest NFL valuations calculate the team to be worth $9.9 billion. Back over to you. All right, Julia, thank you. Coming up, we'll get a live report from China on the summit, including President Xi's warning to President Trump.

That's coming up on closing bell overtime. Welcome back to closing bell overtime live from the NASDAQ market site. A couple of nice round numbers today. The Dow getting back about 50,000 for the first time since February, and the S&P 500 closing. above 7,500 for the first time ever. Also a record close on the day for the NASDAQ. Applied materials beating on the top and bottom lines and guidance for the third quarter well above expectations. The company sees earnings of at least 316 per share. The current

consensus is 288. Figma also gaining after beating on earnings and revenue, raising its guidance as well, based on what it calls promising early traction on AI monetization. Dexcom, the medical device maker and after hours winner as well. The company says it plans to name two new independent directors to the board. That'll happen at a later date. This comes after what Dexcom calls constructive engagement with activist firm, Elliott Management. The first day of meetings between President Trump and Chinese President Xi Jinping and Beijing in the books. Trump announcing China will buy 200 Boeing jets along with some energy and soybean purchases. But apart from that, there weren't really any big deals unveiled. Amon Javers is there

with the latest details. Amen. Yeah, Melissa, that's right. It was a day of pageantry and imagery. on an epic scale in Tiananmen Square Thursday, as President Trump was honored by President Xi Jinping of China. They had a military honor guard, the inspection of the troops. They had adoring children greeting the two leaders. It was quite a spectacle today. But to your question about what deals we have specifically to announce, as of right now, we don't have very much. We saw the president going on Fox News earlier today to say that the Chinese side had agreed

to buy those 200 Boeing jets. That's down from a 500 figure that had been circulated last year. So we'll wait and see what Boeing has to say in terms of the official commitment from the Chinese side, how many jets, what type and over what period of time are all going to be important questions there. Also on Fox News, President Trump said that President Xi Jinping of China had told him that the Chinese are not going to send military equipment to Iran. Here's what he said about that commitment. I mean, when you say support, they're not fighting a war with us or anything. No.

He said he's not going to give military equipment. That's a big statement. He said that today. That's a big statement. He said that strongly. But at the same time, he said, you know, they buy a lot of their oil there and they'd like to keep doing that. So we haven't seen that commitment matched by the Chinese side yet, Melissa. So we'll wait and see whether the embassy here in Beijing or here in Washington releases any details of

what the agreements are from the Chinese perspective. Sometimes you get these differing redouts as to what exactly was agreed to. But the Chinese have said in the past they weren't going to send military equipment to Iran. The president said that Xi Jinping also told him that he was not going to, or he was eager to help in Iran and dealing with the Strait of Hormuz, that he would be of some assistance. A little bit vague about what that assistance might be. So we're left with sort of more questions than answers as it nears morning here in. Beijing. We are going to see the two leaders again shortly. And one of the big questions, I think, on a lot of people's minds will be the follow-up to that warning that President Xi Jinping gave Donald

Trump on Taiwan saying that the U.S., if it mishandles that issue, could end up in a conflict with China. That was fairly stern and raised eyebrows around the world. We'll see if he repeats it when the two leaders meet in a couple of hours time. Melissa? Yeah, and perhaps if it gets a more explicit response this time. Amen, thank you very much. And so how much can this meeting alter U.S.-China relations in the long run? Joining us now is Michael Froman. He is president at the Council on Foreign Relations. Michael, it's good to have you. I guess not too unusual, perhaps, for each side to accentuate different priorities or interpretations of what's happening. But how does this all fit together with, I guess, what process we're in? Is it sort of managed to disengagement between the U.S. and China or

or whatever else. Well, the Chinese leader laid out a phrase around a constructive China-U.S. relationship of strategic stability. And it seems like strategic stability is what he is certainly seeking and what President Trump is seems to be seeking in terms of not dealing with a lot of the major underlying conflictual issues, but trying to just get through the next year or two with relatively de Tom's relative stability between the two powers, as you're, as you're, as a As Eamon mentioned, Taiwan was raised to a higher level rhetorically by Xi, who warned about

collision and potential conflict with the U.S. if the U.S. mishandles the relationship. There were some modest sales of airplanes and soybeans and energy. That's all positive, of course. But the underlying issues in terms of the conflicts between the United States and China over economic imbalances, technology, competition, the South China Sea, the nuclear program, North Korea, et cetera, those still remain very much unaddressed. Amid had mentioned that there are always differences in the readouts, but this time it seemed even more striking when it came to Taiwan.

I mean, the Chinese released its readout about Taiwan in that warning as the two leaders were meeting. And in the U.S. readout, there was no mention of Taiwan. And when a reporter asked President Trump about Taiwan, he noticeably did not answer that one. Do you think President Xi sees that this is the ultimate card that they have to play, that having a chokehold on physical AI for all the players around the world is the ultimate position that he would want to be in. Well, I think he has made clear for some time that the Taiwan issue was a paramount importance to China and to him personally and that he wanted to resolve the issue, including what he calls the rejuvenation of the Chinese nation, on his watch during his time as leader. and that includes addressing the Taiwan issue.

I think what we've seen here is that he feels he's in a pretty strong position, feeling pretty confident that he can raise the rhetoric, raise the heat around Taiwan and warn the United States, whether it's about arms sales to Taiwan or military exercises there or support for any move towards greater autonomy or independence, that China won't stand for that and that China will use its tools. And what it demonstrated last year is that it does have a chokehold, over the rest of the global economy in terms of being able to deny critical minerals, magnets,

other products that are absolutely central to not only the U.S. military capabilities, but a lot of the broader manufacturing sector. So it is demonstrated that it has leveraged and it's willing to use it if the U.S. doesn't address what it feels its needs are with vis-a-vis Taiwan. There were some reports over the course of the day or the last couple of days of maybe a little more ship traffic going through the Straits of Hormuz, the Chinese vessels, perhaps Japanese as well. So that would seem to be another area where there could be a little bit of letting out the pressure to some degree in the relationship. Certainly China has every interest in seeing the freedom of navigation restored in the Strait of Hormuz.

It gets a significant part of its energy from that area. And it's very much more dependent on oil and energy coming out of that area than the United States is. And so it has a strong interest there. The president said that the President Xi agreed with our position in terms of not having Iran toll and not having the straight closed. Whether China is willing to employ serious diplomatic leverage over Iran to get Iran to stand down, though, remains to be seen. Really, it's one of the few countries that can engage with Iran and try and put pressure on it to stand down. And we'll see in the follow-up to this meeting, whether there are any concrete actions by China in that regard. Michael, I'm not sure if you think that there will be any sort of military conflict between the U.S. and Taiwan in any way regarding Taiwan.

But I'm wondering how important do you think it is? Because if Taiwan actually falls to China and China controls it entirely, then they cut off all access. to chips. 90% of chips will all of a sudden be under the control theoretically of the Chinese Communist Party and the U.S. cannot allow that if we want to advance our AI hopes. Would we go to war for that? Well, we have a lot of reasons, including chips, but also Taiwan being critical to our defense. It's a major democracy in the region for supporting Taiwan, not necessarily its independence, but supporting the resolution of the Taiwan question in a non-confrontational non-kinetic way. And as you said, for all for the capability of Taiwan to produce the world's chips

to fall under China's hands just adds to its capability to use choke points against the rest of the economy. Look, that's why the U.S. with bipartisan support, pursued the Chips and Science Act while we're trying to build fabs here in the United States so that we're not completely dependent on China. But it will be years and a lot more investment before we have a significant capability of of substituting for what is currently being done in Taiwan. Yeah. Michael, great to speak with you. Thanks.

Michael Freeman, CFR. Ford rallying once again and is now up more than 20% in just the past two days. Up next fast when he's Tim Seymour on how he's playing this hot stock. Check out shares of Versant Media, which are getting a nice pop today. The parent company of CNBC reporting better than expected first quarter top and bottom line results. Thanks to a jump in revenue from content licensing and digital platforms. It is Versan's second report since being spun on. from Comcast in early January.

Closing bell overtime. Be right back. Welcome back to overtime. Bitcoin and crypto-related stocks rallying today after the Senate Banking Committee approved the Clarity Act on a bipartisan basis. The bill, which is supported by the crypto industry, but opposed by the banks, would create a regulatory framework for digital assets if approved by both the House and the Senate. Senate lawmakers say under this version of the bill, crypto companies can give rewards for using and spending stable coins, but not for simply holding them. Those rewards are the big dispute between the two industries. However, the banks now say there is a loophole

that would allow rewards that look like interest. I guess the idea here is you could charge holders a small subscription fee, which would obviously be paid in stable coins, and that constitutes a transaction, and then you can just pay rewards that seem like interest on the balance is held. Yeah, I mean, I think it's a pretty compelling argument that the banks make. Yes, agreed. They're basically deposit institutions without the regulations. without the regulatory overhead. And without having a whole capital against the and all the rest of it.

So, yeah, I do think that the idea of stable coins and what's fascinating to me is the reason people are excited about stable coins is simply that, oh, the providers of them just earn T-Bill interest on the dollar collateral underneath the stable coins. It's not that fascinating a business, but it would be so huge, perhaps.

It's like banks, you know. It would be like State Shooter Bank of New York where they just have monstrous balances, they glean a little bit of interest often. We'll see. Well, Ford shares are on full speed up more than 20% in two days. The move seems to be tied to the official introduction of Ford Energy this week. The new business will use Ford's lithium ion battery capacity to build storage systems for utilities and data centers in the U.S.

We should note, though, the company first announced this plan back in December. One Barclay's analyst notes, the action highlights its ability to occasionally tap into the mean spirits of the market. So, Heidi trade this name, joining us now Seymour Asset Management founder in Backer, fast money trader, Tim Seymour. It's like people are just looking for the next data center play, and they stumbled upon Ford, getting on this energy business. Tapping into the meme psyche of the market is not what I think you want to be doing if you're investing in Ford. And Ford has been a lot more gimmicky than GM over the years, and I'm a GM holder. I have a small position in Ford, but I really think I'm an investor in GM.

The headlines around Ford are, I get it. I know what we can do to this, this value I would know we can, and Morgan Stanley's put a 17 and a half multiple on a $10 billion dollar EB storage business and it's going to compete with Tesla and it's going to be this, it's going to be that. We're also rolling back, you know, anti-pollution dynamics from the EPA and the Biden era. These are all things that are driving a company that's also done a decent job of communicating a more streamlined approach to their business, but is massively underperformed GM, and I think it probably still will. As much as it seems like, you know, kind of a flighty move, this is a stock that is that like six or seven times earning,

as GM is, right? I mean, they trade at these ridiculously cheap multiples because the world thinks there's just no growth over a long cycle here. So maybe it's not warranted dollar for dollar with what this business is going to mean, but I think it also was a way for them to make lemonade out of the sunk investment into the EV business

that they're now scaling back. If you have battery capacity, you can utilize it somehow. I think that's right. And let's not forget that the F-150 EV was, was really the most exciting car in the EB market, and I still think it could be. I think the underperformance of Ford to GM, though, is a function really of operational efficiency, not about brand power. I think Ford's got some incredible brands. I think at eight times Ford, I kind of see Ford is a little bit expensive here. I think GM's still really cheap.

Yeah, and they're doing the massive buybacks and all the rest. Yeah, sure. Well, Tesla, finishing the day lower, but the stock is up 15% since last Wednesday. So here are some hopes in this stock that China will approve the company's full self-driving during President Trump's visit. I don't know, that sounds like a few links in the chain have to go right. Well, it does. I mean, it sounds like there's a headline for every person who had a seat on that plane that the markets have done over the last couple days. And I think with Tesla, as much of the move of almost 30% off on this kind of recent run today. It's kind of meandering. It has been meandering actually for a week since their earnings. In fact, in the aftermarket of the earnings, it went from being kind of a rally play. We learned

a little bit more about CapEx spend. We learned a little bit more about the uncertainties. And I think you're really left with where I have been with Tesla for a long time. Forget about the auto business. It's a really expensive company. The places where someone that's not, I'm not long Tesla, and I'm not sure if I'm going to get long Tesla, but SpaceX IPO, access to AI, what Elon Musk is doing, this is what you're buying, and maybe some optimists, and depending on the analysts that you're talking to, you're getting optimist for free. That's the story here. It's not about, is it expensive, though? I'm going to get off of that, you know, that platform because it's not really why you should be investing in Tesla.

Yeah, never was. Let's get to Starbucks because this note, we want to talk about this note. I mean, the title is so clever. T.D. Cowan, upgrading a stock to a buy, raising the price target to 120 from 106, better latte than never is what the note is called. The firm saying the company has numerous tangible drivers to deliver positive sales revisions and expects to see a 4% increase in same source sales by 2028. The stock is up 26% year to date. So better latte than never? I mean, it's a better title than better macchiato than never.

But, you know, I, so I'm long Starbucks and I'm a big Starbucks fan as a consumer. I think the story around Brian Nicol is one of three or four. And I think this is where TD Cowen is leaning in. You've got three or four drivers that are all important parts of getting this stock to actually start to move. And that's operations, that's loyalty, that's innovation, that's menu. I think the improvement on the operation side is really interesting. Again, they're getting into kind of where they think these will lead from 26 to 28. They're saying North America is going to grow 6%.

They're putting almost 20 to 25 percent EPS growth during. those years, and then they can have its, you know, one and a half peg ratio. I just read that report this morning. It makes sense to me. I think you have to have a lot of faith in Brian Nicol. And I'm not saying, I don't. I'm saying those are things that change the story of one that's been, I think there's a lot of pressures, the same ones we talk about on this network all the time with both the consumer and what's going on with cost inflation, I think are still big headwinds for this business. So I'm kind of in a, yeah, I would say I'm in a medium blend here. relative to what they're saying.

All right. See you in nine minutes. See you soon. Didn't see more. We've been focused a lot on the price-conscious consumer, whether rising gas prices will hurt beer sales, for instance. But next we're going to focus on luxury shoppers and what they may be buying. We'll be right back. Welcome back to overtime shares of watches of Switzerland,

having the time of their life today after forecasting strong annual operating profit There was above expectations thanks to demand from U.S. shoppers for brands like Rolex and Tag Ware. Burberry also seeing strong demand from the U.S., but that did not prevent the stock from closing lower today. Weakness in Europe and the Middle East weighing on the company's turnaround efforts. Another luxury retail name closing lower today, Canada Goose, it beat revenue Smitz for Q4, but it is seeing a challenging macro environment that reflects soft demand trends. And we could get more clues on the health of the luxury consumer as the spring auction season begins today at Sotheby's, Christy's, and Phillips. But this is really, I mean, it shows you what a

K-shaped economy it really is around the world. For sure. And subject to these kind of ebb and flow of fashion. I mean, the watches thing is interesting to me. Yeah. It seems like we're on a little bit of an uptick in terms of people wanting the men's watch status type of thing again. Right. We're wearing watches as jewelry. Right. I mean. I'm wearing half the time it's wrong. Exactly. Yes. But the rest of it, yeah. I mean, clearly it's not, it's not a clear story of of global demand. I mean, Canada goose, once you bought a $1,000 coat this year,

maybe you don't need another one, right? And it's getting warm now. Yes, of course. All right, let's get you up to speed with tomorrow trade today. While there are no earnings on the calendar, there are two noteworthy events happening. First, it'll be Jay Powell's last day

as chairman of the Federal Reserve, and it's also the first quarter 13F filing deadline. So we'll find out what some of the largest investors have been buying and selling. You know, obviously, they make news. It's sometimes a little bit stale, but it's definitely worth keeping an eye on, especially because there's often the Friday dump. Yeah, absolutely. It will be interesting to see day two of Cerebrus and how it treats. It didn't close at the high, so we'll see how it goes through.

No, it closed 60 bucks below the high or something like that. So we'll see if any analysts want to get the jump and try to weigh in on it before too long. That does it for overtime today. Fast money starts right after this quick break.